There Wouldn’t Be A Problem If Prices Had Kept Going Up
It’s Friday desk clearing time for this blogger. “According to the California Association of Realtors, the median home price in L.A. County was $390,000 for February 2014 – up 15.2 percent from the same period last year. In Orange County, the median home price last month was $677,000, up 11.6 percent. Only 30 percent of L.A. County residents can afford a median price home, down from 44 percent last year. In Orange County, it’s down to 20 percent from 34. ‘Much like 2006, 2007, we have limited inventory. Prices are therefore going higher. There are a lot of qualified buyers, which is the key in the market now – unlike we had in 2007. So yeah, we are seeing a frenzy,’ said Real-estate agent Jeremy Shelton.”
“Rising home prices over the past year turned South Florida into a seller’s market. Short sales and foreclosures now are selling for list price and above. South Florida investor Mike Mondelli said foreclosures and short sales once were plentiful, but no more. He said novice investors are flooding the market, often overpaying and depleting the supply of homes. ‘It’s definitely difficult to find the bargains that work,’ Mondelli said.”
“The fear of an impending bubble in Dubai’s real estate market was ruled out long ago, now real estate experts are convinced the residential segment won’t witness any oversupply. In its recent report, HSBC Global Research said that Dubai will see a supply of 90,000 new units by 2018, but the market will absorb fairly easily, even if the population grows less than 5 per cent per year. ‘We assume that 30 per cent of this new supply will be bought by foreigners who intend to use them as second homes, which they will not rent out,’ HSBC states, pointing to Emaar and Damac statements that ‘a large portion of their sales are to second-home buyers.”
“If you have confidence in Mount Isa, now is the time to buy property. Jay’s Real Estate principal Sophie Keily said that as of last week more than 350 properties were on the market. That figure marks a complete turnaround from the property shortage experienced by the city in 2012 and 2013 that forced traditional renters to buy property in order to find an affordable place to live. She said having such a large glut of reasonably priced homes was unusual for the region.”
“‘We have owners out there who have had property for a long time and are willing to sell it for less, because they’re ready to leave town,’ she said.”
“Property consultant Matthew Gilligan said there had been a ‘mini crash’ in South Auckland, and other cheaper areas would also be affected. Property commentator Olly Newland had two clients who bought entry-level properties to do them up and sell, but were stuck with them. ‘People can’t come up with 20 per cent. Even on a $350,000 property, $70,000 is a hell of a lot for a young couple to put together.’”
“A vendor in Massey, who declined to be identified, said the lending restrictions had hit the wrong end of the market. He had reduced the price of his property to just under $400,000, but there were still no takers. ‘It’s made the low end of the property market die. Lower-priced properties aren’t selling at all.’”
“As China’s property bubble shows signs of deflating in some areas, privately held developers are falling by the wayside, victims of a toxic combination of unjustified optimism about the property market and sky-high interest rates. ‘It’s not just Ningbo, it’s Hangzhou, and Nanjing has a problem too. Even Beijing,’ said Zhang Yongmin, director of the Centre for Global Finance at Nottingham University’s Ningbo campus. ‘Real estate has a problem; it’s over built.’”
“Analysts say there are plenty of other companies that have borrowed at punitive rates - sometimes as high as 20-30 percent - on the assumption that property prices would rise faster. ‘There wouldn’t be a problem if prices had kept going up,’ said the chief finance officer of a mid-sized property developer, with projects mainly in coastal provinces.”
“Housing prices in metro Phoenix were down again last month, compared to the month before. That’s according to a new report from Arizona State University. ‘Buyers are out there but they’re not showing a great sense of urgency, and many of them are still struggling to qualify even if they want to buy homes, so it’s creating less than ideal conditions for home sellers,’ said Real estate expert Mike Orr, of the WP Carey School of Business.”
“Attorney General Eric T. Schneiderman will bring his proposed legislation to address ‘zombie properties’ and increasing the number of land banks across New York State to Buffalo. ‘After just over a year, our Homeowner Protection Program is getting real results and helping New Yorkers in danger of losing their homes,’ Schneiderman said. ‘The next step – with new ‘zombie properties’ and land bank legislation – is to take the burden off our cities and towns, and help them recover from an epidemic of vacant properties.’”
“U.S. Census data shows about 10 percent of the housing stock in Erie and Niagara counties is vacant – about 50,000 units.”
“There’s a group of Ormond Beach homeowners battling a zombie home problem. The group has identified at least 300 foreclosed homes throughout the city, and numerous abandoned homes with no paper trail that homeowners simply walked away from. RealtyTrac said there are more than 140,000 homes in Florida that are in zombie mode, or are bank-owned. And zombie homes in Florida are in foreclosure for about 1,095 days. ‘It is an eyesore and it is exactly a zombie home because we don’t even know at this point who owns the homes,’ said Rita Press, president of Citizens for Ormond Beach.”
