Discount Sales Can Create A Snowball Effect
It’s Friday desk clearing time for this blogger. “Summer has brought a dramatic shift in the Portland-area housing market. Sales have slowed. The inventory of homes is growing. Longtime real estate brokers and market-watchers recognize this new normal as something approaching — well, normal. And that, they say, would be a welcome return to something Portland hasn’t seen since before the housing bubble started to form back in the mid-2000s. ‘The bottom hasn’t fallen out. The sky isn’t falling or anything like that,’ said Chris Guinn, the co-owner of Dwell Realty in Northeast Portland. ‘Sellers have had a pretty good five, six, seven-year run. It’s almost overdue.’”
“More homesellers are dropping prices, realizing after they fail to net an offer that their homes might not have appreciated in value as much as they expected. Buyers, meanwhile, might have the luxury of taking some time to think — a big change from recent years, when many felt the only way to buy a house was to make an offer on sight. The region’s apartment-building spree, meanwhile, has slowed the rising rents. That’s eased the pressure for some renters seeking the financial stability of homeownership, and it might have pushed some owners of rental houses to sell.”
“A growing number of homes for sale in the area signals a slight slowdown in the housing market, according to new data from the Northwest Multiple Listing Service. Throughout Western Washington, there were 5.2 percent more homes on the market in June than in June 2017, and 8.4 percent fewer pending sales. There were also fewer buyers making offers on them, according to the listing service. ‘Inventory is up and demand has dropped,’ said Robert Wasser, an officer with the board of directors at the listing service. That combination is ‘a pretty simple economic recipe for a softening market.’”
“Home purchases are down or unchanged in more than half the Dallas-area’s residential districts this year, ending several years of ever-increasing sales. Most of the slowdown is concentrated in higher-priced neighborhoods that have already seen high sales volume and big price hikes in recent years. Longtime Dallas real estate agent Barry Hoffer says he’s seeing more price cuts on houses that don’t quickly attract a buyer.”
“‘We’re not seeing the buyer frenzy that we did two years ago — multiple offers on most houses,’ said Hoffer. ‘You have a lot of factors coming together that are causing a little bit of slowdown, more days on market and the inventory building.’”
“It’s still a good time to sell a home in Fort Collins, but the tide may be shifting. Realtor Mike Salza said the market is changing as some sellers get lazy and buyers get fed up with continually rising prices. Homes that are overpriced or not staged properly are sitting on the market. ‘There aren’t enough people to buy,’ Salza said.”
“At the midway point of 2018, the latest data from the Matrix multiple listing service indicates the market is experiencing a leveling off of home sales from the lofty heights of the past several years. Jan Holland, a Realtor in Bentonville, noted one segment of the market where inventory is becoming more balanced — the higher-end market. ‘The buyers are still there for the higher price points,’ she said ‘There’s just so many more choices than years past.’ Holland said the market ‘definitely’ favors buyers among high-end homes. ‘Leveling off had to happen at some point to keep things healthy,’ she said.”
“Uncertainty surrounding State Farm was one of the biggest pressures on the Twin City housing market during the first half of 2018. Sales are down 10 percent through May—most recent data available—and average prices are down 2 percent too, according to the Bloomington-Normal Association of Realtors. Those in the industry say the market is soft in the higher price ranges—above $250,000. Prices are dropping on those more expensive homes.”
“‘We used to be in this thing called ‘The Bubble,’ because we had State Farm and ISU and Mitsubishi,’ said Keith Thompson, senior loan officer at MSI in Bloomington. ‘We had great employers that kept the market rolling. In Bloomington, things were going well no matter what. But that’s no longer the case at the moment.’ ‘The upper end definitely has taken a hit. That’s because we don’t have the jobs in Bloomington-Normal to support that upper end of the market. The prices—I like to say they’ve corrected,’ said John Armstrong, president of the Bloomington-Normal Association of Realtors.”
“You’ve probably seen the ‘for sale’ signs all over Virden in front of houses that have been on the market for months, some of them even years. The housing market seems to have slowed to a crawl - what realtors call a ‘buyers market.’ If you bought a house in a resource-producing region like southwest Manitoba at the peak of the market, say 2013 or 14, you may lose money by selling now. On the other hand, if you try to get what you paid, the property can languish for a long time.”
