August 17, 2018

More Sellers Have Been Lowering Their Prices

A report from ABC 7 News in California. “The Bay Area remains a difficult place where few can afford to buy a house. And that may be one of the reasons why existing home sales are starting to fall by double-digit percentage points in one location — the South Bay. The latest numbers from the Santa Clara County Association of Realtors indicates the number of homes on the market is rising. But the number of sales is on the decline. Rick Smtih is past president of the Association of Realtors.”

“‘We’re in the teens in terms of percentage of population that could actually afford to buy a property today at the median price, so affordability is very, very low,’ Smith says. Existing home sales fell 14.6 percent in one month’s time — from June to July this year. And down an even steeper 16.7 percent from July of last year to July of this year.”

“One year ago, in places such as Mountain View, home to Google, homes were selling for 22 percent over the asking price. The market has cooled a bit. ‘They’re still selling for over the asking price but only 11 percent more,’ said Smith. ‘It doesn’t sound like a lot, but on a $2 million average property, that’s a lot of money. In addition, the days on market, that’s actually more than doubled to about 18.’”

“‘I don’t expect a major correction in home prices and hopefully this slower price growth will actually give both incomes a bit of a chance to catch up so that we can repair some of this eroded affordability we’ve seen during the cycle,’ said Jordan Levine, senior economist at the California Association of Realtors.”

The Mercury News. “Could the South Bay’s super-heated real estate market finally be showing signs of cooling? More sellers in San Jose have been lowering their prices on Zillow recently, and rising interest rates have economists looking for a slow-down. Zillow found that prices in the San Jose region were cut on 9.5 percent of listings in June, up from just 7.2 percent a year ago. Sellers in the San Francisco and Oakland market cut prices at the same rate as last year.”

“Redfin CEO Glenn Kelman told investors last week that homes are staying on the market longer in hot cities such as San Jose, Portland and Seattle. Buyers ‘have finally had enough, at least for now,’ he said.”

From LA Downtown News. “One of Downtown’s largest developments has hit another milestone. Metropolis Tower II, a 40-story building with 514 condominiums, opened for residents on July 28. Construction wrapped earlier this year, according to developer Greenland USA, which is the U.S. branch of the Chinese firm Greenland. Prices go from $600,000 for a studio to $1,200,000 for a two-bedroom condo.”

“The first tower in the $1 billion mega-project, a 308-unit, 38-story building, opened in 2017. The development’s Hotel Indigo opened last year as well, but was put up for sale in January. Earlier this year, Greenland USA put the last tower, a 56-story skyscraper that will have 736 condos (it is still in construction), on the market.”

The Camarillo Acorn. “On a parcel of land off Ponderosa Drive, just north of the 101 Freeway, a parade of work trucks rumble by. The farmland between Las Posas Road and Central Avenue sits at the epicenter of a construction boom the likes of which the city hasn’t seen for over a decade. It’s home to four of the city’s seven housing developments now underway.”

“The five companies overseeing this wave of construction will bring 1,364 new houses, townhomes and apartments to Camarillo city limits by 2020. The city averages about 2.7 people per housing unit, so that’s nearly 3,700 residents, or a population increase of about 5 percent, who could be calling Camarillo home by the time the last of these projects is completed. ‘This is the busiest we’ve been with housing construction since the Great Recession,” said Joe Vacca, Camarillo’s director of community development.”

“Many of these homes are presold, largely to people who already live in Ventura County, often in Camarillo, according to some sales managers for the developments. But those who move from one part of Camarillo to another still leave open housing, which will allow the city to grow and could potentially strain roads, parks, schools and other infrastructure. Officials say they’ve expected this growth and have planned accordingly.”

“More construction could be coming as well. Some developments, like Walnut-based Shea Homes’ project at St. John’s Seminary, have approval but haven’t started building yet. Others, like ParkWest Townhomes near Pleasant Valley and Lewis roads, will begin construction in the coming weeks.”

“The city recently bought the former Stock lumberyard, which could provide up to 75 new affordable housing units, Moe said, but that won’t be enough to meet state requirements. Private developers would have to be willing to agree to build low-, very-low- and moderate-income units in exchange for concessions, or breaks on city requirements, such as the number of parking spots for recreational vehicles.”

