A Sign Sellers Have Had To Adjust Price Expectations
A report from the Spokesman Review in Washington. “After climbing steadily for most of the year, homes sale prices in Spokane County appear to be leveling off. The average price for homes with sales closing in August was $260,800 – nearly unchanged from $259,300 in July, and down from a peak of $268,830 in June, according to the Spokane Association of Realtors. But the same conditions that triggered a $40,000 increase of the average sales price in Spokane County since January are expected to linger into 2019, local agents say.”
“When Diana Humphrey and her husband decided to sell their house and buy a bigger one, the Spokane couple also thought strategically about the market. ‘Houses were going so quick,’ Diana Humphrey said. ‘We got the new listings every morning. By the time we got out to look at them in the evening, about half of the inventory had disappeared.’”
“After about two months of searching, they bought a 1921 Craftsman-style house in the Logan neighborhood. They had noticed the house – priced at $196,000 – had been on the market for a while, which allowed them to negotiate a lower price with the owners. The Humphreys owned two homes – their family home and a rental. The couple waited until they had purchased a new home before putting their rental on the market. ‘We weren’t being forced to move,’ Diana Humphrey said. That took some of the pressure out of house-hunting in a competitive market, she said.”
From Common Wealth Magazine on Massachusetts. “A new report from a Washington-based liberal think tank raises concerns about the proliferation of luxury condominiums in Boston and urges policymakers to identify who all the new owners are and impose new taxes on them. The administration of Boston Mayor Marty Walsh has largely welcomed the jobs and investment associated with the luxury construction. Officials say the strong demand for the new luxury housing is easing pressure on existing units elsewhere in the city and helping to stabilize or drive down rents. The officials also note that luxury housing developers are required to subsidize the creation of affordable housing in the city.”
“The new report from the Institute for Policy Studies, entitled ‘Towering Excess: The perils of the luxury real estate boom for Bostonians,’ paints a much darker picture of the luxury housing boom, suggesting the expensive high-rises are driving up land and housing costs and contributing to the city’s affordable housing crisis. The report describes the luxury high-rises as ‘vertical gated communities’ that contribute to income inequality in Boston and are ‘part of a global hidden wealth infrastructure.’”
“The report says thousands of high-priced luxury units are in the pipeline in Boston. The institute said 35 percent of the units at the 12 buildings are owned by shell corporations or trusts that conceal the identity of the true owner. The report also said 64 percent of the owners do not claim a residential exemption on their property taxes, suggesting their units may not be their full-time residence.”
“Currently, the report said, it is far too easy to conceal the identify of property owners, raising the possibility that some of the owners may be hiding their wealth, dodging taxes, or possibly laundering money. It identified a number of condo purchases in Boston made with cash by shell corporations. ‘It is harder to get a library card at the Boston Public Library than to create an anonymous shell corporation and purchase a luxury real estate unit,’ the report said.”
From Boston 25 News in Massachusetts. “Boston has some of the highest rent prices in the country, but for the first time in nearly a decade, prices are beginning to plateau and fall in East Boston. Real estate broker James Bowen from the ERA Russell Realty Group believes the end of the rising prices is near. ‘There’s a lot of supply hitting the market right now,’ Bowen said.”
“Bowen said the average time a rental is on the market has gone from 60 days to six months, and he has seen prices drop for the first time since the 2007 real estate crash. ‘This is the first season, the summer season, I have seen it reverse almost 10 percent in three months,’ Bowen said. ‘We are done, in my professional opinion, with the rise in multi-family tenements for rent.’”
“Bowen said new luxury apartment buildings are drawing people from the traditional housing stock with deals and amenities. ‘Inside washer and dryer, it has all the amenities,’ Ayan Choudhury from East Boston said. ‘Two-bed, two-bath, it’s cheaper than what I had in the South End.’”
The Mortgage Reports. “It seems like the red-hot housing market might finally be cooling off. According to a new survey, almost half of all homeowners think home buying has gotten less competitive in the last year. Even more think the ever-pricy California and Colorado markets have slowed down. According to the latest Modern Homebuyer Survey from ValueInsured, many homeowners — ‘who are typically more informed and aware of the latest market conditions in their neighborhood’ — think the housing market has turned a corner.”
“Almost half of all those surveyed — 48 percent — have noticed a less competitive home buying market in their area and lighter open house traffic since spring 2017. In Colorado specifically, 56 percent of homeowners think home buying has slowed. Many California and New York homeowner have noticed the same in their states, with 54 percent and 53 percent reporting a slow-down in the area.”
“The survey’s results fall in line with what many experts are predicting: that the housing market will soon shift from the sellers’ favor to the buyers’ — and maybe quicker than expected. According to CNBC, 14 percent of all home listings saw a price cut in June. In half of the country’s biggest metros, home price growth has finally stalled.”
