It Can Be A Gamble For The Sellers
The Journal Gazette reports from Indiana. “In the Fort Wayne area, sales of existing homes are up. Median home prices are way up, and the percentage of list price garnered at sale is up. What’s going on? Nothing like Realtor J. Kyle Ness has ever seen in his 12 years selling the area’s residential real estate. ‘With our inventory so low, people are scrambling to get to it,” says Ness, who heads the Multiple Listing Service for the Upstate Alliance of Realtors. ‘It’s almost like a frenzy. When something hits the market, it’s gone in a couple of days.’”
“Ness says he recently closed a sale with one buyer who told him that the purchased home seemed ‘a little dirty and needed work,’ but she was happy to have it. ‘But she said, ‘If I had never seen it first, I never would have thought I’d go for it,’ Ness says. ‘There’s not a lot out there.’”
The Associated Press. “Once considered a last resort to dump a property that was distressed or couldn’t sell, auctions have become a viable marketing option for selling luxury homes. It can be a gamble for the sellers. Sheldon Good recently sold a house next to the 12th fairway of the Pebble Beach Golf Links for $14 million from a starting bid of $6.9 million. On the other hand, a seller in Seattle who previously had a home on the market for $25 million ended up selling for $12 million after no buyers were willing to pay the minimum auction bid of $15 million. Sellers can only back out of an auction if their minimum bid isn’t met. Otherwise, they are locked in.”
“‘The auction helped to identify the buyer and the marketplace,’ Craig Post, executive director of Sheldon Good, said of the home in Seattle. ‘In this case, the market didn’t feel the home was worth $15 million. The seller listened and accepted a lower price.’”
King 5 News in Washington. “The housing market is hot all over Western Washington, but not everywhere. Real estate broker Wayne Snoey of Coldwell Banker Bain in Kent blames media coverage focusing solely on the building boom in the area’s largest cities. He says it’s up to him and other brokers to temper some clients’ sky-high expectations. ‘They expect Seattle everywhere. It’s not Seattle everywhere,’ Snoey said, referring to some clients’ high hopes. ‘If it happens to be in those less robust areas, you have to spend a lot more time educating the clients as to realistic expectations.’”
“Valerie Stone lives in Shelton in Mason County and says she’s noticed some signs staying up for months – or even years. ‘They’re just there,’ Stone said, adding some signs start to blend into the scenery after a while.”
The Boston Globe in Massachusetts. “The Boston area’s red hot real estate market has suddenly become a lot more volatile, with price cuts and scuttled home sales both on the rise. That’s the takeaway of two new reports tracking the health of the real estate market in Greater Boston and across the state. The percentage of listings in the Boston area with price reductions is now up over 21 percent, compared to 20 percent last year, Redfin reports, with a growing number of listings in Boston and the inner suburbs sporting price cuts.
“Meanwhile, anywhere from 13 to 20 percent of all sales are falling through before they close, an analysis of monthly pending sales numbers put out by the Massachusetts Association of Realtors shows. When one sale falls through, it can disrupt a whole chain of deals, especially if it involves a move-up buyer who is planning to sell their house, brokers say. ‘It’s this kind of domino effect,’ said James Gulden, a Redfin agent working out of the company’s Boston area office. ‘If one piece doesn’t go forward, then the next piece won’t go forward.’”
“Arlington, Melrose, Concord, Lexington, Hopkinton, Andover, Wellesley and Winchester are some of the most prominent suburbs that have seen a surge in price cutting. Arlington has seen a 23 percent increase over last year in homes with price reductions, bringing the total of listings with at least one price cut to more than 45 percent, according to Redfin.”
New Jersey Advanced Media. “According to RealtyTrac, 1 out of every 544 homes in Newark was in foreclosure in June. In some areas concentrated in the South and Central Wards, the rate was as high as 1 in 331. The state as a whole is faring only slightly better, with a foreclosure rate of 1 in 584 last month. Roughly a quarter of those were so-called ‘zombie foreclosures’ — homes that have been vacated by their owners — the highest percentage in the nation.”
