The Days of Double-Digit Appreciation Rapidly Fade Away
The Aurora Sentinel reports from Colorado. “While the housing market across the metro region continues to tighten, homes in Aurora are some of the most affordable in the state, according to a new market report released by Coldwell Banker. Average home prices in Aurora sit just under $297,000, which is significantly below the statewide mean of $407,000. Ed Hardey, board chair of the Aurora Association of Realtors, said that the rate of appreciation in Aurora has been staggering. ‘Aurora has seen dramatic appreciation in the past year, and prices show no indication of going down at all,’ he said. ‘The home that you bought six months ago is worth far more today than when you made your initial purchase.’”
From Bloomberg. “Growth in million-dollar home sales is slowing in areas including Miami, Las Vegas and Los Angeles as rising prices and the strengthening U.S. dollar discourage foreign investors who helped lead the recovery. ‘If the domestic buyer doesn’t step in. I wouldn’t be surprised to see the market stall,’ said Peter Zalewski, principal of CraneSpotters, a Miami-based real estate consulting firm. ‘It’s becoming too expensive for foreigners to buy in South Florida at the same pace as previous years. Foreign currencies are weakening against the dollar and local real estate prices are on the rise. It’s creating a perfect storm to push the foreign buyers away, or limit what they can acquire.’”
“Cash deals in the Las Vegas area have dropped in part because investors that helped revive the market by purchasing single-family homes after the crash have pulled back, said Kolleen Kelley, president of the Nevada Association of Realtors. Not only were investors buying low-priced homes to rent out, some were purchasing high-end foreclosures and reselling them for a profit, she said. ‘We don’t have big diversified economy here,’ Kelley said. ‘When the market starts slowing down, it really starts slowing down.’”
Vegas Inc in Nevada. “Southern Nevada homebuilders continue to struggle this year, with lower sales and a rising volume of canceled deals, a new report shows. Builders pulled 514 construction permits in October, ‘much less than we had hoped to see,’ Home Builders Research President Dennis Smith wrote. Buyers increasingly are canceling sales, Smith reported. Buyers backed out of 21 percent of new-home sales contracts in Henderson last month, up from 12 percent in April, according to Smith. In North Las Vegas, cancellation rates jumped to 34 percent from 25 percent in that period; in the northwest valley, it went to 24 percent from 13 percent; and in the southwest valley, it rose to 22 percent from 19 percent.”
The Seattle Times in Washington. “Housing prices showed further signs of cooling in September, with prices falling in the Seattle area and almost half of the cities in the S&P/Case-Shiller 20-city index, officials said. ‘The days of double-digit, home-value appreciation continue to rapidly fade away as more inventory comes on line, and the market is becoming more balanced between buyers and sellers,’ said Zillow Chief Economist Stan Humphries.”
Crain’s Chicago Business in Illinois. “The big-money investors that gobbled up thousands of local homes aren’t as hungry anymore. Institutional investors accounted for 4.7 percent of Chicago-area home sales in the third quarter, down from 7.6 percent a year earlier, according to RealtyTrac. Investor activity peaked at 10 percent of the sales in first-quarter 2013. The question is whether traditional homebuyers can pick up the slack. ‘That’s the only way the recovery can be sustainable, is if more traditional buyers get involved,’ said RealtyTrac VP Daren Blomquist. ‘The good news is the traditional buyer has less competition, but it probably means there’s not a lot of great affordable inventory in that market right now. If there were, the investors would be jumping on it.’”
The Union Tribune in California. “After a sluggish summer, the pace of home price appreciation in San Diego County’s housing market slowed again in September. It continued an intense slowdown in the pace of appreciation from a little more than a year ago, when prices were increasing 21.5 percent annually. At that time, the market’s large gains were driven by investor-led activity like foreclosure resales and fixing-and-flipping. ‘Prices continue to trend upward but most importantly they continue upward at a sustainable rate,’ said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. ‘We all want our houses to double in value, the problem with that is you end up with a market that’s going to collapse on its own weight.’”
The News Miner in Alaska. “Numbers collected by the Fairbanks North Star Borough show 150 foreclosures occurred through September of this year in the Fairbanks Recording District. That’s up from the 137 foreclosures for the same time period last year. In 2012, the number of foreclosures through September was 117. In 2011, the number was 102. Laura Burke, executive director of Fairbanks Neighborhood Housing Services, said her agency, which provides low-interest loans, is seeing a slight increase in the number of late payments, and she is bracing for harder times to come. ‘There is something in the air,’ she said. ‘I think it’s going to hit us again pretty hard.’”