“A report released last week by the National Low Income Housing Coalition, looked at the annual ‘housing wage,’ the hourly wage a full-time worker must earn to afford a two-bedroom rental home at fair-market rent while spending no more than 30 percent of income. The report found that Vermont’s housing wage is $19.36 per hour, based on $1,007 fair-market rent for a two-bedroom apartment. The state’s minimum wage is $8.73. A Vermonter earning minimum wage would have to work 89 hours a week to afford rent, according to the report.”
“In the United States, the average 2014 housing wage for a two-bedroom apartment is $18.92 — more than two-and-a-half times the $7.25 federal minimum wage, and 52 percent higher than it was in 2000. In no state can a full-time minimum wage worker afford a one-bedroom or two-bedroom rental unit at fair market rent, the report found.”
“Data from the National Association of Realtors shows sales of homes priced below $100,000 dropped 19% during the past year. For homes priced above $1 million, sales rose by 38%. Vacation homes are in high demand, with sales jumping 30% in 2013. That represented 13% of all transactions — the highest level since 2006, which was the last year of the housing bubble.”
“There’s no mystery behind the gilded spending of the wealthy. The value of financial assets has climbed to a new record of $67 trillion, with a major assist from investor-friendly easy-money policies at the Federal Reserve. Many Americans, of course, are feeling no wealth effect at all, since they rent instead of owning a home and hold few financial assets, or none. Renting can actually be a smarter option than buying for some people. Had fewer people bought homes during the housing bubble, the subsequent recession probably wouldn’t have been as severe.”
“Still, a broad housing recovery remains critical to the overall health of the economy, as Fed Chair Janet Yellen has stressed repeatedly. ‘We are trying to make homes more affordable and revive the housing market,’ she said in a recent speech. ‘Our goal is to help Main Street, not Wall Street.’ Main Street is still waiting.”
It’s Friday desk clearing time for this blogger. “According to the California Association of Realtors, the median home price in L.A. County was $390,000 for February 2014 – up 15.2 percent from the same period last year. In Orange County, the median home price last month was $677,000, up 11.6 percent. Only 30 percent of L.A. County residents can afford a median price home, down from 44 percent last year. In Orange County, it’s down to 20 percent from 34. ‘Much like 2006, 2007, we have limited inventory. Prices are therefore going higher. There are a lot of qualified buyers, which is the key in the market now – unlike we had in 2007. So yeah, we are seeing a frenzy,’ said Real-estate agent Jeremy Shelton.”
That all sounds bright and cheery until the logical outcome is discussed;
California Housing Demand Falls to 5 Year Low
http://picpaste.com/pics/81270d2467720457ba7dbefea5b45a9c.1396445465.PNG
Declining rate of price increases soon to become an increasing rate of price declines.
So much fraud occurring in CA, wait until 5 years from now when it all becomes exposed. Massive amounts of FHA fraud just like when they changed things in the early 2000s to loosen up who could offer or broker those loans.
Exactly.
Take a look at what few recent sales there were and it’s easy to pick out the fraud. Theres going to be a whole lot of these participants heading to court.
Only morons pay above retail. Suckers pay retail.
HA, how does a 5% rate of increase in sales equal falling demand? You make no sense. A slower rate of increase is not falling demand. It is just a slower rate of increase. HA-larious.
No my friend. A 10% decline in sales yoy. Nice try my deceptive one.
“Housing prices in metro Phoenix were down again last month, compared to the month before. That’s according to a new report from Arizona State University. ‘Buyers are out there but they’re not showing a great sense of urgency,
What buyers?
Housing demand is at 18 year lows. Combined with the reality of 25 million excess empty houses, of course prices will fall.
“Housing prices in metro Phoenix were down again last month, compared to the month before. That’s according to a new report from Arizona State University.”
Sounds like a tennis match broadcast by the corrupt Shills at ASU Carey School of Business. Do they have a picture in the lobby of the Emperor in his invisible clothes?
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” -Upton Sinclair
The number of home sales have increased YoY for the last 5-years. How is that falling demand? Sales are up 6.8% last year over the last 12 months.
More deceptive math J. Fraud?
Phoenix Housing Demand Sinks 26 YoY; Now At 4 Year Lows
http://www.zillow.com/local-info/AZ-Phoenix-home-value/r_40326/#metric=mt%3D30%26dt%3D1%26tp%3D5%26rt%3D8%26r%3D40326%26el%3D0
From the Yahoo Finance article:
“The result has been a bifurcation of the [US] housing market, with sales of expensive homes going up while those of cheaper homes decline… sales of homes priced below $100,000 dropped 19% during the past year. For homes priced above $1 million, sales rose by 38%.”
