October 21, 2013

Sellers Will Have To Get Realistic

The Press Enterprise reports from California. “The Inland region’s feeding frenzy on house-flipping has subsided, a third-quarter report by RealtyTrac suggests. Bernie Bramante, a Realtor with Rancon Real Estate in Temecula, says he’s seen a shift in the dynamic play out in recent months. Sales were downright frothy at the beginning of the year, he said: ‘Six months ago, everyone had this expectation things would go up 20 percent per year,’ he said. ‘Now prices are at a plateau, and I’m seeing a squeeze with investors, and with flipped homes not getting as big of a return on the investment.’”

“Investors are not out shaking the bushes the way they were earlier this year, he said. ‘It’s having an effect on the volume and the price of homes.’”

Inland News Today. “The run-up in home prices that began early last year may be running out of steam. ‘There are fewer investors and cash buyers out scouring the market. Mortgage rates have risen a percentage point or more since May. And, there’s more inventory with more homes to choose from,’ said DataQuick’s Andrew LePage.”

“LePage says realtors are no longer getting multiple offers and homes are staying on the market longer. Sellers will have to ‘get realistic’ by dropping their asking prices, LePage said.”

Los Angeles Daily News. “DataQuick analyst Andrew LePage said that the market is downshifting a bit. ‘I’ve heard of fewer multiple offers and properties are staying on the market a little bit longer,’ he said. ‘And there are some drops in asking prices. Some sellers are really trying to reach for the stars based on the appreciation we were seeing during the summer. The market has cooled somewhat from then.’”

The Mercury News. “A September slowdown in Bay Area home sales and prices is helping buyers begin to turn the tables on sellers. Sales were down from August and the median price for all types of homes across the nine-county Bay Area slid for the second month in a row, DataQuick reported. ‘The pendulum has swung toward the buyer since the summer,’ said DataQuick’s Andrew LePage.”

“Real estate agents report price reductions for higher-priced homes in some parts of the Bay Area, and buyers were encountering less competition from investors. ‘September was slow for everybody,’ said Joe Cutrufelli of Alain Pinel Realtors in Walnut Creek. He said he was glad to see ‘the craziness” end. ‘Frankly, we needed it to happen. Where there were 30 to 40 offers, now it’s down to two or three.’”

“Sales of single-family homes were down from August by double digits in the East Bay, Peninsula and South Bay, while median sale prices were either flat or below their August levels. Inventory around the bay was at its highest level for the year in mid-September, according to ZipRealty. Sales of lower-priced homes still are brisk in Contra Costa County, but at prices above $800,000 sales have slowed, said Don Cruz Datanagan, head of ZipRealty’s East Bay office in Walnut Creek. ‘We have properties in Danville in great neighborhoods that haven’t moved,’ he said. ‘We’re seeing a shift toward a buyers’ market, but just in certain price ranges.’”

“‘There was a time when anybody could put anything on the market and people would line up to buy it. That’s not happening now,’ said Doreen Roberts, a Fremont broker.”

The Press Democrat. “Home sales slowed in September as fewer investors and other buyers hunted for properties in Sonoma County. Demand remains healthy, but ‘we’re not red hot any longer,’ said Tim Freeman, manager of Coldwell Banker in Santa Rosa.”

“‘You don’t see 15 offers on a property anymore,’ said Shawn Hermosillo, an agent with Keller Williams in Santa Rosa. ‘You see one to three offers, or no offers.’”

“The lack of offers often occurs when sellers make their asking prices higher than recent comparable sales. ‘The buyers are smart, and they know if something’s not priced right,’ said Brian Connell, a broker/manager for Frank Howard Allen in Santa Rosa.”

The Sacramento Business Journal. “Speakers from different real estate sectors gave their sense of where the Sacramento region is headed in 2014, with a general sentiment among all: Recovery underway, but it is a long way from complete. The speakers used strong examples and lots of charts at Thursday’s Sacramento Real Estate Connect event to make that point, including Tom Heacox of Cornish & Carey Commercial Newmark Knight Frank who said that available office space in the region is equal to an entirely vacant downtown Sacramento.”

“Scott Reynolds of Scott Reynolds Commercial Real Estate said he’s recently noticed a lack of shrimp platters from developers throwing parties for new shopping centers.”




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42 Comments »

Comment by Housing Analyst
2013-10-21 05:20:09

Gawd…. that state is rife with mortgage and housing fraud.

