Sellers Created Downward Pressure In The Market
A report from the Denver Post in Colorado. “The number of homes on the market surged, the number of sales dropped, and price reductions were abundant last month, all signs that buyers are pulling back in metro Denver, according to the latest market trends report from the Denver Metro Association of Realtors. The inventory of single-family homes and condos available for sale at the end of August rose to 8,228, an increase of 7.65 percent from July and 11.8 percent higher than August 2017. Normally, the inventory barely drops between the two months and the change set a record.”
“‘Over the past four years, we’ve experienced the strongest sellers’ market in recorded history,’ said Steve Danyliw, chairman of the DMAR Market Trends Committee. ‘This past month, we saw available homes for sale increase to the highest level in four years, giving buyers more homes to choose from.’”
“Single-family home sales in August dropped 7.46 percent from July, and are down 9.75 percent from the same month a year ago. Condo sales dropped 5 percent for the month and are down 15.6 percent from August 2017. About 30 percent of sellers lowered their listing price in August to entice buyers, Danyliw said. That has created downward pressure in the market.”
“Danyliw pointed to several signs that buyers are pushing back more — fewer multiple offers on properties, fewer inspection allowances and fewer appraisal guarantees. That said, homes that are priced correctly and move-in ready still sell quickly.”
From Mansion Global on New York. “Luxury buyers signed contracts for 16 homes in Manhattan in the week ending Sunday, modest activity reflecting the effect of a long holiday weekend, according to the Olshan Report. The most expensive contract signed was a Tribeca condo carved out of the top five floors of a townhouse on Harrison Street, asking $11.5 million. The 8,442-square-foot home sits above a mixed-used first floor. The home has six bedrooms and six bathrooms, and hit the market in June 2017 for nearly $17 million.”
“The second most expensive home to find a buyer was a tie between a Fifth Avenue co-op and a brownstone on the Upper West Side, both asking $9.95 million. The Fifth Avenue co-op marked a loss for Marc Lasry, billionaire hedge funder and co-owner of the Milwaukee Bucks, who bought the one-bedroom, two-bathroom apartment for $10.6 million in 2011, according to the Olshan Report.”
From Chelmsford Patch in Massachusetts. “What was once Chelmsford’s priciest home for sale has seen its asking price drop by over $100,000 since it was first listed. This five-bedroom with a pool hit the market last August at $989,000 and is now listed at $829,000.”
‘The number of homes on the market surged, the number of sales dropped, and price reductions were abundant last month’
Eeee-bola Denver!
Denver had been one of the last ebola holdouts. I suspect the contagion is even now spreading to Colorado Springs and Manitou Springs, where the Cult that Real Estate Only Goes Up (Because it’s Different Here) remains fanatically committed to their dogma.
Now that a few other states permit recreational weed, and we are no longer affordable, I hope the hipsters move on. I enjoy having a few hipster areas, but we were totally overrun by man buns, mustaches and people wearing sandals with suits driving the prices of everything through the roof.
‘The Fifth Avenue co-op marked a loss for Marc Lasry, billionaire hedge funder and co-owner of the Milwaukee Bucks, who bought the one-bedroom, two-bathroom apartment for $10.6 million in 2011′
Seven bubble years wiped away.
Fake wealth created by fake Yellen Bux wiped away.
There, fixed it for you.
He’ll make his losses back in a day or two selling bonds in bankrupt fraudulent companies to other members of his tribe that run pension funds or directly to little old ladies looking to upgrade their diet from just cat food.
Thousands of bubble tears just beginning to drop.
Boo hoo hoo
A song dedication for speculators and FBs.
https://www.youtube.com/watch?v=_FHXhDj3YGo
Sherman Oaks, CA Housing Prices Crater 7% YOY As Price Declines Engulf California
https://www.movoto.com/sherman-oaks-ca/market-trends/
Rise in big mortgages offered by Hong Kong developers to speed up sales raises default fears
https://www.scmp.com/business/article/2162955/rise-big-mortgages-offered-hong-kong-developers-speed-sales-raises-default
Some developers are offering loans of up to 85 per cent of a property’s value, just as interest rates are set to rise and property prices to fall
The number of Hong Kong developers providing mortgages for homebuyers hit a record in the second quarter of this year, raising concerns over a possible rise in defaults should an increase in interest rates and falling prices hurt sentiment in the world’s most expensive property market.
