August 9, 2018

Slipping In What’s Traditionally The Peak Season

A report from Seattle PI on Washington. “The Seattle condominium market continued to exhibit its buoyancy in July with increased inventory, fewer sales and rising prices. Seattle condo values rose year-over-year by 11.26% to $514,000. However, it was 2.6% lower than June and it also reflected the 3rd consecutive monthly decline of the citywide median sales price. Inventory of Seattle condo units listed for sale skyrocketed for the second month in a row, rising 104.6% to 403 units compared to a year ago. That’s also 8% more than were available last month. However, seller are starting to feel the effects with longer market times, fewer multiple offers and more instances of price reductions.”

“Even though buyers are starting to gain the advantage in the market place, they’re cooling off from pulling the trigger…at least in July. Condo sales, or pending sales transactions (listings with accepted offers), fell in July by 7.5% compared to a year ago and by a rather significant 22.4% from the prior month. That’s somewhat disconcerting given that listings had spiked 139% in June as well.”

From The Real Deal on Florida. “In Greater Downtown Miami, it’s a true buyer’s market. The area is facing a glut of luxury condo inventory, with about five years of excess supply, according to a new report from Condo Vultures Realty. Nearly 560 luxury units asking at least $1 million are on the market. During the first half of 2018, about eight high-end units sold each month in Greater Downtown Miami. That means that there are about 70 months of inventory.”

“Inventory is growing in Greater Downtown Miami. A year ago, there were 434 luxury units on the market in the area with about 8 units selling per month. That came out to 55.5 months of supply, or over four years of excess inventory, according to Peter Zalewski, whose firm created the report. Earlier this year, a Condo Vultures analysis found that there were about four years of luxury condo inventory countywide.”

From Bloomberg on New York. “It’s shaping up to be a cruel summer for Manhattan’s apartment landlords. Last month, the median rent fell 1.3 percent from a year earlier to $3,307, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the second straight July with a decline and came after a 2.8 percent year-over-year drop in June. Rents are slipping in what’s traditionally the peak season for apartment demand.”

“Landlords contending with an oversupply of apartments had to offer sweeteners, such as a month’s free rent or payment of broker fees, on 35 percent of new leases in July, up from 27 percent from a year earlier, the firms said. And renters weren’t exactly jumping at the chance to move. A total of 6,145 new agreements were signed in July, just 0.2 percent more than a year earlier.”

The Bloomington Pantagraph in Illinois. “After years of consistent expansion, Normal’s student apartment market appears to be slowing down, and those involved think it may be healthy despite the obvious impact on the local economy. ‘There are 431 new construction beds opening (this month) for the (Illinois State University) campus, and that has shifted the supply and demand,’ said Andy Netzer, general manager of Young America Realty, a Normal-based company that oversees hundreds of units near ISU. ‘Developers aren’t that hungry to build new. I don’t know that we can support more supply.’”

“Netzer’s assessment squares with what town officials are seeing: The next wave of construction off-campus has gone missing, with a couple notable exceptions, after years of new construction without a significant enrollment jump. Netzer said regardless of the slowdown, student housing is likely to continue to be the best use for many properties near campus.”

“‘The highest and best use for so much of the land up here is habitational,’ he said. ‘I’m not sure I could think of anything that’s turned into something that’s not housing.’”

The News and Observer in North Carolina. “The increasing number of apartments built in the Triangle is starting to put a dent into the region’s rising rents. The Triangle has seen some of the most intense construction of new apartment buildings in the U.S., according to RealPage. The Triangle — which for this report included Wake, Durham, Orange, Chatham and Johnston counties — has the sixth-highest percentage increase in apartment units in the country.”