Rising Median sales price while the market is tanking. We’ve seen this before.
A friend in the mortgage business says that effective Jan 1st, many new laws were unleashed on the industry. Now:
1) Mortgage companies are going to be held responsible is a mortgage goes bad,
2) Buyers have to prove their ability to pay the mortgage, such as having savings large enough to mitigate any loss, and
3) Down payments have to be larger, 20% I believe.
Anyway, all of the new laws effect the lower end buyers much harder that the upper end and I think this is the reason the low end market is tanking.
Lower end buyers can’t qualify for a loan.
You mean all this happened under the current admin’s watch?
Say it ain’t so, Joe.
Do the same rules impact all the federal programs to buy a house or just the private market?
Blackhawk, these do not look like laws; they don’t even look like regulations. More likely, the regulations say that Fannie will no longer buy loans indescriminately. If a bank wants to make its own loan at 0% down and eat the losses, that’s the bank’s priviledge. But don’t even try to stick the taxpayer with the losses like what happened in 2008. The banks are on their own. Perhaps these “laws” are internal guidelines set forth by the bank?
The banks are not “on their own”.
“The banks are on their own.”
Highly unlikely.
With interest rates fixed abnormally low (think: no lender cushion) the only people who could honestly qualify for a loan don’t need a loan. Little has changed during the last five years other than the window dressing, IMHO.
From CNN Money regarding these 2014 regulations:
A significant factor is what’s not in the rules. There’s no minimum down payment or credit score requirement.
“Attorney General Eric T. Schneiderman will bring his proposed legislation to address ‘zombie properties’ and increasing the number of land banks across New York State to Buffalo. ‘After just over a year, our Homeowner Protection Program is getting real results and helping New Yorkers in danger of losing their homes,’ Schneiderman said. ‘The next step – with new ‘zombie properties’ and land bank legislation – is to take the burden off our cities and towns, and help them recover from an epidemic of vacant properties.’”
“U.S. Census data shows about 10 percent of the housing stock in Erie and Niagara counties is vacant – about 50,000 units.”
How many millions of excess empty houses are there in that state? 2 million? 4 million?
“Homeowner Protection Program” sounds much better than “Banker Protection Program”, no?
It’s also an easier sell; The Unwashed Masses would never buy into a Banker Protection Program, but a Banker Protection Program is essentially what it is.
People are smart.
Call a homebuyer a homeowner and he will act accordingly - he will act as if he actually owns the home when, in fact, he doesn’t.
People are smart.
Data from the National Association of Realtors shows sales of homes priced below $100,000 dropped 19% during the past year. For homes priced above $1 million, sales rose by 38%.
Why won’t Realtors be truthful with the public and explain how they are distorting the truth about housing prices with this statistic? Inventory continues to stack up which is driving prices lower yet they continue to report the opposite using the median price trick.
Thousand Oaks, CA Housing Prices Sink 26% YoY On Falling Demand
http://www.movoto.com/thousand-oaks-ca/market-trends/
Change the metric to 5-years to get a completely different perspective on the market. Complete opposite of what HA posts! HA, HA, Halariousness!
Falling for 5 years straight. Thanks for the tip J._Fraud.
Ventura, CA Housing Prices 22% YoY; Inventory up 33%
http://www.movoto.com/ventura-ca/market-trends/
The report found that Vermont’s housing wage is $19.36 per hour, based on $1,007 fair-market rent for a two-bedroom apartment. The state’s minimum wage is $8.73. A Vermonter earning minimum wage would have to work 89 hours a week to afford rent, according to the report.”
The libs have been hammering lately that lucky duck employers need to pay a “living wage.” Conservatives have hammered back that lucky duck jobs were never meant to be a career; they are supposed to be summer jobs or fill-in cash until the lazy lucky duck “betters himself” and “gets a better job.” If our economy bifurcates even more to where those “better jobs” no longer exist, someone will need to reconcile this dilemma.
As it is now, it looks almost doable in Vermont. IF a lucky duck can get a full-time hours, another full-time lucky duck roomie, and subsidized Obamacare, at 30% income for rent, he can live sustainably for some time. Yes you could almost make a career out of flipping burgers… as long as nothing drastic happens.
As it is now, it looks almost doable in Vermont. IF a lucky duck can get a full-time hours, another full-time lucky duck roomie, and subsidized Obamacare, at 30% income for rent, he can live sustainably for some time. Yes you could almost make a career out of flipping burgers… as long as nothing drastic happens.
If you are o.k. with not heating your home during the cold winter those numbers will not work. However, what the story does not tell you is Vermont has a massive renter’s rebate program that will pay up to $8000 a year back to low income renters. Of course, one of the reasons rents are so high in Vermont. Vermont also has a program for owners. Both these programs have distorted rents and housing prices up.