Builders offering financing to buyers accounted for 17.4 per cent of total mortgage deals for new flats from April to June, up from 6.5 per cent in January to March, according to data from mReferral Mortgage Brokerage Services on Wednesday.
Developers typically offer financing plans that are much higher than the standard mortgage ceiling of 60 per cent of the value for flats below HK$10 million and 50 per cent for those above that figure, with some offering as much as 80 or 85 per cent of a property’s value.
“‘Over the past four years, we’ve experienced the strongest sellers’ market in recorded history”. This is a good indication that the market was a FOMO market.
“‘This past month, we saw available homes for sale increase to the highest level in four years, giving buyers more homes to choose from.’” This is a good indication that the FOMO market is morphing into becoming a FONGO market.
It’s time to pop up a batch or two of popcorn, sit back and relax in your easy chair, and enjoy the fun that has just begun.
While I’m at it I might as well post this thing again …
https://images.google.com/imgres?imgurl=https%3A%2F%2Fwolfstreet.com%2Fwp-content%2Fuploads%2F2018%2F01%2FUS-Treasury-yields-3-months-2018-01-27.png&imgrefurl=https%3A%2F%2Fwolfstreet.com%2F2018%2F01%2F29%2Fus-treasury-yield-curve-steepening-or-flattening%2F&docid=yLOkj17ixmL1vM&tbnid=LTIsNd2410cK-M%3A&w=504&h=437&source=sh%2Fx%2Fim
A better link for you https://fred.stlouisfed.org/series/T10Y2Y
I like it. Seems to imply we still need a significant move before an official recession even begins…
Hi
Breaking news: People are stupid.
As an example, Let’s look at TESLA …
“Tesla is a high-performance cash-burn machine. It must raise ever larger amounts of cash to fuel this machine. The ability to raise more cash has been predicated on the mutual guarantees of sorts offered by bondholders and shareholders to each other.”
Trick and Frack.
“For bondholders, Tesla’s sky-high stock price, and therefore its ability to sell more shares and raise more money with ease was a guarantee that Tesla can always issue more shares and use the proceeds to service its debt.”
Frick desperately needs Frack.
“And for shareholders, the eagerness of bondholders was a guarantee that Tesla could always raise money by issuing more debt, thus minimizing the dilution of existing shareholders.”
And Frack needs Frick. And both Frick and Frack are idiots.
“As Musk Goes Nuts Publicly, Tesla Bondholders Get Antsy”
https://wolfstreet.com/2018/09/05/as-musk-goes-nuts-publicly-tesla-bondholders-get-antsy/
Losing money hand over fist isn’t a problem though.
Here’s a chart of Tesla along with some fun numbers …
https://finviz.com/quote.ashx?t=TSLA&ty=c&ta=0&p=w
It must raise ever larger amounts of cash to fuel this machine.
This sounds suspiciously like a ponzi scheme.
I guess there’s no word on those swappable batteries? And if electric cars are so simple and have so few moving parts compared to ICE cars, then why is it so hard to ramp up an assembly line?
why is it so hard to ramp up an assembly line?
I thought it wasn’t so much a moving parts issue as a non-moving parts issue. Such as body panel/frame bonding and fit/finish.
Musk’s comments on Twitter have been bad for business, almost as bad as DJTs for his presidency. The two share a lot in common actually.
As for profitability, look at Q3 and Q4 to see progress, even profitability. Those reports will be telling. They have been doing massive capital expenditures. You wouldn’t look at a doctor’s debt before she leaves med school to see how profitable she will be.
Tesla has invested tons of money in getting their mass market offering ready. The model 3 line is in early innings. Telsa is ramping production and has had massive capital investments, but it takes time to pay those expenditures back. Legacy automakers have huge factories and have been doing this for decades. Tesla was a niche EV maker, trying to scale quickly. Selling a boatload of model 3s, Xs, and Ss at a good profit will let us know if they can turn the corner.
