Sellers Are Unaccustomed To Hearing That Horrible Word
A report from the Marysville Globe in Washington. “Have you noticed? It’s not such an insane, over-the-top real estate market anymore. The thought of I’ll just throw a for sale sign in my front yard on Thursday and have a crowd of crazed buyers offering $15,000 to $25,000 over my asking price is nearly over. A shift in our real estate market is taking place. Many sellers are searching to understand the term ‘Price Reduction’ as they are unaccustomed to hearing that horrible word spoken to them by their real estate broker. We have seen a record number of price reductions over the last two months.”
“Enthusiastic sellers who overpriced their homes in May and June are sitting in their homes scratching their heads saying, ‘My broker said there would be multiple offers.’ Those sellers and today’s sellers need of a major dose of reality, and the days of multiple offers are days of the past.”
From Northwest MLS on Washington. “House-hunters in Western Washington can choose from the largest supply of homes in three years, and they are facing fewer bidding wars, according to officials from Northwest Multiple Listing Service. New statistics from the MLS show prices appear to be moderating (up about 6.7 percent overall), but brokers say they are not bracing for a bubble, or even anticipating a quick shift to a buyers’ market.”
“In Clark County, inventory doubled from a year ago to lead the list based on percentage gains. King County was runner-up with a 74.3 percent increase, rising from 3,329 active listings a year ago to 5,803 at the end of August. A slower pace of sales also contributed to the boost in supply. ‘The Puget Sound residential housing market remains positive, though the market has transitioned from a frenzied state to one of strong sales activity,’ remarked J. Lennox Scott, CEO of John L. Scott Real Estate.”
“George Moorhead, designated broker at Bentley Properties, commented on buyers ’still sitting on the sidelines despite clear indicators.’ He believes, ‘This is the best time in three years to be aggressive in the marketplace’ given rising inventory, a significant increase in the number of cancelled and expired listings, and more incentives being offered by builders. ‘We are now seeing price reductions in new home communities as builders try to move inventory of completed homes,’ he noted.”
“With more homes on the market in the tri-county area, growth of home prices has slowed, noted OB Jacobi, president of Windermere Real Estate. ‘Buyers are under less pressure to bid on any home that comes on the market,’ he remarked. ‘Despite what some of the headlines may read, this is no cause for panic; in fact, it’s good news because it’s an indication that we are moving closer to a more balanced market,’ he suggested.”
“‘The real estate sky isn’t falling,’ said Dick Beeson, who acknowledged the ‘huge increase in inventory the past few months speaks volumes about the anxiety levels sellers have as they try to get all they can before the market crashes, which it won’t. The Northwest still has the best economy in America,’ Beeson emphasized.”
“Why the run-up in listings?, Beeson asked rhetorically. Sellers have read about exorbitant prices and the need for inventory, he explained, adding ‘I guess we should have schooled them a bit about a phasing in process and not to bunch up at the listing house door.’ Several brokers commented on the importance of realistic pricing. ‘You can’t underprice a home in today’s market, but you can overprice it,’ Beeson stated.”
The Gloucester Times in Massachusetts. “The bidding dual over the Brightside condo highlighted an auction that brought in $139,500 for the city’s coffers – far less than the $300,000 initially raised at a similar auction last year, but one that disposed of five of the six properties on the block. ‘Some of the properties maybe weren’t as sexy as some of the ones last year,’ said auctioneer Paul Zekos, whose Zekos Group LLC of Shrewsbury has run the city’s recent tax auctions. ‘But we did sell all but one of the properties – and five out of six isn’t bad.’”
“Two of the vacant-land properties sold at last year’s auction ultimately wound up back on the block Thursday after last year’s bidders defaulted on closing, Zekos had said. ‘There really is no goal for these types of things,’ said city treasurer and collector John Dunn. ‘They get what they can get, and we go from there.’”
“The biggest drop in potential sales revenue Thursday may have come when the only property aside from the Brightside condo with a house on it failed to draw any bids at all, even as Zekos lowered the minimum bidding on the 58 Hill Top Road site from an initial $100,000 to $30,000. The property is assessed by the city at $214,800.”
“Another property, at 72 Witham St., sits virtually across Thatcher Road from the main Good Harbor Beach parking lot, and includes just .35 acres, complete with wetlands. So after getting no bids at $30,000, Zekos dropped the bidding to $10,000 – and still initially got nothing. But Janet Muzzy, seated toward the back of the hall, shouted out $2,500, then agreed to raise her bid to $5,000 after Zokos and Dunn conferred over a minimum bid they intially set at $5,600. Dunn agreed to accept the bid. ‘You drive a hard bargain,’ Zekos told her.”
