The Market Is Saturated And They’ll Sit Empty Awhile
The Baton Rouge Business Report in Louisiana. “While the Baton Rouge area saw home sales rise 3.5% last month, inventory is growing and the pace of slowing, according to the Greater Baton Rouge Association of Realtors. The 4,198 homes on the market last month represented a 16.8% increase over the same month last year, while the average days on market increased 26% from last June to 63 days. Meanwhile, the month’s supply of inventory—or the amount of time it would take to sell all of the homes on the market at the current sales pace—increased 21.1% to 4.6 months, up from 3.8 last July.”
“‘Housing price bubble chatter has increased this summer, as market observers attempt to predict the next residential real estate shift,’ reads the July housing report. ‘It is too early to predict a change from higher prices and lower inventory, but the common markers that caused the last housing cooldown are present.’”
The Victoria Advocate in Texas. “Homes priced around $200,000 and under are selling quickly in Victoria, while more expensive homes sit empty, housing experts said. Sales for existing homes are 4 percent higher than this time last year, while sales on new single-family homes are down 56 percent compared to last year in Victoria County, said Jim Gaines, chief economist of the Real Estate Center at Texas A&M University.”
“‘Houses $300,000 and higher — the market is saturated with those, and sometimes they’ll sit empty awhile because there’s so many of them,’ he said. ‘That’s kind of what’s happening in Victoria at the local level. We’re hearing that same story all over the state.’”
“Most of the homes selling are priced from $150,000 to $220,000, said homebuilder David Hurst. A few years before the hurricane, Hurst sold plenty of new-build homes priced more than $400,000, he said. ‘There’s not a whole lot we can do right now because there’s so many houses out there vacant that have been for sale for a year — that’s in the higher-priced houses, $400,000 and up,’ he said.”
The San Francisco Chronicle in California. “While the next crop of luxury condo towers like 160 Folsom, which developer Tishman Speyer has branded as Mira, continue to rise in the fast-growing eastern end of South of Market, other approved housing projects across the city, like 2675 Folsom St., are stalled and on the market because of soaring construction costs and fees, developers and other industry sources say.”
“The growing number of developers seeking to cash out rather than risk losing money on building is fueling concerns that residential production will start to decline even as the Bay Area’s housing crisis worsens. ‘Most entitled projects in the city are for sale right now — either publicly or privately,’ said Bill Witte, president of developer Related California, which has 1,300 units under construction in the city. ‘We’re at that point in the cycle.’”
“There are 6,750 units under construction in the city, about 1,000 units more than a year ago. While that is well above the historic average, there are another 15,000 units that have been approved by planning officials but have not started construction. Projects containing 6,690 of those units have secured all the permits needed to start construction but have not broken ground, Planning Department documents show.”
“Chris Foley, a real estate investor and partner in brokerage firm Polaris Pacific, said that in the current construction environment a condominium developer needs to sell units for at least $1,400 a square foot for a wood-frame building and $1,800 a square for a taller, steel-frame midrise or high-rise. Even in a city where more than 80 percent of the population is priced out of the market, those numbers are a stretch, Foley said.”
“‘The demand for condos is there, but construction costs are killing the industry,’ he said. ‘Above $1,400 a square foot is a tough sell unless it’s an unusually good location.’”
“That’s the case with three buildings rising near the new Transbay Transit Center: Mira, the Avery at 400 Folsom St., and One Steuart Lane, which overlooks the Embarcadero at the foot of Howard Street. Unless there is a remarkable drop in the market, units in all three of those buildings will probably have an average sales price of more than $2,000 a square foot and penthouses could fetch $3,000 or even $4,000 a square foot. A 3,326-square-foot penthouse at 181 Fremont St., which opened last spring, recently sold for $15 million, or $4,500 a square foot.”
‘Houses $300,000 and higher — the market is saturated with those, and sometimes they’ll sit empty awhile because there’s so many of them,’ he said. ‘That’s kind of what’s happening in Victoria at the local level. We’re hearing that same story all over the state.’
Oh dear Jim, why I haven’t heard you mention this in the numerous interviews you’ve done with larger newspapers.
‘The growing number of developers seeking to cash out rather than risk losing money on building is fueling concerns that residential production will start to decline even as the Bay Area’s housing crisis worsens. ‘Most entitled projects in the city are for sale right now — either publicly or privately,’ said Bill Witte, president of developer Related California, which has 1,300 units under construction in the city. ‘We’re at that point in the cycle.’