“In addition to foreclosures, a massive share of Newark-area homeowners are underwater on their mortgages, having purchased their homes at prices that averaged about $325,000 at the highest of the real estate bubble, but are now worth as little as half that.”
“When Grace Alexander bought her home in Newark, she thought she had finally reached the culmination of a long journey, one that began in her native country of Guyana nearly 20 years earlier. Before long, however, her dream appeared to have gone horribly wrong. She lost 2 of the 3 jobs she had been using to pay her bills, and was repeatedly turned down by Bank of America when she tried to modify her mortgage. Falling further and further behind, she turned to everyone she could for help, including politicians from the White House to Newark City Hall. ‘All I got (were) promises after promises. After all that I’ve done, I’m about to lose my home,’ she said.”
‘The Boston area’s red hot real estate market has suddenly become a lot more volatile, with price cuts and scuttled home sales both on the rise. That’s the takeaway of two new reports tracking the health of the real estate market in Greater Boston and across the state. The percentage of listings in the Boston area with price reductions is now up over 21 percent, compared to 20 percent last year, Redfin reports, with a growing number of listings in Boston and the inner suburbs sporting price cuts.’
‘Arlington has seen a 23 percent increase over last year in homes with price reductions, bringing the total of listings with at least one price cut to more than 45 percent’
I found and posted many other places in the US where this is happening in the past few days, like here.
5,364 properties found Austin, TX Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/Austin_TX/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home
1,836 properties found Austin, TX Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/Austin_TX/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home/show-price-reduced
You too can contribute to the crater! Just go to realtor.com, input the area (note some like Phoenix aren’t available), in the filters select your interest and click create. Copy the results and paste into the HBB, go back to filters and add “price reduced”. Copy results to HBB and we’ve got a crater party goin’ on!
Cratering housing. Let it crater.
I checked two of the townships in my area - the majority of price reductions are in the smaller and older houses that predate the last building boom by decades. Very few of the newer McMansion type houses have reduced prices. BUT, there are many more listings in the 350K and up price range showing up as new. It’s only a matter of time before they start showing up in the price reduced category.
The canary in the coalmine….
Manhattan
25,639 properties found New York, NY Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/New-York_NY/sby-7
5,038 properties found New York, NY Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/New-York_NY/type-single-family-home,multi-family-home,mfd-mobile-home,condo,co-op,townhouse,undefined-condo/show-price-reduced/sby-7
The slasher has arrived
‘The pace of Orange County homebuilding jumped almost 38 percent during the first half of the year, buoyed mainly by construciton of apartments and condos.’
‘Building permits for apartments and condos jumped 55 percent to 4,562 units in January through June, according to the California Homebuilding Foundation’s Construction Industry Research Board.’
‘In dollar terms, the estimated value of single-family homebuilding this year so far exceeds last year’s value by 21 percent, likely due both to increased building and rising home values, industry figures show. The total value of new houses under construction is $698 million, up 21 percent year over year.’
‘The estimated value of multi-family construction nearly doubled to $703 million.’
‘Metro Denver tenants snapped up an additional 4,550 apartments in the second quarter, but the robust new supply wasn’t enough to keep rents from rising and vacancy rates from falling, according to the Denver Metro Area Apartment Vacancy & Rent Report.’
‘While not reversing rent increases, the added inventory seems to be increasing the incentives landlords must offer to stay competitive, which will benefit renters over time.’
‘Discounts and concessions averaged 10 percent in the second quarter of this year, up from 9.7 percent in the previous quarter and 8.7 percent in the fourth quarter of 2014, according to the report.’
“Discounts and concessions are a major indicator of softening, but it will be slow,” said Nancy Burke, spokeswoman for the apartment association.’
The estimated value of multi-family construction nearly doubled to $703 million ??
