September 17, 2018

Increased Supply With Larger-Than-Usual Discounts

A report from the Naples Herald in Florida. “The Naples housing market continues to show strength after closed property sales increased by 5 percent and inventory rose 2 percent in August, according to the Naples Area Board of Realtors. ‘I’m really encouraged by activity in the lower end of the market during August,’ said Mike Hughes, General Manager for Downing-Frye Realty, Inc. ‘Historically, August is where we begin to see an increase in inventory as sellers get ready for our busy winter season.’”

“According to Adam Vellano, West Coast Sales Manager, BEX Realty – Florida, ‘One indication that homeowners were pricing homes to sell in August was apparent in the MLS as 50 percent of the inventory that sold during the month had been on the market for over 100 days.’”

“Overall median closed prices fell 3 percent in August to $319,000 from $328,000 in August 2017, and it fell 13 percent for properties above $300,000 to $446,000 from $510,000 in August 2017.”

From Curbed Atlanta in Georgia. “Following a thorough renovation, this circa-1920 brick bungalow in Roseland, a community between Chosewood Park and South Atlanta, harkens back to a simpler time, but with key modern upgrades. Although the listing states this home ‘won’t last in this fast growing community,’ it’s actually been on the market for nearly 80 days. And that’s after a $30,000 price cut that brought the original asking price of $349,000 down to the current $319,000.”

From Mansion Global on New York. “Manhattan’s luxury housing market logged a slow week as the Jewish New Year cut two business days from many people’s work weeks and children in the city were off from school, according to the Monday Olshan Report. Those homes that did trade hands also went with larger-than-usual discounts. The average property to find a buyer last week went into contract with a 9% discount.”

“Case in point, the most expensive transaction was an Upper West Side townhouse with five bedrooms, an elevator and a $4.5 million price cut. The home first went on the market for $19.5 million in October 2016, but officially found a buyer last week for $15 million.”

From Palo Alto Online in California. “As summer comes to a close, buyers and sellers want to know what to expect this fall. Will the market heat up, kind of like late summer temperatures often do in the Bay Area? Will home prices continue to rise, stay the same or decrease? Does a market like Silicon Valley even slow down? ”

“For the majority of 2018, inventory levels for Silicon Valley have hovered around one month’s supply. Historically speaking, these numbers are very low. But in July, inventory levels crept up a bit to almost one-and-a half-month’s supply. This still doesn’t indicate a buyer’s market, but it does mean buyers had more homes to choose from in July than they’ve had the rest of the year.”

“Accompanying the increase in supply was a drop in the median home price for single-family homes for both Santa Clara and San Mateo counties as a whole, and many of the individual markets they encompass. In July, the median home price in Santa Clara and San Mateo counties fell from second-quarter numbers of $1.4 million and $1.65 million respectively, to $1.35 million and $1.6 million. This represented a 4 percent (Santa Clara) and 3 percent (San Mateo) drop in median home prices.”




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33 Comments »

Comment by Ben Jones
2018-09-17 12:44:16

‘Overall median closed prices fell 3 percent in August to $319,000 from $328,000 in August 2017, and it fell 13 percent for properties above $300,000 to $446,000 from $510,000 in August 2017′

This doesn’t tell the whole story because Naples has been getting their a$$ kicked for a couple of years now.

Comment by qt
2018-09-17 13:14:37

Dont worry. Everyone has been putting 20% down payment with FICO score of 700 and above. Nothing to see here. Dont panic please! Now is the best time to buy!

- Local Realtor

Comment by Apartment 401
2018-09-17 16:17:10

Realtors are liars.

 
Comment by rms
2018-09-17 17:45:30

@qt-
/sarc :)

 
Comment by John
2018-09-19 06:14:53

Is there anywhere near the same level of crap loans as the last time?
I.e. stated income stated assets?
We are seeing negatives, rising interest rates, and reduction of mortgage interest deductibility (in high state tax states like CA).
I also wonder how much of the market in CA was driven by Chinese $$ and if that is going to continue.

