August 8, 2018

Buyers Want What They Want For A Steal

A report from the Wall Street Journal. “Western states experienced the sharpest decline for existing-home sales in the second quarter, a sign that rising prices, higher mortgage rates and, to a limited extent, the new tax law are weighing on pricier markets. Existing-home sales in the western region, including California, Washington and Arizona, declined 4.1% in the second quarter compared with the first quarter, according to the National Association of Realtors. The West, which has seen a particularly sharp run-up in prices in this six-year housing rebound, is bearing the brunt of the slowdown. ‘The West region has the fastest job-growing regions in the country, yet sales are coming down’ because prices have risen so much, said Lawrence Yun, chief economist at the NAR.”

The Sonoma Index Tribune in California. “Sonoma Valley home prices soared 24 percent this spring, an impressive jump fueled by a scarcity of houses on the market, agents said. Agents in the Valley attributed the double-digit increase to factors including a cluster of high-end sales and a dearth of homes for sale. Agent David Kerr said, ‘The east side of Sonoma is where a lot of the sales took place. We had a couple of sales in the $3 million range,’ driving up the average.”

“While agents said they weren’t concerned about a bubble, they conceded that the area is in a bit of a slowdown. ‘The market is good, but I wouldn’t say homes are selling like hotcakes,’ said agent Duane Margreiter. ‘We have seen price reductions on some properties – though some of that is a reflection of people shooting to get to the top of the market’ and listing homes at too-high prices, he said.”

“Agent Tracy Reynes said, ‘There are more price reductions across all price ranges in the Valley. This tells me price fatigue is starting to set in,’ referring to the near-constant escalation of prices for the last five or more years. ‘There are many more price reductions than I’m accustomed to seeing. That will help to dampen that extreme rise in prices moving forward,’ Reynes added.

“‘We are seeing a slowdown,’ Kerr acknowledged. ‘We are seeing buyers sit on the sidelines now. We are not seeing the same levels of activity we saw at the beginning of the year.’”

“Agent Carol Sebastiani summed up, ‘At some point, the market inevitably will correct, we just don’t know when. You can’t sustain the kind of momentum we have indefinitely.’ She added, ‘You have to be prepared for that inevitability at all times.’”

From Loudoun Now in Virginia. “The tug-of-war between supply and demand in Loudoun County’s hot housing market is getting even more heated. Husband-and-wife team Ryan and Megan Clegg, with Atoka Properties, said the market has created a stalemate between buyers and sellers. ‘In a lot of cases, sellers can get unrealistic about the value of their houses and buyers want what they want for a steal,’ Ryan Clegg said. ‘There are tons of buyers right now, but they’re not going to buy unless they feel like they’re getting value.’”

“The Cleggs have seen a few sellers reluctant to lower their price because they want a return on any upgrades they made to the home over the years. ‘We remind sellers that the market dictates your value. So you can have an appraisal that might help you set the price, but if you don’t get an offer you’re probably not at the right price,’ Megan Clegg said. ‘The line we get a bunch is ‘but we’re in the wealthiest county, surely they can pay this,’ Ryan Clegg said. ‘But buyers still want value.’”

“The prices now peaked at an all-time high have some in the industry having flashbacks to the market’s crash in 2008. But Jay Thomas, a Realtor with Keller Williams, describes the uptick in home prices—increasing between 4 and 6 percent annually—as pretty healthy. ‘There’s a lot of factors in play,’ Thomas said. ‘I just hope we stay healthy and not revert back to the bubble and burst again.’”

From Mansion Global on Florida. “Fueled by a surging condo market, Miami luxury home sales jumped in the second quarter, according to a report released Wednesday. Sellers of very fine luxury homes have adjusted prices ‘with a reduction ranging from 5% to 25%. That has stimulated pent-up demand,’ said Christopher Zoller of EWM Realty International.”




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40 Comments »

Comment by Ben Jones
2018-08-08 16:41:34

‘At some point, the market inevitably will correct, we just don’t know when. You can’t sustain the kind of momentum we have indefinitely.’ She added, ‘You have to be prepared for that inevitability at all times.’

Translation = all you bag holders are past fooked.

‘‘There are more price reductions across all price ranges in the Valley…There are many more price reductions than I’m accustomed to seeing’

Comment by Mr. Banker
2018-08-08 16:49:21

“‘At some point, the market inevitably will correct, we just don’t know when.’”