“The number of apartments in the Triangle have increased by 25.1 percent (or 31,890 apartments) over the past eight years. The area trails only Charlotte, Austin, Nashville, Salt Lake City and San Antonio. Annual rent growth in the Triangle is now clocking in at 2.2 percent, a rate that has slowed from 4 to 5 percent in 2014-2015. The norm for the U.S., in comparison, is around 2.5 percent. How that translates to local renters is a smaller increase in rent when renewing a lease or generous concessions — discounts offered by apartments — to sign a new lease.”

“Throughout the Triangle you can now find newer apartments offering deals to renters. For example, at the Bullhouse apartments in downtown Durham — which was only 43 percent full when it sold in June, according to Colliers International — you can get one month of free rent. Bell West End, another apartment in Durham, is offering up to two months’ free rent, and, in Raleigh, the Link Apartments in Glenwood South is dangling one month free rent and an extra $500 to potential renters. The current occupancy rate across the Triangle stands at 94.4 percent.”

“The rate of construction doesn’t appear to be slowing down yet even as land prices and construction costs continue to rise. ‘There’s still quite a bit of activity ahead for Raleigh-Durham,’ said Greg Willett, chief economist for RealPage. ‘Another 4,123 apartments are under construction, and those additions will grow the stock by 2.6 percent over the next year and a half or so.’”

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Comment by Ben Jones
2018-08-09 07:38:19

‘Inventory of Seattle condo units listed for sale skyrocketed for the second month in a row, rising 104.6% to 403 units compared to a year ago. That’s also 8% more than were available last month. However, seller are starting to feel the effects with longer market times, fewer multiple offers and more instances of price reductions.’

Good morning crow breath trolls! More price reductions! Eat up.

‘pending sales transactions (listings with accepted offers), fell in July by 7.5% compared to a year ago and by a rather significant 22.4% from the prior month. That’s somewhat disconcerting given that listings had spiked 139% in June as well’

OK main stream media, where’s this supply coming from? After years of force feeding us this shortage myth, what do you have to say? Is it magic?

Comment by Professor 🐻
2018-08-09 07:41:26


Is this the new moniker for ‘crash’?

Comment by Mr. Banker
2018-08-09 07:58:09

“The Seattle condominium market continued to exhibit its buoyancy in July with increased inventory, fewer sales and rising prices.”


1. Increased inventory.

2. Fewer sales.

3. Rising prices.

Let’s take a close look at number 3, rising prices …

“Seattle condo values rose year-over-year by 11.26% to $514,000. However, …

Ooops, there’s that pesky “however” word …

“… it was 2.6% lower than June and it also reflected the 3rd consecutive monthly decline of the citywide median sales price.”


“Inventory of Seattle condo units listed for sale skyrocketed for the second month in a row, rising 104.6% to 403 units compared to a year ago.”

No doubt inventory “skyrocketed” due to its “buoyancy”. 😁

“That’s also 8% more than were available last month.”

Looks as if this buoyancy thingy just might possibly mirror the buoyancy suffered by the … the Titanic.

“However, seller are starting to feel the effects with longer market times, fewer multiple offers and more instances of price reductions.”

Hey, not to worry, what we are seeing here is a special sort of buoyancy, real estate buoyancy, in action.


Comment by crispy&cole
2018-08-09 09:03:04

Agree!! Sounds like desperation from the REIC to me

Comment by Anonymous
2018-08-09 07:43:07

Hmm, 104% increase in inventory? No shortage here. Look out below for falling prices!

Comment by Mafia Blocks
2018-08-09 08:48:24

Kirkland, WA Housing Prices Crater 6% YOY As As Tidal Wave Of Housing Inventory Slams Seattle Area

Comment by Ben Jones
2018-08-09 09:49:31

noun: outlier; plural noun: outliers

-a person or thing situated away or detached from the main body or system.
-”less accessible islands and outliers”

So now our new trolls “outlier” thing is in New York, Connecticut, Florida, Colorado, California and Washington.

Troll: I Picked the Wrong Week to Stop Sniffing Glue

Comment by Mafia Blocks
2018-08-09 10:22:43

I just checked in at SeattleClownHouse and they’re still pimping shortage.