“Audrey Foldoe, a real estate professional in Fairbanks for more than 30 years, said some of the foreclosures are a result of people simply walking away from their mortgages. Some people bought a home when prices in the real estate market were high about 10 years ago but now can’t sell their home for what they owe on the mortgage, she said. ‘One of the biggest factors is the fuel,’ she said. ‘A lot of people operate month to month,’ Foldoe said. ‘Any little thing is going to throw it off.’
“The Fairbanks housing market is strong with a large inventory and low interest rates, she said, making it even harder for strapped sellers to find a buyer. Sellers have to make concessions.”
when they quote yoy 8% then 6% then
dosen’t that mean the current quarter is negative?
how else could the yoy rate drop?
This is what is so stupid and dishonest about real estate and the entire REIC racket. Anyone looking at the charts will see prices peaking earlier this year and then sharply declining since then. So they know there is a point where it is going to go negative absent some unknown miracle.
It is all based on lies. It is not an honest business.
Check this out:
http://blog.lucidrealty.com/wp-content/uploads/2014/11/Case-Shiller-Chicago-Year-Over-Year.jpg
Exactly. Chart looks the same in my zip code. This should be the story being reported in banner headlines in every newspaper and real estate magazine. Nope, we’ll just pretend, like Lisa Marie marrying Michael Jackson.
“This should be the story being reported in banner headlines in every newspaper and real estate magazine.”
And newspapers and real estate magazines will have interest in doing this because …?
A picture is worth at least 1000 words in that case!
A quick glance at that chart certainly suggests that U.S. home price appreciation is retracing the slowdown at the end of the 1980s which led into to the real estate bust of 1990-1997. Except that this time, the preceding price run-up was much more extreme.
Actually, if you look at the 1988 rate of appreciation, it was much more extreme then. 18% in 1988-89 vs 10% in 2014.
And then fell by 75% in the following years.
See how that works Jingle_Fraud?
What I see in the recent episode is that SFR home price appreciation stalled out when budget-constrained demand for $500K+ houses spilled over into the relatively affordable condo market. The 18% appreciation showed up in 2014 for condos, at least in the version of the graph which appears on my computer screen when I open it.
Yes, I saw that too. When the condo market heats up, the housing market downturn is not far away! It is the last one who gets asked to dance before the music stops!
http://www.movoto.com/chicago-il/market-trends/#city=&time=1Y&metric=Median%20%24%2Fsqft&type=0
how does it compare w Movoto ?
I guess condos are last up and first down
What happens at the peak is that only condos are affordable for most families. Households have the rare opportunity to pay a SFR price for the pleasure of cramming themselves into a condo for the next thirty years.
Don’t do it if you don’t wanna get stucco!
A simple note. The housing bubble was represented by about 7 straight years of annual 5-10% increases in prices. Then came the collapse after bigtime rise.
Then we got about 1 year, maybe 1.5 years of 10% annual price increases.
Are prices generally too high?
Yes.
Are they as high as they were in 2007?
No.
Correction Rental Fraud. It was 10 years of double digit increase.
In my area, prices actually have topped 2007 levels, but inventory is even lower now than it was back then.
Where is your “area”?
HA, look at his post. Think. Analyze. Your is there. You just don’t see it. Sort of a microcosm of your life!
Your answer is there…
Strange you have to speak for him huh Jingle_Fraud.
So speak up and spit it out.
Where oh where Jingle Fraud? Speak for once.
“In my area, prices actually have topped 2007 levels, but inventory is even lower now than it was back then.”
HA. Ha, ha, hahahaha. Really, you can’t see it?
Redmond.
Now go pull the data…..
Looks like prices reversed course and are falling Jingle_Fraud.
You always say that HA. Ha, ha, hahaha…you’re such a jokester.
You have plenty of reason to deny it Jingle_Fraud.
“It is all based on lies. It is not an honest business.”
That really is the crux of the biscuit. The damage caused by the misconduct of those involved is on display for everyone to see. It’s a timebomb that allows the perps to distance themselves before detonation.
…not to mention after detonation.
I was looking at a history of total discretionary spending for the US going back to 1992. In “real” dollars, spending is totally flat since 2008 at the 1992 level. I suppose the “real” dollars is calculated using the bogus CPI, so it is likely worse than 1992, a lot worse. This with an increasing population and increasing employment. Yet we are told the economy has recovered. Lies everywhere.
http://www.blytic.com/Player.aspx?key=f42dd8c52e4747938dd088f688185885
Fascinating find Blue.
Current retail sales in real dollars equals the same volume as 1996! How?
I submit globalization took off, U.S. wages stagnated as jobs moved off shore, so income dropped and the prices of retail goods (manufactured) also dropped (cheap imports).