The Star Press in Indiana. “Many readers will be unfamiliar with Indiana’s housing glut, which the U.S. Census reports are more than 300,000 excess homes. This is partly because few community leaders and even fewer Realtors wish to talk about this chronic problem. I’ll explain by beginning with a Muncie example that is applicable to much of the state.”
“Shortly after my recent article on the urgent need to preserve middle-class neighborhoods, a Realtor replied to my column. He took exception with my inference that there was an excess supply of homes in the greater Muncie region. Citing local real estate data listing of only 392 homes for sale in Delaware County, he argued that there was an acute housing shortage. He could not have been more wrong.”
“That same week the local paper listed the county sheriff’s sale of some 1,300 homes, a modest share of the annual listing of abandoned homes in the county. Worse still, the most recent Census data reported more than 5,100 vacant homes in Muncie alone, with more than 1,000 more across the rest of the county.”
“In any market, excess supply causes prices to drop, and Muncie is a prime example. Across three city council districts comprising 14,600 homes, the average tax assessment is less than $45,000 per home. My research with Professor Dagney Faulk indicates that homes priced in this range are over-assessed by 62 percent to 156 percent. That means when these homes do sell, they are changing hands at a fraction of their assessed value, or about the price of a decent used car.”
“The cause of this is clear. The Census reports that Muncie has lost close to one in six families since the early ‘70s and one out of every 50 families since 2010. This means thousands of excess homes that suppress prices across the county and beyond. The realtor who criticized my data on excess homes, or rather criticized the Census count of excess homes, claimed there was abundant demand for homes priced in the $250,000 range. That is unalloyed nonsense.”
“Every Realtor can tell stories of families visiting their community who are dissatisfied with the choices. I shouldn’t have to write this, but the presence of a buyer willing to pay $250,000 for a home that cost well more than $300,000 to build ain’t evidence of demand for new housing.”
‘rising inventory, a significant increase in the number of cancelled and expired listings, and more incentives being offered by builders. ‘We are now seeing price reductions in new home communities as builders try to move inventory of completed homes’
Oh dear…
Price reductions in new home communities certainly kills the sense of urgency and angers the existing residents, not to mention the sleepless nights for those that went under contract but have not yet closed, as they ponder if they should just walk away or bite the bullet. Desperation must be seeking in.
Honey. Maybe we should have read that contract.
.
But..but…we are victims!
Never gets old.
https://www.youtube.com/watch?v=20n-cD8ERgs
Let’s see: insane, frenzy, panic. Do these UHS listen to themselves?
‘The real estate sky isn’t falling,’ said Dick Beeson, who acknowledged the ‘huge increase in inventory the past few months speaks volumes about the anxiety levels sellers have as they try to get all they can before the market crashes, which it won’t.’
Good to hear from you again Dick. Enjoy the crash. I’m sure you’ll be specializing in foreclosures and short sales soon.
“No cause for panic” seems to be a common theme percolating up through these realtor discussions of the “changing” housing market. Spoken in fearful, quavering tones as the dissembling realtor blinks like a toad in a hailstorm.
do u want to see people in soup lines?
It won’t bother me one bit to see everyone who drove housing to such ridiculous and unaffordable levels in a soup line. Let them be a cautionary tale for what happens to fools who “invest” in bubbles.
The globalists drove housing prices to these levels as part of their efforts to remove real wealth from this country and transfer it to developing countries. Deindustrialize this country and have Americans continue to consume goods produced elsewhere with debt. The power of the globalists and how contrary to the agenda of the average person is seen in the Swedish elections. The left of center Swedes are prepared to give 17% of their votes to neo-Nazis because only that party will address immigration. If the PTB were not pulling the stings at least one of the mainstream parties would have addressed the issue as a way to obtain votes. People like to come to power and when democracy is really working politicians adopt popular positions. However, all the mainstream parties not only did not change positions, they are refusing to join any coalition including the anti-immigration party. It shows the globalists PTB have laid down the law not only in Sweden but the entire world, you will be for open borders and you will ignore the will of the people so we can push globalism. Thus, the overwhelming opposition to Trump among the elites:
https://www.reuters.com/article/us-sweden-election/anti-immigration-party-set-for-election-gains-as-sweden-swings-right-idUSKCN1LO0V6
Nazi = anyone who doesn’t want their daughter raped by an illegal invader
Fyi - Nazi is slang for National Socialist
Ask yourselves two questions. Where was the PPT in the Fall of 2008 and why wasn’t Sarah Palin invited to the McCain funeral service? She has never spoke ill of McCain and supported his reelection bid and her support was needed among conservatives for him to win. I think the answer to both questions is related. However, the globalists learned from 2008 that they cannot count on the normal V shaped recovery from a recession. The recession ended in 2009 before any of Obama’s policies had taken hold but there was no real recovery. If that had not happened the globalists would simply crash the market again to get Trump out of office.