Double dear!! Good try with the crisis/shortage slant Chronicle.
The cycle in Ca from concept to completion must be 3+ years.
Maybe 4
eeeeebola
Nothing another 10% gain in the s&p over the next 3 months can’t absorb. Stocks to the moon today. This corrupt system must inflate at any cost.
Thee long lever$ puller$ $till unpacking from $wizzler $tirring drink$ on the playground$ $ands … Ha$ “wage labor$” day pa$$ed bye? …
‘Comment by foorbarbaz’
Hey aren’t you Outlier Man? Looks like the whole state of Texas is in deep cow stuff. That’s some outlier! Did you know Houston builds more houses than California? Eat your crow Outlier Man!
Ooooo, snap—called out!
Frisco, TX Housing Prices Crater 9% YOY As Mortgage Fraud Saturates Dallas-Fort Worth Area
https://www.zillow.com/frisco-tx-75034/home-values/
….. and don’t forget to look at price on dropdown menu.
I’ve got one for you. Burbank 91501 down 12% in one month.
That’s even with median house size being 100 sq ft bigger on average and a 1% drop in square footage on price.
Look at all the new listings:
https://www.movoto.com/burbank-ca/@34.29742007504825,-118.24610649414063,34.071691128318854,-118.53175102539063,11/
Burbank, CA Price Reduced Homes for Sale
1 - 50 of 561 Results
https://www.movoto.com/burbank-ca/reduced-30/@34.32963880947149,-118.23064840673828,34.10399622746601,-118.51629293798828,11/
Something like 10%.
10805 W Stallion Ranch Rd
Sunland, CA 91040
For Sale
$2,650,000
Price cut: -$240,000 (8/15)
8/15/2018 Price change $2,650,000 -8.3% $440
8/14/2018 Price change $2,890,000 -3% $480
4/12/2018 Listed for sale $2,980,000 47.2% $495
7/15/2013 Sold $2,025,000 -3.5% $337
8/4/2012 Price change $2,099,000 -6.7% $349
6/5/2012 Listed for sale $2,249,000 7.1% $374
5/3/2012 Listing removed $2,099,000 – $349
11/11/2011 Price change $2,099,000 -6.7% $349
6/5/2011 Price change $2,249,000 -4.3% $374
2/25/2011 Listed for sale $2,349,000 – $390
https://www.zillow.com/homedetails/10805-W-Stallion-Ranch-Rd-Sunland-CA-91040/95544415_zpid/
Yep.. seeing this too in LA area.
The listing prices still look high, but if you dig in to the price history, it’s clear the slashing has begun.
My friends that bought in 2016 are fooked.
‘The growing number of developers seeking to cash out rather than risk losing money on building is fueling concerns that residential production will start to decline even as the Bay Area’s housing crisis worsens.”
Like a bunch of “luxury” condos would have done anything to help with the Bay Area’s housing crisis in the first place.
But it is the proverbial canary in the coal mine. If big scale developers can’t find a way for SF construction to pencil out, good luck with that.
They’re lying. The truth is they have loads of empty housing inventory and not a buyer in sight.
‘We’re at that point in the cycle.’
Is that the point where you’re fooked?
North Bethesda, MD Housing Market Craters 19% YOY As Public Views Housing As ‘Toxic’
https://www.movoto.com/north-bethesda-md/market-trends/
While the Baton Rouge area saw home sales rise 3.5% last month, inventory is growing and the pace of slowing, according to the Greater Baton Rouge Association of
Grammar optional
Realtors are liars.
…. and every closing a crime scene.
“The growing number of developers seeking to cash out rather than risk losing money on building is fueling concerns that residential production will start to decline even as the Bay Area’s housing crisis worsens.”
It’s like New York City. If we could built 10 San Franciscos we could fill them — but not at that price point.
https://larrylittlefield.wordpress.com/2014/11/23/the-new-urban-crisis/
So why can’t we?
https://larrylittlefield.wordpress.com/2014/12/06/can-the-urban-archipelago-be-recreated/
This whole mess is the result of a higher share of the latest generation wanting to live in walkable, transit-served areas rather than in places you have to drive everywhere, relative to the generations preceding.