Multi family development & Re-Dvelopment around here is beyond incredible…If you see it in print its difficult to believe but if you watch it being finished and leased and more going up its jaw dropping…
Example; There is a existing 220 unit apartment complex close by…Its old but still has both physical and economic life remaining…This property would easily fetch 50-mil on the open market…
They are redeveloping the property…Tearing down the entire apartment complex and building a new 600 unit complex over retail on the first floor…Like I said…Jaw dropping…
From yesterday:
‘The dog days of summer are typically characterized by a bit of a lull in home sales. But not like this. The last few weeks have been too quiet when it comes to activity, pending sales and even refinances.’
‘Go look outside your front door when you get done sipping your morning coffee. With the exception of the starter market, say $550,000 or less, there are a lot more for sale signs dotting our O.C. neighborhoods with fewer pending and sold signs.’
‘Besides wonderings from realty agents and complaints from industry cohorts along with my whining, there is some statistical data that seems to support a sea change in activity.’
‘Most important of all, as inventory levels climb in this end-of-summer season, and with many sellers being unrealistic by overpricing their properties (reportedly by my real agent informants), it’s not going to be too hard to find some motivated sellers.’
http://thehousingbubbleblog.com/?p=9160#comment-2467088
‘the starter market, say $550,000 or less’
Starter market…20 x income for someone getting a “start”?
It will be both a start and an end. We expect young people to launch with the equivalent, in terms of indebtedness, of a hundred pianos on their backs. We’re apparently going to be very surprised when this all blows up in our faces.
Ben, for your next Florida segment, I hope you saw this weekend’s Tampa Bay Times piece on the former Trump Tower property.
They’re not even going to get a chance to exploit the next generation… we already burned through that too.
‘Short-term housing rental industry giant Airbnb now lists more than 1 million rooms available in 192 countries. The platform’s largest market is in New York City, with more than 25,000 listings per night, but it’s also where the debate over how to regulate short-term rentals is the most contentious. In light of a new report by the NY Attorney General that says nearly three-quarters of Airbnb’s listings in the city are technically illegal, the city is cracking down.’
‘SEN. LIZ KRUEGER: Constituents started coming to me and saying, “There’s something strange going on in my building. The apartments seem to be being rented out on a nightly basis. There are groups of tourists wandering in and out with luggage, with keys to the buildings.’
‘HARI SREENIVASAN: Krueger, who has often been dubbed Airbnb’s Doubter-in-Chief, was the primary sponsor of the 2010 state law that effectively banned short-term apartment rentals in New York City.’
‘SEN. LIZ KRUEGER: They encourage illegal activity. They don’t have to, but they choose to do so as a business model.’
‘HARI SREENIVASAN: And the short-term rental activity that troubles officials like Krueger and Attorney General Schneiderman most is what they call ‘commercial users’ of Airbnb and similar websites.’
‘SEN. LIZ KRUEGER: People becoming entrepreneurs and renting one to 100 apartments, claiming that they’re their own homes, and turning them into ongoing illegal hotel arrangements.’
‘HARI SREENIVASAN: In fact, the Attorney General’s report found that while only 6 percent of Airbnb hosts advertise three or more listings, they account for more than a third of Airbnb’s business in New York.’
‘The report also found thousands of Airbnb listings were rented for three months or more of the year.’
‘We found that New York Assemblywoman Linda Rosenthal went on what she terms an undercover sting operation this spring to find these commercial users.’
‘ROSENTHAL: Do you live here? You don’t live here, oh ok.’
‘In one of the videos that she released to the press, Rosenthal is seen visiting a host who, she says, was renting seven apartments in a building, none of which he lived in.’
‘HOST: “But in case anybody asks something, you don’t know what’s Airbnb is.’
‘ROSENTHAL: “Oh, OK.”
‘HOST: “That’s why Airbnb always calls you guests.”
Funny how the people involved never want to use their real name.
‘Geraldo Rivera has slashed the price on his Edgewater compound by 20 percent, real estate listings show.Exactly two months later, he cut the price on the Edgewater compound to $2.95 million, according to the Zillow listing.’
‘Fashion mogul Marc Ecko recently cut the price of his lavish Bernardsville estate to $11.8 million. It was originally on the market for $18 million.’