Will not work=will work, sorry for the double negative
“Will not work…”
Hey, that’s half the guys I grew up with in California.
http://www.state.vt.us/tax/renterrebate.shtml
Nothing will rent below government subsidy. Somebody already has “done something”.
based on $1,007 fair-market rent for a two-bedroom apartment
That’s pretty much the going rate out here.
Believe me it is higher in the “urban” areas of Vermont
‘”Hundreds of thousands” of local workers can’t afford the area’s asking prices for rent, which would require an hourly wage of $31.71 to pay for, according to the Silicon Valley Business Journal.’
‘San Jose is the third-costliest housing market in the United States, behind only San Francisco and Honolulu, according to a report from the National Low Income Housing Coalition. The figures are based on the idea that “affordable” means paying less than 30 percent of your income on housing costs, the newspaper reported.’
‘Silicon Valley has almost 70,000 fast-food workers making $11.44 an hour, and nearly 120,000 workers making $21.50 an hour on average.’
‘Guadalupe Garcia lives in a modest two-bedroom apartment in Coachella with her 18-year-old son. She makes just $11.50 an hour as a caregiver, and must borrow money each month to make rent. “I don’t know how to do it, but I manage to do it. I go to get a loan and when I get paid I go take it back and pay it. And I do that all the time, every month just to make it,” Garcia said.’
‘Her son is a full-time student and washes cars on the side to help his mom make ends meet. “Everybody has to be working and put together just to maintain,” Garcia said.’
‘According to a new report by the Southern California Association of Non-Profit Housing, about 60 percent of renters in Riverside County and San Bernardino don’t earn enough to afford a two-bedroom apartment at Fair Market Rent, which in California is $1300 a month.’
‘While minimum wage is just $8 an hour, a renter would have to make more than $21 an hour to afford that. Garcia’s rent accounts for more than half of her income, and then come other expenses. “I need to pay light, gas. We don’t have cable because we can’t afford cable,” Garcia said.’
‘In Coachella, more than a quarter of families live below poverty level.’
Sounds like high housing prices make you poor. Also sounds like somethings got to give.
“I don’t know how to do it, but I manage to do it. I go to get a loan and when I get paid I go take it back and pay it. And I do that all the time, every month just to make it,” Garcia said.
Garcia doesn’t know that she doesn’t know.
Canoga Park, CA Housing Prices Sink 17% As Inventory Explodes 155%
http://www.movoto.com/canoga-park-ca/market-trends/
Agoura Hills, CA Housing Prices Collapse A Stunning 47% YoY
http://www.movoto.com/agoura-hills-ca/market-trends/
Calabasas, CA Housing Prices Crater 24% YoY As Inventory Balloons
http://www.movoto.com/calabasas-ca/market-trends/
Details are murky as described, but this sounds like it might be a proposal to create a publicly-funded bad bank to buy the ‘zombie properties’ from private owners at prices which reduce their bad gambling debt. Is that on target, or does this proposal have some other purpose?
Command-and-control economic policy has historically seldom achieved its publicly stated goals. Maybe it will be different with the Yellen Fed?
“Our goal is to help Main Street, not Wall Street.”
Lol. Janet Yellen should do stand up.
Once upon a time the term “affordable” was associated with the term “lower prices”; now the term “affordable” is associated with the term “lower interest rates”.
What you cannot buy because you do not have the money suddenly becomes something you can buy if you can borrow the money.
The limits imposed by an Earned Money Economy can be extended well beyond reason once the economy is morphed into a Borrowed Money Economy.
The limits imposed by an Earned Money Economy can be extended well beyond reason once the economy is morphed into a Borrowed Money Economy.
Americans have been borrowng money to buy houses for a long time. It’s not a recent phenomenon.
In any case, wouldn’t a Borrowed Money Economy be good for you, Mr. Banker?
‘We are trying to make homes more affordable and revive the housing market,’
There is helping out people who already bought homes, and there is helping out people who want to buy homes. And the twain shall never meet.
‘the twain shall never meet’
And then there’s the many centuries where the market was left to sort it out and no one in government even thought to manipulate house prices. I wonder if Yellen and these guys might make a big mistake?
And then there’s the many centuries where the market was left to sort it out and no one in government even thought to manipulate house prices. I wonder if Yellen and these guys might make a big mistake?
As you know Ben it is not really about housing it is about allowing people to borrow to keep up their spending when their wages are not going up.
