Consumers May Be Experiencing Sticker Shock
The Salt Lake Tribune reports from Utah. “A top Utah economist predicts Salt Lake County’s real estate markets will see a healthy 2015, even as the U.S. Federal Reserve is signaling a possible hike in interest rates. Residential sales in the county are projected to rise by 7 percent this year and home prices by 4 percent, says James Wood, director of the University of Utah’s Bureau of Economic and Business Research. The U. economist and others unveiled forecasts to a gathering of thousands of the state’s real-estate professionals. With the potential of earning nearly $250 million in total sales commissions this year, Realtors welcomed the positive outlook. ‘How can you not help but dance with the way the markets are moving?’ beamed Dave Robison, president of the Salt Lake Board of Realtors.”
“In 2014, Utah’s housing markets lost momentum from their rebound out of the Great Recession, Wood said. A surge in home prices slowed significantly from double-digit levels the year before, leading Salt Lake County’s median home sales price to end 4 percent ahead where it started in January. Prices even fell in five cities in the county during 2014: South Salt Lake, Holladay, Cottonwood Heights, Murray and Riverton.”
From ABC 13 in Texas. “In the shadow of Houston’s still bustling economy, John Chen, is looking for a job. ‘I got laid off January 14,’ recalls the seven year Slumberger veteran. ‘They basically walked me into HR and said sorry due to the economic situation, we’re going to have to let you go.’ Chen is not planning on selling his house. The computer developer is looking for another job in Houston. ‘I can always move out of town, or do my other business, which is being a DJ.’”
The Flathead Beacon in Montana. “A family from Alberta visiting Montana this week would need to exchange $131.22 Canadian for $100 U.S. dollars. Plagued primarily by plummeting oil prices, the Canadian dollar — the loonie — reached its lowest value in six years in recent days, trading on the global market for barely 79 cents U.S. The declining Canadian dollar could also impact the local construction and real estate industries, which have been aided by second-home buyers or retirees from up north. ‘Canadian investments have really helped us. I’m a little concerned about the Canadian influence now,’ said Chuck Stearns, city manager in Whitefish. ‘We may see a lot of Canadian investment that helped us in the past years dry up a little bit.’”
The Press Enterprise in California. “Rapid home-price gains in 2014 have consumers biting their nails over whether they can afford new homes. Medians – nowhere near as high as they are in Orange County but still relatively high for middle-income buyers in the Inland region – may be at the tipping point. Steve Johnson of Steve Johnson Real Estate Advisory estimates there are now 370 model homes in about 120 projects across the Inland region. It’s an interesting time in the Inland area, primarily because homebuilders did not have enough product on the market to bring excitement into the marketplace in 2014, Johnson said. Now, they do.”
“Analysts concede Inland consumers may be experiencing sticker shock. Prices on new homes are in the $450,000 range near job centers and high-travel corridors, Johnson said. ‘I don’t think everyone has a firm grasp of where this market is really at,’ Bill Blankenship, CEO of the Building Industry Association of Southern California’s chapter in Riverside, said. ‘Communities are opening up all over, but we’ve not seen great results come from that as of yet. The number of sales in Orange County have shrunk because their price points have gotten so high, but we haven’t seen the wave come this way,’ Blankenship said, referring to an all-time median high on a new Orange County home of $867,760 in December.”
“For 2014, western Riverside County is expected to close out the year with 4,300 single-family home building permits – about the same as 2013. The permit count has been highest in the Coachella Valley.”
News 13 in Florida. “A couple was arrested earlier this month and charged with child neglect after police found them living in squalor in a home they didn’t own or rent. Eboni Tucker-Smith and Daquan Smith were squatting in a home in a nice Ocoee neighborhood for months, and they could have continued living there if they weren’t living in filth. Because six children were also living in the home, Ocoee police were forced to come in and arrest the couple.”
