March 21, 2016

Hopes That The Value Will Keep Going Up

A report from Loudoun Now in Virginia. “Talk to most any real estate agent about Loudoun County’s housing market, and you’ll get a resounding, possibly out of breath, response. There’s a lot to be excited about, particularly if you’re a seller. The median sales price rose to $415,000, $6,000 higher than last year and $116,000 higher than 2009. And while the numbers indicate a seller’s market, Shaila R. Millman, director of Dulles Association Realtors, said that doesn’t mean it’s not a good time to buy. ‘It’s a fantastic time to buy. The price points are really affordable for many people,’ she said. But market trends show they’re on the rise, she added. ‘Buy now because prices are going up.’”

The Mercury News in California. “A shortage of Bay Area homes for sale sparked bidding wars last month but kept sales low in what was the second-slowest February in eight years, according to CoreLogic. At this point there’s still a shortage in Berkeley and Oakland, said Barbara Reynolds with McGuire Real Estate. ‘Anything on the market is going for $200,000 to $300,000 over asking for houses priced at $900,000 to $1 million,’ McGuire said. ‘There are plenty of buyers,’ she said. ‘That’s the issue. There are 15 offers for every home.’”

“In San Mateo County, sales were up 3.9 percent over the year, but prices remained below $1 million for the second month in a row at $977,500. Median house prices also dipped below $1 million in San Francisco on a 25 percent drop in sales. It was the first year-over-year decline since February 2012.”

The Denver Channel in Colorado. “In the Denver Metro area, realtors and appraisers say bidding wars may be driving up the selling price, but appraisals are frequently coming in much lower. Unlike in the past, though, sellers are less inclined to take less. Warren Boizot, III, a longtime appraiser in the Denver Metro area, said that in the last two years, he has seen as many as 8 out of 10 homes in this area appraise for less than their sales price, and it reminds him a little of the 2008 housing bubble. ‘It just scares me, though, because sometimes I see people getting anxious and wanting to go a little faster than I am comfortable with,’ said Boizot.”

“Melissa Abels, had already started packing her bags to move after signing the contact on her dream home in Parker. But that’s when she got the bad news. The home appraised for $12,000 less than the agreed sale price. Abels said she and her Realtor, her mother Julie Abels, managed to reach a compromise with the seller of her home, but she will have to bring extra cash to the table. Now, she just hopes that the house value will keep going up, so that it will eventually be worth what she is paying.”

“‘We’re hoping we’ll get that back in investments later on after we own the house for a while,’ she said.”

The Real Deal on New York. “Developers, those most antsy of creatures, would be wise to start getting patient. Roughly 14,500 units are expected to hit the market between 2015 and 2017, according to a new analysis by Miller Samuel for The Real Deal. But by the end of 2017, just over 5,000 of those units are expected to have sold, and going by the current rate of sales, it would take more than five years to sell all that excess inventory. In 2015, roughly 5,500 new condos came online, with another 6,000 and 3,000 projected to hit the market in 2016 and 2017, respectively.”

“Douglas Elliman’s Frances Katzen said some developers are (wisely) repositioning projects based on the current market. ‘The old adage that once you go up [in price], you can’t go down? We’ve seen people do it and do very well. There’s been no shame in it,’ she said.”

“Extell Development, for example, has lowered its expectations at One Manhattan Square, dropping its total sellout price by more than $200 million to $1.87 billion, as TRD reported. Toll Brothers has also dropped prices at 1110 Park Avenue and 400 Park Avenue South, and World Wide Group and Rose Associates have done the same at 252 East 57th Street.”

From Chicago Now in Illinois. “As I mentioned last month RealtyTrac is not releasing their normal Foreclosure Market Report for February. However, they did just release their updated data which shows that Chicago foreclosure auctions surged last month and you can see how dramatic this is in the graph below. The yellow area represents the auction activity and it’s up 313% over last month and 261% over last year. The other area that showed a big increase was bank repossessions, shown in purple below, which jumped 77% over last year.”

“Sadly, the total pipeline of Chicago properties in the foreclosure process actually increased last month - up over 600 units from last month. Since I’ve been tracking this data I’ve only seen an increase 3 other times, and never an increase of this magnitude.”