Also, Tesla’s stock price probably is not justified with where they are at as a company. They definitely need a strong COO. Having said that, they sold more Model 3’s then all of BMW passenger cars combined. They still haven’t hit the 6k weekly rate of model 3s and that is probably fine as long as they are getting quality dialed in. The demand is there, the execution needs to be fine tuned. The product is good. We have a row of residents in our climate control garage where I manage apartments who are Tesla owners. They all plug in with our hookups we provide. Makes leasing apartments easy to a higher end clientele.
There’s that “affordability” word again.
https://www.cnbc.com/2018/09/05/weekly-mortgage-applications-are-stuck-in-a-rut-as-rates-rise.html
Arvada, CO Housing Prices Crater 6% YOY As Denver Area Population Loss Accelerates
https://www.movoto.com/arvada-co/market-trends/
‘This past month, we saw available homes for sale increase to the highest level in four years’
Wa? Did they build these shacks? No. Was a magician called in? No. So where did they come from? Were they there all along? So many posters here and “experts” out there have mountains of crow to eat!
Where’s the shortage? What’s going to happen to the poor bashtards that listened to such nonsense?
https://fred.stlouisfed.org/series/MSACSRNSA?utm_source=series_page&utm_medium=related_content&utm_term=other_formats&utm_campaign=other_format
Looks like a rising trend in terms of supply the last few years as compared to just before the last bust. The last time things went kaboom really fast. Next summer is going to be interesting. We’ll see who has the strongest hand: the people that try to keep HODLing their inventory or buyers that stay on strike.
It is always good to reword - from’ buy now or be priced ou’t to ’sellers market’
Recently talked to someone - apparently there is a ton of demand to buy homes - its just that the prices are a little too high.
Recently talked to someone - apparently there is a ton of demand to buy homes - its just that the prices are a little too high.
The speculators have been all in for a long time. So you must be talking about people who just want a house to live in. I’m sure there is some demand there…but if all hope of appreciation is lost I think that market will see prices as more than just a little too high. They will be comparing to the price to build. In a dead economy with almost free land.
What’s going to happen to the poor bashtards that listened to such nonsense?
They may or may not be bashtards, but they’re certainly going to be poor.
Reflections from the last housing bubble meltdown. With virtually none of the culprits suffering any real consequences for their actions (with the notable exception of FBs), history was always bound to repeat itself. Only this time, because debt levels have tripled since 2009 while the Fed is out of ammo, it’s going to be far worse.
https://www.marketwatch.com/story/the-regulator-the-whistleblower-and-the-ceo-key-housing-players-reflect-on-the-financial-crisis-10-years-later-2018-09-06
LV inventory up 20% YOY….welcome to the bubble LV…
Not LV! Say it isn’t so!
It looks like the true “outliers” are places where inventory isn’t surging, sales and prices aren’t tanking, and FBs aren’t gobbling Xanax by the handful.
Are there any such places left?
Bueller? Bueller?
Just wait until LV runs out of water. FBers will have to jump in the Bellagio fountain to take a bath.
Link?
Sales also down 4% yoy…sad
LV is absolutely screwed. Houses that used to sell for 50k-100k are now selling for 200k-250k. Most sold as investments to “investors” from CA as they think its a good deals compared to house prices in CA. Anyway who brought within the last few years will lose money on rents but they don’t care (see Greater Fool Theory). Everyone plans to sell at Housing Bubble Peak Prices and exit before it crashes because many think they are smarter than everyone else. Problem is we just ran out of Greater Fools so if they didnt get out by now, they are the Greatest Fools. My wife has asked me once to move to LV because it’s so cheap and the kids can play at the pool, etc. I’m in the tech industry so what will I do there? Anyone I moved to Silicon Valley and will be providing updates on the housing markets there soon. It’s not looking good folks.
I’m in the tech industry so what will I do there?
You could form a crew of illegals and clean up/remediate foreclosed shacks. You’ll have all the work you can handle for years.
