There’s A Normalization Occurring
A report from CBS News. “Home prices have enjoyed explosive growth in recent years, but that run-up may be nearing an end. Combined with several years of dramatic price increases, limited inventory and slow wage growth, that is pushing some buyers out of the market. Less demand means sellers can’t ask as much for their homes.”
“‘Demand was so high for so long, and the inventory was so low, that sellers raised prices because they could,’ said Nikolas Scoolis, an analyst with Meyers Research, a housing consultancy. ‘We may have reached an inflection point. Buyers may now be thinking this price feels expensive for what I’m getting, and sellers may have to reset their expectations.’”
“That’s begun to show up in listing prices, according to a survey by Zillow. The biggest changes occurred on the West Coast, including in Sacramento and Seattle. About 20 percent of listings in San Diego cut prices in June, up from 12 percent a year ago, the survey found. Higher-priced listings are cutting prices more often than lower-priced listings.”
The Colorado Springs Gazette. “A pilot’s dream. That’s the pitch for a new home for sale at Meadow Lake Airport in Falcon, east of Colorado Springs. The 3,600-square-foot ranch home is ‘handcrafted top to bottom,’ with three bedrooms (each with their private bathroom), a professional-grade kitchen, a finished oversized six-car garage — and an attached 3,200-square-foot hangar. The price? $1.2 million — down from an original asking price of $1.4 million. It’s the first million- dollar home among the 30 or so homes at the airport — and a rarity for the plains east of Colorado Springs.”
“In the past three years, there has been only one property in the area that sold for over a million dollars, and that included a lot of land — nearly 150 acres — says Bill Kemp, the Colorado Springs listing agent. Dave Elliott sold the lots to Payne and acknowledges he was surprised when Payne told him his plans. ‘I thought that was a little overpriced for our community, but I’m glad to see it,’ Elliott says.”
From Denverite in Colorado. “Right now a home in Denver only sits on the market for 22 days. There is hope, however, for those looking to get into this red-hot market as there have been some price reductions and some slight increases in the days of over market in the last year or so, according to Kerron Stokes, a real estate agent with Re/Max. ‘Markets always cycle, so how long that cycle’s going to last is hard to predict. If you look at the past couple of quarters, because of the rapid increase of home prices and as well as the first time interest rates going up, there’s a normalization occurring,’ said Stokes.”
From Staten Island Advance in New York. “While home sales are down across the city during the second quarter of 2018, Staten Island is bucking this trend with an uptick in both sales and prices, according to Real Estate Board of New York’s (REBNY) Residential Sales Report. This was the fourth consecutive quarter of year-over-year declines in New York City’s total residential sales and transactions, according to REBNY. In fact, the market has not experienced four quarters of consecutive year-over-year decreases since the third quarter of 2009 said REBNY.”
“Real estate professionals say the decrease in price in other boroughs is also due to prices in those markets reaching their peak. ‘We have watched housing costs in Manhattan, Brooklyn and Queens soar out of control over the past few years,’ said Connie Profaci, broker/owner of her self-titled New Dorp real estate agency. ‘The slowdown in the other boroughs indicates to me that those markets have reached their peak.’”
“Said Julie Porowski, a licensed salesperson with Salmon Real Estate in Castleton Corners: ‘Although sales may have slowed down for the other boroughs, Staten Island market it still very busy, as the statitics show. I think part of that can be attributed to other boroughs reaching a ‘tipping point’ with regards to affordability for desirable neighborhoods.’”
“Staten Island real estate professionals say they expect to see more rising sale prices throughout the end of the year. ‘I do not think in any way are we heading for a recession or bubble bursting,’ said Traci Cangiano, broker/owner of the Great Kills-based Cangiano Estates, Ltd.”
The Sun Sentinel in Florida. “Construction has begun of a single-family home subdivision in Lake Worth — something the city hasn’t seen since the 1990s. Developer Meritage Homes is creating the Lake Cove on 19th Avenue North, generally west of North A Street and north of 19th Avenue North. The subdivision will have 59, two-story homes ranging in size from 1,708 to 2,819 square feet, with prices starting in the mid-$300,000s.”