The Miami Herald in Florida. “If Lil Wayne continues discounting his Miami Beach house, he might as well give it away. Home sale records show the diminutive rapper lowered the price of the mansion by another $2 million this month. It’ll now cost $14 million to live like a music star. The 15,000-square-foot house, with nine bedrooms and 120 feet of Biscayne Bay frontage, started the year with an $18 million price tag. What’s going on here? ‘The market is flat,’ said Ty Forkner, the listing agent. ‘Priced at under $1,000 a square foot, it’s a special deal.’”

“Records show Wayne bought it in 2011 for $11.6 million but spent several million redoing most of the inside.”




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82 Comments »

Comment by Combotechie
2016-03-21 05:52:40

“And while the numbers indicate a seller’s market, Shaila R. Millman, director of Dulles Association Realtors, said that doesn’t mean it’s not a good time to buy. ‘It’s a fantastic time to buy. The price points are really affordable for many people,’ she said. But market trends show they’re on the rise, she added. ‘Buy now because prices are going up.’”

“It’s a fantastic time to buy … The price points are really affordable for many people …”

Wikipedia: “Price points are prices at which demand for a given product is supposed to stay relatively high.”

Price points, as used here, do not refer to the actual price, an actual price that is unaffordable to most people, but instead they refer to a chunk of the actual price, a chunk of the actual price that is affordable to most people.

The affordability of chunks of the actual price allow the actual price to rise and this price rise is the attraction and creates the urgency to buy as expressed by the statement: “Buy now because prices are going up”.

So there are really two things going on here:

1.There is a rapid price rise in the actual price that creates demand and urgency but in itself is a price that is entirely unaffordable for most people to pay and …

2. There exists a method for people to buy small chunks of the unaffordable house one month at a time which allows a person to not actually pay for the unaffordable house but instead to commit himself to paying for an unaffordable house.

Buying something and committing to buying something are two different things but they are related in such a way that the existence of one of these two things allows the other thing to progress to a point to which it would never reach if the first thing did not exist. In the case here, actual prices would never reach the point they have reached if they had to actually be paid for but they do not actually have to be paid for, the only requirements are that they be committed to actually being paid for, and these commitments are structured in such a way that can be stretched out over decades.

And this is what makes it all work, what allows the unaffordable price to be paid to the seller all at once (an event) while the buyer can pay the unaffordable price over a period of time that may stretch out over decades (a process).

Comment by Combotechie
2016-03-21 06:12:18

If the demand for an object is created by the object’s price rise then the only way to keep the object’s demand up is to keep its price rising.

This feat could not be done if the price rise reached a point where it could not be paid but it can easily be done if the commitments that power the price rise are kept at point whereby they, the commitments, can be paid.

And this seems to be what is going on and it will have to keep going on else prices will begin to fall and when prices fall then the demand created by ever-higher rising prices will vanish and thus a market decline will ensue and this market decline will erase a lot of illusions, illusions that keep much of the economy working.

And here we are.

Comment by Jingle Male
2016-03-21 06:41:20

Combo, we had a robust discussion this weekend about supply and demand. What you are saying makes sense (cents) but I believe it is not the whole story.

Our Sacramento market has population growth driven demand for housing which is not being met by new construction. We are only building about 3,500 homes each year while we need about 7,500 homes. There are 20,000 new residents moving into the market each year (~1% growth rate).

“…..The combination of tight inventory, strong demand and the onset of “buying season” is pushing up prices on Sacramento-area homes. It’s also drawing national interest to the market.

Both Coldwell Banker and the Sacramento Association of Realtors said a lack of inventory appears to be the big reason why. SAR, which only follows Sacramento County sales, said inventory dropped by 23.8 percent from a year earlier, while Coldwell Banker saw a 33 percent drop from February 2015 in Sacramento, Placer and El Dorado counties……”

Build more houses and prices increases (and prices) will moderate. California needs about 200,000 new houses each year. I do not think we have ever come close to building more than 150,000 homes/year. The sooner we make it easier for builders to construct housing, the sooner affordable, stable pricing with happen. This will also provide the answer to Combo’s scenario outlined above.

Comment by Rental Watch
2016-03-21 08:50:54

We exceeded 200k homes per year only a couple of times in the past many, many years–2005-2006.

