July 29, 2015

Gaming The Market

The Denver Post reports from Colorado. “Lauren Frommer, 28, socked away a fifth of every paycheck and last month purchased a Cherry Creek condo, renting out two of the three rooms to friends who help her cover the mortgage. Frommer previously worked in the natural resources industry before becoming a jewelry designer and said the industry’s instability motivated her to lock in a home. ‘It feels like when you are renting, you are throwing away money,’ Frommer said.”

“But Frommer’s view doesn’t appear to be the most common one among her peers, the millennials born between 1980 and 1997. Her roommate Kate Braden, also 28, said she prefers the freedom that renting provides, and even Frommer concedes locking in a mortgage seemed frightening at first. ‘I’ll start to look at houses when I am ready to settle down,’ said Braden, who estimates it will be another five years before she purchases a home.”

The Atlanta Journal Constitution in Georgia. “Metro Atlanta home prices continued to rise late into the spring, although the pace was slower than usual and the number of homes for sale remained lower than normal. Luis Gaud, 27, took the leap this spring, buying his first home, a one-bedroom condo in the Poncey Highland area of the city of Atlanta. The customs officer said he wanted to act while he could afford what he wanted and buy something he’d be able to sell in a few years. ‘I figured it was time to buy,’ he said. ‘And the way things are going, I think the value will go up.’”

The Seattle Times in Washington. “Home prices in the Seattle metro area hit a wall in May, traditionally one of the year’s busiest shopping periods, posting weaker than expected gains, according to the S&P/Case Shiller index. ‘It’s been a slow, languid summer for home values, with annual growth rates having pretty much leveled off over the past few months,’ said Zillow Chief Economist Stan Humphries in a statement. ‘But consistent slowing in the rate of seasonally adjusted month-over-month growth in the Case-Shiller indices will eventually be reflected as slowdowns in year-over-year appreciation, too.”

“Zillow’s Humphries said mortgage rates won’t be in a holding pattern much longer and will put downward pressure on home value appreciation as soon as they begin rising. ‘Enjoy summer while it lasts, because in just a few months, things could start getting interesting again,’ he said.”

The Dickinson Press in North Dakota. “Buying a home in Dickinson is cheaper and less stressful than it was only a year ago, two of the city’s top Realtors said. ‘They (prices) have definitely softened and buyers are now more cautious, so there’s more on the market,’ said Ninetta Wandler, a longtime Dickinson Realtor. ‘But they’re not forced to buy yesterday. Before, if you had three houses to look at, you were lucky — and you didn’t have time to think about it.’”

“About one-third of the homes listed in Dickinson so far this year started at more than $300,000. To put the rise of Dickinson’s home prices into perspective, Wandler said a house selling for $350,000 today would have probably gone for as low as $230,000 five to 10 years ago. ‘That was a really nice house,’ she said.”

The South Jersey Times in New Jersey. “Of all the American homes currently in the foreclosure process, one in four were vacated by homeowners prior to a bank repossessing the property, according to RealtyTrac. These houses sit abandoned, with the homeowners gone and the bank not yet in possession of the properties. New Jersey has the highest rate of foreclosures — and zombie foreclosures — in the nation.”

“It’s not only a matter of the state’s lengthy mortgage foreclosure process that leaves these houses in limbo, though. Banks are keeping many properties out of circulation, hoping that if they don’t flood the market with foreclosures they can getter a better price later as the market continues to improve, explained Realtor Nancy Kowalik, of Keller Williams Realty. She described situations in which she has interested buyers for such homes but cannot even get a returned phone call from these institutions. ‘They don’t want to sell,’ she said. ‘They are gaming the market.’”

From Marketplace. “JoAnn Henderson bought her house New Carrollton, Maryland, in 2001. She refinanced a few years later for a higher amount. Shortly before she retired from her teaching job, she started having trouble with the steep payments. Henderson got a loan modification, which dropped her interest rate to 3 percent. Now she’s even got a rainy day fund. ‘A tiny one,’ she says, laughing. ‘Not a big rain. A small rain.’”

“What would really help Henderson is if the amount of her loan could be reduced in what’s called a principal reduction. Henderson owes more than $450,000 on her house, which is only worth $212,000, according to Zillow. She’s underwater, owing more on her home than it’s worth. Mel Watt will be making the decision on principal reduction. He’s head of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.”

“Watt is caught between homeowner advocates like Wilson, and people like Tim Rood, chairman of the Collingwood Group of financial advisers. Rood wonders where the money for principal reduction would come from. ‘This money doesn’t come out of thin air,’ he says. ‘So, it’s going to have to come from investors or from taxpayers.’”




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99 Comments »

Comment by Mafia Blocks
2015-07-29 04:15:00

“Henderson owes more than $450,000 on her house, which is only worth $212,000, ”

That would be the case with most houses….. Barely with half of the previous sale price.

Comment by taxpers
2015-07-29 05:08:37

Hilary will save her.
After all some man talked her into it.vIctims unite !

 
Comment by Mr. Banker
2015-07-29 05:26:56

“Henderson owes more than $450,000 on her house, which is only worth $212,000, ”

“Shortly before she retired from her teaching job, she started having trouble with the steep payments.”

A retired teacher who owes $450,000 on her house. Bahahahahahahahahahaha … and the best part is:

Her students grow up to become my clients.