Unfortunately, most of those places were killed off in the 1970s, and not those that survived are unaffordable.
And NOW those that survived are unaffordable. Although the collapse of public services due to under financed and retroactively enriched pensions, debts and inadequate infrastructure maintenances and replacement may kill those off too.
‘If we could built 10 San Franciscos we could fill them’
People are leaving San Francisco.
A year or two ago the Chronicle ran an article that asked “is a commercial real estate bust coming?” With this one quote they said it’s arrived:
‘Most entitled projects in the city are for sale right now — either publicly or privately,’ said Bill Witte, president of developer Related California, which has 1,300 units under construction in the city. ‘We’re at that point in the cycle.’
And this guy knows because you can bet every one of them went shopping their project to Related first. Why don’t they want to finish?
‘The growing number of developers seeking to cash out rather than risk losing money on building’
Answer: prices have fallen and they can’t sell them. This construction cost thing is a load of hooey!
I had a post all set earlier and didn’t add comment but you prompted me.I I’ll just say this….. I’ll wager down to my last dollar this guy doesn’t have a dime of his own money in it and he’s flat out lying or b) he really doesn’t have any idea what he’s talking about.
“Chris Foley, a real estate investor and partner in brokerage firm Polaris Pacific, said that in the current construction environment a condominium developer needs to sell units for at least $1,400 a square foot for a wood-frame building and $1,800 a square for a taller, steel-frame midrise or high-rise. Even in a city where more than 80 percent of the population is priced out of the market, those numbers are a stretch, Foley said.”
“‘The demand for condos is there, but construction costs are killing the industry,’ he said. ‘Above $1,400 a square foot is a tough sell unless it’s an unusually good location.’”
Yeah, why don’t they do what they usually do? Raise the prices. People who expect the airbox prices to go through the roof will pay what they need to, right?
What’s that? Oh the demand isn’t there at higher prices? And maybe that’s because people don’t expect prices to go up anymore? Maybe they are falling right now!
No one can afford to live there anymore. It’s insane.
The debate is to whether new buildings reduce prices or new buildings raise prices by attracting even more $zillionaires, and the political argument that stopping development will stop soaring rents is gaining believe it or not.
At this rate it will end up like Venice.
anymore. It’s insane.
People have been buying houses they couldn’t pay for. It’s a mania.
insane
+infinity, Blue.
If they can not afford the houses, they should just plan a weddings and have all their guests donate $5000 a piece to buy their dream homes.
Speaking of donations…crazy:
‘Our request was not f***ing out of the ordinary’: Bridezilla who asked guests to pay $1,200 to attend her wedding calls it off and breaks up with her fiancé when they refuse to cough up
Sounds like a lovely girl. The guy dodged a bullet if this was all her.
Definitely. And to top it off the story contained the word “outlier”.
Hey, Carl - my husband’s niece must be an outlier, too. There were similar antics before and during her wedding; no thank you note despite a generous “donation”. Maybe more have been Kardashianized than we know.
Yes that is the story that triggered my post.
Here is a post from last Sunday on San Francisco apartments:
I was at a conference and sat next to the CEO of an apartment ownership group. They owned 6,000 units in multiple locations and occupancy is solid and rents are firm.
What I found fascinating is that he owned over 600 units in San Francisco, in small and medium buildings. When I asked him his vacancy, he said about 20%. I was stunned. It turns out they are not re-renting units that go vacant. Rent control creates a scenario where the units are much more valuable vacant the rented.
Once a building has enough vacancy, it becomes twice as valuable to buyers looking to to create for sale housing. How ironic!
Rent control creates all sorts of unintended consequences:
Removes units from the market
Increases “shadow” inventory
Drives prices up for rental housing.
The City needs to remove rent control or create a vacancy tax. Wonder which way they will go?
San Francisco, CA Housing Prices Crater 13% YOY As Banks Choke On Toxic California Mortgages
https://www.zillow.com/san-francisco-ca-94109/home-values/
*Select price from dropdown menu on first chart
I see you did not us Movoto for this post……..
https://www.movoto.com/san-francisco-ca/market-trends/
Is that because prices are up, days on market are down, and inventory is dropping?
HA!
