High Prices And A Glut Of New Inventory
KGW reports from Oregon. “Portland’s hot housing market has buyers stepping up their game, and the pressure is forcing some to get personal. Local realtors and sellers say they’ve seen cases, recently, of desperate buyers sending unexpected gifts, like baked goods or wine, and dropping by unannounced. Some are even knocking on the doors of homes, not for sale, and asking to look around! Realtor.com gives a step-by-step guide. It’s so specific, that it instructs the writer to flatter the seller, avoid mentioning future changes you’d make to the home and end with a sincere, yet conversational sign-off.”
“Portland realtor Mary Pahl adds, be truthful about who you are, and trust that the right seller, with the right home, will relate. ‘They want somebody that’s going to come into their home and take care of it the way they did, and that’s important to most sellers,’ she said. ‘So, if you can say ‘This is what I want to do with this. This is how I see myself living in your home’… It just puts them one leg up on the competition.’”
The Washington Post. “The spring home-buying season has started strong in the D.C. region with house hunters scooping up places to live at a brisk pace. Prince George’s and Montgomery counties accounted for 42 percent of the sales in what RealEstate Business Intelligence classifies as the D.C. region, due in part to the high number of foreclosure sales. Those two counties were where 85 percent of the foreclosed homes were sold in the area.”
“The median price for the D.C. region climbed to $400,000, rising to its highest level for March since 2007, which was during the height of the housing boom. Most jurisdictions had median price increases with the exception of Falls Church and Howard County. Falls Church, whose median price soared to $712,500 in February (a 27.9 percent year-over-year increase), saw its median price plummet to $585,000 last month (a 19.1 percent year-over-year decrease). Because there are so few sales in that jurisdiction, the numbers tend to be volatile. Howard County’s median price dipped to $365,162 last month from $400,000 in March 2014.”
The New York Daily News. “It’s raining condos in Manhattan. A stream of uber-luxe new condos is coming to market in some of the city’s priciest locales, finally putting an end to the enduring inventory shortage that’s been pushing up prices. Approximately 5,377 new condo units are expected to hit the market this year, including 1,900 this spring alone, according to data from Corcoran Sunshine.”
“That’s still well below the peak of the last cycle in 2007, when a whopping 8,052 units came on the market, but it’s more than double the number of new apartments that arrived last year and almost 20 times the number that were built in 2011, following the economic crash. ‘It really is a lot of inventory,’ said Andy Gerringer of the Marketing Directors, which specializes in marketing new condos and rentals. ‘It could create a bit of a backlog in the market.’”
The Miami Herald in Florida. “Houses are staying on the market longer in the Miami area than in most other big cities around the country, according to Trulia. The likely culprits? High prices and a glut of new inventory, said Trulia chief economist Ralph McLaughlin. ‘Miami is in this weird stalemate situation where sellers probably don’t want to reduce the price of their units because they don’t want to lose money, but middle-class buyers aren’t able to afford them,’ McLaughlin said. ‘So what we’ll see is homes sitting on the market longer until either sellers decide to lower their sales price or the economy continues to improve and buyers can start to afford them.’”
The Press of Atlantic City in New Jersey. “Atlantic County again led U.S. metropolitan areas in foreclosure activity rates in the first quarter of 2015, and other southern New Jersey counties saw big year-over-year increases too, RealtyTrac said. The new figures reinforce the struggles of real estate markets battered by years of down local economies and a spate of New Jersey distressed properties delayed by previous backlogs and moratoriums.”
“All area counties and New Jersey were up in the first quarter from one year ago. ‘It signifies this is still a market that’s experienced a lot of housing trouble,’ said Daren Blomquist, vice president of market research firm RealtyTrac. ‘It’s not just that (Atlantic County) is the highest but we’re continuing to see these increases in foreclosure activity so it’s still getting worse.’”
National Mortgage Professional on Rhode Island. “The nation’s smallest state is seeing an oversized spike in foreclosures. According to a new report, Rhode Island experienced a 30 percent year-over-year increase in foreclosure deed filings during the fourth quarter of 2014 and a 10 percent increase in 2014 versus 2013. The new report, which was compiled by Roger Williams University’s HousingWorks RI research group also found that 11,609 residential foreclosure deeds were filed in the state between 2009 and the end of 2014, representing 6.5 percent of all residential properties carrying mortgages.”