Bahahahahahahaha … I hope she taught her students all she knows about personal finance.

Dumb ‘em down, and profit.

Bahahahahahahahahahahahahahahahahahahahahaha

Comment by rj chicago
2015-07-29 07:42:25

Mr. Banker is just evil!!! :)

Comment by Professor Bear
2015-07-29 08:18:14

But you have to admire his integrity.

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Comment by Dman
2015-07-29 08:39:18

So if I buy a new car and it depreciates the moment I drive it off the lot, can I go to the bank and demand that they reduce my loan amount? Just wondering.

Comment by GuillotineRenovator
2015-07-29 10:58:46

Exactly. You bought it, you own it.

 
 
Comment by Oxide
2015-07-29 08:59:17

What did she do with the bubble re fi money????

She’s lucky she got a 3% mod after her reckless cash out. Now she wants a cram down too? Eff her.

Comment by GuillotineRenovator
2015-07-29 10:59:48

If you found yourself underwater by that amount, and there were “programs” available, you’d be in line, right?

Comment by oxide
2015-07-29 11:19:44

What I’m saying is that the “programs” shouldn’t be available to people who cash-out refi.

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Comment by Mafia Blocks
2015-07-29 13:16:20

Donk,

Financing depreciating assets at grossly inflated prices for 15 or 30 years shouldn’t be available either.

 
Comment by toast on the coast
2015-07-29 17:40:16

An associate in Long Beach, CA purchased his home for $850,000. Re-fied it to $2,500,000 and did a cram down with Wells Fargo to $1.2 mil.
Lived large on all that free money.
We are the suckers.

 
Comment by Ben Jones
2015-07-29 18:16:24

There’s more than one way to make money on a housing bubble.

 
 
 
 
Comment by rj chicago
2015-07-29 14:37:17

M. Hanson on CNBC just now -
To echo Mafia Blocks….
CRUSHING
HOUSING
LOSSES…..

Demand for U.S. housing in the second half of 2015 looks so weak that the Federal Reserve will not be comfortable starting its interest rate tightening cycle, independent real estate analyst Mark Hanson said Tuesday.
“Having rates at zero hasn’t done much if you take a look at the numbers, but having rates 200 basis points higher or 100 basis points higher would crush housing. I don’t think they can take that chance,” the founder of M Hanson Advisors told CNBC’s “Squawk on the Street.”
Hanson said last week’s new home sales data from the Commerce Department was a sign of a lingering stimulus hangover and a “huge miss.”

The Commerce Department reported new home sales fell 6.8 percent to a seasonally adjusted annual rate of 482,000 units. Analysts had expected a 0.7-percent increase to 550,000 units.

Read More Homeownership rate drops to 63.4%, lowest since 1967
With respect to homebuilder’s pricing power, he said new home prices have been down for the last seven months. The picture in 2015 looks worse when compared with 2013, he added, noting that comparisons with 2014 data are misleading because an interest rate plunge and the stimulus cycle boosted demand that year.

“When you do that, you’ll see new home sales are only up 4.65 percent and prices are relatively flat,” he said.

Comment by Mafia Blocks
2015-07-29 15:27:42

I could have told them that.

How come Ben Jones wasn’t asked to be interviewed?

 
Comment by Professor Bear
2015-07-29 19:20:18

The Commerce Department reported new home sales fell 6.8 percent to a seasonally adjusted annual rate of 482,000 units. Analysts had expected a 0.7-percent increase to 550,000 units.

So? It’s not like this is the very first miss the housing market has witnessed since the 2007-08 bubble collapse.

 
 
 
Comment by Ben Jones
2015-07-29 04:49:31

From the Dickinson Press article:

‘The average year-to-date sale price for residential property has fallen nearly 10 percent — from about $294,000 to $266,000 — according to the Badlands Board of Realtors’ market summary report for June.’

‘Still, more than 84 percent of active listings last month were for homes priced above $200,000 — a decrease of only about 3 percent from last year — while more than half of the homes on the market at the end of June were listed between $250,000 to $400,000.’

‘Shirley Dukart, president of the Badlands Board of Realtors, said homes were selling last year, on average, within 97 percent of their listing price. This year, that isn’t necessarily the case. “The people who were moving here, they had to buy the homes with the prices on them,” she said.’

‘There were 68 more homes on the market in June 2015 compared to the same month last year. However, the year-to-date increase in home listings is up about 13 percent, meaning more homes are on the market this summer than there were in the first few months of 2015. “You have a lot more choices right now,” she said.’

‘they had to buy the homes with the prices on them’

Yep, they just had to. They must talk kinda funny up there.

Comment by Mafia Blocks
2015-07-29 05:11:38

Had to…. the lyin’ realtor said so.

Comment by Dman
2015-07-29 08:43:14

It’s a great time to buy, house prices only go up, you’re throwing your money away on rent, things are different this time, etc. etc.

 
 
Comment by GuillotineRenovator
2015-07-29 11:03:55

Prices are sticky on the way down. These oil patch areas are going to get slaughtered. By the time it’s all said and done, people will be able to buy 6 or 7 houses for the same price 1 used to sell for.

 
 
Comment by Ben Jones
2015-07-29 04:51:20

‘Frommer previously worked in the natural resources industry before becoming a jewelry designer and said the industry’s instability motivated her to lock in a home. ‘It feels like when you are renting, you are throwing away money’

With logic like that you’ll go far. You already have the jeans with holes in the knees.