Well she’s got some nerve to even mention affordable housing. This is what I mean when I say the dominant economic theory today is central bank-ism. What does that mean exactly? What ever nutty idea they come up with. Bernanke; we’re going to push house prices up to lower unemployment. It makes no sense at all, but everybody nods their head thinking how clever these guys are. These people are economic witch doctors. Standing around a boiling caldron, pitching in bats wings and roots, chanting incantations, expecting a super natural outcome. Then something like this happens:
‘He had reduced the price of his property to just under $400,000, but there were still no takers. ‘It’s made the low end of the property market die. Lower-priced properties aren’t selling at all.’
Unfortunately, Ben, I don’t see house prices falling just to accommodate Joe 6 pack.
HBB still seems to think that J6P wages control house prices. In other words, if J6P can’t afford a house, then prices will fall until he can afford a house. I don’t agree. I believe that there is enough cash (or cheap interest) sloshing around to buy up almost all of the viable real estate* in jobbed areas. Anytime prices fall even a little, investor activity boils up again. And an investor paying cash can out-bid J6P’s mortgage PITI any day. Then J6P can rent; three families to a unit if necessary.
As far as I can tell, there are only two paths to get end-consumer families into houses in an inflated market. The first path is to outright ban investors from buying, so J6P can buy without competing with cash. That’s an anti-free market nightmare as you know, and I’m not even sure it’s Constitutional.
The other path is to subsidize J6P so that their mortgage is on par with investor cash. One avenue to accomplish this is to offer down payment assistance and long-term forgiven loans to deserving buyers. That’s how SFhomowner bought her house.
Another avenue is to subsidize through banks, through low interest or backstopping low-down crap loans. This is the preferred route for any government program: contract it out to the private sector because presumably private sector has the infrastructure to handle it “efficiently.” Of course, private sector takes advantage of that efficiency to skim public monies, as it has been doing to centuries.
However, I suspect this that will be the pattern. Instead of low house prices, we’ll see government subsidizing high prices.
————-
*I don’t mean every single house on the block; I mean they can buy enough inventory to keep comps high. For example, the 2013 bubble was fueled by investors even though investors, at most, accounted for 50% of the transactions.
‘I don’t see house prices falling’
I’ve got 5 or 600 years of real estate history to back up what I’m saying. You have the experience of a handful of years inside the largest financial mania even known. I’m pretty sure how this is going to turn out.
“Then J6P can rent; three families to a unit if necessary.”
Quaint.
Mz. Craterton,
Who is it that’s going to buy up 25 million excess empty houses again? And “they” are going to keep them empty according your conspiracy theory…And the motive for this is?
Oxide says: “The first path is to outright ban investors from buying, so J6P can buy without competing with cash. That’s an anti-free market nightmare as you know, and I’m not even sure it’s Constitutional.”
FHA does that already. When Ginnie Mae forecloses and puts a house on the market, the first 10-days of the listing are exclusively for owner occupants to make offers to buy. Investors are excluded. If no O.O. bids, then it is opened to investors. The property almost always goes under contract within the 10-days.
no one in government even thought to manipulate house prices ?
Arn’t they also manipulating stock prices….Major development…Car prices…Ultra low interest rates lift a lot of boats and leave many others sunk…Its not a balanced interest rate market place…
How close of a relative is Janet Yeltsin to Boris?
“South Florida investor Mike Mondelli said foreclosures and short sales once were plentiful, but no more.”
Maybe this is why. From the same article:
“Thousands of owners who were “underwater” on their mortgages now have equity. They don’t have to let the homes fall into foreclosure or need permission from their lenders to sell for less than they owe on the mortgage.”
Now that they are not underwater, they can suddenly “afford” to pay their mortgage.
‘Much like 2006, 2007, we have limited inventory’
That’s the biggest bunch of bullcr@p I’ve ever heard. I’m really getting sick of this limited inventory lie. Where did all the houses go ? Were they bulldozed? Taken up by he rapture? No, there are even more houses than ever. But no rule of law to make the bank cronies sell them.
“But no rule of law to make the bank cronies sell them.”
Or even repossess them.
Better to leave them in limbo, better for me at least.
“But no rule of law…”
+1 That’s good for one cheese flavored doggie treat.
Camarillo, CA Housing Prices Nose-Dive 41% YoY; Demand Collapses
http://www.movoto.com/camarillo-ca/market-trends/
“She had that Camillo Brillo”, Frank Zappa
http://www.bing.com/videos/search?q=zappa+camarillo+brillo&qpvt=zappa+camarillo+brillo&FORM=VDRE#view=detail&mid=0B3934FBB123096656A00B3934FBB123096656A0
Riverside, CA Housing Demand Craters 14% YoY; Falls To 10-Year Lows
http://www.zillow.com/local-info/CA-Riverside-home-value/r_47401/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D47401%26el%3D0
http://www.movoto.com/riverside-ca/market-trends/
Median number of days on Movoto (which I assume is the median number of days listed) is 38. Does that sound like a market with weak demand?