‘But comedian Artie Lange has apparently pulled his waterfront Toms River mansion from the market, at least temporarily, after trying to sell it off and on since 2010. In May, he reduced the price to $1.9 million in May and then upped it to $2.5 million July 10 before the listing was yanked a day later.’
‘Competition among home buyers is mounting in western Pinal County as the supply of houses can’t keep up with demand. Maricopa Real Estate owner Steve Murray said he has not seen this level of competition between buyers in years. He mentioned one Maricopa home was recently listed at $139,000 and had at least five offers made within the first day — the home’s price eventually scooted up to $149,000.’
‘Florence broker Cindy Sills of Belva’s Real Estate said the town’s inventory of homes is not where it needs to be. A decent, ready-to-move-in home valued at about $115,000 is snatched up almost instantly. Sills said the construction of new homes in Florence is alleviating some demand, but it’s not enough to satisfy the number of interested buyers.’
‘The construction of single-family homes on a national scale has risen 9.1 percent in the past year, while purchases of new homes have doubled that rate. Rudy Benitez, licensed mortgage originator for AnnieMac Home Mortgage, attributed the “intense” bidding wars to low interest rates. If interest rates were increased by the Federal Reserve, which is expected to happen this fall, then Benitez expects buyer demand to significantly decrease.’
‘The San Diego Union-Tribune says the current housing market in the city is too expensive for people reaching home-buying age. Supply is especially limited in the bottom third of homes, or those valued below $406,450, which is outpricing first-time buyers. Additionally, low inventory in the middle and upper range of homes is hurting the ability of existing sellers to trade up.’
“It feeds on itself,” said Svenja Gudell, Zillow’s senior director of economic research. “If you don’t start having a little bit of inventory, you have this perpetuating cycle of tight inventory. It’s hard to get out of that.”
‘Zillow currently lists more that 4,500 homes for sale in San Diego, but with median prices reaching $479,100, it’s too high for most buyers.’
‘La Jolla real-estate agent Michelle Silverman told the San Diego Union-Tribune a big part of the problem is the supply of homes. There simply are not enough for new buyers.’
“It would be like walking into Nordstrom with a $1,000 gift card and you walk around the store and the racks are bare — that’s what it’s like for buyers in some markets,” Silverman said.’
Nordstrom? Thousand-dollar gift cards? Talk about rose-colored glasses and a totally inappropriate analogy for this era.
‘Jason Freedman from the real estate website 42Floors has a fascinating observation that could spell the end of the current cycle of expansion in the internet startup sector. It’s not about an investment bubble or any problems with the basic product of any of today’s startups. Instead, it’s a funny observation about the commercial real estate market.’
‘The real problem, he writes, is that many of the city’s landlords “are trying as hard as they can to get non-startup tenants right now. We at 42Floors recently experienced this firsthand when we were searching for our new office space.”
“Landlords look at their tenants as a portfolio of revenue streams and risks,” Freedman says, and they want to hedge against a possible bust in the startup market by making sure that they don’t have a portfolio that’s too crowded with internet startups. There comes a point when a landlord is willing to take a significant hit on the rent to be leasing to some lawyers or accountants or architects or anything that won’t vanish if a wave of venture capital skepticism suddenly sweeps the country.”
Jason Freedman from the real estate website 42Floors has a fascinating observation ??
“But unless the Bay Area changes its attitude toward new building permits, the office space crunch will remain, and there will be a fundamental physical constraint on the number of people who can find housing in the technology hub”
I actually went to the Vox website to see where they are based out of…”Washington DC”…Makes me wonder if this Freedman guy has been to Silicon valley in the last two years or if he’s pulling this view out of his butt because Both office and housing (Multi-Family) are being built in this valley at breakneck pace…There are 8 giant cranes on the new Apple site alone…That new space will house 15,000 people…
One of the best things my economics professors did was make us plot supply and demand curves. It forces you to understand how markets take signals and react. Higher prices should result in more supply. Higher prices with increased demand shouldn’t happen and shows something else is at work. It is difficult enough for developers to match supply with demand. If you have artificial price signals, over building can easily be created. If Tokyo can be over-built, any place can.
