A Noticeable Shift From The Go-Go Days
A report from the Oregonian. “Portlanders apparently upset with the direction of the local housing market are slapping ‘no Californians’ stickers on For Sale signs in the city, real estate agents say. ‘A lot of these homes are going into bidding wars and going over ask price,’ said Quinn Irvine, of M Realty. ‘And a lot of these guys are getting outbid. And I think they’re going around to agents who have properties that have sold over ask price and putting anti-California stickers.’”
“Realtor Lori Fenwick said somebody covered her name on one of her signs, replacing it with a phrase: ‘STOP THE BUBBLE.’ She and Irvine acknowledged that they are dealing with a lot of out-of-state buyers, many of whom do come from California. ‘I’m dealing with a couple of San Francisco buyers,’ Irvine said. ‘One guy’s cash.’ But both agreed that out-of-state buyers are coming from everywhere – not just south of the Oregon border.”
The Boston Globe in Massachusetts. “These are good days to be a well-heeled renter in Boston. With so many new luxury apartments coming onto the market, landlords are increasingly competing for tenants able to afford rents that can start at $2,800 for a studio and be two or three times that for two-bedrooms. The competition is a noticeable shift, real estate brokers said, from the go-go days of the past few years, when it felt as if landlords held all the cards and rents could only go up.”
“‘Renters can be choosers,’ said David Huddleston, rental manager at The Charles Realty in the Back Bay. ‘There’s just so much inventory right now.’”
“Derek Ebrecht, a broker with Boston City Properties, has a one-bedroom in the Back Bay for $2,250, with two months of free rent, in part because of the noise of nearby construction. Despite the discount — and pictures of a sunny unit with exposed brick — his phone isn’t exactly ringing off the hook. ‘You’d think I’d get more calls,’ he said. ‘I’m posting it multiple times a day.’”
The News Journal in Delaware. “James Stein knows the luxury market – and he knows Delaware. So when he put his Centreville house on the market recently for $1.175 million, he went into it with his eyes open. ‘I know it’s not easy to sell,’ Stein said of his house. ‘But I hope someone will love it as much as me.’”
“Stein is not alone. Sellers of houses priced $1 million and up now are faced with a drooping mansion market in New Castle County as the number of expensive offerings has ballooned to a more than two year supply, according to data compiled by Trend, the region’s MLS. If Stein needed any proof of the soft market, he only has to look across the Selborne Drive to the medieval mansion built in 1928. Ten years ago, the house was listed for sale for nearly $6 million. After languishing on the market for years, the 10,650-square-foot house on nearly six acres sold for $1.5 million in March.”
“Following the Great Recession, even buyers who can afford a more than $1 million home question whether it makes financial sense, some say. ‘They ask themselves: Will I get the return on my investment if my circumstances change or I no longer want or need this home?’ said Kevin Kelly, the past chairman of National Association of Home Builders and president of Leon N. Weiner & Associates in Wilmington.”
KOMO News in Washington. “The future of four area developments, including a 41-story Seattle highrise, is in limbo after federal officials accused the developer of defrauding hundreds of foreign investors out of millions of dollars. The Securities and Exchange Commission filed a complaint and sought a restraining order this week against Lobsang Dargey, CEO of Path America, alleging the Everett-based builder told more than 250 Chinese investors their involvement in his projects would help secure their residence in the U.S.”
“‘It’s unfortunate there will probably be a hold on this project for a long time because it does create a vacant lot,’ said Dean McColgan, president of the Belltown Community Council.”
The Charlotte Observer in North Carolina. “Roughly nine years after the start of the U.S. housing crisis, complaints about mortgage companies top the list of grievances North Carolina consumers are filing with a federal regulator. Consumer advocates say the CFPB’s mortgage complaints are troubling because many of them represent familiar problems, such as the inability to get mortgage modifications, that borrowers have faced from mortgage companies since the housing market collapsed.”