Comment by Ben Jones
2015-07-29 04:54:10

‘Central Denver remains ground zero for the region’s apartment building boom. But the south metro area is also seeing a wave of new units targeting renters willing to trade the urban hustle and bustle for more space and amenities.’

‘But the apartments are coming at such a fast pace, and mostly under the “luxury” label, that market watchers such as Cary Bruteig worry whether they all can get absorbed.’

‘There are 1,648 apartments being built in the Denver Tech Center area and another 1,464 units in the Highlands Ranch and Lone Tree areas, according to counts from Bruteig’s firm. The new supply will boost the current apartment inventory of 16,402 units in that area by nearly a fifth in just two years.’

“That is a large increase any way you want to look at it,” said Bruteig.’

Comment by Goon
2015-07-29 05:16:25

the south metro area

Unless you’re taking the train downtown to get to work, expect to spend alot of time stuck in traffic on 25, 225, 470, Santa Fe, Parker Road

 
Comment by aNYCdj
2015-07-29 06:40:12

unless you are having kids its amazing how little space you need to live today compared to even 5 years ago… when we go into peoples apartments and cat sit gone are the multiple bookcases or cd/dvd racks the big 35″ picture tube tv’s, big old tanker type office desks, full size component stereos with huge cerwin vega speakers.

so now the rent for a 1 bedroom is what they used to charge for 2 or more which could be easily shared at a reasonable price.

for more space and amenities.’

 
 
Comment by snake charmer
2015-07-29 06:56:24

She’s likely self-employed, making a product that is a discretionary item, and the only way she can afford that condo is to rent out two rooms to friends. I can hardly think of a more tenuous arrangement. I understand that Cherry Creek is a very upscale area, but I don’t think that will save her.

Comment by Blue Skye
2015-07-29 07:18:10

She locked herself into long term debt because she feared instability.

Comment by In Colorado
2015-07-29 08:30:15

I think what she meant was “rising rents”

But if she can’t rent out her spare rooms she’ll learn the real meaning of “instability”

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Comment by Oxide
2015-07-29 08:52:05

My guess is that she was a receptionist at some fracker, got laid off, and is beading on Etsy. She can’t be making much money, and does she expect these roommates to be there for all 30 years?? Foreclosure is baked in the cake.

This is what drives women to “seek an arrangement”. The world’s oldest profession is the only profession still hiring.

Comment by Ben Jones
2015-07-29 08:58:51

‘does she expect these roommates to be there for all 30 years’

She’s thinking like this guy:

‘The customs officer said he wanted to act while he could afford what he wanted and buy something he’d be able to sell in a few years’

What ever you think of rental watch’s “cash put in the bottom”, it’ll be debt that puts in the top.

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Comment by Mafia Blocks
2015-07-29 07:13:09

She’ll leave it up to the Housing Crime Syndicate to establish the value instead of doing the priceless work herself.

A real dimwit right there.

Comment by Dman
2015-07-29 08:53:20

The next logical step would be for her and her friends to go in on a time-share, that way they could take vacations together and never have to be away from one another.

 
 
 
Comment by taxpers
2015-07-29 05:05:29

Zillow seems obsessed w the 05 peak vs today’s prices.
Ex fl to go up 7% ¿¿ Que

Comment by ComfortableClass
2015-07-29 05:56:52

So they can claim all the problems were “10 years ago” but that’s all behind us now, ancient history, nothing to see here, move along move along.

That being said, while I see prices being lower YOY in some places (front runner tip of the spear cities) is there any sign of a collapse anywhere? What about all those oil patch places? Any decent sized area where prices are down YOY by 15 percent plus?

Comment by VinceInWaukesha
2015-07-29 06:59:52

“So they can claim all the problems were “10 years ago” but that’s all behind us now, ancient history, nothing to see here, move along move along.”

Exactly… there was a lot of talk here, (more or less) a decade ago, about how teens watching their parents and friends parents get financially vaporized in the bubble pop would never buy houses, but here’s the propaganda in 2015 claiming 29 year olds love to buy condos.

What was overlooked is they also watched their parents ditch the house, file bankruptcy, tax forgiveness, and no substantial effect on lifestyle maybe 2 years out, if that. So go ahead, buy an option on a house, if the value drops, ditch the house and mortgage just like mom and dad did so successfully.

 
 
 
Comment by Senior Housing Analyst
2015-07-29 05:06:49

Seattle, WA Housing Prices Fall 11%

http://www.zillow.com/seattle-wa-98121/home-values/

Comment by ComfortableClass
2015-07-29 05:59:07

11 percent down YOY is pretty good. Oh but the value, the value, is up. Hahahahahhahahha.

 
Comment by MarkinSF
2015-07-29 11:12:24

It looks like they went UP by 11% YOY

 
 
Comment by Senior Housing Analyst
2015-07-29 05:09:44

Cypress, CA Housing Prices Fall 6%

http://www.zillow.com/cypress-ca/home-values/

 
Comment by Senior Housing Analyst
2015-07-29 05:13:47

Tenafly, NJ Housing Prices Fall 14%

http://www.zillow.com/tenafly-nj/home-values/

 
Comment by Senior Housing Analyst
2015-07-29 05:15:00

Arvada, CO Housing Prices Fall 15%

http://www.movoto.com/arvada-co/market-trends/

Comment by taxpayers
2015-07-29 05:42:21

price per sq ft up 10%
try again

Comment by Senior Housing Analyst
2015-07-29 05:44:30

It’s the falling transaction price that is important here. $/sq ft will fall as demand plummets and transaction prices continue to crater.