Which should be reason enough to stay out of it. But for some people it isn’t reason enough.

 
Comment by CHE
2018-08-09 12:48:46

Kept my mouth shut yesterday when I overheard two of my circa 2016 purchasing bagholder friends high-fiving and backslapping each other over their “equity” yesterday. They also are anticipating even more now that the city of LA is building out all this “infrastructure” for the Olympics next decade.

 
 
Comment by Mortgage Watch
2018-08-08 16:59:46

Santa Cruz, CA Housing Prices Crater 9% YOY As Prices Continue To Fall To Long Term Factor Of 2X Annual Household Income

https://www.zillow.com/santa-cruz-ca-95060/home-values/

*Select price from dropdown menu on first chart

Comment by BubblevilleCA
2018-08-08 18:03:41

Doesn’t surprise me. Almost 1m for most crapshack / cheaply flipped homes in a town that is open arms to the homeless, tweakers, and free loaders. Been here my whole life and it’s bad, my vehicle has been broke into many times as well as all my neighbors, needles found along our streets and in our yards, some people have reported human waste dumped on there sidewalks. Soon as this bubble pops I’m out and moving to a gated community or something that resembles an army barracks, very frustrating to live in SC and see all this happen while I’m raising my kids in a so called “paradise” ocean town. Most homes that have sold recently are either empty many months after or immediately rented, not seeing locals buying at least not any that know what’s really going on here…

Comment by Mr. Banker
2018-08-08 18:27:59

From Wikipedia …

“Santa Cruz consistently suffers the highest property crime rates per capita for medium and large-sized cities in the state of California,[59][60] in addition to some of the highest violent crime rates in the state of California for medium and large-sized cities.[60] Additionally, Santa Cruz suffers some of the highest rates of homelessness in the US, with 9,041 estimated homeless in Santa Cruz county in 2011, approximately 3.5% of the total county population.[61] with over 52% of homeless experiencing some form of mental illness, including clinical depression or PTSD and over 26% suffering unspecified mental illness.[61] Additionally, 38% of homeless surveyed in Santa Cruz county in 2011 experienced drug and/or alcohol dependency.[61] In recent years, citizen groups such as Take Back Santa Cruz, established in 2009, have lobbied city government and officials to address this public safety crisis that has gathered national attention.[62][63]

“In 1973, with the discovery of four bodies in Henry Cowell Redwoods State Park, then District Attorney Peter Chang mumbled a comment about “Murderville, USA.” It was picked up by a reporter and went to wire service as “Murder Capital of the World.”[64]“

 
Comment by Big V
2018-08-08 19:17:40

I think you should consider the possibility that it isn’t really a paradise.

Comment by BubblevilleCA
2018-08-08 20:58:44

No need for consideration, it’s a realization

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Comment by GuillotineRenovator
2018-08-08 22:43:31

Not only is it not a paradise, it never was. I remember spending time there in 1988 and it was a scary dump. Not sure what BubblevilleCA was expecting.

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Comment by BubblevilleCA
2018-08-08 18:14:24

Headline should read “Santa Cruz, CA Housing Prices Crater 9% YOY As Homeless deficate on residential properties while dumping used needles”

 
 
Comment by Ben Jones
2018-08-08 17:32:51

‘The line we get a bunch is ‘but we’re in the wealthiest county, surely they can pay this…But buyers still want value.’

Huh. No multiple offers. No love letters, no squirrel feeding. Looks like taxpayer missed the boat.

Comment by Mr. Banker
2018-08-08 17:44:17

Some trivia from Wikipedia …

“From 2017 to 2018, Loudoun County saw an increase of 18.5% of households experiencing homelessness, a 21% increase for single adults, and a 36% increase for families.”

Comment by Jessica
2018-08-09 05:23:16

Those would be Northern VA new Democrat voters “fleeing from violence in their home countries”.

Comment by oxide
2018-08-09 06:14:10

+1. Illegals, most of them.

Loudoun is full of mostly upper-class people who don’t want to admit that they are upper-class. They are the ones who employ illegals to mow the lawn, pick the lettuce, and take care of the kids, all while kvetching about a “living wage,” of course.

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Comment by Mortgage Watch
2018-08-08 17:45:56

Arlington, VA Housing Prices Crater 7% YOY As Senior Housing Analyst Advise A 60% Price Correction Ahead

https://www.movoto.com/arlington-va/market-trends/

 
Comment by Big V
2018-08-08 19:15:44

Wait. You mean the realtoRs are actually admitting it this time? There must be something wrong then.