So less money in the hands of Americans, cheap goods at Walmart = stagnant sales volumes. This is why we have no inflation and will not have any until employment recovers and workers receive wage gains for productivity.
Ask yourself the question Jingle_Fraud.
Do you really believe wages are going to triple to meet grossly inflated prices?
Of course not. Prices will continue falling to meet wages.
And we’ve got a good start going.
Falling prices were absolutely wonderful late 2008 - 2010. I bought a lot of stuff at steep discounts. Prices are artificially high now.
Me too Puggs. I bought a bunch of houses at steep discounts. I like “stuff” that produces cash flow.
Uh huh. Like your $90k water meters Jingle_Fraud that you’re now remarkably silent about.
Why is that?
“a bunch of houses at steep discounts”
If that’s the case, then you never realized that we had a massive RE bubble, because when something gets marked up an extra 200% and then goes on sale for 30% off, it’s a Trojan Horse.
Did you really mortgage these puppies at 3% four years ago? I keep scratching my head about that one.
They were $650,000 - $710,000 sales in 2004 - 05. I picked them up in ‘08-9-10 for $265,000 to $287,000, or between $80-90/SF. My original mortgages were in the mid 5% range. The refi rates were in the low 4%. I did get 3.25% on my own home.
I sold one house 18 months ago for $420,000 because the tenant was a pain. I am keeping the rest for cash flow.
Prove it. You won’t because you can’t.
I believe you are confusing changes in velocity rates with changes in velocity direction.
Say a $200,000 house increased 8% last year ($16,000) to $216,000.
If it increased 6% this year, the $216,000 went up by $12,960 to $228,960.
The house has not decreased in value. It has simply increased in value at a slower rate.
And if fell this year by 4% thus the $216k house is now down to $207k and falling.
“…..if fell this year by 4%….”.
Stick to the data HA. HA, Ha, ha, hahahahaha. Ever heard that one before?
How is prices increasing by 4% a decrease in value. Analyst, please analyze. Use your math skills. I know you have some.
Just for you Jingle_Fraud.
Pleasanton, CA Sale Prices Dive 4% YoY; Plummet 10% QoQ and 4% MoM
http://www.zillow.com/pleasanton-ca/home-values/
Price appreciation is decelerating and will soon go to negative, at which point your fellow investors are likely to dump en masse.
What is your exit plan?
Exit plan? I will just keep on collecting cash flow and save the money in my Vanguard accounts.
If we get to another bottom, I will have lots of cash to buy more properties.
Paraphrasing Roberto Clemente:
“Real Estate has been very good to me!”
How does that work with rental rates falling at a faster clip than housing prices Jingle_Fraud?
That’s funny! With a 1% yearly return on the price of the houses you bought, by now you’d have enough stashed away to buy what, a single room? If prices drop below what they were in 2010 you will be wiped off the board and no bank will lend you large again after looking at your portfolio. Just broad approximations Jingle, but thinking you will build an empire of debt around a crumbling one seems kind of ironic.
HA, Ha, ha….maybe in the rust belt, but not in the Sierra foothills!
I just leased a house coming vacant in two weeks. Old rent $1543. New rent $1620. Posted for rent last Friday. 8 calls by Saturday morning. Selected a qualified tenant yesterday. Signed lease in place. Moves in 7 days after old resident will leave.
Vacancy factor last 8 years: less than 1%. 23 days in 8 years. Paid $142,000 for the house in 1997 BTW. It was a year to buy too. I bet 2020 might be similar.
$20k/yr cash flow, $6k/yr taxes devered, $30k/yr principal reduction = $56k/yr.
5 years X $56k = $280,000. I can work with that amount. I like it better than a box of rent receipts.
With rental rates falling as rapidly as housing prices, what will a phony fraudster do?
Median Rental Rate Falls 7% YoY Nationally
http://files.zillowstatic.com/research/public/Metro/Metro_MedianRentalPrice_AllHomes.csv
Since your own chart lists rents in my market have increased by 10% during the last 4 years, I’ll just keep collecting the inceased cash flow.
Think. Analyze. You can find the answer if do HA. Ha, ha, hahahaha…
That’s not what the data says Jingle_Fraud.
Worse yet, housing prices fell YoY and the declines are accelerating.
HA, it is what the data says.
2010 rent = $1,025/month
2011 rent = $1,131/month
2012 rent = $1,118/month
2013 rent = $1,179/month
2014 rent = $1,285/month
Do you EVER analyze anything or do you just post gibberish and blabber thoughtlessly?