“No developer has yet come forward to build a project where a majority of the units are designated as affordable housing, and David Moe, the city’s assistant director of community development said it’s unlikely one will because of the requirements surrounding the number of affordable units, current zoning and prevailing wage. But if someone does, space won’t be an issue, Vacca said: The city has room to grow for the next 10 to 15 years.”




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44 Comments »

Comment by Ben Jones
2018-08-17 10:03:59

‘One year ago, in places such as Mountain View, home to Google, homes were selling for 22 percent over the asking price. ‘They’re still selling for over the asking price but only 11 percent more’

So Rick does that mean the people who borrowed a year ago got whacked 11%?

I’m looking at this last link right now. Call me crazy but it looks like there are a whole lotta shacks and airboxes going up, pronto! Is this really California? I mean, we’ve been told thousands of times that they can’t build but one shack a year in California and here we see hundreds going up at once!

‘if someone does, space won’t be an issue’

Wa?

Comment by oxide
2018-08-17 10:31:34

None of those pix were shacks. They are all airboxes. That’s why space isn’t an issue. Not difficult to rack up the numbers of “homes” when you can build 800 of them in a city block.

Comment by Ben Jones
2018-08-17 10:51:03

Bzzz, wrong. First photo leads to this:

https://www.elacora.com/where-we-build/southern-california/springville/?utm_source=&utm_medium=email&utm_campaign=Springvile+elacora+

New Homes for Sale in Camarillo, CA

‘Introducing Springville in Camarillo – a family-friendly community with four distinct single-family attached and detached new home neighborhoods and a five-acre park.’

Comment by Mafia Blocks
2018-08-17 12:02:23

Camarillo CA Housing Prices Crater 8% YOY

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

The poor donks. The poor poor donks.

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Comment by oxide
2018-08-17 12:45:08

OK you’re right. The first pic is butt-ugly shacks. All the others are construction of ugly attached product. But if they expand, it might be less shack and more airbox.

Per Teh Goog el Mapo, there are a lot of buildable fields just south of Camarillo, but it’s outside the city limits.

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Comment by Ben Jones
2018-08-17 10:05:47

‘prices in the San Jose region were cut on 9.5 percent of listings in June, up from just 7.2 percent a year ago. Sellers in the San Francisco and Oakland market cut prices at the same rate as last year.’

The media wants you to believe this downturn started recently, but the numbers they keep putting out show it was at least a year ago.

Comment by Ben Jones
2018-08-17 12:33:56

“What is considered the South Bay area?”

“The county’s urbanized area is known locally as the South Bay or Santa Clara Valley. It includes the cities of Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga and Sunnyvale.”

‘One year ago, in places such as Mountain View, home to Google, homes were selling for 22 percent over the asking price. The market has cooled a bit. ‘They’re still selling for over the asking price but only 11 percent more’

‘Could the South Bay’s super-heated real estate market finally be showing signs of cooling? More sellers in San Jose have been lowering their prices on Zillow recently, and rising interest rates have economists looking for a slow-down. Zillow found that prices in the San Jose region were cut on 9.5 percent of listings in June, up from just 7.2 percent a year ago’

Now why would I cut my price if I can get over asking? Somebody’s a lion.

And note the Mercury News didn’t go into any detail about how much prices were being slashed.

 
 
Comment by Anonymous
Comment by Mr. Banker
2018-08-17 10:23:28

“Efforts are underway to find a No. 2 executive to help take some of the pressure off Mr. Musk, people briefed on the search said.”

I nominate Casey Serin (aka Casey Constantine).

😁

Comment by steadykat
2018-08-17 11:02:16

Serin was a lightweight.

Remember this guy?
https://activerain.com/blogsview/393419/daniel-sadek—founder-of–quick-loan-funding—subprime-lending-

Sadek and his partner bragged that they generated more than $500 million in loans per week. He owned a stable of expensive cars along with multiple mansions and dated a daytime soap actress who starred in Redline, a very forgettable movie that he produced.

More:
https://www.sfgate.com/movies/article/Redline-actor-wrecked-a-Ferrari-but-the-real-2602248.php

Comment by octal77
2018-08-17 11:27:44

From the article:

“…In the Wells Fargo lawsuit… “…accused Sadek…”

Crooks #1 I would like you to meet Crook #2.

I am sure you all have much in common.