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Comment by Professor 🐻
2018-08-09 10:26:08

Look forward to a record number of outliers as the Housing Bubble descends to its final resting place.

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Comment by BlueSkye
2018-08-09 10:48:00

Maybe they are simply liars.

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Comment by GuillotineRenovator
2018-08-09 09:47:27

A lot of the shills in Seattle have absolutely no clue about the market, and are newbies to the area. Back in 2000-2002, there were mass price reductions in rental rates, and lots of short sales in houses.

Comment by rms
2018-08-09 11:28:01

Remember when subprime lender WaMu went t!ts up?

Comment by Apartment 401
2018-08-09 12:03:04

More importantly, remember in 2008 when the short selling of bank and financial stocks was suspended.

Pigmen gonna pig.

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Comment by Boo Randy
2018-08-09 12:12:14

Speaking of Pigmen, the rise of those pesky nationalists and populists is making it harder for the oligarchy to proceed with its plans to turn the planet into its private looting preserve.

Comment by GuillotineRenovator
2018-08-09 13:07:27

“…making it harder for the oligarchy to proceed with its plans to turn the planet into its private looting preserve.”

It’s over - it already happened. There was a class war and the moneyed set won handily.

Comment by BlueSkye
2018-08-09 14:11:35

Their position is weak, held in place only by willing debt donkeys.

Comment by Boo Randy
2018-08-09 07:54:05

Already the psychology of the market is shifting towards caution. As it becomes increasingly evident that Housing Bubble 2.0 is bursting and the pipeline of Greater Fools shuts down to a trickle, the panic selling by over leveraged FBs is going to commence in earnest.

Comment by davidd
2018-08-09 07:54:41

Rents In The UK Will Rise 15% Over The Next Five Years, Survey Reveals

Rents are expected to soar by 15% in the UK over the next five years as fewer rental properties become available while demand from tenants rises, a survey has revealed.

“One consequence of this imbalance” the Royal Institution of Chartered Surveyors (Rics) said was that rents will rise by nearly 2% over the next 12 months.

Figures from the tenant referencing company HomeLet showed average rents in London rose 3.3% year-on-year in July to £1,615 while the average rent in the rest of the UK was up 1% to £777.

Rics said that small landlords have been selling up their properties following tax changes that made buy-to-let properties less lucrative, while more people are looking to rent, partly because they can’t afford to buy a home.

The Rics survey showed, for the eighth consecutive quarter, the number of rental properties on the market has fallen.

Comment by GuillotineRenovator
2018-08-09 09:48:35

“Rents are expected to soar…”

Shelter prices, for sale or rent, should never “soar.”

Comment by Boo Randy
2018-08-09 17:04:46


Comment by Anonymous
2018-08-09 10:13:38

If they say so.

Comment by Boo Randy
2018-08-09 10:16:12

Rents are expected to soar by 15% in the UK over the next five years as fewer rental properties become available while demand from tenants rises, a survey has revealed.

This is a survey of “experts,” i.e. paid touts and shills for the RE industry with a vested financial interest in convincing the muppets to get on that property ladder. These self-same “experts” have an inglorious track record when it comes to “no one could’ve seen it coming” prognostication of bursting asset bubbles.

Comment by octal77
2018-08-09 12:35:36

“…This is a survey of “experts,…”

I have always wondered how one becomes an “expert”.

Is there some sort of secret, by invitation only school that meets in some sort of clandestine location to pass along secrets that only the REIC intelligentsia know about?

I think anytime someone claims to be an “expert”, its time to turn around and run the other way.

Comment by Professor Bear
2018-08-09 08:00:12

Any thoughts on why government bond yields are so plungy these days?