The two things that have damaged affordable housing in CA are:

1. CEQA (California Environmental Quality Act), which makes it VERY difficult to obtain entitlements to build. It also marginally increases cost, but that’s not nearly as big a problem as the restriction of supply.

2. Prop 13–has driven many municipalities to increase fees in order to drive revenue for government. This has pushed up the base cost for a home (higher impact fees, etc.).

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Comment by CalifoH20
2016-03-21 11:26:28

Prop 13 is destroying CA’s schools and roads and infrastructure.

 
Comment by taxpayers
2016-03-21 12:12:11

send in extra

 
Comment by Blue Skye
2016-03-21 13:54:39

“to drive revenue for government”

Odd, incomes have been stagnant yet the government keeps getting more expensive.

 
 
Comment by Eddie89
2016-03-21 10:22:21

And the problem with the few new houses that are being built are over sized and expensive!

There’s a lot of demand for single story, under 2,000 sqft homes, but the builders aren’t building them because they won’t make as much profit!

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Comment by Jake
2016-03-21 10:27:51

Are you sure about that?

US Housing Demand Craters To 20 Year Low

http://1.bp.blogspot.com/-0q8fIAsczFk/VUANHEhSbnI/AAAAAAAAjRs/oANwXOUviGw/s1600/MBAApr292015.PNG

 
Comment by CalifoH20
2016-03-21 11:31:25

Is it demand or supply? With a small supply, less sales take place.

The cost of permits in CA are crazy. I heard $22k for water/ sewer.

 
Comment by Jake
2016-03-21 11:59:48

We covered that too. $5k in connection fees gets you to $57/sq ft.

 
 
Comment by Jingle Male
2016-03-21 10:28:59

The Next Housing Crisis is Here: Supply

This article covers supply and lack of financing for marginal buyers. It directly addresses the dearth of sub prime lending today and the lack of product for sale.

“….First-time homebuyers are crowded out, with Trulia’s chief economist Ralph McLaughlin writing Monday that the number of starter homes on the market has declined 43.6% in the past four years.
Homeowners who want to move from a starter home to something better can’t afford the next step. McLaughlin notes that the number of “trade-up” homes on the market is also down about 40% over the same period.
Meanwhile, mortgage lenders, despite record-low rates, are still reluctant to extend credit to less-than-superb borrowers…..”

http://finance.yahoo.com/news/next-housing-crisis-152505885.html

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Comment by Jake
2016-03-21 10:38:25

I guess an over-supply of housing can be considered a crisis…… if you paid too much for a rapidly depreciating asset like a house.

 
Comment by Ben Jones
2016-03-21 10:42:38

Or a box of New York air:

‘by the end of 2017, just over 5,000 of those units are expected to have sold, and going by the current rate of sales, it would take more than five years to sell all that excess inventory. In 2015, roughly 5,500 new condos came online, with another 6,000 and 3,000 projected to hit the market in 2016 and 2017, respectively’

Now about this supply crisis…

 
Comment by Jingle Male
2016-03-21 12:39:09

Yeah, if NY City can get overbuilt, I am hoping San Francisco can too. I have children wanting to buy there.

I do think there is a big difference between high end condos in NYC and the rest of the market across the US. I do know we have a shortage of supply in the Sacramento foothills. I have a broker friend who sold 2 houses last week in the $400k range. Both houses were on the market less than a few days and the buyers were all cash individuals buying to occupy.

It is a very interesting market……certainly a bit frothy here.

 
Comment by Jake
2016-03-21 12:50:08

Record low housing demand never translates into a supply shortage.

Try again.

 
 
 
 
Comment by Jake
2016-03-21 07:23:06

Parsing words doesn’t get you past the grim reality that housing demand is at record lows because prices are 250% higher than long term trend and double construction costs.

Remember…. I can ask $50k for my worn out 10 year old Chevy pickup but where is the buyer at that price?

So it is with any depreciating asset like a house.

 
Comment by Ethan in Northern VA
2016-03-21 07:44:44

Townhouse across from me - the for sale sign just went down and a new vehicle showed up in the driveway. Sale price seems to be $519,000 for the 3 bedroom 2450sqft end unit townhouse. Originally purchased for $330K or so in 2002.

I think I just need to find a higher paying job?