“According to police, the couple drew up a fake lease and had the electricity turned on in a number of names. If the couple kept the home in decent condition, they likely could have continued squatting there for years. In fact, once they post bail, they could go back to the house. ‘In Eboni’s situation, we have a bank that’s basically saying we are not going to foreclose on this house,’ said Lt. Mike Bryant, of the Ocoee Police Department. ‘Then we have the owners, and the owners are saying, ‘I don’t want this,’ so she picked the right house at the right time.’”
The News Journal in Delaware. “When word came that Chrysler was closing its Newark auto plant in 2009, it seemed plain to many employees that financial trouble could be on the horizon. So Jeff and Robbin Brown went to their mortgage company – CitiMortgage – in early 2010 to see if they could make different arrangements until Jeff, a millwright, found new work. A series of frustrating attempts to renegotiate terms went nowhere. Soon they got notice they would have to leave the $325,000 five-bedroom dream house they built on Old Baltimore Pike.”
“These kinds of stories inspired attorneys general nationwide to investigate the nation’s largest banks. As a result, Former Delaware Attorney General Beau Biden secured multiple settlements totaling $185 million – $100 million of which went directly to Delawareans either as a check in the mail or mortgage modifications, refinancing or loan forgiveness.”
“The Brown family got a $500 check from the settlement with Citi, they said. But it was nothing compared to the $125,000 they expected after reading a remediation framework published in 2012 by the Office of the Comptroller of the Currency. Families like the Browns also feel angry that the money has been doled out to other causes. They say a victim’s compensation fund or services could help replenish their depleted retirement savings account and send their two youngest children to college.”
“The Browns are quick to say they feel blessed to have found a home they could manage in Dunleith, where they moved in October. But, nothing can be done to reverse the emotional impact, Robbin Brown said. ‘We will never recover from the disbelief that they let the banks get away with what they did,’ she said. ‘The people who ratted on each other are getting more money than the people who it affected.’”
“second-home buyers or retirees from up north. ‘Canadian investments..in Whitefish. ‘We may see a lot of Canadian investment that helped us in the past years dry up a little bit.’”
The Canadians I know do not dream of retiring in Whitefish Montana. They are ready for something a little warmer. Since your neighbors to the north are already having a recession, and are up to their eyeballs in debt, expect them to start liquidating their investments in Whitefish.
Small Valley with LOTS of retired rich, entitled money. gotta talk your book.
Utah booming? this guy is paid by taxpayers=hell still have a job after spewing this idiocy
“For 2014, western Riverside County is expected to close out the year with 4,300 single-family home building permits – about the same as 2013. The permit count has been highest in the Coachella Valley.”
Got Joshua trees?
IELandlordking is going to buy them all and set up a colony. He can’t lose.
“Builders sold 611 new homes in Southern Nevada last month, ending 2014 with a tally of 6,007 sales, down 18 percent from 2013, according to Home Builders Research. The median sales price of last month’s closings was $291,785, down 2 percent from a year earlier. Overall, the results ‘are less than anyone projected,’ Home Builders Research President Dennis Smith said in the report. ‘The annual totals leave us disappointed but with an ‘it could have been worse’ feeling,’ he wrote.”
“Perhaps in a sign of weak finances and tougher lending requirements, buyers at one point were increasingly canceling purchases. In October, they backed out of 21 percent of new-home sales contracts in Henderson, up from 12 percent in April, according to Home Builders Research. In North Las Vegas, cancellation rates jumped to 34 percent from 25 percent in that period.”
http://thehousingbubbleblog.com/?p=8829
“As the key spring U.S. homeselling season approaches, buyers are finding deals on new houses as builders focus on boosting revenue. Dwayne Saunders purchased a house in Eastvale, California, in December, paying $450,000 after builder D.R. Horton Inc. cut the price by 4.5 percent, threw in a washer-dryer and covered his closing costs. This month, the house next door sold for $404,000. ‘It was bigger too,’ Saunders said. ‘I think D.R. Horton just wanted to finish this phase and move onto the next one.’”
http://thehousingbubbleblog.com/?p=8831
New construction is the thing to watch.
the IE seems like a gross area that only the most desperate commuter would consider.
As is all of SoCal not within 1/2 mile of a beach.