“Christy Romero, the special inspector general for the Troubled Asset Relief Program, the federal bailout program for the financial system, is among those concerned about borrowers being rejected for mortgage modifications. In July, Romero’s office noted a ’startlingly high’ denial rate by mortgage servicers of borrowers seeking assistance through the federal Home Affordable Modification Program, which is part of TARP. Citing U.S. Treasury Department data, Romero said 70 percent of homeowners, or 4 million people, who applied to lower their mortgage payments through HAMP have been denied.”
From Florida Today. “The housing crash of 2007-08 threw the United States into a major recession and ruined the livelihoods and lives of thousands. We asked a number of individuals with ties to the housing and financial markets their thoughts on the cause of the crash and what — if anything — was learned.”
“Who should get most of the blame for the crash? Jack McCabe, owner of McCabe Research & Consulting LLC, Deerfield Beach: ‘There are a couple that come to mind. First off is Angelo Mozilo (chairman and chief executive officer of Countrywide Financial until July 2008). He made all these (bleep) loans and he hasn’t spent a day in jail. And I think he is worth hundreds of millions of dollars. Alan Greenspan (former chairman of the Federal Reserve) and his monetary policies had a lot to do with it.’”
“What have we learned, if anything, from the housing crash? Larry Hufford, founder of Lifestyle Homes, West Melbourne: ‘Sadly nothing. At the heart of this, and the 1990 big recession and even the Great Depression, are under-regulated banks. Our government seems to serve the largest political contributors best. At this point in history that would be the banks.’”
“Christy Romero, the special inspector general for the Troubled Asset Relief Program, the federal bailout program for the financial system, is among those concerned about borrowers being rejected for mortgage modifications. In July, Romero’s office noted a ’startlingly high’ denial rate by mortgage servicers of borrowers seeking assistance through the federal Home Affordable Modification Program, which is part of TARP.
Boo hoo hoo already. I am so tired of these people whining about needing a mortgage modification. Your scam failed so grow up and move on.
smelly mel watts will get them approved
and taxpayers will bail them in 2016 etc
sos
There are several versions of this report going around:
‘It wasn’t that many years ago that homes sellers in the Pacific Northwest loved to see a newly transplanted Californian come along because it often meant a quick sale with no dickering over price.’
‘Often the Californian, having sold his or her overpriced (before the real estate bubble burst) rambler for a small fortune would come to the northwest and quickly pay top dollar for just about any house on the market.’
‘They did so because (a) they had all that appreciated California home equity money in hand and (b) to those Californians all the home prices in the Northwest looked cheap compared to where they had just come from.’
‘How times change. Now some Portlanders - local home buyers upset with the direction of the local housing market - are slapping “no Californians” stickers on For Sale signs in the city, according to real estate agents.’
‘Locals from Portland, Ore., are up in arms about out-of-staters buying houses and making real estate prices go up. Agents say they are dealing with a lot of out-of-state buyers, many of whom come from California.’
“It’s thought that he was specifically referring to the Californians moving to the state in droves in search of a better life”.
‘Also, Vice asked a random Portlander if Portlanders hate Californians, and she said, “In general yeah”, and she added that we’re all being blamed for “gentrification and other community problems”, including “the increasing difficulty of finding work and housing in the city”.
‘Locals from Portland, Ore., are up in arms about out-of-staters buying houses and making real estate prices go up. In addition, these out-of-staters are mostly (allegedly) Californians. That’s why someone is sticking “No Californians” stickers on real estate signs. Specifically, stickers with the state of California covered by a red circle and slash, much like a “No Smoking” sign.’
‘According to The Oregonian, Portland-based real estate agents started finding out about this when one of them, Lori Fenwick, was approached by her buyer, and sent a picture of a sticker on her sign. She then went to Facebook with the evidence, where other agents came out of the woodwork to say that they had also been targeted. Fenwick herself had a sticker covering her sign that said, “NO HOUSING BUBBLE” in big capital letters.’
‘The real estate agents who have been on the receiving end of these protests acknowledge that many people from out-of-state are buying houses, and many of them do come from California. “There’s the lowest inventory we’ve had in over 10 years, and people are frustrated,” agent Quinn Irvine said. “They’re basically blaming Californians for raising their real estate prices.”