Almost a third of the houses listed had price reductions in the past month.
33% of all listings had a price reduction? That’s called weak demand.
Houses that are NOT priced aggressively are selling relatively quickly (our firm has some minor recent experience in Riverside–one home).
A lot of people’s expectations are out of whack (sounds like about a third). Those homes that actually do close escrow seem to be selling at more than they did last year and last month (higher price per foot on M-o-M and Y-o-Y basis according to Movoto).
Apparently not considering sales are at 10 year lows.
At least we better understand how for denial is formed.
‘like about a third’
That was a third in the past thirty days. And the same for each month going back for many months.
Homes are only on Movoto for a median of 38 days.
That indicates that that once priced correctly, they sell pretty quickly.
Pick out a few actual sales on Zillow over the past 6 months…they show listing prices and price reductions.
http://www.zillow.com/homedetails/2606-14th-St-Riverside-CA-92507/17844953_zpid/
First one picked (not cherry picked–it was 6 months to close this one):
Listed at $230k in September ‘13, pending in October ‘13, obviously didn’t close. Price change to $239k in December ‘13, Back down to $230k in January (one of your price reductions, after a price hike), ultimately sold March ‘14 at $230k.
http://www.zillow.com/homedetails/4668-Velvet-Ct-Riverside-CA-92503/54954239_zpid/
2nd:
Listed in November ‘13 for $285k
Listing removed December ‘13
Sold January for $290k
http://www.zillow.com/homedetails/4016-Sutton-Ct-Riverside-CA-92501/79840073_zpid/
3rd:
Listed September ‘13 for $360k
Sold October ‘13 for $350k
http://www.zillow.com/homedetails/6185-Port-Au-Prince-Riverside-CA-92506/17865544_zpid/
4th:
Listed July ‘13 $470k (after being purchased for $668k in May ‘13–I wonder what THEY were thinking)
3 price reductions later, down to an ask of $430k by August ‘13, it sold finally in October ‘13 for $418k
http://www.zillow.com/homedetails/3376-Franklin-Ave-Riverside-CA-92507/17839571_zpid/
5th:
Listed October ‘13 for $229k
Price change in October ‘13 to $224k
Ultimately sold for $230k in December ‘13
You can go through as many as you want, once they are priced right, they sell. The one that I found with lots of price reductions was someone who clearly recently overpaid, and asked a high number to recoup what they could.
Again, I didn’t try to prove my point by only looking for houses with no price reductions (or I would have not shared the high priced home with lots of reductions), I just gave links to the first 5 that I pulled from Zillow’s last 6 months of sales selected around the city.
You can do the same here:
http://www.zillow.com/homes/recently_sold/Riverside-CA/house_type/47401_rid/6m_days/built_sort/34.118484,-117.066364,33.773297,-117.732067_rect/11_zm/
LOL!
Nobody shucks and jives like you RenTrollHogwash…. NOBODY!
Here’s your housing demand in Riverside, CA
http://picpaste.com/pics/9c71ac053af21af96347d1824d29ad65.1396646683.PNG
Equating number of sales to demand WITHOUT REGARD TO OTHER FACTORS is case of willful ignorance.
One very simple factor to consider is how long homes stay on the market, which I noted at a median of 38 days isn’t very long.
The second other factor to consider is HOW MANY HOMES ARE ON THE MARKET. A home that is not on the market cannot be sold. It is widely held that a “balanced market” is one that has 5-7 months of inventory (total listings divided by monthly sales). In Riverside, Movoto has about 600 listings. Last month, there were 502 sold/expired. However, you need to tease out the “expired” listings.
If you grab the most recent 90 days of sales data from Zillow, they note 460 homes sold…however, there is a lag in the data, so the most recent sale is noted as closing March 24th (one home)…they are missing the most recent sales out of those 90 days, so you can’t just take 460 and divide by 3 (which would get you to about 150 homes, or 4 months of supply).
So, take the most recent 4 COMPLETE weeks of sales. The week ending March 21st? 44 sales.
The week ending March 14th? 39 sales.
The week ending March 7th? 37 sales.
The week ending Feb 28th? 61 sales.
You can do this yourself if you want to find the truth, just look for the last 90 days of sales and list them by “Newest”, and count them.
The last 4 complete weeks of sales was a total of 181 sales. Indicating that 600 homes is approximately a 3.3 month supply of listings. A seller’s market.
The third thing that needs to be considered is the direction of pricing, which in Riverside is up considerably year-on-year (Zillow notes their index up 24%, and sales price per foot up 29% year on year, Movoto notes median price per foot up 14%).