“The average selling price this year on Virden homes is almost a quarter of a million dollars, Virden real estate agent Kelsey Gerrand says. ‘When a home is overpriced, buyers will look past it as it doesn’t compare to other homes that are priced lower,’ she says. ‘This can lead to some properties sitting on the market for some time.’”
“A report in the Financial Times lays bare the scale of the housing market downturn in central London - it suggests almost 40 per cent of new-build sales in recent months have been to corporate landlords. The FT says discounts to asking prices from 10 to 15 per cent are now ‘becoming quite normal’ with 20 to 30 per cent reductions possible on selected schemes. The piece continues saying: ‘An analyst in the sector, who asked not to be named, said bulk discount sales can create a ‘snowball effect’. ‘As more of this comes through, it becomes obvious to the rest of the market and triggers further sales among those who had been hoping to ride out [the tough market],’ he said.”
“Apartment sales in Jakarta slumped in the first half of this year, Jones Lang LaSalle said. Developers only built 1,292 units between January and June this year, bringing the number of total unsold units to 144,000. In the same period last year, developers built 4,843 units, resulting in total stock of 134,536 units.”
“As one of Cambodia’s leading economic centers, Siem Reap has drawn its fair share of local and foreign investors. Massive investments from abroad have fuelled a roaring property boom. According to Mario Tan, Sales and Marketing Director of Siem Reap-based Hunter Estate, the number of rental transactions this year declined by 40 percent, compared to two or three years ago. ‘Before, we receive around 100 inquiries every month. But it went down to only 50 to 60 inquiries these days,’ he said. ‘And they are not even good quality inquiries,’ Mr Tan stressed.”
“Sek Saran, Business Director at A1 Real Estate Cambodia, echoed Mr Tan’s observations that rental transactions in Siem Reap are taking a big hit and going down. ‘Rent inquiries dropped down more than 50 percent, compared to the previous years,’ he said. With regards to rental price, there was also a significant decrease. According to Mr Saran, the rents went down by as much as 30 to 40 percent. ‘These have become much cheaper. But at least they’ve get some rents’ he mused.”
“A growing number of landlords who rented out their homes are at risk of being unable to return deposits to tenants seeking to move out amid declining sales due to stringent curbs on property speculation. According to the Korea Housing and Urban Guarantee Corporation (HUG), which guarantees deposits paid by tenants, 142 defaults on deposits were reported during the first six months of this year, up from 33 during the same period of 2017.”
“The Korea Appraisal Board forecast in a recent report that jeonse and apartment prices across the nation will drop in the second half of this year along with an increase in empty homes, with the trend expected to be especially noticeable in the outskirts of Gyeonggi Province and other provincial areas. ‘Many people leveraged to purchase homes as an investment by getting loans without their own money, expecting profits from skyrocketing home prices over the last few years,’ said Park Won-gap of KB Bank.”
“The full impact of the end of the mining boom on WA’s property market has been revealed with new figures showing falls of up to 73 per cent in house and unit values over the past decade. In 2008 the median house price in Perth was almost on a par with that of a Sydney house. They are now close to $500,000 apart. CoreLogic found that the worst hit parts of the nation have been the northern and southern areas of outback WA, with house values falling 38.4 per cent and 34 per cent respectively.”
“It was even worse for their apartment markets, with the value of units in the State’s northern areas falling by 73.3 per cent. In the southern outback they fell by 65.7 per cent.”
“Thousands of properties are coming into the state’s possession not because they’re bogged down in debt, but simply because the people who inherit them are opting to give up the titles. According to real estate experts, more than 135,000 inheritances were disclaimed in 2017, because the beneficiaries were unable to pay the inheritance tax or they found the future financial demands of the property unbearable.”
“Recent data from Eurostat showed that Greece had the highest housing costs as a percentage of disposable income among the European Union’s member-states. ‘Property has become a burden,’ says Babis Haralambopoulos, a certified valuer, scientific consultant to Solum Property Solutions and former president of the Hellenic Valuation Institute. ‘Since the start of the crisis, residential properties have shed an average of 45 percent of their value.’”