Within 20 miles of the beach is fine. 100 miles, out in the middle of a hot desert, not so much.
Within 20 miles of the entire hellhole of a state is too close for me.
I just got this email:
‘Based on the latest Google Trends data and updated housing market data tracked by Auction.com – which together indicate a shift in January home sales – the adjusted Auction.com Nowcast projections fall slightly below those released on January 26 (between 4.90 and 5.21 million annual sales, with a targeted number of 5.06 million).’
“Our January Nowcast, like the recent Pending Home Sales report from the National Association of Realtors®, is pointing towards weaker demand by homebuyers as we enter 2015,” explained Auction.com Executive Vice President Rick Sharga. “In light of near record-low interest rates and slowing home price appreciation, it’s troubling to see demand slow down from an already-lackluster level of activity. Hopefully as more inventory comes online in the spring selling season, buyers will return as well.”
““In light of near record-low interest rates and slowing home price appreciation, it’s troubling to see demand slow down from an already-lackluster level of activity. Hopefully as more inventory comes online in the spring selling season, buyers will return as well.”
Yeah because, as everybody knows, if nobody is interested in buying the inventory you’ve already got to offer, what you really need is lots more inventory just like it. Obviously.
We lose money because we can’t sell any, but we make up for it in volume.
“In light of near record-low interest rates and slowing home price appreciation, it’s troubling to see demand slow down from an already-lackluster level of activity. Hopefully as more inventory comes online in the spring selling season, buyers will return as well.”
Are the used home sales people dialed in to the connections between those low rates and slowing home price appreciation to borderline panic in the international financial arena?
Not that global financial panic should ever stand in the way of anyone wishing to join the Ownership Society…
‘A plunge in oil prices has been accompanied by an exodus of RVs from the Wyoming State Fairgrounds, where fifth-wheels recently competed for spaces at one of the few campgrounds in the area. Part of the slowdown is seasonal. Drilling in Wyoming typically ebbs during the winter. But even by those standards, the past several months have been uncommonly slow, according to some 35 or so campers who remain.’
‘News of layoffs are frequent occurrences. Rumors of jobs in states like Texas surface and are dismissed. And oil field hands, accustomed to making top dollar over the past two years, contemplate moving to other fields like construction, where a pay cut is all but assured.’
“All last summer, we were working 80- to 100-hour weeks,” said Bill Long, a 48-year-old dirt mover from Sheridan. “Now if we get 10 hours, we’re lucky.” Through Thursday morning, he had worked one hour all week. He recently signed up for unemployment.’
‘Long’s friend William Bell, a truck driver from Colorado Springs, Colorado, agreed. “Things have dried up,” he said. “You can tell by the lack of traffic.”
‘Their tale is a common one here in Douglas, a small town at the southern edge of the once-booming Powder River Basin. The town became a magnet for oil field hands over the past two years. Housing vacancies shriveled and rents soared. Trucks jammed the streets.’
‘Bell, the truck driver, said he had been offered two jobs in construction, but he was not wild about the idea, given the prospects of a pay cut. Long said he would go back to working road construction if jobs in the oil field dried up.’
‘In the meantime, both have car payments to make. Each man recently bought a truck. Bell, looking over his vehicle, noted that oil prices seemed to drop the week after he made the purchase. “I was kind of upset,” he said.’
And barely a cent in the bank….
And a $1000 a month payment on his F-350 super duty diesel.
‘Despite improvements, foreclosures and distressed properties are still part of today’s residential housing market. “We show 421,164 residential properties that are still bank-owned, with an additional 642,927 in default and in the foreclosure process but not yet foreclosed, for a total of 1,064,091″ at year-end, said Daren Blomquist, vice president at RealtyTrac. “So there’s a lot of property still in the foreclosure pipeline,” he said.’
‘In its latest numbers, released January 17, HousingPulse said that distressed sales were 23% of total sales in December. That’s up slightly from the lowest level in four years, which was 21.3% in September 2014.’