From Curbed Hamptons in New York. “The stunning newly built home at 20 Hook Pond Lane in East Hampton has reduced its asking price after coming on the market in May for $17.5 million. Four months later, the price of this beauty is $14,995,000.”
From Mansion Global on New York. “Manhattan’s luxury housing market saw the best post-Labor Day week in over a decade, according to the weekly Olshan Report. The most expensive unit to find a buyer was a penthouse at the Sterling Mason building in Tribeca, asking $15 million. Developers of the warehouse lofts have chopped $5 million off the price of the unit since it first hit the market in 2013, a sign that sellers have had to adjust the price expectations amid a cooled luxury market.”
‘homes sale prices in Spokane County appear to be leveling off…The average price for homes with sales closing in August was $260,800 – nearly unchanged from $259,300 in July, and down from a peak of $268,830 in June’
Eeee-bola Spokane!
‘They had noticed the house – priced at $196,000 – had been on the market for a while, which allowed them to negotiate a lower price with the owners’
Wait, I thought all shacks sold within minutes of being listed? Before that even.
‘The Humphreys owned two homes – their family home and a rental. The couple waited until they had purchased a new home before putting their rental on the market’
OK, this is a common form of speculation. And we only read a thousand tales of woe from people who got stuck with two shacks.
The alligator loves two mortgages!
Actually at least for a while three
‘There’s a lot of supply hitting the market right now’
‘Bowen said the average time a rental is on the market has gone from 60 days to six months, and he has seen prices drop for the first time since the 2007 real estate crash. ‘This is the first season, the summer season, I have seen it reverse almost 10 percent in three months’
Oh dear!
Nashville, TN Housing Prices Crater 16% YOY
https://www.zillow.com/charlotte-park-nashville-tn/home-values/
*Select price from dropdown menu on first chart
“A new report from a Washington-based liberal think tank raises concerns about the proliferation of luxury condominiums in Boston and urges policymakers to identify who all the new owners are and impose new taxes on them.”
Bahahahaha … these guys crack me up. Let’s inact a No-Dollar-Escapes policy and wage war on those who are prosperous, perhaps even drive them out of the city.
I’m no liberal, but I’m all for exposing the role of shell corporations, money launderers, and tax dodgers, as well as crony capitalist firms like BlackRock who are making housing unaffordable and being sh*tty landlords to boot. Communities have every right to protect themselves from financial predators and parasites.
Concur with both.
I dont like the ‘grab every last dollar for taxes’ approach of big cities.
However, there is a lot just hate the low interest rate and money laundering that is misusing housing. Just take a look at the condo situation in Vancouver
The media likes to look at this through the lens of no bubble here. Ask the question, why are there too many luxury and not enough regular housing? Because then the supply demand thing breaks down. Do supposedly rich people really want a condo they don’t live in? It’s absurd.
Do rich people want to make a huge amount of money in a short period of time for doing nothing? Bingo!
Do rich people want to make a huge amount of money in a short period of time for doing nothing? Bingo!
Bingo. This isn’t about class warfare or soaking the rich. This is about reining in speculation run amok and all its undesirable societal consequences.
Yet now we have calls for local “reforms” (vacancy taxes, rezoning) to fix artificially-created global problems, themselves the result of previous “reforms” (interest rate manipulation, looser lending standards, down-payment assistance).
Should we reward the same people that created or failed to stop the scourge of unaffordable housing by granting them new authority to “fix” a problem in a way that does nothing to address the underlying cause? And in fact refuses to acknowledge there IS an underlying cause other than rich people being greedy?
If unaffordable housing was Step 1 of a power grab, any reform to “help” that doesn’t include enforcing existing basic lending standards and bank regulations, allowing the market to dictate interest rates, and curtailing government power to manipulate markets is just Step 2.
Liberal/progressives have only two tools in their tool box.
Raise taxes and ban things.
And how can it be that the exact same thing is happening on every continent at the same time? Obviously there is something much larger at work than expensive airboxes in Boston.
“And how can it be that the exact same thing is happening on every continent at the same time?”
Since the dollar is the reserve currency of the world everyone had to inflate their money supply and/or lower interest rates. The fed likely had a “play book” and narrative worked-up for the other central banks.
Liberals are tools of the globalists.
But what’s driving these globalists? It seems as if they want to even out the world, even if the people in it are clearly not even.
For example, I’ve been pondering why they are enabling all this economic migration. I simply don’t buy the “cheap labor” argument. Even at low wages, there are already far more migrants than there are paychecks. Even here in the US I suspect we’re at saturation for low-skill jobs, and it’s only going to get worse as processes are automated.
It seems as if they want to even out the world, even if the people in it are clearly not even.