Burke, VA Housing Prices Crater 13% YOY As Federal Workforce Reductions Ravage DC Area
https://www.movoto.com/burke-va/market-trends/
Which Federal workforce reductions are you talking about? Tons of retirements and many workers making a move to private sector for higher pay?
portlandia
if the dream isn’t alive there then
it’s over
bikes are over
top knots are over
etc
Top knots, you mean man buns? Total soyboy
I am pained to report that the Brady Bunch house is for sale. Can’t we declare this a National Historic Place or something?
Parts of the interior have a distinctly 1970s look. Check out the floral wallpaper and wood paneling!
http://www.latimes.com/business/realestate/hot-property/la-fi-hotprop-brady-bunch-20180718-story.html
https://www.elliman.com/california/11222-dilling-street-studio-city-qmsxabp
Gawd… can you imagine having a hangover that pink bedroom?
Yeah, we had wood paneling just like that in the SoCal house I grew up in.
But our house was nowhere near so big and otherwise fancy!
Does the house have toilets yet?
5 Things You Probably Never Knew About ‘The Brady Bunch’
By Yagana Shah
09/26/2014 07:44 am ET Updated Dec 06, 2017
3. The shared bathroom was incomplete.
It’s bad enough to imagine six siblings sharing one bathroom (especially with all the time Marcia probably spent looking in the mirror), but imagine one without a toilet. That’s right. In a strange piece of Brady trivia, it’s believed that a toilet was never actually seen in any of the bathroom scenes during the show’s run. Apparently, networks thoughts it was too crude to show a toilet on-air. In fact, it reportedly wasn’t until 1971 that a toilet flush was even heard on air.
https://www.huffingtonpost.com/2014/09/26/brady-bunch-trivia-_n_5846402.html
I would pay $2 million if I get to bulldoze it on National TV.
From the MN article:
‘It was a different story last year. The average price of an existing home sold in the Bloomington-Normal market and surrounding areas rose 4.4 percent, to $168,861 in 2017. This year, average prices are down slightly (around $163,590).’
‘2017’s rising prices were unusual and were not likely to continue in 2018, said Mike Doherty, an Illinois Farm Bureau economist who’s studied the Bloomington-Normal economy.’
“I’m skeptical because I’m seeing the decline in the labor force numbers. We’ve got fewer people in the labor force, and our employment numbers are not bouncing back to higher levels, so it’s kind of hard to imagine where would future gains in those housing prices come from,” Doherty said.’
‘That said, Doherty doubted that State Farm’s job cuts would have a significant negative impact on the overall housing market. “I would think it’ll soften it just a bit, but the net change of jobs is in the hundreds, so a pretty small percentage of our labor force. We’ve got 90,000 people working here in Bloomington-Normal,” he said.’
So again, it’s State Farm. Or it’s fewer Chinese buyers. Or the strong US dollar. Or hurricanes. It’s always some excuse but the result is the same.
‘Longtime Dallas real estate agent Barry Hoffer says he’s seeing more price cuts on houses that don’t quickly attract a buyer. ‘We’re not seeing the buyer frenzy that we did two years ago — multiple offers on most houses,’ said Hoffer. ‘You have a lot of factors coming together that are causing a little bit of slowdown, more days on market and the inventory building.’
In this article they blame fewer corporate relocations. What’s the common theme: post frenzy.
Il will fall hardest due to union goon supremacy
“Sales have slowed. The inventory of homes is growing. Longtime real estate brokers and market-watchers recognize this new normal as something approaching — well, normal.”
And this “new normal” means - what?
“And that, they say, would be a welcome return to something Portland hasn’t seen since before the housing bubble started to form back in the mid-2000s.”
Which is a fall off of sales. These ignorant real estate pukes who make their living off of commissions are supposidly welcoming a falloff of sales? Give me a break!
“The bottom hasn’t fallen out.”
Stay tuned.
“The sky isn’t falling or anything like that,’ said Chris Guinn, the co-owner of Dwell Realty in Northeast Portland. ‘Sellers have had a pretty good five, six, seven-year run. It’s almost overdue.’”