Comment by Blue Skye
2015-07-29 07:50:06

A 3,500 Ft2 house is, in the end, worth a lot less per ft2 than a more efficient 2,500 ft2 house. Houses were made bigger to accommodate the leveraged specudonkey. In a credit contraction, they are real dogs.

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Comment by Ben Jones
2015-07-29 05:16:04

‘Signs are emerging that housing’s momentum may be destined to falter in coming months. Analysts note that some of the key foundations needed to sustain a brisk pace of home-buying in the long run appear to be missing.’

‘The U.S. economy had only just begun to derive strength from housing for the first time since the Great Recession began in 2007. If home sales flag, that strength would fizzle.’

‘The main problem is also the simplest: There just aren’t enough homes available. Robust demand has failed to draw many sellers into the market. And few in the industry foresee a flurry of home listings arriving soon.’

‘Other pressures will also likely slow sales. Steadily rising home prices can put ownership out of reach for some. What’s more, builders are increasingly focused on apartment construction rather than single-family homes.’

‘And then there are mortgage rates, which have crept up from recent lows and made it incrementally harder for some would-be buyers already struggling to afford a purchase. Some buyers are rushing to finalize deals for fear that rates will keep rising — a trend that could depress demand later this year.’

“What we fear is next is if interest rates rise and prices rise,” said Deborah Heffernan, a Boston-area broker. “That combination will definitely eliminate people from the market.”

“Interest rates are having an effect,” said Nela Richardson, chief economist at Redfin. “It’s making buyers a bit more conservative.”

‘In some key markets, prices have begun to stagnate as buyers seem to be retreating. A majority of homes in Chicago, Phoenix, Los Angeles, New York and Washington, D.C., either lost value or basically flat-lined during May, according to a study by Weiss Residential Research.’

“The reason why demand is high relative to supply is that homeowners are having a hard time moving up,” said Allan Weiss, founder of Weiss Residential Research. “There is gridlock.”

‘Marina Rodriguez, a 26 year-old dental hygienist, recently signed a lease on a one-bedroom apartment in suburban Chicago. “The idea of buying is a little scary – it’s a huge financial obligation,” she said. “I would rather rent and travel and be year-to-year then be locked down.”

‘There’s also evidence that construction is topping out, a potential blow to overall economic growth. The American Institute of Architects said its index that tracks billings for houses and apartments has reached a four-year low. There’s often a nine- to 12-month lag between drawing up blueprints and a groundbreaking, a sign that builders view the current demand as short-lived.’

“What we’re seeing now is going to hit construction in 2016,” said Kermit Baker, the institute’s chief economist. “It does look like that market is getting close to peaking.”

Comment by Mafia Blocks
2015-07-29 05:19:11

“The main problem is also the simplest: There just aren’t enough homes available.”

Says who…. realtors?

Meanwhile, back on planet earth, 25 million excess empty houses sit and rot with another 35 million houses just starting to empty.

 
Comment by Combotechie
2015-07-29 05:44:11

“The U.S. economy had only just begun to derive strength from housing for the first time since the Great Recession began in 2007. If home sales flag, that strength would fizzle.

“The main problem is also the simplest: There just aren’t enough homes available. Robust demand has failed to draw many sellers into the market. And few in the industry foresee a flurry of home listings arriving soon.”

Let’s take a look at this statement:

“If home sales flag, that strength would fizzle.”

But it’s not the number of sales that give the economy its strength, it’s the PRICE that the homes sell for that give the economy its strength.

Price translates into equity - equity for the few homes that sell and equity for the many homes that happen to be in the same neighborhood of the few homes that sell.

Equity! And equity means WEALTH! Wealth for the new homebuyers and wealth for the homebuyers who bought some years ago. Wealth! Wealth for everybody!

Now let’s take a look at this statement:

“Robust demand has failed to draw many sellers into the market. And few in the industry foresee a flurry of home listings arriving soon.”

Few sellers drawn into the market = higher prices. And, as stated above, higher prices create wealth - wealth for everybody.

So … it is all … good.

Comment by Combotechie
2015-07-29 05:58:39

“Other pressures will also likely slow sales. Steadily rising home prices can put ownership out of reach for some.”

But steadily rising home prices is what makes homes attractive to buy in the first place and the monthly-payment-plan is what makes these high-priced homes “affordable” so, again, it is all good.

It is especially good that the steadily rising home prices create equity - equity that can be tapped into now and then and used to help make the monthly payments.

Again and again, it is all good.

Comment by Mafia Blocks
2015-07-29 06:03:49

Grossly inflated prices is a dis-incentive, always.

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Comment by Combotechie
2015-07-29 06:10:59

“Grossly inflated prices is a dis-incentive, always.”

Not always, not in a market that is dominated by insanity.

 
 
Comment by Combotechie
2015-07-29 06:07:51

All a potential homeowner (a potential RE mogul) needs to do is to somehow - somehow - get his signature on the dotted line. If he has to lie to do so then that is what he needs to do because once his name is on the dotted line then …

The ever-rising real estate market will do the rest!