“Mark E. Stivers, Lake Worth’s deputy director for community sustainability, said the city has been aggressively working to ‘get rid of the vacant lots’ and see a revitalization, adding that it is ‘trying to improve the image so people see it as a place to invest.’”
‘The price? $1.2 million — down from an original asking price of $1.4 million…for those looking to get into this red-hot market as there have been some price reductions’
Denver, Colorado Springs?
Eeee-bola!
The air in Denver today is really bad. I’m at I-76 and Federal and you can’t see the foothills from here.
Come for the weed, stay for the asthma.
Air is bad in 1/4 of the country from the fires today.
My sister (in Denver) regularly sends similar reports.
Indian River Shores, FL Housing Prices Crater 12% YOY As Multi-Year Double Digit Declines Decimate Homeowners
https://www.movoto.com/indian-river-shores-fl/market-trends/
‘Less demand means sellers can’t ask as much for their homes.’
Shortage?
‘That’s begun to show up in listing prices, according to Zillow. The biggest changes occurred on the West Coast’
!
‘including in Sacramento and Seattle. About 20 percent of listings in San Diego cut prices in June’
Me confused though. These were the hottest of the hot. And the shortest of the shortage. How could things turn into gluts and mass price reductions so quickly?
It’s almost like things have been headed this way for a long time and the media just didn’t report it.
If they cant blame it on Trump and/or the Russians, its not a story to them.
‘In fact, the market has not experienced four quarters of consecutive year-over-year decreases since the third quarter of 2009′
There it is again. Oh dear…
I wonder when the eye-popping stock market will come back down to earth.
‘the city has been aggressively working to ‘get rid of the vacant lots’
If you’ve ever been out there you’d know what he’s talking about. It’s like a mosquito ranch.
And they will continue to stay vacant because there is plenty of oversupply woth ritirees dyong off faster than those wanting to move there. Bok Tower is great for a vosit though.
Oakton, VA Housing Prices Crater 9% YOY As Housing Glut Doubles Inventory In NoVA/DC Area
https://www.movoto.com/oakton-va/market-trends/
We had an adventure over the last couple of weeks where the elementary school we rented right next to and registered at months ago decided they didn’t have enough room for the newest kids and our daughter would have to be bussed across town. We found this out only days before the start of school.
This was unacceptable to my wife so we signed some sort of pre-lease form in the district of the other school she wanted and that was sufficient to get enrolled in that school and away we went. School started, life is going fine.
Problem is now my wife would rather buy a townhome next to the new school rather than wait for a couple of years in a rental as planned. And while there is a unit available that would work, it’s only available because the guy is hanging onto peak pricing even though he missed the window. She’s basically OK with overpaying to get what she wants and I’m gritting my teeth again after thinking I could relax for a while. The only upside is the location is perfect and it’s not a ton a money to lose. But I still hate to lose it when we could just rent a nicer place instead. The unit for sale was purchased for less than half the current asking price 5 years ago for about 160k. I’d prefer not to give more than about 200k for it but that’s going to require a year or so of pain for the seller I think.
Doesn’t sound like you married someone with the same financial views and goals. Bummer.
If I found myself married to someone who insisted on throwing away $200k-$300k, I’d likely divorce them. That’s just too much money to me.
I don’t like this kind of comment. Sure, 200k is a lot of money. But to me it’s not an amount to divorce over. These are two adults who have the right to live their lives the way they see fit
Sure, 200k is a lot of money. But to me it’s not an amount to divorce over.
That depends on how much money they have and are likely to earn in the future. It’s enough to bankrupt a lot of people. Should you stay married to someone willing to destroy your future in order to have what they want today? It quickly becomes about a lot more than just dollars.
Doesn’t sound like you married someone with the same financial views and goals.
True. She brought a lot more money to the table than I did though. If we lose 100k it was her money we lost.
Do you keep your respective assets in separate accounts?
If not, it’s your money, too.
+ a million
Is this in Folsom Carl?
Yes.
Can you drag it out by putting a shit ton of contingencies on the place, Mabye that will buy you some time and allow you to backout / renegotiate a month down the road and pray the RE bubble speeds up in your area. Seems like all the data is pointing in that direction. When I sold my townhome in 2016 it took almost 2 months for the damn thing to go into escrow because of contengincies, HOA crap, and realtors. Townhomes / condos are not my cup of tea but I am biased on bad experience.