So, are we to believe with:
1. Homes staying on the market on about 38 days on average;
2. 3.3 months of inventory; and
3. Home prices going up 14%+ per year.
That contributing to the low percentage of existing homes selling we have:
A lack of supply? or
A lack of demand?
http://www.zillow.com/local-info/#metric=mt%3D6%26dt%3D1%26tp%3D5%26rt%3D14%26r%3D102001%252C394913%252C394806%252C394463%26el%3D0
This is interesting if people care about what list price reductions actually means.
It is a graph of the percentage of listings with price cuts in the US as a whole. It shows significant seasonality in the data, but also shows that the number of listings with a price cut has generally been trending downward around that seasonality.
And to this I ask, what is a “normal” level of listings with price cuts?
I would say that a 0% reading would be highly abnormal, and indicate a market that is dangerously overheated, the ultimate seller’s market–you get whatever you ask with no negotiation.
However, I don’t have a good sense as to what “normal” would be. 10%? 25%? 45%?
When we look to sell an asset, we will typically list it for something above what we would ultimately accept…it gives us room to negotiate, and give the buyer a “win” when they negotiate (they feel like they got something–lower probability of second thoughts during escrow).
And I’m sure we’re not alone in how we price.
Good tap dancing RentrollHogwash…. or is it running from reality.
10 years of falling demand. Keep running.
http://picpaste.com/pics/9c71ac053af21af96347d1824d29ad65.1396646683.PNG
San Bernardino, CA Housing Demand Falls To 2008 Floor; Down 12% YoY
http://www.zillow.com/local-info/CA-San-Bernardino-home-value/r_20328/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D20328%26el%3D0
The Housing bubble blog….. the last bastion and lone outpost of truth as it relates to housing.
‘We assume that 30 per cent of this new supply will be bought by foreigners who intend to use them as second homes, which they will not rent out’
Yeah, I’m loaded and I’m going to spend over half a million on a box of air in the sky. And while I’m flying around the world, I might drop into Dubai for a weekend to stay in my air box. There has to be tens of thousands just like me.
Why not just stay in a hotel?
FWIW, I know people who do just that, they have one or more vacation homes they rarely visit.
But as you point out, they are limited in number.
I know a few myself. And they’re swimming in monthly payments.
The ones I know paid cash. They aren’t wannabes, they actually are rich. Which is why their numbers are quite limited.
They aren’t wannabes, they actually are rich ??
Exactly Colorado…
Sun Valley, ID pretty exists for that very reason. Sparsely visited second homes housing for the rich.
Here’s some good info for you kid. Thew wealthy don’t buy houses, they lease them. That’s why they’re rich.
Who owns the houses they lease? Poor people?
‘Rising home prices and increases in jumbo mortgage rates are steering many wealthy consumers to luxury rentals over homes for sale.’
‘Steve Halpern, an agent at New York-based brokerage Urban Compass, told the Wall Street Journal that nearly half of his clients are choosing rentals, many after losing bidding wars. Many buyers are simply choosing to wait out the market. While these buyers can afford the loans, they are just not willing to take the risk.’
‘Halpern discussed one couple he recently represented who sold a co-op in New York City’s Upper West Side and chose to rent a 3-bedroom condo in the same neighborhood for more than $13,000 a month.’
Here’s some good info for you kid. Thew wealthy don’t buy houses, they lease them. That’s why they’re rich.
Larry Ellison bought an entire Hawaiian Island (Lanai, $500m) and owns dozens of opulent homes, one of which (in California no less) has its own private golf course.
Ben - interesting that they are being driven to rent because they essentially see a luxury price bubble which definitely seems to be the case. Thank you for actually posting a source.
Nice cherrypick.
Who owns the houses they lease? Poor people?
Fell on the floor LOL…Nice comeback Brandon…
And then there is this:
http://www.thefiscaltimes.com/Articles/2014/04/03/Why-Second-Home-Sales-Are-Surging
There is a similar story from this week in the WSJ.
And I recognize that “second home” does not necessarily equal “luxury home”.
BTW, 3 bedroom condo for $13,000 per month as an affordable alternative to buying!?!?!? I’d hate to see what such a 3bd costs to purchase…
“Who owns the houses they lease? Poor people?”
Poor people don’t own houses? Really? You’ve got alot to learn.
H A - you’re chasing your logical tail in your rented bunker. Are you saying no rich people own houses? All rich people rent from poor people? All rich people rent from some poor people? Reach back to college logic class - what are you trying to say?
You got yourself backed into a corner again eh realtard…. good job.
H A - please step back to reality for a moment and think rationally. It is completely reasonable for people to rent across the spectrum. You specifically stated “Thew wealthy don’t buy houses, they lease them. That’s why they’re rich.” Unless the homes are owned by a REIT, hedge fund, etc. someone owns the home. What is the net worth of the owner? Are they generally not well off? I’m curious how I’ve been “backed into a corner?”