Comment by Sean
2016-03-21 09:17:01

Ethan,

I just spent yesterday with the wife and kids looking at open houses in Ashburn and Sterling. Pretty dead with not too many people out. Almost every house had a modified flier reflecting the new lower price. I did tour one bank owned house, took note of everything that needed to be done and wrote it on a paper. Drank a few beers, went to sleep and woke up today to look at my potential offer of $375K, and decided against putting in an offer. I’m just not that excited to go in debt instantaneously, so I’ll rent and keep saving.

Between tech jobs disappearing in LC, older workers moving out of a high tax area, and younger worker with no money and no desire to buy, it’s a horrible time to buy.

 
 
Comment by Ethan in Northern VA
2016-03-21 08:09:04

If I could find a nice place 2500sqft 2 car garage with full walk out basement that hasn’t been finished into bedrooms or other crap for $415K I’d be interested.

Comment by Jake
2016-03-21 08:13:44

At that price it would make you a bonafide DebtDonkey.

Are you sure?

Comment by Ethan in Northern VA
2016-03-21 09:48:27

errr 3.5x income, tax writeoff. My only fear is switching jobs cause commutes around here could be brutal.

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Comment by Jake
2016-03-21 10:03:37

Paying a 300% premium for a rapidly depreciating asset isn’t a good idea regardless of income.

 
 
 
Comment by oxide
Comment by Jake
2016-03-21 11:58:24

They better get slashin’ those prices Donk.

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Comment by taxpayers
2016-03-21 12:15:11

stuff in my hood is 200x rent ,so still high
60 yr old homes
22151

Comment by Jingle Male
2016-03-21 12:42:49

Yes, that is a bit high. I paid 131 times rent, but that was in 2010. It would cost 250 times rent today. It’ll probably come back down again, but the problem rents are going up too and you may have to wait another 5-10 years for the next bottom.

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Comment by Jake
2016-03-21 12:48:29

You paid a 250% premium and now your stuck with a rapidly depreciating asset in an environment of collapse demand and record high inventory.

 
 
 
Comment by rms
2016-03-21 22:24:38

“If I could find a nice place 2500sqft 2 car garage with full walk out basement that hasn’t been finished into bedrooms or other crap for $415K I’d be interested.”

I couldn’t get in a night’s sleep owing $415k for a home.

 
 
 
Comment by Ben Jones
2016-03-21 06:39:12

‘Now, she just hopes that the house value will keep going up, so that it will eventually be worth what she is paying’

I heard the other day, I don’t remember where, price is what you pay, value is what you get.

Comment by Jingle Male
2016-03-21 07:00:14

Combo strikes another chord on the HBB….

Comment by Combotechie
2016-03-19 07:36:48
“Yet rental rates are half the cost of buying the same structure.”

Cost is one measurement, price is another.

Comment by Combotechie
2016-03-21 08:01:56

“Cost is one measurement, price is another.”

What I meant by that (in a brief outlined form) is:

If the entire price of an item is paid in full at the point of sale then the price of the item is the same as the cost of the item. But if the entire price of the item is not paid in full at the point of sale then the cost of the item can become very different from the item’s price both measured in short spans of time and as measured over long - very long - spans of time.

Comment by Jingle Male
2016-03-21 09:36:49

I agree. Paying $400,000 cash for a house is much different than paying $2,500 for one month. It is an important distinction.

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Comment by Jake
2016-03-21 09:41:06

It’s a distinction without a difference. Unless you you’re renting it which is not much more than $1500 a month.

 
Comment by CalifoH20
2016-03-21 11:42:29

half! Half!! Half is $1250.

 
Comment by Jake
2016-03-21 11:56:28

Good point my friend. Good point.

 
 
 
 
Comment by Jake
2016-03-21 07:42:05

There isn’t much value there when you pay a price that exceeds construction price(lot, labor, materials, profit) by 200%.

Comment by CalifoH20
2016-03-21 11:40:58

Jake - land and permits, Jake, permits….

Comment by Jake
2016-03-21 11:55:15

(lot, labor, materials and profit)

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Comment by Ben Jones
2016-03-21 06:41:40

‘The old adage that once you go up [in price], you can’t go down? We’ve seen people do it and do very well. There’s been no shame in it’

Not at all, and pretty soon they’ll be walking away from these New York pre-construction condo’s like the Asians are doing in London.