So-called bond king Gross has been ‘wrong and wrong badly,’ his boss at Janus says
Published: Aug 9, 2018 10:45 a.m. ET
Bill Gross of Janus hasn’t lost faith in his fundamental view of bonds, Richard Weil says
The Bond King?
By Mark DeCambre

Is Bill Gross still the bond king? Maybe not. The quondam fixed-income royalty—at least by the recent reckoning of his current employer—got less than a ringing endorsement from his own boss, Janus Henderson CEO, Richard Weil, on Thursday.

And so he hasn’t lost faith in his fundamental view. But he’s been wrong and wrong badly in the short term. And he’s accountable and we’re accountable for that.
—Richard Weil, CEO at Janus Henderson CEO

The less-than-flattering statements about the 74-year market maven, made by Weil during an early morning interview on CNBC, comes as investors have pulled money out of Gross’s Janus Henderson Global Unconstrained Bond (JUCAX, +0.23%) for a fifth straight month, according to a Bloomberg News report. The report indicates that Gross’s signature fund has seen $200 million in redemptions just last month, rapidly shrinking the assets that he manages to $1.25 billion from $2.24 billion.

Oddly enough, to folks who have followed Gross, those losses emanate from bets he made on U.S. Treasurys (TMUBMUSD10Y, -0.80%) and German government bonds, known as bunds (TMBMKDE-10Y, -5.95%) expecting that the gap between the pair of sovereign debt rates would converge. They haven’t.

The interesting aspect of those investment plays is that it hews with previous wagers that have failed to come good for Gross. In 2015, Gross declared bunds, the “short of a lifetime.” He told CNBC that same year that “It’s just a question of when,” referring to that bund bet materializing.

Gross: German 10yr Bunds = The short of a lifetime. Better than the pound in 1993. Only question is Timing / ECB QE
— Janus Henderson U.S. (@JHIAdvisorsUS) April 21, 2015

Indeed, it is the “when” that has thus far confounded Gross, one of the more-respected investors on Wall Street and a frequent guest on Bloomberg, CNBC and other news outlets, proffering market pearls.

Gross has been featured prominently in MarketWatch as well. About three years ago, he predicted the end of the rip-roaring bull market. However, the current stock bull market is entering its 10th year and approaching a record not seen since 2000, with the Dow Jones Industrial Average (DJIA, +0.07%) although lagging behind its peers, up 3.5% so far in 2018, according to FactSet data as of Wednesday’s close. The S&P 500 index (SPX, +0.16%) is within 1% of eclipsing its Jan. 26 record, while the Nasdaq Composite (COMP, +0.39%) stands just 50 points shy of its all-time high.

That is not to say that Gross is entirely wrong—far from it. He makes the case that ultraloose monetary policies, which have artificially inflated asset values, have fostered an environment ripe for a downturn. That is certainly top of mind for investors as lofty stock values persist and the convergence of the so-called yield spread between short-term and long-term U.S. government debt, known as the yield curve, flashes yellow recession warnings.

But as famed economist John Maynard Keynes has said, “the market can remain irrational longer than you can remain solvent.”

Comment by oxide
2018-08-09 12:37:15

“Plungy?” What are you Buffy the Vampire Slayer?

Comment by Boo Randy
2018-08-09 08:16:28

The lemmings who paid top dollar for their shacks are going to be in for a rude awakening once the real cratering begins.

Comment by Mortgage Watch
2018-08-09 08:38:32

Hyannisport, MA Housing Prices Crater 11% YOY As Global Housing Bubble Implodes

Comment by taxpayers
2018-08-09 11:16:33

did the kennedys give HI-annus back to the Indians yet?

Comment by SWFL
2018-08-09 08:58:10

Speaking of falling prices, I’ve been looking at houses in SWFL on Zillow and see nothing but falling prices for over a year.

One house that I’ve been looking at has been on the market for about 480 days aside from a few remove/relist maneuvers, probably to make it look less desperate. During that time the price has been reduced about 8 times for a total of $70k less than the original list price. Either somebody priced it WAY too high initially or the market is dropping hard.