Ebola
Emeryville, CA Housing Prices Crater 8% YOY As Tech Wreck Trashes Bay Area Economy
https://www.movoto.com/emeryville-ca/market-trends
There’s going to be some unhappy buyers who bid up sales earlier this spring. Here in Laguna Niguel listing prices in May were on avg. $1,071,000. Just a month ago avg. fell to $999K. End of August $939K. In 4 months that’s a $132,000 shredding in value. Pair that with speculators investing 60K - 100K to upgrade for flip and another 60K in real estate commissions/fees to sell and that’s a quarter mill loss. Or some seriously FB’s.
Most “flips” flop. Like a gambler’s losses, you never hear about those.
Most young Americans are living on the edge financially:
https://www.marketwatch.com/story/most-young-americans-are-living-on-the-edge-financially-2018-08-27
No “pent-up demand” for $500,000 starter homes happening here.
You mean jacking up shelter prices for 7 straight years hasn’t led to prosperity? Gee, you don’t say…
But dat GDP doe.
crushing.housing.losses.
A nation of dummies …
“The findings highlight how many young people are leaving high school and even college without a basic understanding of how to handle their money, and starting their first jobs without little idea of what to do with their paychecks.
“Americans are woefully behind in financial literacy. Last year, the U.S. ranked seventh out of 15 countries in the Program for International Student Assessment, which evaluates 15-year-old students’ knowledge in science, reading, math and financial literacy. More than a fifth of U.S. teenagers were considered financially illiterate.”
Surely you’re not complaining about that?!
“Surely you’re not complaining about that?!”
Lol, not at all. These are the pukes who pay my bills.
More than a fifth of U.S. teenagers were considered financially illiterate.”
Only a fifth??!? Surely that study must have been deeply flawed.
“The findings highlight how many young people are leaving high school and even college without a basic understanding of how to handle their money, and starting their first jobs without little idea of what to do with their paychecks.”
Can’t cook their own meals either.
This stuff used to be taught by families, back when 2/3 of children had then throughout childhood, instead of 1/3.
It seems that Ontario homes are not selling. Most are having price reductions and still not selling. Interest rates are going up; lendors have tightened up; and the governments have put additional taxes on.
Completely understandable why prices will now come down.
Are coming down.
“Homes priced around $200,000 and under are selling quickly in Victoria, while more expensive homes sit empty, housing experts said.
Not to worry. Soon those “more expensive homes” will be either priced under $200K or in foreclosure. Welcome to true price discovery, greedheads.
“‘The demand for condos is there, but construction costs are killing the industry,’ he said. ‘Above $1,400 a square foot is a tough sell unless it’s an unusually good location.’”
Is there any sane reason why a condo should cost that much per sq ft?
Its luxury man LUXURY, only the best will do, we cant waste time building for people who would rather save for their old age and not live for today! ……. get with the program…
The corporate media truth-makers are still pushing the “shortage” line of BS. I wonder if these REIC shills and touts have any inkling how utterly discredited their MSM propaganda outlets are.
https://www.marketwatch.com/story/the-hidden-reason-you-cant-find-a-house-to-buy-right-now-2018-08-27?dist=realestate
Welcome to 2018, where realtors are the new telemarketers: If you’re like me, you get a couple of calls a week, not looking to sell you a house, but looking for houses to sell. That’s because the real estate market is (exaggerating slightly) as bare of inventory as the shelves of a former Soviet Union grocery store, to hear builders and realtors tell it.
There are a bunch of houses for sale in my neighborhood. I’m just not paying the high prices for them. All these reasons for slow sales (construction costs, interest rates…….) and they can’t see the obvious picture: The cost is too high
Richardson, TX Housing Prices Crater 7% YOY On 20 Years Of Toxic Financing
https://www.movoto.com/richardson-tx/market-trends/
A truly retch-worthy REIC spin on why the housing market (aside from 13,478 outlier municipalities) hasn’t reached its tipping point yet.
https://www.businessinsider.com/heres-why-home-price-appreciation-hasnt-yet-reached-a-tipping-point-2018-8
Londoners driven out of capital as housing remains priced out of reach.
Heckova job, central bankers.
https://www.bloomberg.com/news/articles/2018-08-26/londoners-driven-from-capital-as-home-prices-remain-out-of-reach
Scientists are developing a robot to replace human strawberry pickers at farms:
http://www.dailymail.co.uk/news/article-6103873/Experts-steps-create-ROBOT-strawberry-pickers-end-need-human-workers.html
Realtor trolls in California, there is no “pent-up demand” for $500,000 starter homes, borrowing unpayable debt, with no loan underwriting standards.