 
Comment by taxpayers
2016-03-21 06:42:42

The median sales price rose to $415,000, $6,000 higher than last year ”
how about $ per sq ft
flat to down
I’m in the next county

Comment by Jingle Male
2016-03-21 07:03:37

“….The median sales price rose to $415,000, $6,000 higher than last year and $116,000 higher than 2009.”

This may seem like stratospheric increases, but it is a 4.9% annual increase since 2009. Considering 2009 was likely a Great Recession bottom of the housing bust, this is not so out of balance.

Comment by Jake
2016-03-21 07:24:31

Yet the reality is 2009 prices where 250% higher than long term trend and double construction costs.

Housing prices have a long way to fall before they reach the long term historical price levels.

 
Comment by Ben Jones
2016-03-21 07:34:12

‘This may seem like stratospheric increases, but it is a 4.9% annual increase’

This reminds me of the casual calculations of how long it will take until houses cost one million each.

Comment by Jingle Male
2016-03-21 09:37:57

I could tell you that too, but I already deleted the Excel spreadsheet……..

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Comment by Ben Jones
2016-03-21 06:43:51

‘Anything on the market is going for $200,000 to $300,000 over asking…In San Mateo County prices remained below $1 million for the second month in a row at $977,500. Median house prices also dipped below $1 million in San Francisco…It was the first year-over-year decline since February 2012′

Somebody is a lion.

Comment by Jingle Male
2016-03-21 07:07:12

My son has been wanting to buy a house in this market for 3-years. He decided to rent for a few years, given the economics (thank you HBB).

He watches inventory and said there is more on the market today than he has seen since he started looking, but it is all relative. It is still less than 30 days of inventory. That market will not bust until the dot coms burn through all their cash and fold. Some of that is starting, but it is a slow burn.

Comment by Jake
2016-03-21 07:30:45

With 25 million excess, empty and defaulted houses, 4.4 million of which are in CA, he’ll have plenty to choose from.

Comment by Jingle Male
2016-03-21 09:39:50

HA, I like your new name. Did you give up on Mafia Barron?

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Comment by Jake
2016-03-21 10:01:47

Data my friend.

Ventura, CA Housing Prices Crater 16% YoY

http://www.movoto.com/ventura-ca/market-trends/

 
 
 
Comment by Ben Jones
2016-03-21 11:57:50

‘Jack Dorsey, the co-founder and chief executive officer of Twitter, was staring at a puddle. It was shaped like Greenland and stretched across a busy sidewalk in the English city of Newcastle upon Tyne. Some employees at a nearby ad agency had noticed the puddle and for some reason decided to broadcast a live video stream of the minor havoc it was causing pedestrians. They did so using a smartphone stuck to a window and a free mobile app called Periscope, which is owned by Twitter.’

‘That was in January. In mid-March, Dorsey still has the puddle on his mind. “It wasn’t that we were watching a puddle,” he says at Twitter’s offices in San Francisco. “It was that we were watching a puddle together.’

“I was connected to the audience, and I could actually talk with them,” he says. “I could say, ‘Isn’t this ridiculous? We’re watching a puddle.’ And then, ‘Oh, is that woman going to walk around it? Is she going to get wet? Like, what’s going to happen?’ And it was just so cool to see how this little tiny thing became an event. But that’s been our history for 10 years.”

‘But even as Twitter’s annual revenue soared last year from $1.4 billion to $2.2 billion, the company lost $507 million. Its user base has stalled at roughly 320 million monthly active users. That’s a big audience, but nowhere near as big as the following of some important competitors. In the weeks after Twitter’s initial public offering in 2013, shares reached $73.71. Now the stock is at $17.03.’

http://www.bloomberg.com/features/2016-twitter-turns-ten/

This is tech, this is innovation:

‘Isn’t this ridiculous? We’re watching a puddle’

Comment by Bluto
2016-03-21 13:09:44

There have been a few interesting articles on stock dilution at Twitter recently…

http://www.ejinsight.com/20160319-excessive-stock-based-compensation-leads-to-disaster/

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Comment by rms
2016-03-21 22:59:04

“Isn’t this ridiculous? We’re watching a puddle”

American Beauty a la filming of the Plastic Bag.