Comment by Jingle Male
2013-10-21 12:24:45

Yes it is. I helped the FBI put about a dozen of them in jail…..this being the latest…

Cynthia Suratos Lorica….

http://www.fbi.gov/sanfrancisco/press-releases/2013/cynthia-suratos-lorica-sentenced-for-mortgage-fraud-and-tax-evasion

Her sister Edwinna Suratos Firmeza just joined her in the Dublin Correctional Facility for Women a couple of months ago….

Sisterhood of the traveling mortgage fraudsters……..

Comment by oxide
2013-10-21 12:39:23

Seems like you do well with the small fish. Can’t you, like, work on Angelo or Lloyd or something?

Comment by Jingle Male
2013-10-21 14:54:26

I’m just a little fish too, swimming in a small pond. The whales need to be harpooned by some much bigger guns. I wish it would happen, but it seems increasingly unlikely. The statute of limitations is ticking along….

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Comment by Housing Analyst
2013-10-21 17:08:39

And you’re just like them.

 
 
 
 
 
Comment by Combotechie
2013-10-21 05:48:31

“The buyers are smart, and they know if something’s not priced right.”

Well, that brought me a laugh.

“Not priced right” generally means, in this case, that “the price is no longer going up”.

If you can somehow cause the price to go up then buyers will come out of the woodwork and they will buy. If you can’t cause the price to go up then buyers will stay in the woodwork.

Which means buying causes prices to go up and prices going up causes people to want to buy. It a self-reinforcing loop which works … until it doesn’t.

And it appears we have entered this “it doesn’t” stage.

 
Comment by MacBeth
2013-10-21 06:02:45

“The Mercury News. “A September slowdown in Bay Area home sales and prices is helping buyers begin to turn the tables on sellers. Sales were down from August and the median price for all types of homes across the nine-county Bay Area slid for the second month in a row, DataQuick reported.”

Does anyone here now how many stores Dollar Tree/Family Dollar expects to open in San Francisco during 2014? The answer would be telling.

I trust their activity more than a pseudo-economist/realtor’s mouth.

 
Comment by Whac-A-Bubble™
2013-10-21 06:06:21

“Investors are not out shaking the bushes the way they were earlier this year, he said. ‘It’s having an effect on the volume and the price of homes.’”

 
Comment by Whac-A-Bubble™
2013-10-21 06:09:14

“Sales of lower-priced homes still are brisk in Contra Costa County, but at prices above $800,000 sales have slowed, said Don Cruz Datanagan, head of ZipRealty’s East Bay office in Walnut Creek. ‘We have properties in Danville in great neighborhoods that haven’t moved,’ he said. ‘We’re seeing a shift toward a buyers’ market, but just in certain price ranges.’”

‘Lower-priced’ = under $800,000.

Got it, Mr. Datanagan.

Comment by Housing Analyst
2013-10-21 06:21:18

Contra Costa county is the epicenter for mortgage and housing related fraud.

Comment by Whac-A-Bubble™
2013-10-21 08:30:12

I used to own there. :-)

 
 
 
Comment by Whac-A-Bubble™
2013-10-21 06:11:12

Can anyone predict how long from now it will be when we start to read sob stories about the all-cash investors in Coastal California real estate who lost their shirts?

Comment by Salinasron
2013-10-21 06:18:35

All cash buyers in this area were mainly for rental purposes so when places can’t get the renters at the right price you should hear the sob stories about how they lost their retirement income and can’t get a job as a Walmart greeter.

 
Comment by Ben Jones
2013-10-21 07:54:17

These reports are based on sales from a month or two past. I’d guess the wailing will begin in another month or three.

There are several interesting things here. This about face isn’t just happening in California. Inventory is growing in spite of the homeowner bill of rights. Everybody knew all along that “investors” were behind this thing in California. So is this a surprise?

‘Six months ago, everyone had this expectation things would go up 20 percent per year,’ he said. ‘Now prices are at a plateau, and I’m seeing a squeeze with investors, and with flipped homes not getting as big of a return on the investment…It’s having an effect on the volume and the price of homes.’

In this very same news outlet (PE) a few months ago, we read about “investors” paying over asking for the sole purpose of raising comps on their nearby houses. Well, they succeeded. Now what, genius?

Comment by United States of Crooked Politicians and Bankers
2013-10-21 19:23:07

“…we read about “investors” paying over asking for the sole purpose of raising comps on their nearby houses…

This is better than fiction.

 
 
 
Comment by Blue Skye
2013-10-21 07:02:08

“The buyers are smart, and they know…”

Unlikely since housing mania is all emotion and no math. A more likely possibility is that the bag of unindentured fools isn’t adequate to balance the multitude of debt mansions available.

Comment by Housing Analyst
2013-10-21 08:01:41

Every scam eventually runs out of suckers.