If you have artificial price signals, over building can easily be created ??
They do it every time when the Elephants dance in this valley…All the big dogs are here scrambling to beat the other guy to market…Irvine company with what appears to be unlimited amount of money is gobbling up every piece of dirt they can…Related Cos. proposing a 8 Billion dollar development in 95054…
DR Horton doing little small project (8 units) in 95008…Think about that for a moment…The biggest home builder in the country doing a 8 unit development in a small town of 40,000 people…
That development would have taken me 4 months or more to finish all the on & offsite infrastructure…They were done in 30 days…Like I said, its happening at breakneck speed…
Doubtful…..
Same thing in my back yard: a major regional homebuilder, who normally does developments with hundreds of new homes (on their former timber land), is now fighting for table scraps and building on a four lot short-plat. And they are taking their own sweet time too (not sure why, but my best guess is a shortage of labor right now since everybody is building like mad).
Are you sure?
Seattle, WA Housing Prices Fall 15%
http://www.zillow.com/ballard-seattle-wa/home-values/
China concerns bring Apple down to earth
http://www.ft.com/cms/s/0/831638a0-3a21-11e5-8613-07d16aad2152.html?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev,traffic/partner/feed_headline/us_yahoo/auddev#axzz3hnnqHs2R
Twitter, Inc. (TWTR) 29.27 Down 1.74(5.61%)
Twitter, Inc.
1355 Market Street
Suite 900
San Francisco, CA
http://finance.yahoo.com/q?s=twtr
Here’s another dog:
Yelp Inc.
140 New Montgomery Street
9th Floor
San Francisco
25.92 -0.48(-1.82%)
52wk Range: 23.66 - 86.88
‘Sharpton: Let’s act now to give everyone a chance at homeownership and the American dream’
Crude Oil Craters: Fall to Fresh Lows
http://www.wsj.com/articles/nymex-september-oil-futures-hit-4-month-low-at-46-81-bbl-1438567753
There is nothing more positive for your economy than falling prices of oil and housing. Nothing.
You can’t keep prices artificially high in a deflationary world forever.
I’m a patient man. I’ll wait…
I am patient also, and I don’t sit on the tracks waiting for the train to arrive.
Hovnanian Enterprises Inc. (HOVNP) -Nasdaq
9.26 Down 1.66(15.20%) 11:01AM EDT
52wk Range: 8.61 - 17.98
http://finance.yahoo.com/q?s=HOVNP&ql=1
From the Boston article:
‘Massachusetts home sellers being forced to drop their asking price, in these towns most of all’
“They are worried they are paying too much, there is all this stuff they have to do with the house—it just scares them,” said Zachary Christman, a Hammond Residential Real Estate broker working the Newton/Brookline market. “There is no doubt about it. The buyers, when they realize they are paying five or six figures over asking, it just makes everything else that much more scary.”
They aren’t paying over asking anymore Zachary. Still, one has to wonder what will happen to those who did? I’m sure they all put 20% down and it’ll be fine.
San Francisco Metro Housing Demand Falls To 1998 Lows
http://files.zillowstatic.com/research/public/Metro/Metro_Turnover_AllHomes.csv
Alameda, CA Housing Inventory Balloons 88%; Prices Fall 14% YoY
http://www.movoto.com/alameda-ca/market-trends/
Newton, MA Housing Prices Plummet 28% As Defaults Rise
http://www.movoto.com/newton-ma/market-trends/
Bubble in Fort Wayne? I talked about northwest Indiana last week, but north-central Indiana also is wrecked. I was in downtown South Bend a few years ago, and everything looked bombed out. Plus, a foot of snow recently had fallen and it was twenty degrees.
I’ve read that some residents are purchasing majestic older homes on the cheap and restoring them.
“I’ve read that some residents are purchasing majestic older homes on the cheap and restoring them.”
Restore?
Thus instead of cheap, they become big empty debt shacks.