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Comment by Boo Randy
2018-08-17 13:52:26

Crooks #1 I would like you to meet Crook #2.

I am sure you all have much in common.

They can defraud with impunity, thanks to our corrupt or criminally negligent regulators, enforcers, and judiciary.

 
 
 
 
 
Comment by Ben Jones
2018-08-17 10:23:09

‘The first tower in the $1 billion mega-project, a 308-unit, 38-story building, opened in 2017. The development’s Hotel Indigo opened last year as well, but was put up for sale in January. Earlier this year, Greenland USA put the last tower, a 56-story skyscraper that will have 736 condos (it is still in construction), on the market’

Are these Chinese out of their cotton pickin’ minds? Why they’re leaving hundreds of million$ in sweet equity on the table! Could it be these LA airboxes were a bad investment? They should be able to rent them, right?

Comment by Anonymous
2018-08-17 11:13:00

Regarding that article, my question is: who the hell would pay 600k to live in a studio in downtown LA ?! Or maybe this is just money laundering in the sky, and there’s no real intention for anyone to live there.

Comment by octal77
2018-08-17 11:34:42

“…who the hell would pay 600k to live in a studio in downtown LA ?..”

So you can mingle with homeless people shooting up and pooping on the sidewalk outside your ground level door?

Comment by hunkydory
2018-08-17 14:53:53

I smell (yuk!) business opportunity - a chain of shoot n’ poop places covering the land, like so many, uh, well you get the idea.

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Comment by tresho
2018-08-17 18:12:43

Shoot N Poop®

 
 
 
 
Comment by oxide
2018-08-17 12:54:51

I’m just happy that they seem satisfied with buying landless airboxes in a single transaction. Imagine what $600K would buy in flyover. You could probably buy 10 acres, truck in 3-4 new pre-fab houses, fly in the family to visa overstay, and create a safehouse homestead colony.

Comment by ipfreely
2018-08-17 15:01:58

But you could never surf and ski on the same day if you did that. :(

 
 
Comment by Boo Randy
2018-08-17 13:55:07

Spooked Chinese Greater Fools are walking away from their shack deals even though it’s costing them large deposits.

https://www.scmp.com/business/article/2160103/homebuyers-getting-cold-feet-hong-kongs-property-market-amid-growing

 
 
Comment by tresho
2018-08-17 11:21:14

Even worse than sellers lowering prices are would-be buyers forfeiting hefty deposits after having second thoughts. From Hong Kong:
Would-be homebuyers forfeit deposits to escape “deals”

 
Comment by Dave
2018-08-17 11:25:42

Chinese tech stocks got hammered today.

“Some market experts say investors got carried away and ignored warnings that they were paying far more than Chinese internet companies’ earnings justified.

Mohammed Apabhai, head of Asia trading strategy at Citigroup, likens the exuberance for tech stocks to the Looney Tunes cartoons in which Wile E. Coyote chases Road Runner over a cliff.

“You know when he goes over the edge and he keeps pedaling before he drops?” Apabhai said. “It’s like that.”

He could’ve been talking about any asset at this point.

Comment by Ben Jones
2018-08-17 12:09:40

‘likens the exuberance for tech stocks to the Looney Tunes cartoons’

Hey, that’s my bit!

 
 
Comment by tresho
2018-08-17 11:46:53

Sun Hung Kai, Hong Kong’s biggest property developer, has cut the prices of homes at one of its projects by as much as 10 per cent, the second time in less than a month it has taken such action in the latest sign that the property market may be cooling down…(US$3,044) per square foot after discounts

Comment by Boo Randy
2018-08-17 13:50:31

So each “investor” who bought before the discount just saw the value of their shack drop 10%. Bummer.

These latest knife catchers will be bragging about their sweet deal at parties, until Sun Hung Kai whacks another 10% off. And another….

 
 
Comment by Mortgage Watch
2018-08-17 11:47:27

Tarzana, CA Housing Prices Crater 11% YOY As Technology Accelerates Los Angeles Area Housing Bust

https://www.zillow.com/tarzana-los-angeles-ca/home-values/

*Select price from dropdown menu on first chart

 
Comment by Dave
2018-08-17 12:19:15

You forgot “It’s Friday desk clearing for this blogger”!