“‘Nearly 16 percent of Rhode Island mortgages are underwater,’ the report stated, adding that the Ocean State ‘has the second highest percentage of serious delinquent mortgages in New England (Maine was first) and ranks fifth in the nation.’ The report also cited data compiled by Cigna that determined Rhode Island ranked fourth in the nation for homeowners who are paying more than 30 percent of their income on housing costs.”
The Times Herald-Record in New York. “You might think the mortgage crisis would be in the rear view mirror by now, seven years since the outset of the Great Recession. But mortgage foreclosure filings reached 10-year highs last year in Sullivan and Ulster counties, and remained near their peak in Orange County. The increase is partially attributable to court rules imposed since 2011. They require court-supervised settlement conferences between borrowers and lenders, as well as an expansion of civil legal services. That slowed the foreclosure process, and led to a backlog.”
“Lorri Hoolan of New Windsor had a good-paying job as a courier until injuring her back about two years ago. She has been unable to work since then, putting a dent in her family’s income, and they’ve fallen behind on mortgage payments. She sat on a recent afternoon in a hallway of the Orange County Courthouse, where a room is reserved for dozens of foreclosure conferences each week. Hoolan estimates the value of her two-bedroom condominium has dropped $20,000 since she and her husband, Robert, bought it in 2004.”
“‘This is all so embarrassing,’ Hoolan said. ‘I just hope they give me a chance to get back on track and keep the place.’”
“‘We see a lot of people who have an astronomical amount of debt because they refinanced when the market was booming,’ said Faith Moore, executive director of the Rural Development Advisory Corp. of Orange County. ‘They saw their home worth more than they paid; now the house is worth less than the debt.’”
“Portland realtor Mary Pahl adds, be truthful”
Isn’t that ironic. A realtor advising others to be truthful. How about realtor be truthful with the data?
Portland, OR List Prices Dive 15% YoY
http://www.zillow.com/portland-or-97232/home-values/
Flippers won’t buy them. They don’t pencil out even under crazy flipper math.
If there aren’t equity locusts from CA coming in, then good gawrsh, it looks like they might need to sell houses to people with actual jobs.
That means Crater.
“Falls Church, whose median price soared to $712,500 in February (a 27.9 percent year-over-year increase), saw its median price plummet to $585,000 last month (a 19.1 percent year-over-year decrease). Because there are so few sales in that jurisdiction,”
Gee…. Do you think falling prices and “so few sales” might have something to do with the fact that prices are inflated 250% over long term trend and 2x production costs?
Remember….. a house is a depreciating asset.
“‘We see a lot of people who have an astronomical amount of debt because they refinanced when the market was booming,’ said Faith Moore, executive director of the Rural Development Advisory Corp. of Orange County. ‘They saw their home worth more than they paid;
Yet there are far more that have an astronomical amount of debt because they paid too much for a depreciating asset.
Lesson: Never pay more than reproduction costs for a depreciating asset. If you paid more than reproduction costs ($55/square foot), you got ripped off.
Lesson number two: Never buy something that you can not pay for without decades of debt slavery.
HA - I usually dig your input and insights. However, your $55 / sq. ft. comment is one that I do not agree with. Land cost, among other factors, depends on supply/demand. I won’t pay anything to live in Nebraska, however I’ll pay quite a bit to live on a coast. . .
That’s kind of odd. You say you get it that land per se isn’t worth all that people are shelling out for little dots of it, and that you would pay “alot” just to live on the beach. Yet you think construction costs on the beach are somehow more? If your dream house sits on a million dollar ocean view, great. That does not explain 99.999% of the rest of the mania.
If the $55 / sq. ft. figure is proposed to building costs alone (which I don’t agree that it is), then I can see the point. However, decoupling the cost of the construction from the market value of the land is not very meaningful.
And I wasn’t commenting on the mania, which I agree exists. I was simply commenting on the premise being made, which I still don’t agree with.
Whether you “agree” with it or not has no bearing on the fact that M, L and profit is less than $55/sq. Are you in the construction biz?
As far as the cost of the dirt, it’s acceptable to accurately establish my costs going into a project but not so after I build it?
You’re not making any sense my friend.
No - I’m not in construction. First of all, the cost of M, L, and profit is not fixed but depends on, for example, scale. The cost of utility connections (e.g. sewer, electrical, water) is fixed, regardless of the total area of the house. Therefore, the per sq. ft. costs of those utilities are different for a 600 sq. ft. and 2000 sq. ft. house. So the $55 / sq. ft. cost cannot be fixed, as you insist.