Thank your lucky stars that you’re not one of the suckers.

 
 
Comment by Ben Jones
2013-10-21 08:29:20

‘In a report issued Monday, the Bundesbank said that prices in urban housing markets could be as much as 10% higher than the level suggested by fundamentals, such as demographic and economic factors.’

‘Furthermore, “in the attractive large cities, the upward deviations in this segment are as high as 20% in some cases”, the report said, referring to Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf.’

Comment by Whac-A-Bubble™
2013-10-21 08:44:24

How did Germany end up with a housing bubble in their lap? Back in the early 2000s, while the U.S. housing market bubbled sky high, they were among the few developed nations without one.

Comment by Ben Jones
2013-10-21 09:11:04

Probably the same way you get a bubble in Fresno or San Jose. Easy money looking to get rich quick.

 
 
 
Comment by Whac-A-Bubble™
2013-10-21 08:57:16

Oct. 21, 2013, 10:00 a.m. EDT
Existing U.S. home sales dip 1.9% in September
By Jeffry Bartash

WASHINGTON (MarketWatch) - Sales of previously owned U.S. homes fell a seasonally adjusted 1.9% in September because of higher prices and rising mortgage rates, the National Association of Realtors said Monday. Sales dipped to an annual rate of 5.29 million last month from 5.39 million in August. Economists polled by MarketWatch had forecast sales to decline to a 5.30 million rate. The pace of sales in August, originally reported as a six-year high of 5.48 million, was sharply reduced to match the level of sales in July. Those two months reflect a four-year high in existing home sales. The median sales price of used homes was up 11.7% at $199,200 compared to a year earlier. The number of months it would take to sell all the homes now on the market was little changed at 5.0 months. Looking ahead, NAR forecast that sales are likely to continue to decline as affordability fell to a five-year low.

 
Comment by Whac-A-Bubble™
2013-10-21 09:01:25

Was there a farmland bubble in the runup to GD1?

Oct. 21, 2013, 11:24 a.m. EDT · CORRECTED
Farmland bubble? 10-year rise raises red flags
Price rally faces ‘moment of truth’ as tailwinds become headwinds
By William L. Watts, MarketWatch

An earlier version of this story incorrectly identified the location of a farm sale that took place in Grundy County, Iowa. The story has been corrected.

NEW YORK (MarketWatch) — Farmland prices have been on a tear for over a decade, barely slowing as the rest of the country suffered a housing collapse, leading economists and investors to worry that a dangerous bubble is forming in the heartland.

The average acre of Iowa farm real estate rose 20% in value to $8,400 in 2013, according to the U.S. Department of Agriculture. That’s up from $3,850 in 2009, and data show overall farmland prices have been on the rise for more than a decade. It’s a similar story across the Corn Belt and the Northern Plains. But it takes more than a string of big gains to blow a bubble. And while some farm real-estate professionals are wary, they argue that the evidence doesn’t justify bubble fears – at least not yet.

“In general, if you ask, is farmland in a bubble, I’ll say, no,” said John Taylor, national farm and ranch executive for U.S. Trust, a private bank that is part of Bank of America Corp. “But if you ask, are some people paying bubble prices, I’ll say, yes.”

Comment by Blue Skye
2013-10-21 09:12:45

How much money can you make off a good acre of farm land these days, working dawn to dusk?

Comment by Carl Morris
2013-10-21 09:45:40

Legally? Without taking advantage of any subsidies?

Comment by Taxpayers
2013-10-21 10:01:26

commie farmers ! eheheheh

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Comment by Carl Morris
2013-10-21 09:44:40

Was there a farmland bubble in the runup to GD1?

I thought I had heard that there was? And that was why so many farmers left for California…

 
 
 
Comment by inchbyinch
2013-10-21 10:03:36

“Scott Reynolds of Scott Reynolds Commercial Real Estate said he’s recently noticed a lack of shrimp platters from developers throwing parties for new shopping centers.”

Way too many shopping centers have been built. What a sad commentary of land use and what people do in their free time. It might be my career, but I am realistic. I may switch to a medical building REIT career. 78M Baby Boomers makes the change a shoe in.

Comment by Taxpayers
2013-10-21 10:45:36

the shrimp platter index

Comment by Ben Jones
2013-10-21 11:20:14

How about the IPO un-rented house index:

http://www.americanhomes4rent.com/rental_listings

Comment by United States of Crooked Politicians and Bankers
2013-10-21 22:17:24
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Comment by Beer and Cigar Guy
2013-10-21 11:47:08

When they stop offering boundless ‘cockroach of the sea’ platters, you know its getting serious. Lets keep a close eye on the ‘bolt-on, aftermarket-fun-bag surgery index’. That is always a highly-correlated leading indicator of Realtor profitability and future expectations.