Prove it Jingle_Fraud
Prove it? That is easy, you just did it for me. Your table shows Sacramento rents have increased 25% in the last 4 years.
It is all about the cash flow HA! You are finally starting to understand. HA. Ha, ha, hahahahahahaaaaa!
Substantiate your claim Jingle_Fraud.
Gilford, NH Sale Prices Plummet 19% YoY As National Housing Demand Craters To 20 Year Lows
http://www.zillow.com/gilford-nh-03249/home-values/
$297,000 in aurora is the most affordable?
6 x median income is most affordable?
Nothing like a live streaming feed of a high speed chase through Aurora to go with the americano and gmo free bagel.
Another all time high for metro Denver in September
http://www.denverpost.com/business/ci_27011629/metro-denver-home-prices-reach-new-high-but
Prices in Loveland are much lower. The median is about 200K. And median income is higher than Aurora.
300K for an Aurora house is proof, however, that there is a bubble in the Centennial State.
Immigrant Welcome Center opens in Aurora school building this month
“Councilwoman Sally Mounier said there are 34 percent foreign-born citizens in Ward 1, where the welcome center will be. In fact, one in five people who live in Aurora were born in another country.”
http://www.denverpost.com/news/ci_26013979/aurora-looking-create-immigrant-welcome-center
he said. ‘The home that you bought six months ago is worth far more today than when you made your initial purchase.’”
sue this fck
in any re transaction you have to deduct 6% com and another 1% transfer stamps etc
Now there is a lucid rational response.
Got more?
‘The days of double-digit, home-value appreciation continue to rapidly fade away as more inventory comes on line, and the market is becoming more balanced between buyers and sellers,’
How is that balance going to look when an unprecedented number of get-rich-quick flippers rapidly morph from buyers into sellers?
when an unprecedented number of get-rich-quick flippers rapidly morph from buyers into sellers ??
In Florida, AR or NV its going to be a race to the bottom…
As it is in CA too. Remember. Sale prices in CA are now negative YoY and falling.
This is simply not true. Per the Calif Assn of Realtors latest report, median sales price of single family is up 5.4% from Oct 2013 to Oct 2014 (6.4% on a square foot basis), and condo is up 7.1%. This report is produced monthly and the details are here
http://www.car.org/newsstand/newsreleases/2014releases/oct2014hsales
Give it a month.
And remember…. Why wouldn’t housing prices be falling across California considering there are 4.4 million in excess empty inventory and current prices are 300% higher than long term trend and 2x construction costs?
Give it a rest! HA, HA, HA.
Being a contractor you can speak to construction costs Jingle_Fraud.
Go ahead.
Here’s a growing trend:
http://finance.yahoo.com/news/chinas-property-market-unravel-2015-034849575.html
‘China’s wobbly property market has kept investors on edge this year, but the country’s first rate cut in two years is expected to bring some stability into the all-important sector in 2015. Johnson Hu, analyst at CIMB believes the move is an inflection point for the housing market that could drive a sustained sales recovery.’
“The PBoC’s (People’s Bank of China) rate cut is a strong catalyst for the China property sector as a) there is room for further cuts in mortgage rates, b) home buyers may see it as a signal of property market stabilization and thus boosting home sales and lowering housing inventory,” he said.’
‘Historical patterns show that the first rate cuts in a cycle - September 2008 and June 2012 -helped drive a pickup in sales that lasted 1-1.5 years, according to CIMB. Home prices also started to rebound in 1-2 quarters after the first interest rate reduction.’
So nothing about what people can afford, or supply and demand. Just magical, technocratic pushing on knobs and pulling levers, all will be solved. But there are doubters:
‘Jinsong Du, research analyst at Credit Suisse, meanwhile, doesn’t believe the rate cut will have a lasting impact on the market unless it’s accompanied by an increase in liquidity.’
“Although further interest rate and RRR (reserve requirement ratio) cuts have now become more likely, it remains unlikely that money supply will grow at a magnitude similar to 2009 and 2013 levels,” he said. “Therefore, we continue to expect a flattish housing market [in 2015].”
The Chinese need more money creation and lower interest rates to fight off the bubble caused by, you guessed it, previous money creation and low interest rates!
I say phooey! Cut to the chase and bring on the space aliens.
The Chinese need more money creation and lower interest rates to fight off the bubble caused by, you guessed it, previous money creation and low interest rates ??
And the question that comes to my mind is; Is the Chinese government doing this to allow more to enter or exit the market ??
“The Chinese need more money creation and lower interest rates to fight off the bubble caused by, you guessed it, previous money creation and low interest rates!”
So the Chinese have adopted the popular ‘hair-of-the-dog’ hangover cure?