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Comment by Ben Jones
2015-07-29 05:22:50

‘The customs officer said he wanted to act while he could afford what he wanted and buy something he’d be able to sell in a few years. ‘I figured it was time to buy,’ he said. ‘And the way things are going, I think the value will go up.’

‘The S&P/Case/Shiller reading on home prices surprised to the downside on Tuesday. The May report shows home prices fell 0.2% in May and April was revised down from a gain of 0.3% to a decline of .03%. The three-month annualized price gain is 3.3%, down from 8.9% just one month ago, according to Ian Lyngen of CRT Capital.’

‘He has these details: “The YoY was +4.9% — little changed from April. The largest declines were seen in Chicago (-0.87%), San Francisco (-0.74%), and Detroit (-0.7%). Improvements were seen in Las Vegas (+0.96%), Miami (+0.48%) and Minneapolis (+0.33%).”

‘David Blitzer, who chairs the index committee at S&P Dow Jones Indices says weakness in first-time home buyers due to the need for high down payments is a big reason the market isn’t stronger.’

‘He explains in the release: “First time buyers provide the demand and liquidity that supports trading up by current home owners. Without a boost in first timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory. Research at the Atlanta Federal Reserve Bank argues that one should not blame millennials for the absence of first time buyers. The age distribution of first time buyers has not changed much since 2000; if anything, the median age has dropped slightly. Other research at the New York Fed points to the size of mortgage down payments as a key factor.”

Comment by ComfortableClass
2015-07-29 06:05:10

Organic demand is not there. Flippers and infestors are 40 percent of the market. When their ability to make outsized liar HGTVS profits dries up, so do 40 percent of the sales. Also the big boys who bought during the crash and held (the real rental frauds) are beginning the flood before the button is pressed.

Incomes do not support prices, it is just that simple. Without loosening credit to bubble standards it all collapses.

Comment by Ben Jones
2015-07-29 06:09:57

‘Home prices in San Diego rose 0.9 percent between April and May, according to the Standard & Poor’s Case-Shiller Home Price Indices released Tuesday. Area home prices climbed 4.8 percent between May 2014 and the same month this year, the data showed.’

“As home prices continue rising, they are sending more upbeat signals than other housing market indicators,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.’

“Nationally, single-family home price increases have settled into a steady 4-5 percent annual pace following the double-digit bubbly pattern of 2013,” he said.’

‘According to Blitzer, the price hikes should continue over the next two years, but likely at a slower pace. “Prices are increasing about twice as fast as inflation or wages,” Blitzer said. “Moreover, other housing measures are less robust.”

‘He said first-time homebuyers are a weakness in the market, and if they can’t afford to buy, then homeowners can’t move up to more expensive properties.’

Comment by Professor Bear
2015-07-29 08:27:10

A sharply-negative second derivative normally presages price declines.

I know this time is different and all…

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Comment by Dman
2015-07-29 09:06:32

““As home prices continue rising, they are sending more upbeat signals than other housing market indicators…”

Isn’t the prospect of paying more and more for a house that will be worth less and less upbeat enough?

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Comment by Ben Jones
2015-07-29 05:25:34

‘Home buyer demand in the U.S. may be cooling off, according to new data from real estate website Redfin. According to the index, home buyer demand was up by 13% year-over-year in June, the smallest annual increase since January.’

“This year’s seasonal slowdown is more extreme than normal due to buyer fatigue over high prices and low selection, combined with gradually increasing mortgage interest rates,” stated a Redfin report. “Buyers are still in the market, but they’re setting boundaries on what they’re willing to pay.”

“Homebuyers are still touring in force, but they’re more price sensitive,” said Redfin chief economist Nela Richardson. “Fewer are making offers, and when they do, they’re buying less expensive homes. The median list price of pending homes fell by $10,000 to $300,000 in just the last two weeks.”

 
Comment by Ben Jones
2015-07-29 05:28:14

‘After stellar home price gains in 2013 and 2014 the Chicago housing market has stalled despite near record home sales and record low inventories. Lately, each release of the Case Shiller home price index seems to show lower and lower year over year price gains. This morning the S&P Dow Jones Indices folks released the May Case Shiller Home Price Indices for the 20 metropolitan areas and the nation as a whole and it’s more of the same.’

‘The graph below shows the sad story of shattered hopes for Chicago area housing riches. For May detached single family home prices turned in anemic year over year growth of only 2.2%, the lowest since December. Condominiums are faring better with 4% growth but that is also the lowest since December.’

‘You can tell that at the rate we are going it will be years before we get back to bubble peak pricing. In fact, detached home prices were higher than they are now during the entire period from May 2003 through January 2009. Condo prices were higher from August 2003 through December 2009.’

The photo with the rocket headed into the ground is a nice touch.

Comment by Mafia Blocks
 
Comment by taxpayers
2015-07-29 05:43:25

gee, do I want to buy in a city about to go BK ?
hhhhhmmm

 
Comment by rj chicago
2015-07-29 07:52:38

And Ben - you have Mayor Rummy threatening to raise prop taxes - a wait and see approach on his part - keep the sheeple guessing and aggravating them - and then see what happens to housing in the utopian paradise aka Chicago ILLANNOY.