My wife is ok with me pushing hard on price negotiations even though she is willing to overpay. For that reason I think it can take a long time if I want it to. If somebody else comes along and “snaps up” everything we are looking at hopefully she’ll see that as a sign to wait rather than getting desperate.
Im confused. Wouldnt your daughter still be one of the new kids at the school, hence bused across town if you get the TH?
At school #2 it wasn’t as crowded. We are still noobs but as long as we have the “intent to lease in the local area” paperwork we’re good.
“It’s not a ton a money to lose”
If you are already resigned to losing some money (just going by your numbers above), perhaps a compromise might be to consider enrolling your daughter in private/parochial school next year in lieu of buying the townhouse. It would take away the school district insecurity issue, and at least you would be (depending on your perspective) “investing in”/loosing money to a community your family will be a part of for a decade or more, vs. putting money in the pocket of the townhouse’s seller who is asking too much.
Not saying that’s what you should do, just a thought in case you were looking for alternatives to buying.
“It’s not a ton a money to lose”
Is your wife urging you to buy based on the theory that real estate always goes up? Why does she care so much about owning versus renting an even nicer place for the same cost?
Is your wife urging you to buy based on the theory that real estate always goes up?
All the usual reasons including that one. She listens to my ramblings but is skeptical because real estate in Shanghai really did go up for 20 years straight. This will be her first time to see things actually go down with her own eyes.
The USA isn’t Shanghai, and we just went through an epic bust where houses lost 60% of their value less than 10 years ago. Why is she ignoring that and trying to use Shanghai as an example? This does not pass the sniff test.
60% was in junk areas or middle of nowhere exurbs with ghost town unfinished developments. Nice hoods, close to urban centerd lost less than 1/2 that much. 20% was about the average for desirable areas. Hyperbole like yours is why most people roll their eyes at talk of another crash.
Bottom line, she hasn’t watched it happen herself so she’s skeptical. And she doesn’t live it and breathe it so she doesn’t care as much as some of us do. She’s got her money that she made in the Shanghai market and is relatively confident that if she continues to do what she has always done, it will always work out in the end. I would freak out if she was risking all her money but she’s not.
“60% was in junk areas or middle of nowhere exurbs with ghost town unfinished developments. Nice hoods, close to urban centerd lost less than 1/2 that much. 20% was about the average for desirable areas. Hyperbole like yours is why most people roll their eyes at talk of another crash.”
What a bunch of sugar-coated nonsense.
Hogwash indeed.
OC Median House Price
June 2007 $775,424
Jan 2009 $442,168
43% drop in a “desirable” area
CAR
Why does she care so much about owning versus renting an even nicer place for the same cost?
She thinks (correctly I believe) that because this is next to the best elementary school in town that this place will always be easy to rent even after we buy a house in a couple of years. In the meantime of course there’s the allure of setting it up the way she wants it and the payment would be ~$800 a month less than rent at the nicer place. Then there’s stuff like the mortgage interest deduction…
Don’t forget to factor in the $200k to $300k in losses. I suspect you’ve conveniently left that out.
Asking price is 359k. 100k loss is likely IMO. 200+k while possible is much less likely. I tell her all the time she will lose this kind of money if she insists on doing this. But this isn’t a huge amount of money to her, and she is very skeptical it could happen.
I guess if she’s wealthy, can just piss money away, and you’re not on the hook for any losses, go for it.
Stretch out an auto loan to 10 years so it appears to be affordable….. and it’s a nicer car too.
I’m not gonna give advice to Carl. I don’t think he’s *ahem* the type who’s susceptible to be being Suzanned.
“…being Suzanned.”
LOL. That’s exactly what’s going on here. The term “grow a pair” comes to mind.
Wise is the woman who can give advice without giving advice.
There are lines you can draw with your own money that you can’t really draw with someone else’s. And yes, we have his/hers accounts along with a joint account for monthly expenses.