Bad idea.
Who’s saying they went into debt? According to the article, in the New York Times, one sold for $750. I don’t like the idea of this being a glorified flip-that-house scheme, which may well be the intent, but if you want to live there, and are restoring it within your financial means, I’m OK with that.
“I’m ok with it”
I couldn’t care less and the suckers don’t have to run it by me. If you want to throw good money after bad on a run down 100 year old firetrap, have at it.
Still a bad idea.
“Puerto Rico Likely to Be Declared in Default at End of Day Monday”
http://blogs.barrons.com/incomeinvesting/2015/08/03/puerto-rico-likely-to-be-declared-in-default-at-end-of-day-monday/
“Alpha Natural Resources Bankrupt; Mining Default Rate Jumps”
http://blogs.barrons.com/incomeinvesting/2015/08/03/alpha-natural-resources-bankrupt-mining-default-rates-jump/
“The company operates about 60 coal mines in states including Virginia, Pennsylvania and Wyoming. Declining coal prices amid softer demand trampled its business.
With the court providing protection from creditors and a $692 million 18-month “debtor-in-possession” financing in hand, Alpha expects to continue operations. Its shares were delisted last month from the New York Stock Exchange.
With Alpha’s $2.3 billion of debt now in default, Fitch Ratings says the default rate for its metals and mining high-yield group now exceeds 10%.
5500 houses for sale in LA
http://www.realtor.com/realestateandhomes-search/Los-Angeles_CA/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home
1324 Price Reduced
http://www.realtor.com/realestateandhomes-search/Los-Angeles_CA/type-single-family-home,condo-townhome-row-home-co-op,multi-family-home,mfd-mobile-home/show-price-reduced/sby-7
Keep on slashing debtors…. keep on slashing if you want to sell.
“If they’re not giving it away, walk away.”
The PriceSlasher arrived in Albuquerque. He’s coming to your town too.
A whopping 37% of for sale inventory has been slashed in Albuquerque
3,556 properties found Albuquerque, NM Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/Albuquerque_NM/sby-7
1,326 properties found Albuquerque, NM Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/Albuquerque_NM/show-price-reduced/sby-7
Keep slashin’ boys….. keep slashin’. You’re not there yet.
Who was it here who kept saying “Cram downs are coming” a few years ago?
Looks like they never happened.
That would be alpha “crow breath” sloth.
“In instances where their opinion is sought, or where REALTORS® believe that comment is necessary, their opinion is offered in an objective, professional manner, uninfluenced by any personal motivation or potential advantage or gain. The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.”
http://www.realtor.org/sites/default/files/handouts-and-brochures/2015/2015-COE-Poster.pdf
-sniff- So beautiful.
“Print a stylish color poster of the 2015 NAR Code of Ethics (PDF) suitable for framing and hanging in your office.”
“The secret of success is sincerity. Once you can fake that you’ve got it made.” — multiple attributions
3 years old but still……..
BLADE INVESTIGATION
Taxpayer-aided homes sit vacant, vandalized
$114M went to program in Toledo
http://www.toledoblade.com/local/2012/06/24/Better-housing-plan-drains-Toledo-coffers.html
Welcome to Toledo - Living large with food stamps & section 8 in America’s 8th most miserable city.
https://www.youtube.com/watch?v=hep2Ps3HJ_Q
Sounds like every city in NY. Just like it.
“Low supply,” “tight supply,” “supply issues,” etc… All BS. FED engineered bubble from start to finish. And you Baby Boomer pukes f*cking your children over can rot in hell. F*cking pukes. When TPTB decided that mark-to-market wasn’t necessary, and fully legitimized this fraud, it marked the beginning of the blow-off phase. It’ll be epic, in a horrible, you’ll probably wish you weren’t alive sort-a-way.
SF Bay Area is crazy, +$200K quarterly median price increases are the norm. My coworkers, all well paid, are looking to buy, and scratching their heads. All the easy tech valuations money is raining down on the market, squeezing folks from both the rental and purchased places to live. I’m not sure how good this will end.