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Comment by rms
2016-03-21 22:51:44

“Anything on the market is going for $200,000 to $300,000 over asking…”

Who is providing the capital?

 
 
Comment by sfraz
2016-03-21 07:16:40

Seattle- Has Entered The Phase of PONZI Financing.
“In the past, the value of a commercial property was “the capitalized value of the stream of rents from that property.” In this order of things, occupancy rates (content) mattered. Now, commercial properties are not selling content and value but merely value. Meaning, they are selling a “projected increase in price.” Meaning, downtown Seattle has entered the phase of Ponzi financing.”
http://www.zerohedge.com/news/2016-03-20/its-moved-beyond-vancouver-downtown-seattle-has-entered-phase-ponzi-financing

 
Comment by Senior Housing Analyst
2016-03-21 07:33:14

Reston, VA Housing Market Cracks; Prices Plunge 8% YoY As Supply Balloons And Demand Craters

http://www.zillow.com/reston-va/home-values/

 
Comment by Jake
2016-03-21 07:45:42

“‘We’re hoping we’ll get that back in investments later on after we own the house for a while,’ she said.”

lol.

Don’t forget your yearly losses to depreciation. $2.50/sqft/yr racks up to a hefty loss in a real hurry.

 
Comment by rj chicago
2016-03-21 07:46:53

Re: Chicago foreclosures -
This is just the start.
To see the increasing number of signs for office rental space of all types in all parts of Chicago Metro - houses to follow.

I wake up some mornings hating me too. Rahm Emanuel
Read more at: http://www.brainyquote.com/quotes/authors/r/rahm_emanuel.html

 
Comment by Jake
2016-03-21 07:59:54

“Existing Home Sales Crash Most In 6 Years”

http://www.zerohedge.com/news/2016-03-21/existing-home-sales-crash-most-6-years-nar-blames-slowing-economy-bubbly-home-prices

Collapsing housing demand is old news but it’s good to see the media covering it.

Comment by Eddie89
2016-03-21 13:17:26

“…job growth continues to hum along at a robust pace…”

But they never dig into the details, only to discover that the majority of these jobs are just service sector jobs, I.E. waiters and bartenders!

 
Comment by Professor Bear
2016-03-21 18:15:37

So much for the incipient red hot spring sales season!

 
 
Comment by Ben Jones
2016-03-21 08:20:07

‘Companies haven’t fudged their numbers this much since the financial crisis’

A comment:

‘Long forgotten is the Fed’s pressuring of the Federal Accounting Standards Board to suspend FASB 151a… mark to market accounting. Interesting that the rule remains in a suspended state almost a decade after it was suspended.’

Comment by taxpayers
2016-03-21 12:17:06

no worries Fwank Dodd will save us

Comment by rms
2016-03-21 23:01:46

At least Barney swallows.

 
 
 
Comment by Senior Housing Analyst
2016-03-21 08:20:23

Frisco, TX Housing Market Implodes; Prices Cave 9% YoY On Cratering Housing Demand Nationally

http://www.zillow.com/frisco-tx-75035/home-values/

 
Comment by Sean
2016-03-21 09:20:09

“It’s a fantastic time to buy!”

Wow, a salesman telling me to buy their product! Of course it’s a good time to buy, it’s ALWAYS a good time to buy.

Comment by Jake
2016-03-21 09:32:13

It’s a helluva time to sell…… IF you can find a buyer.

Does a buyer at any price exist?

Comment by Sean
2016-03-21 10:10:09

It’s a helluva time to sell IF you can settle your underwater mortgage at closing. One thing “housing analysts” always seem to miss are the fact that so many people can’t. It’s not they don’t WANT to sell, but they CAN’T sell. I believe this is the main cause for them complaining about ‘lack of inventory’.

This, and old people who feel entitled to a profit. Because investments ALWAYS are profitable. I invested in Apple, and they are down about 10 percent YoY. I gonna call Tim Cook and tell him to give me my profit.

Comment by Jake
2016-03-21 10:25:59

“It’s a helluva time to sell IF you can settle your underwater mortgage at closing. One thing “housing analysts” always seem to miss are the fact that so many people can’t.”

The reality is they’ll be even less capable going forward. This is why we’ve heard over and over again; Get what you can get for your house today because it’s going to be less tomorrow for years to come.