Brokers, get ready for some Interesting Times.
Huh, and I’ve been hearing for years that the “new normal” was double digit increases and putting in offers without seeing the house.
‘The full impact of the end of the mining boom on WA’s property market has been revealed with new figures showing falls of up to 73 per cent in house and unit values over the past decade. In 2008 the median house price in Perth was almost on a par with that of a Sydney house. They are now close to $500,000 apart.’
The good news is that Sydney is falling like a turd in a well. So that gap will narrow considerably.
But isn’t shack investing the bestest? Where else can you lose 75% of your yellen bucks and still watch it fall?
“Where else can you lose 75% of your yellen bucks and still watch it fall?”
Come visit me at my bank for a nice friendly chat.
“Where else can you lose 75% of your yellen bucks and still watch it fall?”
An intraday downturn is putting a bitcoin win streak at risk
By Aaron Hankin
Published: July 20, 2018 4:53 p.m. ET
As bitcoin gains momentum its share of the digital currency market is increasing
…
Even bitcoin’s brief recovery is due to more money coming out of China. I missed this article when it came out but it is saying what I did say a few weeks ago, Brazil can only produce so many soybeans so U.S. soybeans will be used but the Chinese tariffs will lead to higher costs for them:
https://www.bloomberg.com/news/articles/2018-07-05/wait-what-brazil-may-buy-up-to-1-million-tons-of-u-s-soybeans
‘The Korea Appraisal Board forecast in a recent report that jeonse and apartment prices across the nation will drop in the second half of this year along with an increase in empty homes, with the trend expected to be especially noticeable in the outskirts of Gyeonggi Province and other provincial areas.’
‘Many people leveraged to purchase homes as an investment by getting loans without their own money, expecting profits from skyrocketing home prices over the last few years’
You summed it up pretty well Park.
‘Apartment sales in Jakarta slumped in the first half of this year, Jones Lang LaSalle said. Developers only built 1,292 units between January and June this year, bringing the number of total unsold units to 144,000. In the same period last year, developers built 4,843 units, resulting in total stock of 134,536 units’
So where did the extra 9,000 come from?
BTW I don’t see much from Indonesia these days, but they’ve got a ginormous real estate bubble and have for years.
what do you think down payments would be if banks had to hold the mort for the full term?
10-15?
Prob still the traditional 20%.
On a related topic…if banks had to eat the bad loans, they also wouldn’t lend 300K to any college student, regardless of major.
😁
‘The housing market seems to have slowed to a crawl - what realtors call a ‘buyers market.’ If you bought a house in a resource-producing region like southwest Manitoba at the peak of the market, say 2013 or 14, you may lose money by selling now. On the other hand, if you try to get what you paid, the property can languish for a long time’
More likely, if you bought a shack in any year after 2013 you are fooked.
After 2013? No way!! I’d set the bar after 2015 for CA.
I’m referring to this town in Canada.
Realtors are liars.
‘According to real estate experts, more than 135,000 inheritances were disclaimed in 2017…‘Property has become a burden’
Babis is saying they gave it away.
Now *that’s* true price discovery.. zero or even negative.
From a linked article…Greeks apparently still not paying their taxes:
With about six days left to do so, “One in eight taxpayers has yet to file a tax statement”
http://www.ekathimerini.com/230934/article/ekathimerini/business/one-in-eight-taxpayers-has-yet-to-file-a-tax-statement
Geezuz, Greece - I haven’t heard that name in a long time. Guess “kick the can” seems to be working out, or not…
Times must be tough. Where are the Greek Casey Serins to take advantage of this?
From a Greek Law website:
“According to the provisions of the inheritance taxation law (as is in effect), the tax free amount has increased to €150.000 (instead of €95.000), while the remaining of the inheritance tax value (including real estate and personal assets) is taxed under a progressive tax scale from 1% to 10%.”
Only 150k Euros? Seems kinda light compared to the US $11M exemption. Greece allows a 12 month payout.