 
Comment by Crispy&cole
2018-08-08 19:41:11

The fall is going to be interesting. The refi market is DEAD right now. Two more rate hikes and ballooning inventory, the purchase market is headed lower at a rapid pace

 
Comment by Ben Jones
2018-08-08 19:55:29

‘Sellers of very fine luxury homes have adjusted prices ‘with a reduction ranging from 5% to 25%’

And that’s on top of the 2015-16 and 17 drastic cuts Chris!

Comment by bradley fuller
2018-08-09 07:19:36

Dont worry be happy it is NOT a crash! ya right
Yes, Home Sales Are Slowing. No, This Isn’t a Crash.
By Jordan Weissmann
Aug 08, 20182:12 PM
https://slate.com/business/2018/08/home-sales-are-slowing-but-theyre-not-going-to-crash.html

 
 
Comment by Mortgage Watch
2018-08-08 20:09:49

Monterey, CA Housing Prices Crater 11% YOY As Housing Watcher Forecasts MultiYear Double Digit Declines

https://www.movoto.com/monterey-ca/market-trends/

 
Comment by 2banana
2018-08-08 20:36:17

Sign of the insanity I saw tonight.

A HGTV flip show that has a couple wanting to flip a house in Atlanta.

The wife? 6 months pregnant.

Comment by oxide
2018-08-09 06:21:23

This is par for the course for HGTV. They know full well that their target demographic is women age 19-44. These shows are basically the new romance novel. So it’s all about the weddings days and the prego. Lemme guess: they MUST finish the flip before the baby comes. It’s always like that.

That said, are they really still flipping in Atlanta? It’s a bad place to flip. There are very few quality houses left — most of them are true fixer-uppers which need $50K minimum. The numbers work for Tarek and Christina in California where houses are $500K, but not in $150K Atlanta. It’s almost not worth it.

Comment by rms
2018-08-09 08:16:49

“This is par for the course for HGTV. They know full well that their target demographic is women age 19-44. These shows are basically the new romance novel. So it’s all about the weddings days and the prego. Lemme guess: they MUST finish the flip before the baby comes. It’s always like that.”

LMFAO… so true, and don’t forget the happy Golden Retriever.

 
 
 
Comment by Professor 🐻
2018-08-09 03:39:31

Permabull-turned-bear stock market indicator:

The eight best stock-market indicators are all flashing warning lights — some yellow, others a shade or two closer to red — and the takeaway is that returns are looking pretty grim over the next decade, according to Mark Hulbert, a longtime MarketWatcher and founder of the Hulbert Financial Digest.

“Of course, it is impossible to say that there aren’t other indicators with even better long-term records than these eight,” Hulbert wrote in a piece for the Wall Street Journal. “But I’m not aware of any.”

One of those measures, in particular, has popped up on investor radars lately, and that’s the “Buffett indicator.” The Berkshire boss called it “the best single measure of where valuations stand at any given moment.” If historical patterns hold true, a thrashing could be in store for complacent investors.

Put simply, the indicator is the total market cap of all U.S. stocks relative to the country’s GDP. When it’s in the 70% to 80% range, it’s time to throw cash at the market. When it moves well above 100%, it’s time to lean toward risk-off.

Where’s it now? Approaching 140% and a new record high, according to Adem Tumerkan of Palisade Research. In our call of the day, he says that the indicator proves stocks are “extremely overvalued” and there’s “huge downside ahead.”

 
Comment by Boo Randy
2018-08-09 05:21:20

Oh dear….

https://www.scmp.com/business/companies/article/2158947/hong-kong-landowner-wharf-sees-core-profit-plunge-two-thirds-amid

Wharf Holdings, one of Hong Kong’s biggest landowners, reported a 66 per cent drop in core profit because of weak property sales in mainland China.

The conglomerate’s core profit came in at HK$2.53 billion (US$322.31 million) for the six months ended June 30, according to a filing to the Hong Kong stock exchange.

Even adjusting for the spin-off of Wharf Real Estate Investment Company (Wharf REIC) last November, the company’s core profit for the first half was down by 9 per cent compared to the same period in 2017.

Wharf reported HK$1.57 billion of core profit contributed by sales of properties at its development projects, down 32 per cent year on year, mainly due to falling home sales in mainland China.