Comment by oxide
2018-08-17 12:55:54

Heh, he’s probably got two more posts queued up for today. I’m having trouble keeping up.

Comment by Mafia Blocks
2018-08-17 13:37:28

Mmmyeah….all these HBB posts kinda sucks huh!

 
 
Comment by Sean
2018-08-17 13:45:42

I’m actually liking these “twoadays”, unlike my old football practices in my youth.

 
 
Comment by Mortgage Watch
2018-08-17 13:41:01

Flagler Beach, FL Housing Prices Crater 24% YOY As Retirement/Vacation Property Market Collapses

https://www.movoto.com/flagler-beach-fl/market-trends/

 
Comment by Boo Randy
2018-08-17 13:42:25

“The city recently bought the former Stock lumberyard, which could provide up to 75 new affordable housing units, Moe said, but that won’t be enough to meet state requirements.

Wait a minute, states impose requirements for affordable housing?

Why not just end the criminal private banking cartel called the Federal Reserve that made housing so unaffordable in the first place?

 
Comment by Professor Bear
2018-08-17 13:47:51

“More sellers have been lowering their prices…”

It seems like there are more and more outliers every day!

 
Comment by Boo Randy
2018-08-17 14:13:26

Don’t become a knife-catcher cautionary tale because you trusted Suzanne’s research or the “buy” rating of some financial sector shill. Just don’t.

https://markets.businessinsider.com/news/stocks/moviepass-owner-hmny-stock-price-robinhood-investors-creamed-during-meltdown-2018-8-1027467912

Comment by Mr. Banker
2018-08-17 14:37:51

Here’s what the chart of HMNY looks like …

https://finviz.com/quote.ashx?t=Hmny

Mr. Banker says: HELOC all that home equity and BUY THE DIP!

Comment by hwy50ina49dodge
2018-08-17 14:56:52

Buttered organic popcorn + movie & 2500:1 rever$e $tock $plit

Hey, it’s Friday Knight!

 
 
Comment by Boo Randy
2018-08-17 14:53:44

Business Insider’s Nathan McAlone spoke with a retiree who described losing more than $100,000 betting on Helios when analysts on E-Trade rated the stock a buy. E-Trade has not discontinued the stock.

It would take a heart of stone to read this bagholder’s tale of woe without laughing.

You’d have to be a special kind of stupid to make an investment decision based on “analysts at E*Trade rated the stock a buy.” If there’s one thing the muppets should’ve learned by now, these “buy” ratings are intended to separate fools from their money in Wall Street’s rigged casino.

Stupidity should hurt.

Comment by OneAgainstMany
2018-08-17 19:48:40

I suppose in some way these stock investors who invested in MoviePass subsidized my 10+ movies a month. MoviePass: it was good while it lasted. I actually really do love what they tried to do, but they didn’t figure out how to throttle the super-users fast enough and couldn’t turn the corner.

 
 
 
Comment by azdude
2018-08-17 14:43:51

looks like they finally started to finish that monstosity of a building over by the chandler mall. Sat like a skeleten for years after the last bust. You can see it driving by on the 202. I think it was going to be condos originally. looks like they are almost done on it now.

 
Comment by Boo Randy
2018-08-17 14:59:09

Seems like really bad timing to be maxing out the house ATM when prices are falling.

https://wolfstreet.com/2018/08/17/canada-house-price-bubble-use-of-home-as-atm/

Comment by Carl Morris
2018-08-17 15:55:09

Unless your plan was to sell it to the bank all along.

 
 
Comment by 2banana
2018-08-17 15:40:11

$600,000 mortgage + $70k in other debts + $600 car payment on a $90k per year combined income????

+++++

Slain Colorado mom had painted happy picture of married life
Yahoo - 8/17/2018

The couple had a combined income of $90,000 in 2014. But they also had tens of thousands of dollars in credit card debt, along with some student loans and medical bills — for a total of $70,000 in unsecured claims on top of a sizable mortgage.

They said in the filing that their nearly $3,000 mortgage and $600 in monthly car payments formed the bulk of their $4,900 in monthly expenses.

Comment by GuillotineRenovator
2018-08-17 19:42:34

Debt makes people miserable.

 
Comment by whirlyite
2018-08-18 08:28:13

The husband sounds like a malignant narcissist to me (based on personal experience, unfortunately). Things never end well.

 
 
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