It’s an interesting situation, Carl. My suspicion is that she doesn’t believe the losses will occur, but if/when they do, she’s going to be very upset just like all those other Chinese speculators we’re reading about. She’s speculating.
I don’t disagree. I put the brakes on as best I can since this seems to literally be the worst possible time to do it, but you can’t always stop somebody from doing what they think is best. And she wants the convenience of being right next to the school for the next 3 years. The rental stuff we pre-leased is a short drive away but too far to walk.
If she has so much money to piss away and wont bat and eye if she lost 200K… what are you doing in Sac town, when you could be in Cupertino? Better Schools for the child… just saying.
School,the hand that rocks the cradle
I think you should emphasize that there’s a lot of changes going on right now, and it’s best to way a bit (at least 6-12 months) before making a large commitment.
Changes include: Federal taxes (I don’t think the impact of SALT deductibility will really be felt until after next April 15, 2019), trade wars, China’s efforts to reduce capital outflows, and increasing mortgage rates, decreasing home sales (at least in SFBA, which will impact Sacramento)
Also, what is her tolerance for capital losses?
I think you should emphasize that there’s a lot of changes going on right now, and it’s best to way a bit (at least 6-12 months) before making a large commitment.
I think we’re in agreement on that…
Also, what is her tolerance for capital losses?
Much larger than mine. Which is the reason she doesn’t see this as a large commitment.
If she can truly handle losses (and not just say she can, but do it), then maybe… but some notes from me:
1. Chinese ideas of “best school” is typically based on test scores. I’m more interested in overall environment and actual learning, not just test results. So maybe it’s good to see how well you actually like the school (and I don’t put too much value in moms’ gossip about schools and teachers)
2. Around here, what schools are “hot” changes over time, and the Asian moms do seem to show synchronized behavior (based on fashion not fact). Also, changes in principals or school board can make a difference.
3. We’ve actually been pretty lucky with teachers, but not by plan. However, both my kids will be changing schools next year, and I’d like to have flexibility to look at other options then, so that’s another reason for me not to buy (even if prices weren’t totally ridiculous).
How do they pick who stays and who gets bussed to a different school? If I bought a house and my kid had to go to a different school because we were ‘new’ I’d be extremely upset!
That’s how they pick it. Whoever registers last. As soon as there is an opening they can come back…
The suggestion of enrolling the kid in private school sounds good to me.
Dallas, TX Housing Prices Crater 17% YOY As CA Housing Bust Interrupts Supply Of Uninformed Buyers
https://www.zillow.com/dallas-tx-75219/home-values/
*Select price from dropdown menu on first chart
Hey interesting thing about property taxes.
If all prices start to go down over the next year, they govt still needs all the $s that they budgeted. So do they just increase the mill rate?
Emeryville, CA Housing Prices Crater 11% YOY As Bay Area Housing Goes Off The Rails
https://www.movoto.com/emeryville-ca/market-trends/
“Understanding Property Taxes”
“Property taxes are based on a government taxing body’s opinion of a property’s worth, or assessed value. Unfortunately, up to 60 percent of all properties may be incorrectly assessed for taxable value by government taxing bodies, according to the National Taxpayers Union. For example, homes similar to yours might be selling for $200,000 but your town says your home is actually taxable at the $250,000 rate. Also, even when the assessed values of properties decline, municipalities may still need at least the same incoming revenue, meaning property tax rates could be increased.”
https://homeguides.sfgate.com/property-taxes-up-value-falls-47142.html
“… meaning property tax rates could be increased….”
It’s going to be reeeeeally interesting to see how this plays out here in SoCal Prop 13 land.
How else are those fat gov’t pensions going to be funded?
Case in point:
Before becoming LAPD chief, Moore retired, collected a $1.27-million payout, then was rehired
http://www.latimes.com/local/lanow/la-me-chief-drop-2018-08012-story.html
Me thinks giant increases in sales tax or other local taxes that don’t fall under the Prop 13 radar gun.
He id a “hero”. He deserves every penny.
My county thinks buildings can appreciate
Land yes ,structures
Just a quick shout-out to the author(s) of the Joshua Tree Firefox extension! It has made my HBB surfing much more pleasant.