I don’t understand your “dirt” comment, but I’m sure that we can agree that the cost of land depends on supply / demand.
In my perspective, you’re not yet making sense. . .
Unit prices are always fixed. Always. That’s the purpose of a unit price vs. lump sum.
I can’t help you with the dirt comment. You’ve convinced yourself that somehow a structure and dirt are one. They’re not. I suspect you’re another who paid too much for a depreciating asset.
Hey HA - I still don’t agree with your position on this one. I don’t at all think that a structure and land are coupled. I cannot understand why you came to that conclusion.
I am currently a renter sitting on a pile of cash waiting for the bubble to burst.
It’s not a “position”. It is what it is irrespective of my or your beliefs.
You said they were coupled, not me.
Rhode Island is a place of special stupid.
Take a small beautiful state with picturesque New England towns with hard working people…
Infested it with complete and total progressive/liberal and public union dominance for 60 years.
Today:
No jobs and no business is ever going to relocate there
Insane taxes
Towns going bankrupt
The state going bankrupt
And 6.5 percent of all residential properties in foreclosure
“‘Nearly 16 percent of Rhode Island mortgages are underwater,’ the report stated, adding that the Ocean State ‘has the second highest percentage of serious delinquent mortgages in New England (Maine was first) and ranks fifth in the nation.’ The report also cited data compiled by Cigna that determined Rhode Island ranked fourth in the nation for homeowners who are paying more than 30 percent of their income on housing costs.”
Yeah, they are all moving to the new no-tax, no-regulation Nirvana that Republicans have created here in Kansas.
Oh wait……
“Thank God I dont have to say I live in Kansas anymore.”
The fixr’s daughter after her recent move to Missouri
The other day I was reading an article from Kansas. They discussed the $400k house here and the $500k house there, and did you know there’s a shortage of such houses?
Johnson County? Or anywhere else in Kansas?
Johnson County is “special”/different.
$500K will buy half of Emporia, or Dodge City
Mom is asking $50K for her ground level, 2br/2bath condo in Topeka. On the market for a year. Only offer she has received is $30K. Turned it down, because she’s not “giving it away”
Overland Park homes for sale $500,000 and up residential property listings
What to expect in $500K price range in OP KS (generally)
http://www.kansascityrealestate411.com/overland-park-homes-for-sale-500000-plus-luxury-houses.asp
http://www.kansascityrealestate411.idxbroker.com/i/overland-park-homes-for-sale-1500000-or-more
Homes for Sale in Wichita Ks 400k-500k
http://www.kansasdreamhomes.com/homes-for-sale-in-wichita-kansas-400k-500k.aspx
Gal in the office next door signed a contract on their “dream house”, contingent on them selling their current house. Went on the market last spring.
Even though they owned it for 10-15 years, couldn’t sell if for enough to have any money left to put a down payment on the dream house.
Dream house go bye-bye. Stuck in the old house, with all of it’s rapidly developing problems. Mainly, DFW-like gridlock on I-35 from downtown out to Olathe……..an hour plus commute to drive 23 miles during rush hour. And “rush hour” now runs from 3pm to 6:30-7:00pm.
Fixr, now being a renter, gets to avoid all of this. 10 minute drive to downtown (with multiple ways to get there), renting in a nice, older, inner suburb.
Just for grins, modified the searches
Number of homes for sale in Overland Park, $500K and up = 236
Number of homes for sale in Wichita, $400K and up = 206
(from the map, it appears that the have included the whole metro area, from Goddard to Andover (26 miles)
You will have a better chance selling that $500K house in OP, than you will that $400K house in Wichita.
Johnson County is turning into a giant mess, traffic wise.
If I HAD to buy a house in KC, I’d be looking along the !-29 corridor up to Platte City, Mo, or US-169 north to Smithville, Mo. Hell, even Lawrence/Tonganoxie is an easier drive than Overland Park anymore.
Mainly, DFW-like gridlock on I-35 from downtown out to Olathe……
True that but besides that rout and parts of JoCo, KC has relatively great traffic and freeways compared to most cities.
Disclaimer:
I’m from the KC area, lived in LA (worst traffic in The USA) The Bay Area (traffic very bad) and live in Rio. (3rd worst traffic in the world according to studies)
Count your blessings.