Tampa, FL Housing Prices Crater 11% YOY As Florida Housing Market Burns To The Ground
https://www.zillow.com/seminole-heights-tampa-fl/home-values/
*Select price from dropdown menu on first chart
From what I hear from MLOs there is still a shortage of homes for sale in Raleigh . However since an article , I think on this blog, stated that a large number of people buying homes in Raleigh were from CA, I think that may change soon, but it is not here yet.
Raleigh isn’t cheap and hasn’t been for years. A friend’s sister is bought there and went underwater back around 2008, had to borrow from family, etc., but she hung-on to it; likely looking better these days. Raleigh is part of the tech triangle, a silly valley on the east coast.
About 15-20 years ago, wasn’t the Raleigh suburb of Cary nicknamed “containment area for relocated Yankees”?
Grew up in Cary and can confirm, yes. And that was back when out-of-towners were in the minority. Nowadays, every small burg in Wake county is busting at the seams with new arrivals.
“A friend’s sister is bought there and went underwater back around 2008, had to borrow from family, etc., but she hung-on to it…”
I don’t get this donkey math, so help me out. Going “underwater” doesn’t change the payment - it’s paper gains and losses until you sell. So I’m calling BS on the borrowing from family BECAUSE she was underwater. She bought more house than she could afford, and it was the PAYMENTS that were the problem, not the phantom value changing.
If the house had appreciated several hundred thousand, that debt donkey would have been braying all the way to Mr. Banker’s office chair to sign up for the dotted-line special, to HELOC her way through life until the music stopped.
“I don’t get this donkey math, so help me out.”
I think she had an interest only loan and the principal payments started, and being upside-down there was no chance to refinance into another low monthly payment loan. Bottom line, she bought too much house. It was a large place too… much larger than what you’d get in California for the same price.
‘More homesellers are dropping prices, realizing after they fail to net an offer that their homes might not have appreciated in value as much as they expected.’
You gotta role with it.
‘Buyers, meanwhile, might have the luxury of taking some time to think — a big change from recent years, when many felt the only way to buy a house was to make an offer on sight’
Gosh, I hope no one paid too much in such an environment!
Where is Caitlyn now? In Portland, rolling with it?
The millennial regret about used house buying from CNBC article posted here a few times here recently says alot.
There are cracks in the wall of the lie…
Allen, TX Housing Prices Crater 9% YOY As Dallas Housing Demand Plummets
https://www.movoto.com/allen-tx/market-trends/
And now a word from your Betters.
OBAMA ATTACKS WEALTHY FOR BIG HOUSES BEFORE RETURNING TO HIS $8 MILLION MANSION
8:16 PM 07/19/2018
Benny Johnson
Obama then chided wealthy individuals for excess, saying, “There’s only so much you can eat. There’s only so big a house you can have. There’s only so many nice trips you can take (especially at tax payers expense Moochelle). I mean, it’s enough.”
“We’re going to have to worry about economics if we want to get democracy back on track,” Obama continued “We’re going to have to consider new ways of thinking about these problems, like a universal income, review of our workweek, how we retrain our young people (I thought we already did that with help from your Porkulus plan in your failed economy), how we make everybody an entrepreneur at some level.”
After the speech calling for rich people to get smaller houses, Obama traveled back to America and to his $8.1 million eight-bedroom, nine-and-a-half bathroom mansion in one of the wealthiest neighborhoods in the world.
http://dailycaller.com/2018/07/19/obama-house-rich/
Listen to your betters.
Florida is a nice state, I would like to visit there again this winter.
Sanibel/Captiva Islands are some of the last unique places in America…
“…how we make everybody an entrepreneur at some level.”
Wasn’t Miss Kitty on Gunsmoke an entrepreneur?
“New ways of thinking about these problems”
Or you could go back to the OLD ways of thinking about these problems, like, you know, kicking out cheap labor (skilled and unskilled) from other countries, making banks eat bad loans, letting house prices drop to where one breadwinner could support a family enough that someone can stay home with young children, ramping up entry-level jobs that don’t need college, and making state school tuition nearly free to train for jobs that do need college.
A platform I could get behind. The only thing I would add to that is a more generous tax credit for child care to bring more workers into the workforce and reduce the amount of welfare spending.