A-Dan: Interesting ideas.
So the globalists think debt (in particular, first world consumer debt) can grow endlessly?
Not endlessly, but long enough to significantly lower the wealth gap between countries. This makes political union easier. Think about which would be harder to sell to the American public, a union between Canada and the United States or a union between Mexico and the United States?
Just the realtors
I’m more focused on the possibility I could one day afford a modest home to live in.
Contrary to the alleged experience of others here, my landlords have always raised the rent at least a little at the end of a lease.
Charlotte, NC Housing Prices Crater 14% YOY As Rising Unemployment Drives Homeowner Defaults To New High
https://www.zillow.com/dilworth-charlotte-nc/home-values/
*Select price from dropdown menu on first chart
‘The biggest drop in potential sales revenue Thursday may have come when the only property aside from the Brightside condo with a house on it failed to draw any bids at all, even as Zekos lowered the minimum bidding on the 58 Hill Top Road site from an initial $100,000 to $30,000. The property is assessed by the city at $214,800′
Shortage?
Yes, A Shortage of profit.
Public union pensions will be paid….
Seattle, WA Housing Prices Crater 8% YOY As Global Deflationary Spiral Spins Up Seattle Area Foreclosures To Record High
https://www.zillow.com/fairmount-park-seattle-wa/home-values/
*Select price from dropdown menu on first chart
things have become so twisted that putting nothing down on a home purchase makes you a homeowner.
As learned here the Home owns you. You are simply a loan owner
“… the Home owns you.”
Partially correct.
The one who posseses the loan is who owns you.
Nirvana, in this case, is composed of two parts:
1. Convincing a puke to willingly become a debt slave.
2. Jacking this debt slave as often and as intensively as possible.
To sum it all up: Ignorant pukes work long and hard for money and then they willingly ship large portions - VERY large portions - of this hard-earned money up the line until it reaches the overflowing coffers of the lenders.
Very true, thanks for the clarification direct from the loan owner 😉
“Why the run-up in listings?, Beeson asked rhetorically. Sellers have read about exorbitant prices and the need for inventory, he explained, adding ‘I guess we should have schooled them a bit about a phasing in process and not to bunch up at the listing house door.’
As the spooked herd heads for the exits and the pipeline of Greater Fools suddenly dries up, no realtor “schooling” is going to abate FBs’ rising desperation to dump their underwater shacks before the bottom drops out.
“Shortly after my recent article on the urgent need to preserve middle-class neighborhoods, a Realtor replied to my column. He took exception with my inference that there was an excess supply of homes in the greater Muncie region. Citing local real estate data listing of only 392 homes for sale in Delaware County, he argued that there was an acute housing shortage. He could not have been more wrong.”
I love those rare occasions when realtors get called out on their lies and dissembling in the media. Most Real Journalists act like parrots on the shoulders of their REIC advertisers.
I ran across this …
US Debt Visualized: Stacked in $100 dollar bills at 20+ Trillion USD for 2017
http://demonocracy.info/infographics/usa/us_debt/us_debt.html
Even if house prices just stagnate, there’ll be no equity for FB’s to remove with HELOC’s that have previously helped push their debt down the road.
We are being told we have the lowest unemployment rate in recent history. Just wait until that changes.
“Even if house prices just stagnate…”
Once the rate of increase falls below 2% annually it’s over.
Stack some of your gold coins next to that!!!
Fiat currency….it is an old scam. Going back to the days of Kublia Khan.
https://en.m.wikipedia.org/wiki/Fiat_money
Reckon Kudlow has made fla$hcard$ so he can ed.u.cate$ the fi$cal con$erative$ repubican$ that $tre$$ their “True Believer$” motto:
“Deficit$ don’t matter$!!!”
$ummer’$ over, popcorn @ the ready, firework$ begin $oon!
They do not matter when they are less than Obama’s deficits and the economy is growing twice as fast.