Plenty of tech jobs available telecommuting. I work remotely 90% of the time and also in tech. You guys are getting our Oakland raiders so that should be interesting for future LV. If a 200k home goes down to say 100k that sucks but if you buy a 1.2m place here in the Bay Area and it drops to 600k your royally fooked!
Plenty of tech jobs available telecommuting.
Not in my field of storage testing.
Las Vegas, NV Housing Prices Crater 18% YOY As Record Low Demand Crushes Sellers
https://www.zillow.com/las-vegas-nv-89124/home-values/
*Select price from dropdown menu on first chart
Inventory is exploding…during peak selling season….this is only the beginning of the pain
In a newspaper serving the Maquokata Iowa area I read about tiny apartments in, I think it was, the Des Moines area, of 200 sq. ft. and the bathroom fixtures were located in the kitchen. In. The. Kitchen!? I suppose if I lived my whole life in the desert as part of a nomadic tribe I might be thrilled by such, but for the life of me I cannot comprehend how someone was mentioned in the article as being happy with the place. It showed a picture, the toilet was about 6″ from the kitchen countertop and the tub was just that, a tub. Right to the side of the toilet. I’ve seen a lot of knarly rentals in my day, but that brand new spiffy place was the grossest thing I’ve ever had the displeasure to know about. Yeesh, what the housing bubble has wrought.
Also, been seeing more doughnut tires on cars and hearing more exhaust systems with holes in them than I have in a long time. Deferred maintenace, ain’t just for loan-owners and landlords. And the beat goes on.
It rented for something like $550 mo. Which reminds me of all the empty duplexes and tiny four-plexes in Muscatine that I know of. It seems that local landlords raised the rents, the places remain empty because of that, with many being still trashed out and unrepaired, I guess the landlords have got gobs of money, don’t care, and love sending their tax money to the Emerald City. For now.
I hear numerous stories of children (plural) moving back in with parents, child in tow. The lot of new apartment complexes around the edges of the town look pretty. And, ya know, it seems every city from here-to-there is rebuilding thier downtown area. Everything is almost done. And, ready. High rents and all! Que: the coconut cult. One more thing, did you know Clinton Iowa has a squatter problem? I didn’t either, I thought it only happened in big cities, but I saw a blurb about it on the local TeeVee news. Why, all those houses are being taken care of, why ‘O why would this happen?
REIC myths are toppling like dominoes. First, the “shortage” lie. Turns out there’s tons of inventory hiding in plain sight, and there is about to be tons more as prices plummet and FBs mail in their keys and slink away under cover of darkness. The shortage was solely of AFFORDABLE housing for those choosing not to commit financial suicide by buying an insanely overpriced shack or paying exorbitant rents.
I suspect millions of FBs and cleaned-out stock market retail investors are going to disappear into the spare bedrooms and basements of parents, siblings, and friends - the ultimate social safety net. Others without such accommodating families are going to end up homeless, unable to afford the millions of vacant homes and apartments even as prices collapse. Sad fact, but a predictable consequence of buying into a bubble. Suffice to say, none of those people are going to be home buyers, or luxury apartment tenants, which is going to exert even more downward pressure on the market and economy.
Turns out there’s tons of inventory hiding in plain sight, and there is about to be tons more as prices plummet and FBs mail in their keys and slink away under cover of darkness.
I listened to the arguments about this here over the years and it took me a while to get it straight in my mind. My conclusion was that the people saying there was a shortage were thinking the old way, before housing got turned into a speculative vehicle. Once houses are turned into Bithouses it will always seem like there is a shortage, right up until suddenly there is a giant glut. Because the speculators are always going to be buying them up and making it look like there is a shortage right up until they all try to lock in their paper gains.
And yes, I remember the argument that if there are people living in them then they don’t count as contributing to the shortage because those people have to live somewhere. That may be at least partially true (lots of people can go back to other people’s basements if necessary). But in a speculative environment it would appear that a lot more end up empty than the people playing by the old rules think are empty.
$3/square foot per year depreciation is painful isn’t it.
Bloomfield, CT Housing Prices Crater 13% YOY As Housing Begins Its’ Declines To Long Term Trend
https://www.movoto.com/bloomfield-ct/market-trends/