Definitely gives off that SWFL circa 2008 vibe to me.

Comment by Anonymous
2018-08-09 10:25:17

Has that house been sitting empty for 480 days? If so, it may be quite a yucky mess inside by now. Heat, humidity, and no AC?

Comment by SWFL
2018-08-09 11:24:35

I don’t know if it’s been empty the whole time but it has been for the majority of it. Who said anything about no AC? Basically every house there is climate controlled even when unoccupied, this one is as well. It’s in great shape.

Comment by BlueSkye
2018-08-09 10:56:00

Asking prices aren’t the market. Selling prices are.

Comment by SWFL
2018-08-09 11:29:20

And water is wet. And the skye is blue.

Generally a comparative market analysis is done to determine list prices if the seller hopes to be able to sell the home to a person who will need financing. In this case it was obviously priced too high to begin with but, looking at recent sales in the area, I can see why they started there. My point was that, based on what I see in this particular market, the “correction” is already well under way.

Comment by destinsm
2018-08-09 11:49:05

In NWFL here… been reading this blog off and on since 2004-2005 timeframe. Looks like we are seeing similar up here. Higher end houses reducing prices, not selling… Inventory building as well.

Crazy to me that we can go through two cycles of housing bubble mania in about a 15-20 year timeframe.

Also interested to see how similar the downfall does or doesn’t look compared to the 2005 go around.

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Comment by BlueSkye
2018-08-09 12:27:21

Generally a comparative market analysis is done…

More often than not people are thinking their house is worth way more than it is.

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Comment by SWFL
2018-08-09 13:30:18

Your first comment is that selling price determines value. Your second comment says that people think their houses are worth more than they really are.

In case you’ve had your head buried in the sand for the past few years, I’ll point out that MANY houses sold for more than list price in the hottest real estate markets. Which would mean that many people thought their house was worth LESS than it actually was.

Comment by BlueSkye
2018-08-09 14:19:06

Could be. Cost you a quarter of a million to find out that wasn’t the case for you though right? You are not alone and many more are about to join you.

Comment by BlueSkye
2018-08-09 15:15:09

And the skye is blue.

Thank you for noticing. I am indeed a lucky guy.

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Comment by crispy&cole
2018-08-09 09:00:57

“Inventory of Seattle condo units listed for sale skyrocketed for the second month in a row, rising 104.6%”

And cranes all over the city just waiting to add more condos…this ends well

Comment by b
2018-08-10 07:09:30

very few condo projects as they are hard to get of the ground from a financing project.

Most of the cranes are for luxury rentals -50% higher than the standard apartment.

Comment by Professor 🐻
2018-08-09 09:17:39

We Wanted Safer Banks. We Got More Inequality.
How regulations after the financial crisis, along with a heavy-handed Fed, have hurt the middle class.
By Joe Nocera
August 6, 2018, 3:00 AM PDT

Comment by Albuquerquedan
2018-08-09 11:12:25

Just confirming what I have been saying Obama’s “reforms” hurt growth. Meanwhile the Atlanta Fed with over a month’s data to use has predicted that growth this quarter will be 4.3 percent. And the changes to Dodd Frank and the resulting relaxation on the smaller banks of the expensive compliance are still working through the system.

Comment by aNYCdj
2018-08-09 15:44:23

Same here they bailed out AIG and not CIT which provided loans to small business, AR advances, and letters of credit to shipping company which collapsed think Dry Ships….

Plus after 2009-10 they were giving out disability to pretty much anyone over 50 who technically became unemployable due to age not illness or morbid obesity. they are still collecting today

Comment by OneAgainstMany
2018-08-09 18:40:09

The two prescriptions for this inequality, as stated by the author, is to accelerate the reduction of the Fed’s balance sheet and to normalize interest rates faster.