Well…not the whole world. You can’t bring everyone up to the level of the elites, which they plan to be part of. But you can get maximum labor efficiency from everyone else…
“we’re at saturation for low-skill jobs”
There’s a lot farther to fall to level the playing field with the rest of the world in terms of wages, working conditions, environmental standards, and living standards. In ‘Adults in the Room,’ Wolfgang Schauble told Yanis Varoufakis point blank that Europe needed catch down to the labor standards and wages of China and India in order to “compete.” That’s the end game of globalism, and some aren’t even ashamed to admit it.
Yanis Varoufakis
The farther I read in the book the more sick to my stomach I get. The ECB is so bad that the book makes our banksters sound like the good guys. Maybe because we don’t see Greece as our potential slaves so we like it when they revolt against the European central banksters. It’s hard for me to see them as actual good guys.
“The farther I read in the book the more sick to my stomach I get.”
The reference to getting laid in Greece for a peanut butter and jelly sandwich was not a cliché. It’s a race to the bottom for the deplorable working-class the world over.
there has to be a ‘coming to deity’ for luxury rentals.
Another building opening up in South Lake Union (Amazon land) in downtown Seattle … but, but it is walkable to work … has great views of the Space Needle. So got off your duff and walk to Lake Union instead of sipping your coffee indoors - otherwise pay $5K or more /month.
I cycle by this building on the way back from the gym. It is nice - but not at these prices
On September 13th, Greystar is set to announce the opening of Ascent SLU, a 25-story, 251-unit high-rise residential tower located at 1145 Republican St. in the heart of South Lake Union. The project will feature a mix of penthouses, lofts and one- and two-bedroom units (with rents ranging from $2,400 to $9,280) as well as 8,727 square feet of retail space, a rooftop deck and 89 retail parking stalls. The project team for the Weber Thompson-designed project also includes Susan Marinello Interiors and general contractor Turner Construction.
The hope is that Ascent—which will feature views of the Space Needle and the Seattle skyline—will offer residents a different experience from other high-rise projects in the surrounding neighborhood, according to Keeler. “The project’s location within the neighborhood is special because it’s surrounded by office buildings that are limited to a lower height than residential towers; so Ascent stands significantly taller than the neighboring structures,” he said.
https://news.theregistryps.com/greystars-251-unit-ascent-in-south-lake-union-comes-during-active-time-for-neighborhood/
It used to be rents would positive cash flow an investment in an apartment complex or rental house.
With the insanity of obama cheap and easy money and ZIRP - landlords were investing for sweet appreciation. Cash flow didn’t matter.
With the last 2 years of the great QE unwind plus increasing interest rates - either rents are going to have to cover landlord rental costs + profit or rental stock prices need to implode.
“All lenders want to be in Idaho because Idaho is one of the fastest growing real estate markets,” McCaslin said.
https://idahobusinessreview.com/2018/09/11/guaranteed-rate-nears-opening-a-mortgage-office-in-downtown-boise/
This is the paywalled article:
Fairly new to Idaho, national mortgage lender Guaranteed Rate expects to open a downtown Boise office by Oct. 1 in the former Umpqua Bank space in the Veltex Building.
Guaranteed Rate first opened Idaho offices in 2017 in Sandpoint and Coeur d’Alene, followed by an Eagle office in February.
Chicago-based Guaranteed Rate is just outside the list of Top 10 largest U.S mortgage lenders with $19 billion in mortgages in 2017, according to Inside Mortgage Finance. Established in 2000, Guaranteed Rate now has about 210 offices in 47 states.
Downtown Boise branch manager Melinda Kim McCaslin opened downtown offices in temporary space in June with four people but expects to grow to 10 or 15 employees within a year. Guaranteed Rate will first occupy half of the 5,515-square-foot space vacated by Umpqua Bank, which moved to Capitol Boulevard and Front Street across from The Grove Hotel. Guaranteed Rate will also have a right of first refusal for the second half of the space, McCaslin said.
“All lenders want to be in Idaho because Idaho is one of the fastest growing real estate markets,” McCaslin said.
Guaranteed Rate focuses on home purchases, refinancing and home construction loans. The company specializes in online mortgages but also does traditional in-person transactions.
“We also believe in customer relations,” McCaslin said. “I still meet with my clients.”
Keller, WA Housing Prices Crater 24% YOY As Trust In Real Estate Industry Sinks To New Low
https://www.movoto.com/keller-wa/market-trends/
Oh come on! 2 houses for sale not exactly a basis for statistics. You are being silly.
Ahhht! ….. Housing.
El Dorado, CA Housing Prices Crater 12% YOY As Sacramento Area Housing Bust Deepens
https://www.movoto.com/el-dorado-ca/market-trends/