‘Fenwick also expressed frustration that people were defacing signs that she has to pay for. And it’s probably obvious that these stickers are only punishing the real estate agents, rather than stopping any out-of-state migration to Portland.’
‘A recent KGW News investigation showed that 25 to 30 percent of the people who move to Oregon each year are coming from California, where real estate values and job salaries are much higher. That trend has been in place for about five years and it shows no signs of slowing down.’
“Unfortunately Portland’s retired hipsters are going to have to get jobs if they want to live in North Portland,” said Realtor Mark Charlesworth, who has had several of his signs removed by vandals.’
‘According to Zillow, Portland’s median housing prices went from $239,000 in 2014 to $330,100 in 2015 as part of a hockey stick-like increase in the cost of real estate that started in 2012.’
‘Niedermeyer told IJ that Californians are being blamed for rising housing prices which is unfair because there are some more important factors at play: “There are a lot of Californians but I’ve seen buyers from New York and Nebraska — really from all over the country. Also there are more just out-of-state buyers with their cash after selling their houses.”
“Loans are difficult to get and sometimes can’t compete if the price of the house goes over the asking price — and many are. It’ll get worse, too. Later this fall there will be even more regulation kicking in and loans could take three to four weeks longer, making closing a three month ordeal. Cash rules.”
Mel, Janet: heck of a job.
Never talked about is the jobs aspect. Where are the jobs to back up the prices? Oh, that’s right, they don’t exist.
I love them portraying real estate agents as victims. They are in fact the only ones who benefit from all of this. Even sellers have to use the proceeds to pay for other housing, which has also gone up in price. Only for RE agents is the bubble pure profit with no downside.
Poor Mexico: So far from heaven and so close to the United Sates.
Poor Oregon: So far from heaven and…
‘……including “the increasing difficulty of finding work and housing in the city”.’
Hmm, not enough housing and not enough jobs. What could you POSSIBLY do to change these problems. Oh, yeah, blame Californians.
If you want jobs and housing in Oregon, try building some and see how that works out. Quit knocking the home builders and support them. They can solve the problems!
There are plenty of houses out there Jingle_Fraud. 25 million of them and 4.4 million of them are in CA.
‘builders can solve the problems’
It’s been shown over and over that you can’t build out of a bubble. These dolts have run up land prices by 2 or 3 times in the past few years, so anything that gets built is too expensive. Even if it’s condos. Look at the Boston article above. It’s a glut, of luxury apartments.
Exactly. The land prices are stupid high again. Same sheet as last time.
Land prices are set by supply, demand, and expectation of home prices when you are going to be selling homes on that land. If you made more land available on which to build, home prices and land prices would be lower. Neither land nor housing are immune to supply and demand.
If lack of supply had nothing to do with high prices, then I would agree, you can’t build your way out of a bubble. But if lack of supply (as measured by vacancy rates, NOT listings) has anything to do with high prices, then building–all else equal–should alleviate high prices to some extent.
Consider rental vacancy rates in the Portland MSA (annual averages per the Census)
2005: 10%
2010: 4%
2015: 3%
Homeowner vacancy rates:
2005: 1.6%
2010: 3.2%
2015: 1%
Prices in 2005 were high despite there being relatively abundant rental properties available…clearly then lack of supply had less to do with the prices going up.
By 2010, people had lost their homes and move to rentals, etc., leading to higher homeowner vacancy rates and lower rental vacancy rates.
And now, both homeowner vacancy rates and rental vacancy rates are as low as they have been in 10 years.
You may disagree to the extent of the lack of supply, but clearly supply is as low as it has been in a decade. I’d like to compare these vacancy rates to other times, but the Census data only goes back to 2005–so that’s the best I can do.
False false and false Rental_Fraud.
Land is highly speculative resulting in massive price swings entirely unfounded on fundamentals. If you’re paying more than $500-$1000/acre, you’re paying too much. That’s why land is referred to as worthless dirt. Besides, there is a globe full of land and roughly 95% of it goes undeveloped and is
Secondly, SFR vacancy rates exclude excess, empty and defaulted houses. Vacancy rates are still double long term trend.
Rental Watch said: “If you made more land available on which to build, home prices and land prices would be lower.”