So long as I remember to click through the posts using the buttons, instead of simply scrolling up and down, LOL.
And, being able to block users is a much-welcome feature.
That’s right. I encourage everyone to use my good friend’s creation.
I encourage everyone to use my good friend’s creation.
I’m not your good friend, but I appreciate the endorsement
“Blocking users” is for emotional snowflakes.
Or for people who don’t have time to waste on drivel.
Just a quick shout-out to the author(s) of the Joshua Tree Firefox extension!
Appreciate it! Please donate to Ben to show your appreciation, if you haven’t already — the extension is worthless without this blog!
Idaho Growth Defies Logic
Our air is dirty all summer due to forest fires. We have inversions all winter. We rank in the top 10 states for minimum wage jobs. Teacher pay is near the bottom rung of the ladder. Housing costs are so high there is no “affordable housing” for the worker bees. West Ada School District has annual bond elections to build new schools. ACHD needs more cash for roads. Jails and prisons are stuffed full. We don’t have enough cops. There is a shortage of courtrooms and judges. The library is sub-par based on population. Gasoline cost is always above the national average. The legislature is practically a one party body. We rank low in kids going on to college and graduating…etc. etc.
https://boiseguardian.com/2018/08/16/idaho-growth-defies-logic/
So, we sold our dump in the Bay Area and took our fat pensions to Bum F**k Hi-de-ho.
What, me worry?
Just checked in at the
SeattleClownHouse. Clown is still saying no inventory.
Whatta 🤡
Use wechat pay no sales taxes Monterrey park style
Tidbits of wisdom from my co-workers.
Hi everyone,
I wonder if anyone thinks the greater Phoenix area in a big bubble or not? The housing market doesn’t seem to cool down at all. I originally wanted to buy around spring 2017, but I think the price increase like irrationally, and it smells like a bubble. Therefore, I decided to wait.
This summer my apartment complex increase close to $100 for rent, and they said they will increase even more next year. For the past 5 years, the rent has increased more than 20%. I know I should not buy high, but it seems like either way I am losing a lot of money. The people around the area thinks that a lot of people migrating from CA and big companies are hiring. The housing price is supposed to go even higher.
Any thoughts are greatly appreciated!
Thanks.
Why buy it when you can rent it for half the monthly cost? Buy later after prices crater for 75% less.
Glendale, AZ Housing Prices Crater 5% YOY As Phoenix Housing Bust Expands
https://www.zillow.com/glendale-az-85305/home-values/
No idea what is happening in PHX. But asking that question here is like asking a group of lions if gazelles taste good. Not exactly an unbiased group.
“Not exactly an unbia$ed group.”
Yepper$, we’re idiot$ $avant$ for wi$hin’ to contribute$ our ca$h to “True Believer$” zealou$ real e$tate belief$ in grabbing $helters & comfort boxe$ @ whatever$ the demanding $eller$ reque$t to bee paid.
Hou$e$ price$ are lie … You & yer decade$ commitment$ to Mr. Banker$ Dotted line$ are freely yer bidne$$. Own yer deci$ion baby!
I don’t see the Phx bubble bursting at all right now…The bubble markets now bursting are NY, Seattle, Vancouver, Parts of SoCal that had massive chinese buyers….
Phoenix reported July YOY sales are up +7% YOY and inventory down -8%. Based on those numbers, I’d say the Phoenix bubble is still inflating.
It would be hard to find a market which was more swiftly and methodically eviscerated than the greater Phoenix area last bust. If you like buying at the top only to watch your abode decline in value by 60%, have at it.
Further, you are not doing a good job negotiating your rent. The area is so hopelessly overbuilt with apartments that you should have your pick at your price.
A cursory glance at Phoenix apt/housing on Craigslist after typing in “free” turned up the maximum number of results - 3,000. Kindly tell your landlords they are liars and you are moving if they don’t reduce your rent.
I live in North Phoenix.
The increase in housing costs has been stomach turning to say the least. Rents and purchase prices have achieved levels that would have been considered a joke just a year ago.
