The Housing Bubble

The News-Leader reports from Missouri. “Christian County, Nixa and Ozark issued a combined 163 building permits for single family residences in 2011. So far combined this year, they’ve issued more than twice as many — 354. Jason Massengale, a Nixa real estate agent with the Heartland team of Keller Williams, likened today’s sales to the rate during the bubble. ‘This real estate market — it’s kind of like it was in ‘06,’ he said, adding that he this year he has been able to list houses one day and sell some the very next day. ‘We haven’t moved stuff this fast since 2006.’”

“Massengale was at a recent board meeting of the Nixa Chamber of Commerce, and he asked those present to guess how much Nixa houses had been selling for recently, according to chamber director Marc Truby. Truby said everybody in the room started guessing, going higher and higher until Massengale ’spilled the beans.’ ‘I didn’t believe it,’ Truby said of when Massengale told them it was more than $200,000.”

The Bozeman Daily Chronicle in Montana. “Affordable housing — perhaps the single most fraught issue facing Bozeman — will be back in front of the city’s five commissioners Monday. Southwest Montana Building Industry Association chairman Brian Popiel said the building industry remains adamantly opposed to the mandatory portion of the proposal, which would kick in automatically if affordable home production falls short. As Popiel puts it, the policy relies on the assumption that builders are ‘greedy bastards selling homes at inflated prices.’ That’s ‘fundamentally misguided,’ he said.”

“The city’s housing consultant, Daniel Werwath, disagrees with the notion the construction industry is running on thin margins, however. Werwath argues Bozeman’s housing market has been distorted by ‘unnatural demand’ fueled by outside money, as retirees and others relocate to the area having sold homes in pricier markets or built savings in communities with higher wages. ‘Houses are not priced at the cost to build them,’ he said. ‘Houses are priced at what the market will pay. People are making good profits right now,’ he said. ‘People could be building lower-cost housing in Bozeman.’”

KTVN in Nevada. “If you’ve driven around any Washoe county neighborhood, you might have noticed a lot of homes for sale. ‘It was the fourth highest October in history,’ said William Process, the 2016 president of the Reno/Sparks Association of Realtors. ‘But we are seeing our traditional seasonal trends. So sales are down a bit from September, median prices are down a bit, sales are down a bit. But so is inventory.’”

“There are still quite a bit of homes for sale. The average median price for a home in Washoe County is $280,000, an 8% jump from last October, but down 2% from September of this year. But the affordability of homes remains a concern. There were only 71 listings that listed under $200,000. That’s a 42% decline from this time last year. And with thousands expected to move into the area, what we have now isn’t cutting it. ‘All the reports that are coming out right now are identifying that we need more homes in the area. And they are building them, Process said.”

The Press Democrat in California. “Sonoma County home sales picked up in October after an end-of-summer lull, according to The Press Democrat’s monthly housing report compiled by Pacific Union International VP Rick Laws. As activity increased, the county’s median home price dipped 2.3 percent to $529,275 from September. That price remains 8 percent higher than a year ago. The median price reached a high this year of $546,000 in June but has dropped slightly each month since. With a relatively limited supply of homes for sale, ‘you would think prices would continue to rise, but I don’t see it,’ Laws said. ‘There’s definitely a plateau.’”

“Laws calculated that based on current sales, the county has a five-month supply of homes priced between $1 million and $2 million; a 14-month supply between $2 million and $4 million; and about a four-year supply over $4 million. Though the housing market has remained active this fall, buyers are showing more restraint, apparently not wanting to overpay or to pay more than they can afford, said Leon Geisberg, a broker associate in Santa Rosa with Better Homes Realty. ‘It seemed like people are starting to be more cautious,’ Geisberg said.”

The South Florida Business Journal. “Pre-sale contracts for new condominium projects in eastern Miami-Dade and Broward counties got mired in a severe slowdown in the third quarter, according to a new report by brokerage ISG World. By the end of September, there were 17,007 units in the pipeline in 96 projects and 12,946 units, or 76 percent, were sold, according to ISG. Its last report with data from June 2015 said 73 percent of the 16,886 units in the pipeline were sold. That means 537 condos were sold during the third quarter.”

“‘That’s way beneath the expectations of not only developers but also the marketplace of Miami,’ said ISG Principal Craig Studnicky.”

From Park Cities People in Texas. “Home sales in the Park Cities and Preston Hollow declined sharply in September compared to June, for example, and prices showed a modest drop as well, according to statistics from the North Texas Real Estate Information System. ‘I think we’re seeing a little bit of a market adjustment. I don’t think it’s a downturn,’ said Michelle Wood, an agent with Briggs Freeman Sotheby’s International Realty.”

“Sales in the Park Cities dropped by more than 50 percent from summer to fall, and almost as much in Preston Hollow. So it makes sense that as fewer people are buying, inventory is on the rise. The number of local active listings reached their 2015 peak during September, and available properties are spending longer on the market, especially in the Park Cities. ‘We’re starting to see a lot of reductions,’ Wood said. ‘It’s a great time of year to buy.’”

“Wood said that sellers can still get good value, but they might not be able to take advantage of the market as they’ve done previously. ‘Seller expectations on price got a little out of line with reality, so now we’re seeing those properties sit that were overpriced,’ Wood said. She said an influx of new construction is also having an impact on the health of the market. ‘It’s making the houses that are not new have to compete a little harder,’ Wood said.”

WNYC on New Jersey. “In October the Atlantic City region had the highest foreclosure rate of any metropolitan area in the country for four months in a row; the Trenton area is number three on the list. When Staci Berger, president of the Housing & Community Development Network of New Jersey, speaks with housing advocates in other states, she realizes just how different her state’s situation is. ‘I was on a phone call with my colleagues around the country and someone said, ‘Now that we have gotten past the foreclosure crisis,’ and I said, ‘Wait a second, some of us aren’t yet.’ So that was really telling,’ Berger said. ‘There are some who feel like this is in their rear view mirror, and we are not there yet.’”

“At a recent auction for foreclosed properties in Mercer County, Diann Timian of Ewing Township sat in the courtroom and watched her three-bedroom ranch house offered up to the highest bidder. She and her husband borrowed against the house to pay for college tuition for their two kids. After they divorced Timian couldn’t afford the extra loans, or the $16,000 a year in property taxes. She now knows she didn’t understand the risk of the refinancing deals. Bankers ‘weren’t shy in coming by and saying, ‘We can give you this much money to pay off your credit cards and you won’t see the increase,’ which wasn’t true,’ Timian said.”