“The Fed needs to let interest rates normalize. Right now, what the Fed calls the neutral rate — the rate that drives their thinking — is about 2 percent. The previous neutral rate had been 5 percent. Think about that on an inflation-adjusted return. Back in the day when Treasury bills were 5 percent or higher, if I had my savings in that, I could make money in low-risk assets. If you have monetary policy where the rate is 2, that combined with the 2 percent inflation, and you will have a permanently impoverished middle class. My main call in my book is that the Fed needs to think about that.”

Comment by taxpayers
2018-08-09 11:17:58

a failed gov program? lets’ try again w HC

Comment by rms
2018-08-09 16:35:22

Joe Nocera also co-authored with Bethany McLean… good work too!

Comment by Mortgage Watch
2018-08-09 10:40:10

Albany, OR Housing Prices Crater 23% YOY As Housing Gamblers Panic

Comment by Fisherman
2018-08-09 10:56:23

Not housing per se, but on a semi-related note… how is everyone in FL driving a $30K+ car? Yes, “everyone” is a bit of an exaggeration, but it still doesn’t compute. There are so many high end crew-cab F150s and Silverados on the road that it boggles the mind. Those things are $$$, and I see lots of 20-somethings driving them while I hum along in my $2K cash-bought beater. That and new Wranglers everywhere. How can housing prices be historically unaffordable at the same time when seemingly everyone has an expensive car, boat, RV, or all three? It seems to me like the overall credit bubble is much bigger now than in 2005 and that the decline is going to reach more deeply into other aspects of the economy. Thoughts? Am I just perceiving this wrong?

Comment by Boo Randy
2018-08-09 11:21:44

US household debt had soared to a record $13 trillion by the end of 2017, with the trajectory accelerating. A big percentage of this was for education expenses and vehicles. It also reflects families and individuals not being able to make ends meet and going deeper into debt in our economic “recovery” that has benefited only the 1%.

Comment by OneAgainstMany
2018-08-09 11:31:25

Maybe the two are related. The wealth effect of rising home equity prompts people to go out and take on more debt, or do HELOC and cash-out refis. I see lots of advertisements by banks around me advertising this route (e.g. “What will you do with your equity? RV, boat, remodel?).

Comment by rms
2018-08-09 11:58:59

“…how is everyone in FL driving a $30K+ car?”

This is one of the best auto finance stories I’ve seen yet.

“A critical factor in leasing a car is called the residual value — how much it will be worth when the lease ends. For instance, the lender may figure that a car selling for $20,000 today will be worth $10,000 three years from now, and will calculate monthly payments to cover that loss in value.” —

“The US Auto Industry is about to Implode - Michael Alkin”

Comment by GuillotineRenovator
2018-08-09 15:07:46

That was from January, but unfortunately the meltdown has not yet come to materialize. Check out the used vehicle value index. It’s at its highest ever as prices are spiking this summer. There’s always next year…

Comment by taxpayers
2018-08-09 11:19:48

Pan American Silver Corp. (PAAS)

17.41+1.48 (+9.29%)

I asked the genius here about this

Comment by Boo Randy
2018-08-09 11:28:19

Picked up some Hecla Mining (HL) on the cheap yesterday. It’s up 10.45% so far this morning. Am probably going to pull the trigger on ABX and IAG as well at these prices.

Comment by GuillotineRenovator
2018-08-09 14:41:00

So Sammy’s a gambler…

Comment by Boo Randy
2018-08-09 17:02:08

When you have Keynesian fraudsters at the Fed and central banks debasing the currency into worthlessness, precious metals and precious metals miners seem like a prudent investment, especially at these beaten-down prices.

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Comment by oxide
2018-08-09 13:20:39

Not a genius but imo pm > pm stawx

Comment by Boo Randy
2018-08-09 12:20:04

“Affordability crisis” causing exodus of young people from London. Gosh, that “affordability” word just keeps cropping up in discussions of housing.

Comment by rms
2018-08-09 14:35:36

Be thankful that you’re not one of the UK’s subjects.

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