Some of us on the HBB have long and vivid memories of the last bubble.
Those strawberry pickers will not be buying houses like last time
If you shop right you just might be able to pick up a crop picking sex doll.
Think of it: She earns money for in the daytime by picking crops and earns money for you at night by flat-backing for strangers.
Here …
(psssst … this is a video of sex dolls so be sure to have your bag of Cheetos handy)
“North America’s first sex-doll brothel opening in Toronto”
https://toronto.citynews.ca/video/2018/08/25/north-americas-first-sex-doll-brothel-opening-in-toronto/
stock and home price gains are the economy now.
Funny how $15 trillion in Fed funny-money “stimulus” and ultra-easy credit since 2008 can create the illusion of wealth, at least until the financial reckoning day comes around.
What’s to stop the Fed from indefinitely postponing the Day of Reckoning? Isn’t that their preferred alternative?
What’s to stop the Fed from indefinitely postponing the Day of Reckoning?
Only the value of the dollar itself. As long as they have value it will be possible to kick the can by printing more.
Since home price appreciation is decelerating while stocks go up like gangbusters, should homeowners sell their houses in order to get more money into stocks?
Home-price growth slows again, Case-Shiller says
By Andrea Riquier
Published: Aug 28, 2018 9:04 a.m. ET
Las Vegas: the comeback kid of the housing crash
…
The sooner the Fed’s Everything Bubble implodes, the sooner housing can become affordable again.
https://www.msn.com/en-us/money/realestate/affordability-of-starter-homes-hits-a-decade-low/ar-BBMwda7?li=BBnbfcN&srcref=rss
Here’s why the U.S. housing market is cooling: Prices are just too high.
Starter homes are now more costly to purchase than at any time since 2008, when the last boom came to a crashing halt.In the second quarter, first-time buyers needed almost 23 percent of their income to afford a typical entry-level home, up from 21 percent a year earlier, according to an analysis by the National Association of Realtors.
The property market, after years of price gains that outpaced income growth, is showing signs of slowing as sales decline. The affordability crunch is especially severe at the low end of the market and in hot areas where supplies are tightest and values have risen most. A jump in mortgage rates this year only made it worse.
Wouldn’t a higher income-to-debt ratio favor home ownership?
Something about the story below leads me to believe that Ed did not have a written contract with the lender.
Why buying a home can be almost impossible with massive student loan debt
- Eighty-three percent of people ages 22 to 35 with student debt who haven’t bought a house yet blame their educational loans.
- Owning a home, the most common way Americans build wealth, can become a distant dream for many crushed by student debt.
Annie Nova
Published 9:36 AM ET Thu, 23 Aug 2018 Updated 12:13 PM ET Thu, 23 Aug 2018
In the late 1990s, Ed McKinley fell in love with a $65,000 house by a lake in New Hampshire.
The owners let him move in early and pay rent until the buying process was completed.
Inside his new home, McKinley installed a modern stove, painted the walls and began to redo the floors.
Then came the bad news.
“The mortgage company decided that my income-to-debt ratio was a little bit higher than they were comfortable with,” McKinley, 59, said.
They were referring to his $34,000 in federal student loan debt.
He had to pack up and leave.
“It’s crushing,” McKinley said, choking up. “I have a very strong desire to own a piece of land that I can put my signature on.”
…
“Eighty-three percent of people ages 22 to 35 with student debt who haven’t bought a house yet blame their educational loans.”
Ya mean$ to tell me, that monie$ lender$ has knot yet “created” a way to have $tudent loan$ era$ed & hand over the down payment fund$ to allow $mart youngin’$ to purcha$e an overpriced $helter?
$urely you je$t Professor!
Oh, Mr. Banker, where art thou “financial product$ of innovation$”?
( Hwy mumble$, ragastat … ragastat … bunch of dotted.line$ $lacker$)
There’s no doubt that everybody is trying to get first dibs on the fresh meat. But it will be funny if Mr. Banker screws himself and misses out on the big money later on due to loaning them a little money now. But maybe as long as they end up slaves one way or another it’s all good.
59 years old and still has student loan debt?
What the heck did he major in, basket weaving?