Sorry, but you failed Bubble Logic Fact #3: Pervasive credit lines heavily distort supply and demand.
More land made available would just fill the requisite credit lines. That much sale action would cause prices to RISE, not fall.
If we used CASH to buy residential land, we’d know real supply and demand.
As other posters continually point out, there’s a massive glut of empty and for-sale domiciles in the nation. That fact alone should dictate that prices fall on average. We have local variations like the California Equity Locusts, however.
Californians are a nice scapegoat. My cousins and uncle all moved to Portland from CA about 30+ years ago. Californians heading north is not new.
However, the other thing to consider is jobs…Portland is becoming a place where tech companies are locating some offices (access to younger, educated workforce). AirBNB has a presence there (as an example), which started within the past few years. A recent article noted tech employment reached a 12 year high in Portland. Overall job growth is up 2.9% in the past year.
If you strip out the job growth, are home prices as high (regardless of where people are coming from)?
Perhaps they should put signs up that say “no new jobs” instead. Maybe “no well-educated buyers”.
The other point to consider is the restrictive zoning laws of Portland. Their “Urban growth boundary” artificially reduces available housing. Yes, the growth boundary, restricts sprawl, which is great. But a byproduct of it is that in times of economic expansion, housing prices go up higher and faster than they would if the growth boundary didn’t exist.
I’m not saying that migration isn’t a factor. It is. However, in addition to high home prices nudging people away from CA, there are other things that attract businesses (and jobs) to Portland, which also put pressure on home prices–absent some ability for Portland to add supply…which is limited given their Urban Growth Boundary.
Californians are a nice scapegoat. My cousins and uncle all moved to Portland from CA about 30+ years ago. Californians heading north is not new.
Disliking Californian “equity locusts” isn’t new, either. 30+ years ago plenty of people I knew were talking about Californians coming up here with all their money and bidding things up. They’re a nice scapegoat for a reason.
Yes, but even then, not everyone who moved from CA were “equity locusts”. My relatives brought no equity with them–they moved to get a job and still live modestly.
What do you call migrants from CA who are simply looking to work and are starting out as renters? Are they to be shunned? Or welcomed?
When I first got to Sedona in 2003, I would ask people where they were from. I estimated half the people were former Californians and hadn’t been there long. Some had sold there, bought here. Prices were skyrocketing. It’s like the Chinese, some truth gets turned into perception. It’s OK to pay half a mil for a Sedona house because some Californian will pay me 750k in 2 years. It’s the idea more than anything.
In 2006 I had a California equity locust drove me out to some barren scrub between Sedona and Cottonwood. He wanted me to go in on this 850k sweet deal, and with great enthusiasm urged me to visualize what a gold mine it was! It didn’t even have water. I told him in Texas you could get the same thing for 10k and asked to go back. That same land is still barren scrub and it will be for a hundred years or more.
“It’s the idea more than anything.”
I agree–people don’t seem to place enough importance on market psychology–which can drive prices way too high, and too low.
“In 2006 I had a California equity locust drove me out to some barren scrub between Sedona and Cottonwood. He wanted me to go in on this 850k sweet deal,
Californicans have never been known to be real bright or smart with their money. It’s why they’re always broke and begging for a loan.
mafia
What a load of horsesh*t. My cousin is an example of UCLA Law School smarts. Hooked up in his R E Lawyer Days, with a well known residential builder. Decided to do LLPs with them, bought a destination shopping center, and spent his life becoming a Billionaire. California is full of many success stories. My family is wealthy from smart real estate investing.
Now, how about you? You spend so much time here, either your investments pay your bills, or you’re a poster child for loser.
Broke, busted and empty pockets.
‘Boston Glutpocalypse! Broker, Landlord Panic Grips Luxury End’
‘Well more than a year ago, we called a luxury glut in Boston’s apartment market. Simply put: There were too many higher-end apartments planned or under construction even in a city starved for housing. As many as 2,200 have opened in the city’s center this year alone. Something had to give either demand- or rent-wise—and now it has.’
‘The fact that some developments are offering free months and other incentives is not news. What is news is that there is now a general climate of near-panic among brokers and landlords. Ever so gradually the worm has turned.’