I double posted this below as well - sorry.

http://www.chicagotribune.com/news/local/politics/ct-rahm-emanuel-city-budget-met-0729-20150728-story.html

 
 
Comment by Ben Jones
2015-07-29 05:33:21

“The residential real estate market, now at its midpoint in 2015, is on track for its best year since the peak of the housing bubble in 2006,” said economist Jonathan Smoke with the National Association of Realtors. “But this time it’s not a housing bubble.”

‘Q. Are there hidden costs in being a homeowner?’

‘A. There are expenses that some owners might consider hidden. Homeowners say the most stressful part of owning a home are the extra or hidden costs. That may be because homeowners can pay more than $9,000 in hidden and home maintenance costs every year, according to a new analysis by Zillow.’

‘To help first-time buyers better plan for the expenses associated with homeownership, the study calculated several unavoidable hidden costs like property taxes and insurance, as well as five common outsourced maintenance costs, like yard care and carpet cleaning, for the nation and across 15 metros.’

‘Nationally, homeowners pay an average $6,042 per year in unavoidable hidden costs, which include homeowners insurance, property taxes and utilities.’

Unavoidable? Hidden? Bah, I’m sure the NYT rent or buy calculator has that built in.

Comment by Mafia Blocks
2015-07-29 05:39:26

‘Nationally, homeowners pay an average $6,042 per year in unavoidable hidden costs, which include homeowners insurance, property taxes and utilities.’

And that doesn’t cover the $2-$3 per square foot of losses to depreciation year after year. Whats the average floor plan…. 2000 sq ft? $4000-$6000 loss year after year on top of taxes, insurance fees?

Oooooph.

Comment by Puggs
2015-07-29 10:43:38

People clammor that they own their home when it’s paid off. The above Mafia proves this is never true.

Debt slavery is all around you. YOU CANNOT ESCAPE IT.

 
 
Comment by VinceInWaukesha
2015-07-29 07:11:28

I can’t help but point out that my cheap bachelor pad rental paid prop tax out of my rent, my personal property insurance was a nominal $20/yr, we had professional (well, done by illegal laborers) yard care, common area carpets were scrubbed roughly monthly or as necessary… Its not like paying the landlord to pay in my place magically made any of the costs disappear, if anything the increased accounting makes it more expensive for a rental to provide the same service… I had “free” water at that apartment but its not like I use a drop more or less depending on if I rent or own. Certainly I don’t generate any more or less sewage depending on the ownership status of the toilet.

There’s a reason owning costs 3x to 4x renting and it isn’t the lawnmower… the propaganda claim was a distraction. Also if the median american only gets like $40K/yr I don’t think they’re gonna spend more than 1/8th of that on lawnmowers. Completely bogus numbers and overall claim in that quoted story.

 
Comment by Dman
2015-07-29 09:54:46

A friend of mine recently had to shell out $6,500 to bring his driveway and sidewalk up to code. Concrete required - no asphalt allowed. Those little expenses have a way of sneaking up on you.

Comment by Bluto
2015-07-29 10:55:07

Another common big $$$ expense when selling is when the city requires a remote camera inspection of the sewer lateral before signing off on the sale…my vintage 1937 house failed (I was not surprised, had needed RotoRooter a few times over the years but the law was brand new and THAT was a surprise) and running a new lateral out to the middle of the street was $5K.

 
 
 
Comment by Ben Jones
2015-07-29 05:36:52

‘Banks are keeping many properties out of circulation, hoping that if they don’t flood the market with foreclosures they can getter a better price later as the market continues to improve, explained Realtor Nancy Kowalik, of Keller Williams Realty. She described situations in which she has interested buyers for such homes but cannot even get a returned phone call from these institutions. ‘They don’t want to sell,’ she said. ‘They are gaming the market.’

As I’ve said for years, and documented countless times, people in the foreclosure biz know what’s going on. Oh, have there been no serious investigations by major media outlets? Surprise surprise. Jeebus, how hard would it be to make a few phone calls or follow up with UHS like this one?

Comment by Ben Jones
2015-07-29 05:39:00

Back at the ranch:

‘The U.S. homeownership rate fell to 63.4 percent in the second quarter of 2015, according to the U.S. Census. That is down from 63.7 percent in the first quarter and from 64.7 percent in the same quarter of 2014. It marks the lowest homeownership rate since 1967.’

‘Homeownership peaked at 69.2 percent at the end of 2004, when the housing market was in the midst of an epic boom. The 50-year average is 65.3 percent.’

“It is now just five-tenths from the record low seen in 1965 in data going back also to 1965,” noted Peter Boockvar, an analyst with The Lindsey Group. “All the governmental attempts (certainly aided and abetted by many players in the private sector) at boosting homeownership has gotten us to this point in time with all the havoc it wreaked over the past 10 years. It’s just another governmental lesson never learned, of don’t mess with the free market and human nature.”

Comment by Professor Bear
2015-07-29 08:31:13

It seems U.S. government efforts to boost home ownership rates have been about as successful as more recent Chinese government efforts to reflate their stock market.