BTW I’m quite fascinated how you think I’m a RE agent. Makes me feel quite powerful that I get to live rent free in your mind and become part of your grand real estate conspiracy fantasies. Your ex must have been a Realtor - your harbor quite the bitterness.
Your’e right. Someone owns it. And it’s not the wealthy person leasing it.
This isn’t about me my friend. You’re here bemoaning of your shelter problem. Now this? You tapdance around here like RentrollHogwash.
Apologies if I appear to be bemoaning my rent vs buy decision as opposed to having an open discussion/debate re: whether the current market is a bubble, merely frothy, or something else entirely. Yes I’m faced with a shelter “problem” and must choose between two options. Am I not allowed to participate in discussion independent of whether I’m faced with a housing choice?
I started watching this blog again when faced with the decision and discovering rents have increased locally and the supply of rentals down. Regardless of what you say/think, that is the current situation in Boise. Decisions are not made in a vacuum and the price/availability of rent is weighing heavily on my decision as well as other factors.
And you continue running from the fact that rental rates are half the cost of buying at current grossly inflated asking prices of resale housing.
Sun Valley, ID pretty exists for that very reason. Sparsely visited second homes housing for the rich.
Most houses in Aspen are owned by absentee zillionaires.
Most houses in Aspen are owned by absentee zillionaires ??
Thats what I would suspect…
Money laundering?
Report sees housing bubble echoes in Southern California
http://www.latimes.com/business/money/la-fi-mo-housing-bubble-once-again-20140403,0,509298.story
‘My wife, Kiana, and I have been searching since we moved to Austin four years ago. We’re currently renting a house in the Westlake area, which is just five miles west of downtown. We chose it for the schools. We have four kids.’
‘Our initial budget was $400,000 and we wanted a four-bedroom, 2,200 square-foot home.’
‘Within our neighborhood, listings have gone from about $200 a square foot to $300. Do the math: That’s $660,000 and that’s not for some sprawling estate. It’s more like a tract home.’
‘So we increased our budget to $500,000.’
‘We have submitted a dozen offers. We have never made it as far as negotiating the terms. In each instance, we’ve been outbid. We have been priced out of the market — literally. Now we are planning a move, probably to North Carolina or Tennessee.’
He’ll find that if he moves to Cary or Chapel Hill, NC (presumable he will, because that’s where the jobs are) that house prices are equally insane.
listings have gone from about $200 a square foot to $300 ??
It appears to be happening in many places…What are the common denominators ?? Jobs & interest rates…Change the interest rates prices will come down because incomes cannot rise nearly fast enough to offset the significant increase in payments due to higher interest rates…
‘So we increased our budget to $500,000.’
+1 Everyone should do this.
“More than half of all homes in seven metro markets, including Denver, are unaffordable to typical buyers”:
http://www.denverpost.com/business/ci_25490189/wannabe-metro-denver-homebuyers-may-be-pushed-by
Yeah… Definitely seems sustainable to me!
Talk about statistical nonsense:
“The analysis looked at the income required to cover the monthly mortgage payment on a median-priced home, and compared it to the income required to pay for a home prior to the real estate boom that started around 2000. If the percentage of monthly income gobbled up by the mortgage payment on a median-priced home is greater today than it was before the bubble, the home is considered unaffordable.”
By very definition, since they are looking at the MEDIAN, half of all homes at the starting point were “unaffordable”, meaning that to be at the SAME level of affordability as before 2000, 50% of homes would be considered “unaffordable” by their analysis. We are now all the way (insert sarcasm) to 52.8%.
And the money quote:
“Between 1985 and 2000, metro Denver homeowners spent about 22 percent of their monthly income on mortgage payments. Today, they’re spending about 18 percent, or $961.”
So, despite 52.8% of homes being “unaffordable”, people in metro Denver are paying about 18% LESS of their income on housing than before the bubble?
Sounds like someone is trying to sell newspapers.
And yes, I know, interest rates will rise, which will narrow that gap.
The critical question is how much do they need to rise to make that 18% move to 22%?
Answer: Rates need to rise enough to increase the PAYMENT by 22.2%
If today’s mortgage rate is 4.2%, a $1,000 of mortgage principal requires a monthly payment of $4.89. A 22.2% increase in payment would put the mortgage payment at $5.97.
To get to a payment of $5.97, the 30-year needs to rise from 4.2% to 5.96%.
4.2% to 5.96%.
So we can have a 1.75% increase in rates, and all that we’ve done is bring the percent of income used to pay mortgages in Denver back to the 15-year average from 1985-2000.
What am I missing?