Traffic Congestion in the World: 10 Worst and Best Cities
http://www.newgeography.com/content/004504-traffic-congestion-world-10-worst-and-best-cities
All but one of the 10 least congested large cities in the Tom Tom report are in the United States. The least congested is Kansas City, with a peak period index of 19.5, indicating that a 30 minute trip in free flow is likely to take 36 minutes due to congestion. Kansas City has one of the most comprehensive freeway systems in the United States and has a highly dispersed employment base.
…The most congested US and Canadian cities rank far down the list. Los Angeles ranks in a tie with Paris, Marseille and Ningbo (China), at a peak hour congestion index of 65.
…Rio de Janeiro is the third most congested city him with a peak hour traffic index of 99.5. The average free flow 30 minute trip takes 60 minutes due to congestion during peak hours.
Were any Latin American cities analyzed other than cities in Brazil? I looked at the source material and didn’t see that. Bogotá is horrible, just really bad. The city commissioned a study on the average speed of the “Transmilenio” bus fleet — which in theory has a dedicated lane — and it turned out to be a discouraging 27 kph. Attempts to limit traffic by banning driving on certain days, depending on license plate numbers (”pico y placa”), have had no discernible effect. One of my in-laws simply gave up commuting to work, and now works remotely. Buenos Aires and Panama City are bad too.
One thing about bad traffic in the U.S is that drivers stay in their lanes. In Latin America that doesn’t always happen. Sometimes traffic jams look like an experiment in particle physics.
Were any Latin American cities analyzed other than cities in Brazil?
I don’t know.
U.S is that drivers stay in their lanes. In Latin America that doesn’t always happen. Sometimes traffic jams look like an experiment in particle physics.
True. My first trip to Brazil in 88 I told my wife that she was going to drive because it was her country and people drove nuts. But it was so scary sitting there and seeing it that I quickly told her to pull over and let me drive. It was a VW bug when 1/2 the cars were VW Bugs.
Before we set out that day in her dad’s car I asked where were the seat belts. (lap belts only) Her parents looked at me like I was crazy and said there were no seat belts. I reached between the seat and pulled out the seat belt still in the factory plastic wrapping on a car that was about 7 years old. LOL
But they drive a lot better here than they did in 88.
LOL about the seat belts. Fastening your seat belt in that part of the world is an obvious tip-off that you are a gringo. I did that once in a taxi and the driver was stupefied, looking at me like I was visiting from another planet.
Um yep…
———–
Blue State Residents Are Flocking to Red States
Matt Vespa | Aug 26, 2014 | TownHall.com
People are fleeing blue states in droves. In Illinois alone, half of its residents would rather move someplace else. You might recall Dan’s post detailing their plight. After all, the Land of Lincoln had anemic job growth; only 500 jobs were created between 2013-2014.
The blue diaspora has helped offset the fact that many of the nation’s fastest-growing states are traditionally Republican. You can think of it as a kind of race: Population growth in these Republican states is reducing the share of the Electoral College held by traditionally Democratic states. But Democratic migration has been fast enough, so far, to allow the party to overcome the fact that the Northeast and industrial Midwest contain a smaller portion of the country’s population than they once did.
The migration helped President Obama win Colorado, Florida and Virginia in both 2008 and 2012. In 2014, the influx of blue-state natives gives Democrats a better chance to win Senate races in Colorado, Georgia and North Carolina, among other places.
The spread of people born in New York State offers a particularly telling example: Of the 20 million Americans alive today who were born in New York, nearly one in six now live in the South. That would have been almost unthinkable 50 years ago, when the share was one in 25.
Also, the Times noted that blue state migration is especially high in South Carolina, Idaho, and Utah. But have no fear; there’s no immediate impact yet. Not all residents from blue states are liberal, as seen with the migration patterns to Texas, Utah, and Idaho. In fact, the Lone Star State has welcomed a healthy share of red state migrants as well.
Nevertheless, the wonks helming the New York Times’ Upshot say that the “blue state diaspora” will likely continue. That might require conservatives to be savvier in their political maneuvering given the diluted voter rolls; challenge accepted.
I think there ought to be a law that liberals be required to inhabit the habitat that they destroy and remaining there and not be allowed to infest healthy habitats.
Healthy like Alabama? West Virginia? LOL. There’s way too much that goes into migration patterns to reduce it to a simple partisan political conclusion.
I do see a breakup of the U.S. in the distant future. Our disparate regions eventually will get the chance to see how their prevailing ideologies work in isolation, not just economically, but socially and politically as well.