 
 
Comment by Professor Bear
2015-07-29 08:30:02

Ben, I recall you having previously mentioned on occasion the existence of U.S. laws to limit the ability of banks to hold foreclosed properties out of circulation. Do you possibly have any links to document this? (Thinking here of a possible future thread on illegal actions underway to fix housing prices…)

Comment by Dman
2015-07-29 10:01:46

“U.S. laws to limit the ability of banks to hold foreclosed properties out of circulation”

The banks have figured out a way to skirt any laws like this - just don’t foreclose. As long as the house is in the buyers name, any legal issues are the buyers responsibility. It’s actually a pretty smart way to have an asset and not have to pay to maintain it. When they do foreclose and go to sell, though, a trashed or moldy house might not be the asset they were hoping for.

 
 
 
Comment by Ben Jones
2015-07-29 05:43:33

‘Between record home prices and a record number of sales, it’s safe to say Durango’s real estate market has recovered from the recession.’

‘As of June 30, the median sales price in town reached $440,000, topping the $426,500 mark hit in 2006 before the recession began. That was up 10 percent from the median home price of $400,000 in the first quarter of 2015. The townhome/condo median sales price, however, has not recovered nearly as well. The median sales price was $276,225 for the first half of the year, down from 2014’s record $292,000.’

“Of course, a median is a median,” said John Wells, owner-broker of the Wells Group. “Hypothetically, if you sold a home for $10 million in the first half of the year, it would be a skewed median, but the average price would be higher, too.”

‘The highest priced property that closed in town sold for $1,018,000; the least expensive was $245,000. “What we’re really seeing is that some of the higher-priced homes are finally starting to sell,” said Gina Piccoli, owner-broker of Coldwell Banker Heritage House Realtors, “not so much that housing prices have gotten significantly higher.”

“Demand is high here, but at least it’s not as crazy as the Front Range, where there are 20 offers on a house,” Piccoli said.’

“The bigger question is ‘What inventory is selling?’” Wells said. “We’re seeing more newer homes selling now in Three Springs. In the last year or two, they sold a lot of homes in the $300,000, or just under $300,000 range, but those are all built out now. The next phase is going to be more expensive, more expensive to develop, more expensive to put in infrastructure, so it will be selling at higher prices.”

‘Builders had been apprehensive about building more expensive homes there, he said, but they seem to be selling.’

‘SkyRidge subdivision has almost been filled out, and most of the flat, easily buildable lots in Durango have already been built on, he said. So Durangoans should expect the cost of new homes to continue to rise.’

“It’s going to create a situation where more families and people rent,” he said. “With 150 to 200 new apartments available within a year from now, including (affordable) apartments, it’s going to take a lot of pressure off the market.”

Comment by rj chicago
2015-07-29 07:53:52

Durango!! Really!!!???

 
 
Comment by ibbots
Comment by Ben Jones
2015-07-29 06:24:34

‘Although the rise in both sales and prices might suggest housing affordability is not yet a problem in Texas, Jim Gaines, research economist at the Real Estate Center at Texas A&M University, warns the price category for potential buyers is becoming an issue, particularly for those with low or medium household income.’

“If you’re a low-to-medium-income household, you’re probably having difficulty finding a home in the price range you’re looking for,” Gaines says. “You’re also probably not finding many new houses because few are being built at that price level. Most builders are building on the high-end scale.”

‘Also, affordability is a relative term, Gaines adds. “Compared with communities around the country, most Texas communities remain a housing bargain in terms of general price levels and availability,” he explains. “But compared with where home prices in Texas have been the last 20 or 25 years, yes, things are getting pricey.”

 
 
Comment by taxpayers
2015-07-29 05:44:47

wpa - don’t look !

It’s just another governmental lesson never learned, of don’t mess with the free market and human nature.”

 
Comment by Senior Housing Analyst
2015-07-29 05:46:00

Denver, CO Housing Prices Fall 10%

http://www.movoto.com/denver-co/market-trends/

 
Comment by Muggy
2015-07-29 05:47:19

“Rood wonders where the money for principal reduction would come from.”

It’s very frustrating to read thoughts like this. Why wonder at all.

Go get some boxes.

Comment by Puggs
2015-07-29 09:40:16

“Rood wonders where the money for principal reduction would come from.”

I dunno, Rood could go collect cans, get a job at Subway, start a window washing business. There really are a myriad of options. Just a thought, normally those are the solutions I think of before dragging out the tin cup.

Comment by Mafia Blocks
2015-07-29 15:04:53

Better yet… just walk away from the depreciating asset like millions of others have done.

 
 
 
Comment by Senior Housing Analyst
2015-07-29 05:55:57

Dallas, TX Housing Prices Turn Negative Metro-wide

http://www.movoto.com/dallas-tx/market-trends/

 
Comment by Mafia Blocks
2015-07-29 06:09:15

PA Realtor Suspect In Real Estate Fraud

http://standardspeaker.com/news/embattled-real-estate-agent-named-person-of-interest-1.1919327

“Jerry T. McGuire, president of the Greater Hazleton Association of Realtors, reported that his office has been flooded with reports of unscrupulous deals in which Beato has been named as an actor.

McGuire has continued to refer those who have complaints to state police and expressed a concern that the public may generalize Beato’s alleged actions and see realtors in a negative light because of this rare case.”

“Rare”? LOL. It’s because of the frequency of realtor involvement in crime like this that realtors rank lower than used car salesmen.

Comment by ComfortableClass
2015-07-29 07:53:41

Jerry McGuire, you had me at the word “fraud.”

Comment by Wittbelle
2015-07-30 02:21:25

Show me the money!