Comment by Mortgage Watch
2018-09-19 09:38:22

There’s a new blog.

http://housingbubble.blog

We’ll be glad to answer your questions in detail with supporting data there.

See you there.

(Comments wont nest below this level)
 
 
 
 
Comment by Mortgage Watch
2018-09-17 12:44:31

Monterey, CA Housing Prices Crater 12% YOY

https://www.movoto.com/monterey-ca/market-trends/

 
Comment by Ben Jones
2018-09-17 12:57:32

‘a $4.5 million price cut. The home first went on the market for $19.5 million in October 2016, but officially found a buyer last week for $15 million’

We’ve seen multi-million $ slashing week after week for at least two years now in NYC and the media still hasn’t called it a popped bubble.

Comment by Anonymous
2018-09-17 21:29:10

NYT too busy hounding the Trump administration.

If they do notice, they’ll blame him.

 
 
Comment by Mortgage Watch
2018-09-17 13:11:16

San Francisco, CA Housing Prices Crater 13% YOY As Tech Layoffs And Staggering China Economy Slams NorCal

https://www.zillow.com/san-francisco-ca-94109/home-values/

*Select price from dropdown menu on first chart

 
Comment by Professor Bear
2018-09-17 13:47:27

“Accompanying the increase in supply was a drop in the median home price for single-family homes for both Santa Clara and San Mateo counties as a whole, and many of the individual markets they encompass. In July, the median home price in Santa Clara and San Mateo counties fell from second-quarter numbers of $1.4 million and $1.65 million respectively, to $1.35 million and $1.6 million. This represented a 4 percent (Santa Clara) and 3 percent (San Mateo) drop in median home prices.”

This presumably is not quality-adjusted. Case-Shiller numbers going forward should be increasingly interesting!

Comment by Big V
2018-09-17 17:35:31

I need the prices to drop a lot more than that.

 
 
Comment by Mortgage Watch
2018-09-17 13:57:03

Denver, CO Housing Prices Crater 10% YOY As Market Floods With Liar Loans

https://www.zillow.com/denver-co-80230/home-values/

*Select price from dropdown menu on first chart

 
Comment by oxide
2018-09-17 14:16:30

From the Atlanta article:

————
“Following a thorough renovation, this circa-1920 brick bungalow … original asking price of $349,000 down to the current $319,000.”

Perhaps potential buyers aren’t keen on living across the street from a towing yard. Or maybe they want an asking price more in line with the $200,000s other for-sale homes in the neighborhood have received.
————

Oh perhaps buyers aren’t keen on living in a house with bricks falling out of the foundation. Or a burned out garage carcass in the back yard. Or a clearly blighted house next door. Or bars on the porch (shoulda been a clue, ya know?).

The article has links to the listing and then to the tax records. Wow, this house has quite a history:

05/26/2017 $7,000
11/09/2010 $10,500
08/30/2010 $3,000
04/06/2010 $89,781
04/06/2010 $89,781
06/29/2007 $0
05/27/2005 $85,000
02/09/2005 $63,000
01/04/2005 $65,300
01/04/2005 $65,300
12/12/2002 $184,000
06/28/2002 $87,000
03/14/2001 $45,000

So someone bought this POS for $7K, spent upwards of $80K doing the main level, greedily wants $300K+ for it now, and didn’t even bother to fix the foundation or do a little landscaping in back? I feel bad for the poor house, but I think it’s gonna rot there.

Comment by Anonymous
2018-09-17 21:32:54

The price was right in 2007! :D

 
 
Comment by Mortgage Watch
2018-09-17 14:41:53

Satellite Beach, FL Housing Prices Crater 9% YOY As 2010-2016 Vintage Subprime Mortgages Fail

https://www.movoto.com/satellite-beach-fl/market-trends/

 
Comment by hunkydory
2018-09-17 14:59:38

Got an email from a realtor last night, lot that was for sale at @ 550K, cut in half. This is in a failed development from bubble 1.0 where nothing was ever built and every lot has a ~100K assessment now in order to put in the infrastructure required before owners can start building. Monthly fees are also quite high as I recall. Those lots were going for 70-120K about 2012.