Old farts moving to where the weather is warmer hardly constitutes a diaspora.
Uhhh, nope…….
http://tinyurl.com/kw2u4mw
(From last year, but the trend continues)
Unaffordable prices in the immediate aftermath of a recession are a recent development. For example, you didn’t see this in the early-to-mid 1990s, when housing around the US was affordably in line with local household incomes.
Given the international scope of the mania, my guess is that this is a transient phenomenon, though only time will tell.
” Some are even knocking on the doors of homes, not for sale, and asking to look around!’
Casing, that’s called casing, as in “casing the joint”.
What a neat cover! “I’m not here to steal, I’m here to buy”.
Beats having to say “I’m looking for my lost dog”.
(True story: A lady I know came home and found some woman in her house. She asked the woman what she was doing there and the woman replied “I’m looking for my lost dog” and then the woman simply walked out of the house and disappeared down the street. The owner was a bit befuddled at first and by the time she regained enough composure to call the police the woman was already gone.)
Check.out this movie: The Visitor
http://m.imdb.com/title/tt0857191/
“…….desperate buyers sending unexpected gifts……”
Fixr hint du jour: If your wife is hot, convince her to give up the booty. If nothing else, you will find out how bad she wants the house.
“It’s raining condos in Manhattan. A stream of uber-luxe new condos is coming to market in some of the city’s priciest locales, finally putting an end to the enduring inventory shortage that’s been pushing up prices.”
How many more empty luxury condo units are due to be built and sold in major cities around the globe before thid wave of the bubble bursts?
The Financial Times has this article:
Global property bubble fears mount as prices and yields spike
http://www.ft.com/cms/s/0/7ba6556e-e28d-11e4-ba33-00144feab7de.html#axzz3XTj5LgRT
April 15, 2015, the MSM is all over it.
Here’s another one:
‘Increasing housing prices and stagnating wages in the San Diego region are harming the area’s economy, according to a study released Thursday by the National University System Institute for Policy Research.’
‘With families having to spend a larger percentage of their income on housing, less money is available for discretionary purchases like cars, health care, education, food and entertainment, said NUSIPR economist Kelly Cunningham.’
‘That means more cash is going to financial institutions based out of town, rather than local car dealers, restaurants and entertainment venues, he said.’
“Rising housing prices are further straining the region’s already pressured household budgets,” Cunningham said. “Housing costs are a key impediment to regional growth and greater economic prosperity.”
So Kelly, are you saying higher house prices just make us poorer and an economy based on buying and selling houses to each other isn’t sustainable? I get the logic, it’s just that I seem to remember hearing that years ago.
‘more cash is going to financial institutions based out of town’
Hmm, I wonder if those financial institutions had anything to do with this situation?
I think it was Neuromance that posted a study where the end result of paying massively inflated prices for houses results in an economic wasteland for 2-3 decades after.
“Falls Church, whose median price soared to $712,500 in February (a 27.9 percent year-over-year increase), saw its median price plummet to $585,000 last month (a 19.1 percent year-over-year decrease). Because there are so few sales in that jurisdiction, the numbers tend to be volatile.”
It can be hard to distinguish volatility from a crash. But ask yourself this: How often in recent months hss ‘volatility’ presented as a large one month decline in Falls Church home prices?
‘Northern Virginia home sales spiked 14 percent in March, setting the stage for what many hope will be a vibrant spring selling season. But the Northern Virginia Association of Realtors notes that the sales spike may be partly due to the unusually cold winter.’
“The 14 percent increase in home sales this past March is a trend to celebrate, however we must remember that the 2014 winter polar vortex cast a huge chill on early 2014 home sales,” said Mary Bayat, the 2015 NVAR Chair and owner of Bayat Realty in Alexandria. “This major surge comes partly from pent-up demand, and more closely resembles a balanced market. Our inventory is up 27 percent with 3,831 homes for sale, giving buyers a great selection. People like choices.”
‘The Federal Housing Administration, which guarantees mortgages for first-time buyers, is loosening the clamps on credit requirements, which could lead to more mortgage approvals.’
“Finally, many buyers who had distressed house sales years ago could have enough repaired credit to qualify for a new loan today,” Bayat explained. “They will get more house for their money now than if they wait.”
“Another local indicator is that active listings have risen more than 25 percent,” Bayat said.’
Strange the PricePukes fail to mention falling prices YoY in NoVa.