‘6 anonymous comments
guest 1′
‘Agree- MLS statistics for Back Bay, Beacon Hill, South End as of 9/4 show that in the price range of $4500-$7500 in the past month 22 apartments rented, 3 with deposits leaving 65 apartments available…most of these are now vacant and all of these apartments are privately owned condominiums. Renters are being drawn towards elevators, garage parking, in-unit laundry, central a/c, ( many or all of these are deal breakers). The ease of renting apartments online with added financial incentives tilts in favor of newer luxury rental buildings–leaving private landlords with two options- renovate or reduce.’
‘@guest #13: Plenty of landlords are now bending over backwards to just get a lease signed. You’re right: deals are out there.’
‘@guest #16: Chicago has vastly more inventory than Boston simply due to the geographic size. While I have not been to Austin, I imagine that is the same case and if not developers can probably continue building into the burbs far easier than here.’
But please, someone repeat how we’ll all be begging a landlord to live in a shipping container.
bad banks- naughty agents
it’s the stupid buyer blaming others
“… 70 percent of homeowners, or 4 million people, who applied to lower their mortgage payments through HAMP have been denied.”
Ignorant pukes agree to borrow money at terms favorable to the lenders and then are stunned when the lenders do not want to modify those terms?
Bahahahahaha … bleed ‘em, bleed ‘em dry.
Seems Mr. Banker and “The Donald” might be one and the same.
Cold, heartless, ruthless, uncaring.
For you, I wish a quick and painless early demise.
‘Years after the great American housing bust, mortgages akin to the so-called liar loans are creeping back into the market. And, like last time, they’re spreading risks far and wide via Wall Street.’
‘They reflect how the business is starting to join in the frenzy that’s been creating booms in everything from subprime car loans to junk-rated company bonds.’
‘The Manhattan Beach story — how the mortgage on that house was made and subsequently packaged into securities with top-flight credit ratings — recalls a time when borrowers, lenders and investors all misjudged the potential danger.’
‘Soon Velocity was bundling the $1.92 million mortgage and hundreds of other loans into securities through Wall Street’s securitization machine. Kroll Bond Rating Agency featured a picture of the house in a report on the $313 million deal, most of which was rated AAA. Marketing documents for the offering, which was managed by Citigroup Inc. and Nomura Holdings Inc., characterized the buyer as an “investor.”
‘But when a reporter recently knocked on the door in Manhattan Beach, the buyer answered and said he never planned to rent out the place. Nor, he said, had he signed documents stating he would. He was living in the house with his family.’
‘In a throwback to subprime times, Velocity and other specialty lenders routinely offer certain mortgages with limited reviews, if any, of borrowers’ finances. That’s because the rules exempt mortgages made for “business purposes.” The setup lets borrowers avoid typical paperwork, in return for paying higher mortgage rates.’
‘Velocity, for instance, sends mortgage brokers e-mails with subject lines like, “Stated? Really??” — a reference to stated-income loans, which became known as liar loans.’
Clearly not good that people are taking out the mortgages as investors, but living in the homes. Weird by the way that people are getting an advantage by calling a home an investment…usually borrowing for an investment was the kiss of death to get a loan.
Anyway, the home in question was $2.95MM. 35% down payment. The loan was $1.92MM. Stated income loans wouldn’t have been a problem if they required a 35% down payment.
Of course, I’m making the leap that there isn’t a 35% stated income HELOC on top of the loan, but that’s a different lender’s problem, not this one.
Also, it is interesting that Velocity is the first to suffer if the securitization has trouble–another difference from before (where they dumped all the securities).
“Who should get most of the blame for the crash?”
Following this statement is a list that contains everybody EXCEPT the thousands ignorant pukes that flooded into the market and willingly and eagerly signed thousands dotted lines that committed themselves to financial misery.
“What have we learned, if anything, from the housing crash?”
“Sadly nothing.”
Following this exchange is some more words that blame everyone except the swarms of ignorant dotted-line signing pukes.