The US deficit in 2010, was 9% of the GDP. This year it will be 3.852%. If the economy grows at 3% and inflation average 2%, next year any deficit less than around $1.1 trillion will actually reduce the debt to GDP ratio since the national debt is already at 21.5 trillion and it will be larger next year. Trump is doing this with interest rates rising which raises the cost of servicing the national debt and with the federal reserve reducing its balance sheet which means less profits being paid to the treasury. MAGA
U$ Debt Vi$ualized: $tacked in $100 dollar bill$ at 20+ Trillion U$D for 2017
They matter$, le$$ yer livin’ in yer own U$A per$onal fanta$y land$
I keep running spreadsheets of inventory levels on certain major bubble cities that I believe will be this burst’s epicenters. Today all of them were at new highs. One month inventory increases were as follows: Seattle 11%; San Francisco 7%; Denver and San Diego 5%; Los Angeles and Atlanta 4%; Portland 3%; and DC and Miami 2%. The most interesting aspect is that September usually has one of the lowest inventory levels and the Summer months usually have the highest because families want to move during the Summer due to school situations. It is going to be an interesting next 24 months. The most important thing in my mind is that, since June, sheeple’s psychology has certainly changed. In June everyone except a few said no housing bubble exists. Now it is all over the papers, and at least half the people I know are thinking about dumping some rental property, feel they over paid and/or have stopped their search for a new house saying I think I will wait this out.
Do your calculations include foreclosures, short sales, tax auctions and abandoned/zombie properties?
I don’t have access to the MLCS, or anything more sophisticated. I just chart the Zillow numbers for each city. I am sure there is a better way to do it if you have access to the right programs. Please let me know if you guys know of a better way to do this.
Wish I did.
That info is tightly guarded.
I know for sherrif’s sales locally you have to pay just to get access to bid. No data for free.
If the public had this insight we would have likely had much less FBs joining the frenzy of buying up homes. I think it is hidden for monetary reasons. I personally would love to have visibility into those factors but that’s asking a bit much
garbage in, garbage out
Las Vegas metro area is conspicuously absent from your list. Yet wasn’t it the foreclosure capitol of the last bust? Maybe things are simply slow to get going here this time around.
I don’t follow Las Vegas. No reason really other than I have few connections there workwise or personal.
The real bubble bust party hasn’t even started yet, and already the FB “victim” sob stories are cropping up in the media.
https://www.dailymail.co.uk/money/mortgageshome/article-6131611/Help-Buy-left-trapped.html
Watch “Time Forgotten” on YouTube
https://youtu.be/X5eWvNnaKPM
Government buying votes from the something for nothing voters…how is it working out for ya?
*****
“In the end, it was the Government’s flagship Help To Buy scheme that gave them the financial boost they needed to secure a £205,000 two-bedroom, new-build flat two miles from the town centre.”
Government buying votes from the something for nothing voters…how is it working out for ya?
$13 Billion$ U$ taxpayer$ monie$ for farm product$ producer$ is vote$ purcha$ed. But since the corn grower$ only get $0.01 cent a bu$hel, the vote$ gathered might bee a mixed crop @ harve$t time.
Go ethanol!!!
Do you drink it or huff it?
Depend$ on the $it.u.a.tion … It’$ knot like the next ri$ing $un is counting on my input$ …
“the experts say firms are trying to cash in because they know that buyers who use Help To Buy can afford to purchase more expensive homes than they could without the scheme.”
So lower down payments and government help causes the prices to increase? I thought it was an inventory problem. Looks to me like they overpaid.
The talks of “rental glut” have been posted here for some time. Looks like the MSM is finally catching up. Usually there like 6-8 months behind. On this topic, it’s been longer than that it seems.
Rental Glut Sends Chill Through the Hottest U.S. Housing Markets
By Prashant Gopal
September 7, 2018
Bloomberg
• Seattle leads U.S. home rental slowdown after overbuilding
• Cities where rents rose most are now leading the slump
Seattle is known for its hip neighborhoods, soaring home prices, and being home to Amazon.com Inc., the world’s most valuable company. So why is its rental housing market experiencing the most severe slowdown in the U.S.?
Seattle-area median rents didn’t budge in July, after a 5 percent annual increase a year earlier and 10 percent the year before, according to Zillow data on apartments, houses and condos. While that’s the biggest decline among the top 50 largest metropolitan areas, it’s part of a national trend. Rents in Nashville and Portland, Oregon, have actually started falling. In the U.S., rents were up just 0.5 percent in July, the smallest gain for any month since 2012.
“This is something that we first started to see two years ago in New York and D.C.,” Aaron Terrazas, a senior economist at Zillow, said in a phone interview. “A year ago, it was San Francisco and most recently, Seattle and Portland. It’s spreading through what once were the fastest growing rental markets.”
https://www.bloomberg.com/news/articles/2018-09-07/rental-glut-sends-chill-through-the-hottest-u-s-housing-markets
Renters are in the catbird seat, and for a long, long time.