Why is that?
‘The Baltimore-area housing market posted the best March sales figures since 2007, continuing a run that suggests home sales are returning to pre-recession levels.’
‘Even with that brisk pace of home sales, there was still an increase of homes being put on the market, RBI said. The inventory of homes available for sale rose 8 percent over March 2014.’
‘Nearly 600 of the homes sold in March were distressed homes — more than one-third of them in Baltimore City — continuing a trend that emerged in January, RBI said. The transactions involving distressed homes are a direct result of a backlog of bank-owned properties that have finally been moving through the court-supervised foreclosure process.’
‘Distressed homes are selling at a huge discount compared to regular market sales. In Baltimore City, the average price of a distressed home is $38,500; a non-distressed home sells for an average of $166,250.’
‘Baltimore County is the second-most active in the distressed home sale market, accounting for 23 percent of all bank-mediated sales, RBI said.’
‘Here’s a look at the median sales price for homes in the region, broken down by county and Baltimore City:
Howard County: $365,162 percent (down 8.7 percent from March 2014)
Anne Arundel County: $299,450 (up 0.5 percent from March 2014)
Carroll County: $259,250 (down 2.2 percent from March 2014)
Harford County: $230,000 (up 9.5 percent from March 2014)
Baltimore County: $207,350 (up 4.2 percent from March 2014)
Baltimore City: $87,500 (down 24 percent from March 2014)
‘The first numbers on the spring housing market in Washington are encouraging for sellers.’
‘Listing service MRIS’ monthly RealEstate Business Intelligence Report says closed sales in March jumped more than 40 percent from February, and pending sales, or contracts signed to buy last month, were up 36 percent.’
‘A better gauge, comparing year-over-year sales, is also positive. Contract signings were up 10.8 percent and sales that closed were up 15.6 percent.’
‘The median price of a property that sold in the Washington metro in March was $400,000, up 2.6 percent, both month-over-month and year-over-year.’
‘There is also more for potential buyers to look at, with new listings up 41.5 percent from February and 15.2 percent higher than a year ago.’
‘$400,000, up 2.6 percent’
How long ago was it that a DC house was reported to have 150 people visit at an open house? Multiple bids, up and away! What happened? It’s hot til it’s not. Falls Church, Howard County, nothing to see here. The media just moves on to the next gee whiz, Denver! Golly, they are going crazy in Denver. Portland! They’re feeding squirrels!
U.S. home construction off to a weak start:
http://m.apnews.com/ap/db_268743/contentdetail.htm?contentguid=bEG8BdNA
That makes sense considering there are tens of millions of excess, empty and defaulted houses out there.
Maybe the market can get some help from slime balls like this……
https://confoundedinterest.wordpress.com/2015/04/15/caution-ex-freddie-mac-officials-settle-sec-suit-over-subprime-loans/
But then again - maybe not….
http://finance.yahoo.com/news/u-foreclosures-rose-sharply-march-040100747.html
‘March’s national foreclosure filings increased 20 percent over a 104-month low in February and increased 4 percent compared to March 2014.’
“The March increase (nationally) is continued cleanup of distress still lingering from the previous housing crisis, not the beginning of a new crisis by any means. Some of most stubborn foreclosure cases are finally being flushed out of the foreclosure pipeline, and we would expect to see more noise in the numbers over the next few months as national foreclosure activity makes its way back to more stable patterns by the end of this year,” said Daren Blomquist, vice president of RealtyTrac.’
‘Dale Barron, owner and CEO of Coldwell Banker Ellison Realty, Inc. in Ocala, said that while Ocala might rank high in foreclosure rates, the area is still on many analysts’ lists of best real estate investment areas.’
‘Barron agreed that many of the area’s foreclosures are a holdover from the worst of the recession and are only now coming to market. “Most of these are legacy assets,” he said. “And everything is a relative number.”
That house next door that sold for half of what you just paid, it’s a legacy issue. And everything is a relative number.
‘Nevada had the nation’s third highest rate of foreclosure filings in the first quarter of the year, real estate analytics company RealtyTrac reported.’
‘One of every 209 housing units in Nevada had a foreclosure filing from January through March, trailing only Florida (one filing per 178 units) and Maryland (one filing per 199 units). The national average was one filing per 421 housing units.’
