The Housing Bubble

The Mountain Mail reports from Colorado. “Multiple offers. Property selling in days. Low inventory and plenty of buyers with cash in hand. Is it 2007? No. But Salida’s real estate market is starting to act like it. ‘We’ve definitely seen multiple offers and back-up offers,’ said Pinon Real Estate Group broker/owner Susan Dempsey Hughes. ‘There have been multiple occasions where that’s happened in the last couple of months. Probably the last time we saw that was in 2007, but we are starting to see it again now.’”

The Denver Post in Colorado. “Home sales have declined for four consecutive months both nationally and in Colorado, according to RealtyTrac. In metro Denver, the average sale price slipped to to $231,500 in February from $235,000 the month before. In February 2013, sales averaged $215,000. RealtyTrac VP Daren Blomquist called the six-month price slump ‘a little concerning,’ compared with national averages that have been down two consecutive months. ‘Not to overblow things, because home prices are still up year-over-year, but there does seem to be some weakness in these monthly numbers being down in Colorado,’ he said.”

“As far as institutional investors, Blomquist said that in January institutional investors represented 8.3 percent of the sales in Colorado and 13 percent in Denver. However, their activity fell dramatically in February, accounting for only 2.2 percent of sales in Colorado and 3 percent in Denver.”

The Gazette in Colorado. “Foreclosure filings, which are the start of a process that can lead to the auction of a financially troubled property, totaled 202 in March, an 11.6 percent increase over February’s total and a 30.3 percent jump from the same month a year ago, according to a report Tuesday by the El Paso County Public Trustee’s Office. More people have bought homes of late, either because they’ve taken advantage of still-affordable mortgage rates or because rising apartment rents have prompted them to buy, said Ryan McMaken, a Colorado Division of Housing economist. As a result, he said, the pool of property owners who could fall into foreclosure is on the rise.”

“‘You’re doing a lot more loans than you were last year and the last few months,’ McMaken said. ‘And so there’s simply more activity - a larger universe of loans that could potentially foreclose.’”

The Salt Lake Tribune in Utah. “Some Realtors say the past few weeks of warmer weather brought buyers out in large numbers and that inventories of available homes already seem tight, even before the 2014 sales season kicks into full swing. ‘It’s insane,’ said Babs De Lay, a broker with Urban Utah Homes and Estates, which specializes in Salt Lake City homes. ‘I cannot find a livable home under $300,000 that isn’t sold in a day within city limits.’”

“At least 3,274 apartments are under construction across Salt Lake County and another 5,674 have been proposed for this year, according to EquiMark. In downtown Salt Lake City alone, one analyst said, nearly twice as many apartments are proposed or being built now as were constructed in the prior decade. ‘The pipeline of new construction keeps growing,’ said Sage Sawyer, a principal broker at EquiMark. The trend, he said, has the potential to glut apartment markets during the next two to three years. ‘If everything that is proposed gets built,’ Sawyer said, ‘there is definitely going to be some softness in the market.’”

The Phoenix Business Journal in Arizona. “The number of Metro Phoenix homes sold in February (5,398) fell by more than one quarter versus a year ago, while total cash spent in those transactions ($1.4 billion) was down 16 percent, according to Arizona State University’s newest housing report.”

“This happened despite the fact that buyers had substantially more homes to choose from than they did a year ago. As of March 1, supply was up by 4 percent from Feb. 1 and by a whopping 58 percent year-over-year, the report said. As for the Valley’s median single-family home price, that number dipped another 1 percent in February to $195,000. That follows a 4 percent decline in January. It was the first time since 2011 the median price declined for two consecutive months, the report said. New home sales in February rose a modest 1.6 percent from January, but were down 23 percent year-over-year.”

“Lloyd Fox, owner of Phoenix-based The Fox Group at Long Realty Co., said he wouldn’t be surprised if the median price even decreases, but slightly, by year end. ‘I think it’s healthy to have a flat market right now … you can’t sit there and think we’re going to go up in double digits (prices) every year. It’s just not sustainable,’ Fox said. Daniel LeClaire, an agent with AZ & Associates, shared that sentiment. ‘It was going so crazy this past 1.5 to two years,’ and it was a little scary, LeClaire said.”

The Arizona Republic. “The Valley’s median home-sales price fell to $195,000 in February, the lowest since August, according to Arizona State University’s W.P. Carey School of Business. The median also fell in January, to $196,500. The median sales price was $205,000 in December. That means median prices have dropped almost 5 percent since the start of 2014. ‘Home-sales activity was a startling 26 percent below February 2013,’ said Mike Orr, director of the Center for Real Estate Theory and Practice at W. P. Carey School of Business. ‘Despite the large price gains since last year, this is the weakest February in four years.’”

“The luxury house market in metro Phoenix is beginning to shift again toward buyers as more owners of houses priced $500,000 and higher try to sell. The number of houses for sale priced between $500,000 and $1 million in Phoenix’s Biltmore and Arcadia areas, Paradise Valley, Scottsdale, Carefree, Cave Creek and Fountain Hills has climbed 50 percent in the past year, according to the latest Walt Danley Realty report done with Arizona State University real-estate analyst Mike Orr.”

“High-end home sales were strong for most of 2013 but slowed late in the year. In February, seven Valley houses sold for more than $3 million, and 12 sold for prices between $2 million and $3 million. That compares with six sales of houses priced above $3 million and 11 houses priced between $2 million and $3 million during February 2013. This month, listings are up and sales down, the same trend happening at the more affordable end of Valley’s housing market. Currently, 2,977 houses priced above $500,000 are listed for sale in the areas tracked by the report. That compares with 2,212 in March 2013.”

Vegas Inc. in Nevada. “As almost anyone who owns a house knows, Las Vegas’ real estate market has been roaring, with used-home prices jumping 27 percent in the past year and new-home prices soaring 36 percent. Many listings receive multiple offers as investors gobble up homes to turn into rentals. At the same time, though, Nevada’s foreclosure rate remains one of the worst in the country.”

“No matter how fast prices rise, the Silver State can’t shake its status as a foreclosure hotbed. The foreclosure rate itself is fluctuating — February’s was down 16 percent from January, which was up 28 percent from December, according to RealtyTrac. ‘(It’s) a tale of two markets,’ local economist John Restrepo said.”

“One culprit might be our personal finances. Nevada has the nation’s third-highest mortgage delinquency rate, says Trans-Union, and more than half of all households are in a ‘persistent state of financial insecurity,’ according to the nonprofit Corporation for Enterprise Development. A family of four would need about $5,900 in savings to carry them for three months through a job loss or other emergency, but more and more middle-class homes in Nevada ‘fall short of that amount,’ the organization has said.”

“Straightening out a family’s finances is tough here — hiring is tepid, wages are stagnant and the jobless rate is high. ‘The traditional homeowner is still struggling,’ Restrepo said.”