The core deceit in the financial system is fractional-reserve banking. Everyone thinks they have that money but in reality, the bank only has ten percent if that. It works fine - most of the time - except when it doesn’t. Then the government steps in to bail out the banks.
The former head of research of the New York Fed decided to remove that core deceit, disintermediate the banks, and create a less risky system that accurately reflects how the system works.
Today the structure is:
customer -> bank -> government (FDIC, etc) -> Fed.
Proposed is:
customer -> quasi-bank -> Fed.
The Fed is not going for it, and the former head of research has sued to move this forward. Probably not going to go anywhere because the Fed is not going to do anything to harm the financial sector. Quite interesting nonetheless.
Fed Rejects Bank for Being Too Safe
By Matt Levine
September 6, 2018
Bloomberg
The basic business of banks is to take deposits and make loans. The deposits have to be “risk-free”: A deposit in a bank account ought to be just “money”; depositors shouldn’t have to worry about it. The loans have to be risky: Lending money to people to start businesses or buy houses necessarily comes with the risk that they won’t pay you back. This is the magic, and the problem, of banking — that banks take risky loans and turn them into risk-free deposits — and there are lots of fraught imperfect ways to make it work.
And so you sometimes see proposals to scrap this basic business of banking and replace it with something else. The something else is generally that banks should take risk-free deposits and invest them in really risk-free things (reserves at the central bank, or perhaps their own government’s securities), while someone else (mutual funds, lending corporations, whatever you want to call them) would be in the business of taking risky investments — from investors who want yield and don’t need money-like deposits — and using them to make loans. These ideas are often called “narrow banking,” or sometimes the “Chicago plan,” but there are other, milder flavors. We talked recently about a proposal, from Morgan Ricks, John Crawford and Lev Menand, in which the U.S. Federal Reserve would offer “FedAccounts”
But that proposal is pretty radical, not only because it might upend the business model of existing banks, but also because the Fed would have to, like, open accounts and do customer service and issue ATM cards and do a lot of other administrative stuff to offer bank accounts to everyone.
But someone came up with a much simpler and amazing solution. It’s this:
Start a bank;
Take deposits;
Invest 100 percent of those deposits in reserves at the Fed; and
Pass the interest on to your depositors.
It is called TNB USA Inc. (for “The Narrow Bank”), it is run by the former head of research at the New York Fed, and it is simultaneously a dumb simple one-sentence idea and the most interesting bit of financial engineering that I’ve seen this year. Of course it is a very 2018 form of financial engineering, which is to say almost the opposite of what financial engineering looked like in, say, 2006.
The traditional form of financial engineering is complex and alchemical, taking lots of dodgy ingredients and stirring them up into something more attractive. This is financial engineering by dynamite blast: You just get rid of all the apparatus of banking and blow a tunnel directly from savers to the ultimate backstop of the banking system.
https://www.bloomberg.com/view/articles/2018-09-06/fed-rejects-bank-for-being-too-safe
The structures are not set up to benefit humankind, they’re there to protect the moneyed special interests. Until people realize this, there can be no change.
You can’t just attack it from an innovative ideas standpoint, you have to attack it from an information standpoint which means educating the masses as to what’s actually going on. Most people are so stupid that I have little hope of that ever being accomplished.
The structures are not set up to benefit humankind, they’re there to protect the moneyed special interests. Until people realize this, there can be no change.
Quite so.
The Internet and Web are part of a large information sharing mechanism. Control over this mechanism is much less than control over “curated” media. This frustrates many influential and powerful people. Look for a full court press eventually to bring this mechanism under the same control as the rest of the media.
The magical financial$ bungi cord, that $$$$$$$$$$$$$$treche$ & never break$!!! …
“The core deceit$ in the financial $y$tem i$ fractional-re$erve banking.”
First, i dont know what below means (from the Sat posting), but i like the phrase “whip hand”
Second, many real estate speculators and defacto speculators were waiting for just before the market top to start selling. Is it feasible that in 2019, buyers will try to wait for the bottom before the bottom, or are they so horny to buy that they will step in too early.
“Economist Stephen Koukoulas, from Market Economics, said the market was a ’stand-off between buyers and sellers.’ ‘The buyers have the whip hand … they’re the ones controlling things,’ he said. ‘The next six to 12 months will certainly be very tough for sellers, they have to adjust their expected sale price lower.’”
This bubble is going to take way more than 12 months to unwind
Seatac, WA Housing Prices Crater 16% YOY As Seattle Area Unemployment Rate Escalates
https://www.movoto.com/seatac-wa/market-trends/
That Indiana article is a bombshell to the shortage narrative.