They need to go to Housing Anonymous meetings. HA! HA for all!
does Zillow still have Ferguson,MO going up 2014/15 ?
Nada.
Ferguson Home Prices & Values
Zillow Home Value Index
None
None 1-year change
None 1-year forecast
Even though the Zillow Home Value Index is “None,” the market there remains “Warm.” Go figure!
Market Temperature
Warm
The median list price per square foot in Ferguson is $46, which is lower than the St. Louis Metro average of $106. The median price of homes currently listed in Ferguson is $54,900 while the median price of homes that sold is $54,757. The median rent price in Ferguson is $775, which is lower than the St. Louis Metro median of $865.
Foreclosures will be a factor impacting home values in the next several years. In Ferguson 15.3 homes are foreclosed (per 10,000). This is greater than the national value of 4.5
…
The annual median rent is $9,300/year.
The median sale price is $54,757?
Gross rent multiplier of 5.8 times? I guess not many people want to live in Ferguson. Low demand.
Demand is at 20 year lows across the country Jingle_Fraud.
Its officially been re-named, ‘Fergudishu’ now. You know, that lawless city ruled by roving gangs of thugs.
Is the Fergudishu intifada heating up or cooling down?
“Liquidate whatever you can to pay off the debt. Hold onto every dollar you’ve got. You’ll be glad you did.”
You better believe it.
How come IMF won’t state this for US housing?
Canadian housing market overvalued by as much as 20 percent -IMF
Reuters 11/26/2014 11:09 AM ET
OTTAWA, Nov 26 (Reuters) - Canada’s housing market is overvalued by as much as 20 percent but is likely to achieve a soft landing, the International Monetary Fund said on Wednesday.
IMF official Hamid Faruqee said national home prices in Canada were between 5 percent and 20 percent higher than fundamentals suggest they should be. Faruqee noted that authorities might need to tighten mortgage rules further to avoid a crash.
He also said the housing market would be jeopardized if rates rose sharply but that the IMF foresees only a gradual increase. (Reporting by Randall Palmer in Ottawa; Writing by Andrea Hopkins and Jeffrey Hodgson; Editing by Lisa Von Ahn)
Because houses in Ontario are twice what houses are a few miles away in the US. If the IMF is correct, you should buy as many houses in the US as you can.
“…but is likely to achieve a soft landing.”
Always and everywhere…
Isn’t that what that noted economist Simpleton Young said in 2005 about the CA market?
What do you want to bet some junk bonds were issued to build these new rigs?
‘The headline news is that SeaDrill is suspending its $1.00 quarterly dividend (18.7% annual dividend yield) to focus on “debt reduction and value creating opportunities due to significant deterioration in the broader markets.”
‘SeaDrill said that the market for its ultra-deepwater rigs will be challenged by the drop in crude prices, but that only 9% of its floater fleet is still available for 2015. The situation is not so encouraging for the company’s premium jack-up rigs, where 65 newbuild rigs are expected to become available next year. SeaDrill said it doesn’t think that all those new rigs will find work.’
‘At the end of the second quarter the company told investors that SeaDrill’s dividend was safe at least through the end of 2016: “Since our last quarterly report a number of developments have affected these factors that dictate our dividend distributions. The most significant impact has been the uncertainty in the macro environment. The Board views the deterioration in oil prices as an indicator of more broad demand growth concerns and must approach the current macro environment with an element of caution. This, taken into account with the near term oversupply of drilling units makes it all the more important to build a strong balance sheet. In addition, the financing market has become incrementally worse, and although Seadrill still has significant access to funding, some markets have become unattractive.”
http://247wallst.com/energy-business/2014/11/26/seadrill-suspends-dividend-after-weak-earnings-report/
The list of things done in this credit bubble more to raise money than to produce something is staggering.
Enslave the 50 states with debt. The federal government is king.
Watching the price protection racket pukes in action is truly entertaining.
University Park (Dallas/Fort Worth) Sale Prices Crater 15% YoY
http://www.zillow.com/university-park-tx/home-values/
Massachusetts Sale Prices Sink 5% YoY Statewide
http://www.zillow.com/ma/home-values/
Boulder, CO Sale Prices Collapse 20% YoY; Crater 5% In October
http://www.zillow.com/co-80302/home-values/
http://finance.yahoo.com/news/this-man-wants-to-teach-you-how-to-flip-homes%E2%80%94for-a–34-000-fee-150349468.html
rip off
http://finance.yahoo.com/news/this-man-wants-to-teach-you-how-to-flip-homes%E2%80%94for-a–34-000-fee-150349468.html