‘RealtyTrac says that from 2012 through 2014 in the Phoenix (Maricopa County) area — big investors’ favorite county in which to invest — they purchased 19,133 single-family homes, or 8.66% of all sales in that period. In second place, the Charlotte area of North Carolina (Mecklenburg County), they purchased 8,852 single-family homes, or a whopping 19.55% of sales, during the same period.’
‘In addition, big investors acquired 24,887 single family homes in nine different Atlanta-area counties between 2012 and 2014. In Henry County, the acquisitions accounted for 32.72%, or nearly a third, of all sales from 2012 through 2014.’
‘Also, Blomquist says that his data comes from public sales records, but many investors buy using a variety of LLCs, which makes sales hard to track. So Blomquist thinks the numbers may be low.’
‘After their shopping spree of the past few years, observers might think that REITs and other big investors are now sated. And some worry that they might sell parts of their portfolios. Blomquist says that big investor buying will slow but not stop. He adds that some will be “selling in one market and buying in a different market” to get “better-performing inventory.”
“In 2014, Utah’s housing markets lost momentum from their rebound out of the Great Recession, Wood said. A surge in home prices slowed significantly from double-digit levels the year before, leading Salt Lake County’s median home sales price to end 4 percent ahead where it started in January. Prices even fell in five cities in the county during 2014: South Salt Lake, Holladay, Cottonwood Heights, Murray and Riverton.”
Falling prices showing up all over the map.
Sellers Slash Prices 31% In Salt Lake City Area As Housing Correction Accelerates
http://www.zillow.com/murray-ut-84123/home-values/
These guys are pros at what they do. I’m shocked he got caught.
“Richmond Realtor Caught On Camera Stealing From Home”
http://wtkr.com/2015/01/22/watch-richmond-realtor-caught-on-camera-stealing-from-home/
The News Journal in Delaware: “A series of frustrating attempts to renegotiate terms went nowhere. Soon they got notice they would have to leave the $325,000 five-bedroom dream house they built on Old Baltimore Pike.”
What did you expect? You paid too much for a depreciating asset. There isn’t a house on the planet that can’t be built for half that amount.
Delaware Sale Prices Sink 3% In 2014 As Speculators Dump Houses
http://www.zillow.com/de/home-values/
“For 2014, western Riverside County is expected to close out the year with 4,300 single-family home building permits – about the same as 2013. The permit count has been highest in the Coachella Valley.”
Riverside, CA Resale Prices Sink 3% In 2014 As More Homeowners Default On Grossly Inflated Houses
http://www.zillow.com/ca-92509/home-values
“Rapid home-price gains in 2014 have consumers biting their nails over whether they can afford new homes. ”
I’m not biting my nails. I’m waiting patiently for the whole sh*thouse to go up in flames. If it never does, that’s fine too. The longer this stupidity goes on, the less I want to be involved in ever owning a house.
“The longer this stupidity goes on, the less I want to be involved in ever owning a house.”
Hear hear!
From the PE article:
“Foot traffic at model home communities is up in the Inland region, he said. Homebuilders have been reporting 250 would-be buyers a week. Last February, model homes attracted 50 visitors on average a week.”
BS? Or not? Since new home sales are reported on the execution of a contract, we should know if it’s not BS in a month or two.
I also find this interesting:
“For 2014, western Riverside County is expected to close out the year with 4,300 single-family home building permits – about the same as 2013. The permit count has been highest in the Coachella Valley.”
I’ve been tracking new home construction in the Coachella Valley…the pace of development is still well below half the long-term (pre-bubble) average. I wonder what they consider “high” in the CV.
With 4.4 million excess empty and defaulted houses in CA, you’re talking about raindrops in the desert Rental_Fraud.
“The Brown family got a $500 check from the settlement with Citi, they said. But it was nothing compared to the $125,000 they expected after reading a remediation framework published in 2012″
Hey, can I have some free money too? West coast house prices are nuts and I could use the help!
Rent for a fraction of the cost of buying while prices continue to crater.
As usual, the lawyers got most of the dough, and the consumers ended up with a 5%-off discount coupon when they purchase their next _____