 
Comment by Boo Randy
Comment by Professor 🐻
2018-08-09 06:32:57

“NEW YORK (Reuters) - U.S. mortgage application activity decreased to its lowest in 2-1/2 years last week as loan requests to refinance an existing home fell to their weakest level since December 2000, the Mortgage Bankers Association said on Wednesday.

If people aren’t refinancing, then how will they be able to tap their home equity wealth gains for cash spending needs?

 
 
Comment by Professor 🐻
2018-08-09 06:46:03

Many Americans ended up homeless during the real estate crisis 10 years ago— here’s where they are now
Viktoria Ney, Business Insider Deutschland
Aug. 7, 2018, 9:43 AM
Nearly 10 million homeowners in the US were faced with the foreclosure of their homes between 2006 and 2014.
Erin Siegal/Reuters
- After the real estate bubble burst in 2008, many families in the US found the cost of running their properties unmanageable.
- Between 2006 and 2014, nearly 10 million homeowners in America saw the foreclosure sale of their own homes.
- Many had to give up their property to lenders or to short-sell it as quickly as possible.

Comment by Mr. Banker
2018-08-09 07:21:26

“Despite being a financial advisor …”

He is a financial advisor.

“… he also fell prey to the real estate bubble:”

😁

“… the Richards family decided to join the same chic lifestyle trend everyone around them seemed to be following: they bought a beautiful Las Vegas property with a palm tree in front of the door —on credit.”

Bahahahahahahahahahaha.

“‘It’s easy to justify it when everyone else is doing the same thing,’ Richards said.”

What a moron.

 
Comment by rms
2018-08-09 08:28:00

Despite being a financial advisor, he also fell prey to the real estate bubble: the Richards family decided to join the same chic lifestyle trend everyone around them seemed to be following: they bought a beautiful Las Vegas property with a palm tree in front of the door — on credit. “It’s easy to justify it when everyone else is doing the same thing,” Richards said.

Is it Osmosis or the Fear of Missing Out?

 
 
Comment by Professor 🐻
2018-08-09 06:50:33

International buyers are dropping out of US housing market
Diana Olick
Published 12:06 PM ET Thu, 26 July 2018
Updated 2:42 PM ET Thu, 26 July 2018
- The dollar volume of U.S. home sales to international buyers between April 2017 to March 2018 dropped 21 percent compared with the previous 12-month period, according to the National Association of Realtors.
- Buyers from China, Canada, India, Mexico and the United Kingdom accounted for nearly half of the dollar volume of sales to international buyers.
- Sales to Canadian buyers fell by 45 percent.

Comment by Professor 🐻
2018-08-09 07:18:55

If the international buyers dump US housing en masse, who will set the bid?

Comment by Boo Randy
2018-08-09 08:19:12

Me. And the greedheads ain’t gonna like it.

 
 
 
Comment by aNYCdj
2018-08-09 07:51:59

55, unemployed and faking normal: One woman’s story of barely scraping by

https://www.youtube.com/watch?v=as6bS-7ZlgQ

Fifty-five, Unemployed, Faking Normal | Elizabeth White | TEDxVCU

https://www.youtube.com/watch?v=hFpQ5N_ttNQ

Comment by rms
2018-08-09 10:27:06

“One woman’s story of barely scraping by…”

“Fifty-five, Unemployed, Faking Normal”

She should have stayed at the bank. Opening the store with “ethnic stuff that you don’t need” was a really bad idea.

Comment by Carl Morris
2018-08-09 11:46:38

Let me guess…the bank job was crushing her soul and the worthless ethnic stuff was freeing it? Sounds like my ex.

 
Comment by rms
2018-08-09 12:27:19

No children or marriage, very progressive and highly liberal arts educated, I imagine this tall lean black woman doing the clothes and serious bling… at least a pound of it. Can you imagine her as your program manager?

 
 
 
Comment by Xens
2018-08-09 10:00:32

Amazing to see this blog chugging along like always. This place kept me sane back in 2004. I was thinking about moving back to the states after 8 years,and it looks like 2004 again, at least in Boston.

Has anyone learned a damn thing in the last 14 years?

Comment by Mafia Blocks
2018-08-09 10:24:37

We’ve schooled a few here and there.

 
Comment by Carl Morris
2018-08-09 11:47:48

Has anyone learned a damn thing in the last 14 years?

Yes, yes they have. “Buy the dips”. Thank the fed for that one.

 
 
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