‘The filings in Nevada included 2,926 default notices, 1,698 notices of pending trustee sales and 977 repossessions by lenders. The 5,648 total filings was roughly 8 percent higher than the first quarter of 2014, though RealtyTrac cautioned that the actual increase may be lower due to improvements in data collection.’
‘Nevada’s foreclosure activity continues to be particularly heavy in the front end of the process, with foreclosure starts up 166 percent in the first quarter compared to the same period a year ago.’
Are the foreclosures selling at prices that are bringing down the comps in the area, or are they not selling at all?
‘Nearly 600 of the homes sold in March were distressed homes — more than one-third of them in Baltimore City — continuing a trend that emerged in January, RBI said. The transactions involving distressed homes are a direct result of a backlog of bank-owned properties that have finally been moving through the court-supervised foreclosure process.’
‘Distressed homes are selling at a huge discount compared to regular market sales. In Baltimore City, the average price of a distressed home is $38,500; a non-distressed home sells for an average of $166,250.’
‘Baltimore County is the second-most active in the distressed home sale market, accounting for 23 percent of all bank-mediated sales, RBI said.’
http://www.realtytrac.com/news/foreclosure-trends/march-q1-2015-foreclosure-market-report/
Title: “First Quarter U.S. Foreclosure Activity Drops to Lowest Level in Eight Years Despite March Increase”
Makes sense considering there are foreclosure moratoriums in effect in all 50 states.
Ruh roh…..
BUZZ-U.S. homebuilders: Housing starts data disappoints
Reuters 4/16/2015 10:00 AM ET
Print Article
** U.S. homebuilders’ shares fall after data showed rise in U.S. housing starts in March was far slower than expected and permits recorded their biggest drop since last May
** Tepid housing report, struggling manufacturing sector suggest economic momentum will probably not be strong enough for Federal Reserve to start raising interest rates before September
** Groundbreaking rose 2 pct to seasonally adjusted annual pace of 926,000 units in March, Commerce Department said; economists polled by Reuters forecast groundbreaking rising to 1.04 mln-unit pace
** D.R. Horton Inc down 2.2 pct at $28.41; Lennar Corp down 2 pct at $50.40; Toll Brothers Inc down 1.8 pct at $39.26
** PulteGroup Inc down 2.1 pct at $22.31; KB Home down 1.5 pct at $15.90
** Up to Wednesday’s close, Dow Jones U.S. home construction index had risen 13 pct this year
“Portland’s hot housing market has buyers stepping up their game, and the pressure is forcing some to get personal. Local realtors and sellers say they’ve seen cases, recently, of desperate buyers sending unexpected gifts, like baked goods or wine, and dropping by unannounced. Some are even knocking on the doors of homes, not for sale, and asking to look around!
GIVE.
ME.
A.
BREAK.
Bubble 2.0 could not be more obvious.
“Watch Out For Falling Copper Prices”
http://www.investopedia.com/stock-analysis/cotd/041615/watch-out-falling-copper-prices-scco-fcx-nsu.aspx
Remember…. Falling prices of all kinds to dramatically lower and more affordable levels is positively bullish and good for the economy.
Positive economic news. Very positive.
“London House Prices Falling At Fastest Rate In Seven Years”
http://www.standard.co.uk/news/london/london-house-prices-falling-at-fastest-rate-in-seven-years-according-to-ons-figures-10175981.html
“Lumber Prices Fall Sharply: Implications For Bonds And Different Stock Market Sectors”
http://seekingalpha.com/article/3068916-lumber-prices-fall-sharply-implications-for-bonds-and-different-stock-market-sectors
Remember…… falling prices is new found money in your wallet.
“Home prices in Delhi fall by up to 20%: JLL India”
http://businesstoday.intoday.in/story/home-prices-in-delhi-fall-by-up-to-20-per-cent/1/218179.html
‘Miami is in this weird stalemate situation where sellers probably don’t want to reduce the price of their units because they don’t want to lose money, but middle-class buyers aren’t able to afford them,’ McLaughlin said. ‘So what we’ll see is homes sitting on the market longer until either sellers decide to lower their sales price or the economy continues to improve and buyers can start to afford them.’”
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Or we could see option three, which is a complete abandonment of all credit standards. That way both buyers and sellers get what they want and no hard choices have to be made by anybody.
I’m still amazed from the reports from Europe this week of negative interest rates on mortgages. Like Ben commented, we’re talking about paying borrowers and charging savers. “Weird” doesn’t even begin to describe the situation.
Falling prices puts more MONEY in my pocket!!