Comment by MWR
2018-09-17 15:36:02

I have mentioned this previously but just to comment on the ridiculous price of land:
In the last bubble the company I worked for lost 90-95% on some land loans. Lend $600k sell after foreclosure for $10-15K.

depending on the development some fees can include, in addition to HOA fees, Club house fees. Meaning you have to spend $x.xx dollars each month in the clubhouse/restaurant/bar.

 
Comment by Mafia Blocks
2018-09-17 15:42:24

Considering there is a globe full of land where 95% of it goes undeveloped, land is essentially worthless dirt. If you paid more than $500-$1,000 an acre you paid too much.

Comment by BlackSwandive
2018-09-17 21:00:48

$500-$1000 per acre is too much if it’s desert scrub. If it’s a wooded parcel full of 2nd growth cedar and fir, you won’t be sniffing it for less than $20,000 per acre.

 
 
 
Comment by Mortgage Watch
2018-09-17 15:19:59

Kirkland, WA Housing Prices Crater 25% YOY As Seattle Housing Market Collapse Deepens

https://www.movoto.com/kirkland-wa/market-trends/

 
Comment by crispy&cole
2018-09-17 15:40:30

Seattle UPDATE:

Aug 2018 vs Aug 2017

Listings UP 105% YOY

Pending Sales DOWN 23% YOY

Comment by qt
2018-09-17 16:28:18

Thanks. Do you have the link?

Comment by Crispy&cole
2018-09-17 16:50:24

CR blog. For some reason I can’t post links to that blog here

 
 
Comment by Big V
2018-09-17 17:40:09

When will the prices go down?

 
 
Comment by Boo Randy
Comment by azdude
2018-09-17 17:04:41

I found some bad economic data in africa today that might b of interest to you home gamers

 
Comment by Big V
2018-09-17 17:43:18

But actually this article doesn’t say that lenders are decreasing their standards.

 
 
Comment by Mortgage Watch
2018-09-17 17:27:11

Provo, UT Housing Prices Crater 13% YOY As Homeowner Negative Equity Reaches Record High

https://www.movoto.com/provo-ut/market-trends/

 
Comment by Boo Randy
2018-09-17 17:32:11

Oh dear. Hong Kong speculator dreams of endless housing appreciation are being dashed on the rocks of rising interest rates.

https://www.scmp.com/property/hong-kong-china/article/2164540/hong-kongs-home-sellers-are-cutting-their-property-prices

Growing numbers of Hong Kong flat owners are selling up for much less than offer prices – some at more than HK$7 million (US$890,000) below bank valuation – as a rise in interest rates looms next week.

According to the latest data from CLSA, the offshore arm of China’s biggest brokerage, between August 1 and September 6, at least 29 cases of low to mid-range properties were recorded as being sold for much less, 19 of them at below Hang Seng Bank valuations.

“[Homeowners] are not positive about the prospects [for the home market]. They fear that if they ask for prices that are too high, their flats cannot compete with others,” said Nicole Wong, managing director of property research at CLSA, which was founded in 1986 and acquired by state-owned Citic Securities five years ago.

 
Comment by Boo Randy
2018-09-17 17:35:07

No, MSM, we are not all to blame for housing bubbles. People who refused to participate in the madness bear no blame whatsoever for the actions of the greedy and reckless. Nice try, though.

https://www.9news.com.au/2018/09/16/03/13/60-minutes-housing-market-prices-mortgage-economy-property

 
Comment by azdude
2018-09-17 17:50:55

i searched the globe for bad news for u guys today.

Comment by Anonymous
2018-09-17 21:36:32

Didn’t you find any?

I prefer to read good news. Housing becoming more affordable is an example.

 
 
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