This is just a reality. A grim reality.

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Comment by Ben Jones
2016-03-21 10:30:27

‘the main cause for them complaining about ‘lack of inventory’

There’s a reason that HAMP loans are on radio ads all day. It’s only the UHS that go on about supply. The builders have made it clar there isn’t natural demand. Listen to this whimsy:

‘The next housing crisis is here. And this time the crisis is all about one thing: supply.’

‘This report also showed that sales to individual investors — or buyers who intend to flip the home for a profit — accounted for 18% of existing homes sold in February, the highest share since April 2014. Almost two-thirds of these buyers paid cash.’

‘New-home sales have been a major laggard. “In our view, the recovery in existing home sales has been led by rising home prices, which has brought additional supply into the market,” Buchta said. This view which is consistent with the increase in investors buying existing homes as well as the high number of cash-only sales, which accounted for 25% of transactions in February. “The lag in new home sales, on the other hand, is more reflective of the economy as a whole and has been adversely impacted by sluggish wage growth and tight credit windows.”

‘If we take the view that the jobs being created aren’t that great — which is an argument for another post — then what we’re going to see is a rising class of renters.’

“These low paying jobs are not the type of job that are conducive to buying a home,” Tchir wrote. “The first problem is saving for the down payment — a Herculean task in itself. The second problem, and the one that I think is addressed less frequently, is who really wants to commit to an area when the job isn’t that good and may not be stable?”

‘And if we consider that the economy is, as much as anything, a confidence game, the reality is that instability and imminent collapse have been the dominant psychological themes for both consumers and investors since the crisis.’

‘So we can hit on the theme that the US economy is not heading for recession time and time again, but there is a reason Donald Trump is leading in the Republican polls: People do not believe in this economy.’

http://finance.yahoo.com/news/next-housing-crisis-152505885.html

‘the economy is, as much as anything, a confidence game’

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Comment by Bluto
2016-03-21 13:19:08

Yep, and in order to sell and at least break even you might need maybe 10% equity or so to cover the commission, inspections, fees, pest report clearance, repairs, etc. For example when I sold my last place the city required a sewer lateral inspection, mine failed and repairs were $5K. I had lots of equity so the contractor was willing to be paid out of escrow…

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Comment by Jake
2016-03-21 13:30:29

What was their reason for failing it?

 
 
 
 
Comment by Ben Jones
2016-03-21 09:47:47

‘Buy now because prices are going up’

I just might if I can sell my cardboard box.

Buy *because* prices are going up. Buy now. Sales are way up but jump in now. It’s almost like this UHS is trying to create urgency.

Comment by inchbyinch
2016-03-21 16:34:40

I saw a sign on a real estate office door this morning. “Scripts and Dialogue Class” tonight. It’s an acting job, but so blatant? lol

Our floor plan just sold for $525K and friends tell us to sell now. My question is “And where can we go for $550 mo?” We’ll stay put. It’s nice being free and clear.

Comment by Jake
2016-03-21 18:24:21

Plenty of places if you hadn’t paid a lifetime of earnings for a shack that you can’t get your money out of.

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Comment by Montana
2016-03-21 19:32:16

Lol…role play…how I hated that.

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Comment by CalifoH20
2016-03-21 11:25:20

Change your oil every 3k miles. Get a haircut every 4 weeks.

 
 
Comment by Senior Housing Analyst
2016-03-21 09:51:17

Corvallis, OR Housing Market Craters; Prices Plunge 7% YoY As Borrowers Walk Away

http://www.zillow.com/corvallis-or/home-values/

 
Comment by Puggs
2016-03-21 11:03:31

‘It’s a fantastic time to buy. The price points are really affordable for many people,’ she said. But market trends show they’re on the rise, she added. ‘Buy now because prices are going up.’”

Riiiiiiiiiiiiiiiiight!

 
Comment by Senior Housing Analyst
2016-03-21 12:59:54

Winter Garden, FL Housing Market Implodes; Prices Plunge 12% YoY

http://www.zillow.com/winter-garden-fl/home-values/

 
Comment by rj chicago
Comment by rms
2016-03-21 23:50:16

More niche market propaganda… hence, 0 comments. Reminds me of the Seagrams Crown Royal billboards in the urine soaked ghettos.

 
 
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