 
Comment by inchbyinch
2013-10-21 14:23:55

Taxpayers
Love your index creation.
I am also networking to work for a TOD as well. Transit Oriented Developments in LA are growing, and with all the Federal Grant $, it is infrastructure $ well spent, imho.

 
 
Comment by Bluestar
2013-10-21 16:49:41

Maybe the promoters don’t trust the seafood.

“We’re seeing crabs with holes in their shells, other seafood deformities. The state of Louisiana oyster season opened on October 15, and we can’t find any production out there yet. There is no life out there.”
Blanchard has also seen shrimp brought in with deformities, and has taken photographs of shrimp with tumours (see above). Others lack eyes. He attributes the deformities to BP’s use of toxic dispersants to sink the spilled oil.

“Everybody living down here watched them spray their dispersants day in and day out. They sprayed our bays and our beaches,” he said. “We got a problem, because BP says they didn’t spray down here, but we had a priest that even saw them spraying. So either we got a lying priest, or BP is lying.”

http://truth-out.org/news/item/19526-gulf-ecosystem-in-crisis-after-bp-spill

 
 
Comment by Ben Jones
2013-10-21 11:45:26

‘Home prices are falling across the country, according to ZipRealty. With 19 percent increase in year-over-year new listings, Denver ranked as the No. 1 metro area offering the greatest opportunities for home buyers based on new listings as of Sept. 15, according to ZipRealty. Tucson, Orange County, Baltimore, Washington, D.C., San Diego and Seattle followed.’

‘Available homes for sale in mid-September outpaced last year’s levels as a total of 152,198 new listings came on line in mid-September — a 5 percent gain, according to ZipRealty.’

“Further moderation in trends was evident in sold-to-list price ratios, new listings volume, pending sales volume, and days on market data for mid-September,” Baker said. “The median number of days on market inched up from 28 in mid-August to 30 in mid-September, though houses are still selling faster this year than last year in every city except Phoenix.”

Comment by Taxpayers
2013-10-21 14:14:09

still tight in my hood N VA 22151
about 1/2 par

 
Comment by Whac-A-Bubble™
2013-10-21 17:41:01

‘Home prices are falling across the country, according to ZipRealty.’

Yawn. Wake me up when prices have dropped to 1997 levels…

 
 
Comment by Ben Jones
2013-10-21 11:51:04

‘Higher mortgage rates and economic uncertainties are starting to temper the Dallas area’s frenetic housing market. Real estate agents say that some of the frenzy that characterized the area home market in spring and summer is gone.’

“We have seen it really since Labor Day,” said Kay Weeks, a top sales agent for Dallas’ Ebby Halliday Realtors. “We are not seeing the open floodgates of business we have experienced from January to July.”

“This summer, buyers were having to act urgently and quickly because new listings were selling overnight,” said Scott Schueler, an agent with Keller Williams Realty. “But now it’s slowed down quite a bit. I have fewer buyers looking, and my listings are taking longer to sell.”

“Joan Eleazer of Briggs Freeman Sotheby’s International Realty, said that the overall market in the Dallas area has recently become more paced. “It’s not what we were seeing last spring,” she said. “For a time, everybody saw such a change in the market, it created a lot of hype.”

‘buyers were having to act urgently and quickly’

Boy, in the rush I sure hope no one paid too much.

Comment by Housing Analyst
2013-10-21 12:01:26

“Boy, in the rush I sure hope no one paid too much.”

BWHAHAHAHAHAHAHAHAHA!!!!!!!

Nothing like telegraphing the truth eh?

 
Comment by Bluestar
2013-10-21 17:03:03

If prices just level off here you still have to factor in the huge number of new people moving into these urban areas. Unless the flood of tenderfoots and greenhorns slacks off these prices won’t drop like other places.

Austin area home sales up 34 percent in September

http://www.statesman.com/news/business/austin-area-home-sales-up-34-percent-in-september/nbTJj/

On a month-over-month basis, sales were down about 19 percent from August, reflecting factors such as rising interest rates, lack of inventory and the typical seasonal slowing.

Comment by Housing Analyst
2013-10-21 17:57:38

“New people”?

-Population growth is the lowest in US history

-25 MILLION excess empty houses can be shuffled any way you’d like.

 
 
Comment by Puggs
2013-10-25 13:33:05

Anytime you buy urgently and too quickly you ARE getting screwed.

 
 
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