“I HAVE BEEN SELLING ON EBAY FOR 15+ YEARS AND HAVE NEVER SEEN SALES AS POOR AS THE LAST THREE MONTHS”
07-18-2018 03:11:35 PM
I have been selling on Ebay for over 15 years and have never seen sales as poor as the last three months. Since about the middle of April I have seen a steadily decrease in my sales, to the point where so far in July they are 75% down, from a year ago, same month. — snip —
A couple more interest rate increases ought to help… fed.
Interesting.
eBay has been crap for sellers the last few years - no protection from buyers who scam you with false returns and high fees. But a drop off in buyers would be a good sign that discretionary income is tightening up.
I’ve got some things I’m meaning to sell on eBay this year only because the audience is very specialized and scattered.
people still use ebay? we last used it in 2006. fees drove us away
“A growing number of landlords who rented out their homes are at risk of being unable to return deposits to tenants seeking to move out amid declining sales due to stringent curbs on property speculation. According to the Korea Housing and Urban Guarantee Corporation (HUG), which guarantees deposits paid by tenants, 142 defaults on deposits were reported during the first six months of this year, up from 33 during the same period of 2017.”
Thanks for your business, come again!
“Please forgive me Trump Supporters?” #WalkAway
https://www.youtube.com/watch?v=MhPbO7CoBF8
‘”I hope this campaign can be about people having the freedom to vote for who they want, talk to who they want, and to be safe to have their own opinions. I hope Trump supporters in particular will see this so I can begin to give my apologies for any part I may have played in your mistreatment.” Shannon.’
6:12
“People are allowed to have different opinions.”
+1 Leave the democrat’s plantation… have your own opinion.
3:04 - 3:11
Name calling is not an argument?
Calling someone racist and bigot is not an argument?
Inventory pop in the hood
Was 20 in April,now 34,
Par is 50
September will reveal
Potomac Falls, VA Housing Prices Crater 28% YOY As Fed Lay Offs Accelerate
https://www.movoto.com/potomac-falls-va/market-trends/
debt=money
loans or the FED creating digits on a computer adding to their balance sheet are the primary ways new money is added to our system.
If all the debt was paid down there would be no money.
Banks are desperate to create more home loans. They create an entry on a computer and boom the home seller gets some digital money and the buyer becomes a debt slave.
That’s because we don’t have the jobs in Bloomington-Normal to support that upper end of the market.
With secure living wage jobs vanishing in our neoliberal economic wonderland, most people won’t have jobs or income to support the middle and lower portions of the market, either. Which means prices are going to have to drop.
“Which means prices are going to have to drop.”
Too bad the feds “floor” is in the way.
When is it time to reduce the price of your listed-for-sale home?
Published 4:49 pm EDT, Friday, July 20, 2018
When a home has been on the market for a month or longer and has had few or no showings, it’s time to reduce the price.
When a home has been on the market for several months and has had 10 or more showings but no offers, it’s time to reduce the price.
When a home is on the market and a comparable property is listed for less, it’s time to reduce the price.
https://www.greenwichtime.com/
Bond defaults in China triggering liquidations of real estate “investments” abroad.
Oh dear….
https://www.scmp.com/business/companies/article/2156213/bond-default-triggers-sale-chinese-oligarchs-manhattan-pad-wan
But they paid cash….. Right?
Ooooph
Explaining the source of the cash to Chinese investigators might be a tad problematic for them.
When will Chinese bond defaults force sales of California real estate HODLings?
Can’t wait…
But you will have to, different Chinese buyers. One are the buyers living in China with corporate interests in China and San Diego buyers who are Chinese that have slipped out of China with cash and do not intend to return to China.
Not necessarily. Massive borrowing on an unrepayable scale and cash in hand often are directly linked. Absconding with the money to another country can help avoid pressure to ever repay what is owed back home.
When?
With all the enpty houses titled to Chinese buyers, you won’t have to wait long.
This is the best news I’ve heard all day! “It’s different this time, we are safe from another bubble, buy now or get priced out” says the realtor. Yup it sure is, but this time it won’t be the US defaulting on there interest only loans, it will be the foreign investors who drive up our market. Looking forward to watching them sell back to us at a loss (hopefully a big loss!).