 
 
 
Comment by Ben Jones
2015-07-29 06:31:30

‘The average worker in Connecticut cannot afford rent on a two-bedroom apartment, according to a new study by the National Low Income Housing Coalition. A renter must earn $24.29 an hour to afford a two-bedroom in Connecticut according to the NLIHC’s Out of Reach report.’

‘But here’s the problem: the average renter’s wage in Connecticut is $16.16 an hour, and if you are a minimum wage worker, you would need to work 106 hours a week to afford that same apartment.’

‘This disparity between income and rent plays out in every state in the U.S., but Connecticut has the eighth-highest gap in the nation according to the study.’

“It’s a real problem,” said David Fink, Policy Director for the Partnership for Strong Communities. “When they spend too much on housing they don’t have much left over for food, clothing, transportation, healthcare, all the other things that they need, so it’s not only bad for them individually, it’s bad for the whole state’s economy.”

‘Fink cited low wages, expensive housing costs, and a glut of single family homes on the market as reasons why this disparity exists.’

 
Comment by taxpayers
2015-07-29 06:58:43

I thought seattle was nirvanna

The Seattle Times in Washington. “Home prices in the Seattle metro area hit a wall in May, traditionally one of the year’s busiest shopping periods,

que?

 
Comment by rj chicago
2015-07-29 07:38:48

And now your daily news headline form the utopian paradise called Chicago ILLANNOY!!
Heading to CO this weekend to look about some more for a decent home in a decent area with decent people - hipsters and rock stars need not apply.

http://www.chicagotribune.com/news/local/politics/ct-rahm-emanuel-city-budget-met-0729-20150728-story.html

Comment by taxpayers
2015-07-29 08:02:37

did u see the HBO/Netflix show BOSS
about chicaggah

Comment by rj chicago
2015-07-29 11:14:51

No - no need - I live with BOSS every day of my little pathetic life here in Chiraq!!!

 
 
 
Comment by taxpayers
2015-07-29 08:11:41

JoAnn Henderson bought her house New Carrollton, Maryland, in 2001. She refinanced a few years later for a higher amount. Shortly before she retired from her teaching job, she started having trouble with the steep payments.

make the honkey (taxpayer) pay

 
Comment by Puggs
2015-07-29 09:32:51

“Frommer previously worked in the natural resources industry before becoming a jewelry designer and said the industry’s instability motivated her to lock in a home. ‘It feels like when you are renting, you are throwing away money,’ Frommer said.”

Yeah, because nothin’ sez STABILITY like being a jewelry designer and overpaying for a high price condo with wonky roomates!

Wouldn’t “instability” make you just want to rent?

 
Comment by Puggs
2015-07-29 09:36:42

“Watt is caught between homeowner advocates like Wilson, and people like Tim Rood, chairman of the Collingwood Group of financial advisers. Rood wonders where the money for principal reduction would come from. ‘This money doesn’t come out of thin air,’ he says. ‘So, it’s going to have to come from investors or from taxpayers.’”

If I was really daring I would take out a HUGE mortgage and whilst signing all the papers just laugh the whole time saying… “you’ll be lucky to get half of this back…”

With all the moral hazard these days why even force borrowers to sign anything!??!?

Comment by Professor Bear
2015-07-29 19:26:00

I’m betting it’s taxpayers who will be stuck with the cramdown tab.

 
 
Comment by "Auntie Fed, why won't you love ME?"
2015-07-29 09:53:34

Comment by Califoh20

2015-07-28 11:18:55

Not true! I know someone who is here from Argentina. When they went to set up her 401k with her fake SS# that she bought, it exposed her. She has an MBA and works for a large company, she has done days worth of research, you cant pull off a fake SS. She is getting a work VISA from another company as she is valuable speaking 3 languages and in satellite equipment sales.

you cant get a bank account with a fake one ether nor a tax return.

yes, they can get paid cash - blame the guy paying them cash and cheating!

You are the only one talking about illegal immigrants with 401k’s. Did she use her fake SS# to get that high-paying job at that big company too? Everyone else is talking about using fake SS#s to get state-funded welfare benefits and jobs. I know a guy who used to do taxes. He says the illegals would line up to file for a return, often claiming the same kids and using the same SS#.

Comment by In Colorado
2015-07-29 10:46:22

I know a guy who used to do taxes. He says the illegals would line up to file for a return, often claiming the same kids and using the same SS#.

Uh, wouldn’t the IRS catch that?

 
 
Comment by Puggs
2015-07-29 10:39:57

I declare October 2015 as; “National Principle Reduction Month”.

Tough nuts for anyone who doesn’t have a loan. That’ll teach you.

 
Comment by Goon
2015-07-29 11:18:53
 
Comment by rj chicago
2015-07-29 14:41:05

And the affect on the Co Spgs housing market will be…..
Let’s hear it for Mafia Blocks….
CRUSHING
HOUSING
LOSSES……

http://gazette.com/lockheed-martin-to-layoff-270-in-colorado-springs-after-losing-key-contract/article/1556362

 
Comment by Mafia Blocks
2015-07-30 06:11:38

Comment by Professor Bear
2015-07-30 00:10:00

We live in an era when debt is easily acquired but difficult to repay.

Solution. Don’t borrow. It’s the borrowing that inflates prices that necessitate borrowing. Vicious money losing circle.

 
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