That article is full of great tid-bits:
‘Julia Dreyer, broker/owner, Dreyer & Associates Real Estate Group, Indian Harbour Beach: “At the absolute peak of the market, there were investors who were putting $1,000 deposits on up to 10 new construction homes at a time that were not going to be built for approximately nine to 12 months. These speculating investors were assigning their rights to these contracts for $25,000-50,000 at the closing table to buyers who were willing to pay these insane gains in order to purchase new construction without the delay. Residential real estate had never, in my experience, been the object of such speculation. It turned the residential market into a futures market.”
I’m reminded of the LA Times report a year or two ago, with “flippers selling to flippers”.
‘The 2015 Global Housing Market Crash. Property Prices Plummet Worldwide’
so instead of where ion the USa are things still perky
San Fran - Denver?
where in the world are they still parky?
answer= no where
“Predictions for many other parts of the world in the near future are dire.”
Very confusing article, says the future will be dire but predicts falling housing prices all over the world, which is great news for future humans. I mean how the heck are the destitute people of the future supposed to afford 500K starter shacks?
“Roughly nine years after the start of the U.S. housing crisis, complaints about mortgage companies top the list of grievances North Carolina consumers are filing with a federal regulator.”
___________________________/
Don’t bother to file complaints with federal regulators. They wanted this.
Denver, CO Housing Prices Fall 10% YoY
http://www.movoto.com/denver-co/market-trends/
guess that leaves san fran
soon their flip show will have to be canceled
“It’s thought that he was specifically referring to the Californians moving to the state in droves in search of a better life”.
That’s debatable. I’ve been to Oregon many times and to me there seems to be a low-class, “white trash” vibe to the place. Rudeness and unfriendliness are worse than California, which isn’t easy to do. This, plus not seeing the sun for eight months of the year, can make living there just plain depressing.
Sure, a Californian with $600K in equity from a crap shack can do a lot better by trading it for a nice place on acreage in Oregon. But you don’t have to go to Oregon to do that.
CA wins the gold when it comes to poverty, crime and welfare.
mafia
We have our problems, for sure, but we also have some great universities, firms, and lots of natural beauty. The yin- yang perspective, my dear. In the 60’s So Ca was Shangri-La. I grew up in Ca’s peak. I feel fortunate.
CA is a crime ridden, impoverished hole and everyone knows it. It’s no secret.
Grew up in Orange County in the late 50’s and 60’s. Back then, it truly was the land of milk and honey. A great place to be a kid.
‘federal officials accused the developer of defrauding hundreds of foreign investors out of millions of dollars…alleging the Everett-based builder told more than 250 Chinese investors their involvement in his projects would help secure their residence in the U.S.’
I was reading about these residence deals last week. Apparently they are a real shot in the dark because the buildings or whatever are proposals, and the foreigners don’t know anything about the developers or how feasible it all is. So this guy saw 250 easy marks and took them to the Madoff.
The entire globe has turned into one giant, crooked scam.
From the NC article:
‘Frances Thompson is among the North Carolina consumers who have filed a mortgage-related complaint with the CFPB. Thompson, who lives about 10 miles north of Winston-Salem, said she became frustrated with Atlanta-based SunTrust Banks as she tried to have her mortgage payments reduced following the 2013 death of her husband.’
‘Thompson, who agreed to be interviewed about her CFPB complaint, said that after she applied to SunTrust for relief, the lender stopped accepting her mortgage payments. At the same time, SunTrust was reporting her as delinquent to credit bureaus, she said.’
“I’d send in a payment, and a couple of weeks later here comes a form letter that didn’t really make much sense and they returned my check,” Thompson, 70, said. “I couldn’t figure out why they kept returning my payments that I knew I owed. … It was just a nightmare.”
‘SunTrust spokesman Thomas Crosson, citing client privacy, said the lender could not comment “beyond the fact that we worked with the client and this has been resolved for some time.”
A mortgage at 70 YO?
Boston Metro Housing Prices Plunge 9% YoY
http://www.zillow.com/ma/home-values/
San Franscisco, CA Housing Prices Plunge MoM, QoQ; YoY Gain Falls To Zero
http://www.zillow.com/san-francisco-ca-94121/home-values/