For example, we live in what equates to a starter home built in the early 1990’s. Less than 2k sqft, small lot, a narrow “2 car” garage that can barely fit a Ford Ranger extended cab(small truck), thin insulation, etc, etc. A floor plan identical to ours was just cosmetically flipped and sold for slightly over asking price at $305k. This is beyond the last bubble’s peak, including inflation.
This is what you get for $305k around here: An aging starter home. The noise of a freeway about 100 yards away(advertised as easy access by RE agents!). Views of the trailer park across the street. Gun shots and the resultant police helicopters after someone is murdered in “The Square” just to the West. What appears to be the densest concentration of title loan shops in the entire valley. Homeless people sleeping in the neighborhood park and just over the proximity walls. Drug deals and prostitute hook ups in the parking lot behind the dollar store. Tweakers stealing the irrigation piping from the neighborhood park. Petty crime galore. Below average schools.
All yours for ~$300k or >$1500 a month to rent. This is a neighborhood in Phoenix on the edge of the ghetto.
Rent is high but with the way housing has appreciated it still makes sense to me to continue renting. The tide does seem to be turning, though. I’m exaggerating but a neighborhood to the southeast has a ton of houses sitting for rent, mostly owned by corporate landlords. Inventory does seem to be building somewhat.
We plan on getting out of this place when our lease is up and shopping the apartment scene because they’ve come up like weeds here.
The beauty of the area is that there are so many apartment complexes everywhere that you can easily find something more than acceptable - and safe.
Thank you everyone for your input. I would wait for the market to calm down. It is hard to be level-headed when the market and everyone else keeps buying buying buying.
Here’s to hoping these reports are greatly inflated.
Bitcoin’s Annual Carbon Footprint Is Equal to One Million Transatlantic Flights
Erin Marquis
Today 10:40am
It turns out, it’s not just the Lamborghinis that Bitcoin enthusiasts seem to be obsessed with that are pumping CO2 into our atmosphere. Accruing the wealth itself is extremely wasteful, releasing 20 megatons of CO2 into the atmosphere a year—as much as the whole Republic of Ireland.
Bitcoin mining is incredibly resource-intensive by design, forcing Bitcoin miners to get creative about where they get their energy, including going to Canada. Put simply, mining works such that the more energy you burn, the faster your computer can commutate, so the more likely you are to “win” Bitcoins. A mining operation may only gain a dozen Bitcoins, but with the currency currently valued (as of this writing) at $6,422 each, a few is all you need to justify a huge demand of energy.
A report from Credit Suisse in January found that somewhere around 80 percent of miners’ winnings are invested back into electricity consumption, according to The Guardian.
Should Bitcoin reach $50,000 or each unit, or over five times its current rate, energy usage dedicated to mining would shoot up ten-fold. Should it ever hit $1.1 million, then it would theoretically be profitable to use all of the electricity currently generate on the planet to mine Bitcoin alone.
https://jalopnik.com/bitcoins-annual-carbon-footprint-is-equal-to-one-millio-1828460235
Wow! … another form of toxic Human$ hacking con$umption!
Filed under: Human beings are stupid.
From out of nowhere …
Venezuela Adds to Chaos With One of Biggest Currency Devaluations Ever - BloombergQuint
https://www.bloombergquint.com/global-economics/2018/08/19/venezuela-s-95-devaluation-adds-to-turmoil-after-drone-attack#gs.lOdWZYk
It is almost as if socialsm fails every time it’s tried or something. Nah that can’t be. Bernie sez it will be awesome.
“It is almost as if $ocialsm fails every time it’s tried”
$eems to work wonder$ for the x1 Billion$.of.$heep of Mega religou$ tribe$ doing “Bidne$$” on the $pinning earth.
Manhattan, NY Housing Prices Crater 5% YOY As List Prices Plunge 13% YOY
https://www.zillow.com/new-york-county-ny/home-values/
*Select price from dropdown menu on first chart
“Miami-Dade Police Lieutenant Arrested For Grand Theft, Insurance Fraud”
https://miami.cbslocal.com/2018/08/14/miami-dade-police-lieutenant-arrested-for-grand-theft-insurance-fraud/
And the final sentence of the article states….. drumroll….“Diaz de Villegas’ LinkedIn page says the lieutenant is also a Realtor.”
These people….. these people.