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Clearly, Dallas, Denver, And Houston Are The Canaries In The Coal Mine

A report form the Orange County Register in California. “April was the second straight month L.A. County house prices failed to beat inflation. Orange County price gains have been below the inflation rate since November. Orange County house prices were just 1% above year-ago levels in April, while prices in Los Angeles County increased by a mere 2.3%, CoreLogic reported. That’s not only the smallest appreciation rate in seven years, but home-value gains also failed to beat the L.A.-Orange County inflation rate of 3.3%.”

The Denver Channel in Colorado. “The number of homes for sale in the Denver metro area saw another big jump last month, reaching its highest level in nearly six years. According to the Denver Metro Association of Realtors, May ended with 8,891 active listings, an increase of nearly 27 percent from the month before and a 38 percent increase from May 2018.”

“‘There has also been more negotiating,’ said DMAR Market Trends Committee Chair and Denver-area Realtor Jill Schafer. ‘The close-to-list price ratio dropped to 99.35 percent year to date. At this point in the past four years, sellers were getting, on average, more than asking price. Home sellers still have control across the housing price ranges, but a little give and take makes buyers feel better.'”

From Dansville Online in New York. “Steuben County figures for April were largely reflective of continued momentum across the state, with more new listings, closed sales and a hike in median prices. In Allegany County, figures were more of a mixed bag. Closed sales dipped by 15.8 percent from April 2018 and buyers failed to keep pace with new listings, which rose 25.5 percent over the span to 59 listings.”

“The glut of new listings resulted in the number of homes that remain on the market (234) up 24.5 percent, and added significantly to the months of housing supply remaining, which was up 40.7 percent to 8.3 months.”

The Milwaukee Business Journal on Wisconsin. “The owner of one of the most expensive condos on the market in downtown Milwaukee, which has its own waterfall and an 11-person home theater, has again reduced the price of the penthouse unit, which now has an asking price of $2.4 million.”

“The penthouse unit was originally put on the sale block in 2015 for $2.8 million and is listed by Chris Corley of Corley Real Estate. It has been on and off the market in recent years, but was put back on in March with an asking price of $2,495,000. It is one of just seven condos on the market in downtown Milwaukee with an asking price of more than $1 million. Online listings show that two currently have accepted offers.”

“Previously, Corley said the condo was included in a January 2016 story on Realtor.com that listed nine penthouses across the country ‘to die for,’ a list that included condos in Los Angeles and New York City. ‘With almost 11,000 square feet of indoor and outdoor space, spectacular views and centrally located makes it ideal for private functions and fundraisers,’ he said.”

The Houston Chronicle in Texas. “While $7 million could buy an opulent estate in Houston, that’s merely the price reduction of one River Oaks home. The 16,931-square-foot, three-story Georgian-style mansion at 1721 River Oaks was listed at $16.95 million in 2015, then reduced to $14.95 million in 2017. It’s now being marketed for $9.9 million by Martha Turner Sotheby’s International Realty agent Walter Bering. The most recent reduction was a $1.1 price cut in March.”

From The M Report. “Demand for homeownership is waning as more residents prefer renting over buying a home, according to the latest national index produced by the Florida Atlantic University (FAU) and Florida International University faculty.”

“The Index’s scores approaching 1 indicate very little chance for families that own to outperform those that rent and reinvest in terms of wealth creation. Scores approaching zero suggest indifference in terms of wealth accumulation between owning and building equity versus renting and reinvesting. Scores approaching -1 strongly favor homeownership to produce greater wealth for families.”

“According to Ken H. Johnson, Ph.D., a real estate economist, and one of the creators of the BH&J Index, the current downward momentum is not surprising since the nation’s housing market is entering ‘the late stages of the current housing cycle.’ Of the 23 metros tracked on the index, data indicates that 19 are in rent territory.”

“The index indicated that markets experiencing dramatic to slight downward pressure on the demand for homeownership are Dallas (.978), Denver (.867), Houston (.773), Seattle (.424), Pittsburgh (.414), Kansas City (.392), Miami (.349), Portland (.327), San Francisco (.311), Atlanta (.276), Los Angeles (.224), San Diego (.159), Philadelphia (.147), Minneapolis (.107), Honolulu (.076), St. Louis (.076), Boston (.041), Milwaukee (.030), and Cincinnati (.025).”

“‘For markets near zero, I have very little concern about future home prices,’ Johnson said. ‘Clearly, however, Dallas, Denver, and Houston are the canaries in the coal mine. As they go, so should the markets like Seattle, Pittsburgh, Kansas City, Miami, Portland, and San Francisco.'”

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This Post Has 48 Comments

  1. ‘May ended with 8,891 active listings, an increase of nearly 27 percent from the month before and a 38 percent increase from May 2018’

    Where do these thousands of shacks keep coming from?

    ‘a little give and take makes buyers feel better’

    Bzzz, wrong answer Jill, not good enough.

    1. “Home sellers still have control”

      Sure they do, REALTOR.

      The best way to make $100,000 in three years is to buy a house in Denver, right?

  3. ‘Scores approaching zero suggest indifference in terms of wealth accumulation between owning and building equity versus renting and reinvesting’

    ‘April was the second straight month L.A. County house prices failed to beat inflation. Orange County price gains have been below the inflation rate since November’

    That doesn’t sound like wealth building.

  4. ‘The penthouse unit was originally put on the sale block in 2015 for $2.8 million…The 16,931-square-foot, three-story Georgian-style mansion at 1721 River Oaks was listed at $16.95 million in 2015, then reduced to $14.95 million in 2017. It’s now being marketed for $9.9 million’

    Rich people don’t mind chasing the market down for years. They can afford it. They also leave the AC on with the doors and windows open in the summer while they vacation in Europe. Or so we’re told.

    1. A lot of wealthy people are extremely cheap. The Disney heiress comes to mind, when she was talking about how a sale on toilet paper was exciting for her or her mother, I can’t remember which.

  5. I was told by someone who recently moved here from New York that Denver is “permanently more popular” and that house prices will soon be on par with LA. That’s why they bought a slot home for $700k because the price will only ever go up. Also they’re planning on moving back to New York in a few years.

    People like them are exactly why Denver has exploded recently.

    1. That’s the old “we’re just catching up to Vancouver” bit. You can also substitute Sydney, Hong Kong, etc.

        2. When I worked at Cisco in Costa Mesa, this place is just a few miles west in Huntington Beach. So sad to see them go! LOL

          /S

        3. “The closing of the two franchises could be more bad news for parent company Realogy, which just recorded a dismal quarterly earnings statement with lower revenue than last year and has seen its stock price erode rapidly over the last few months and years.”

          Future’s so bright gotta wear shades!

    2. They are also fooling themselves that there are upend neighbourhoods that will not fall much in value because ‘everyone wants to live there’.

      Think Cherry Creek or Lowry etc. They thing that only places like Auora will go down in price

      1. And yet, property taxes were hiked really fast (3x$ in 3 years) in my area near Denver. The taxman won’t be revising that any time soon!

    4. It’s related to all the weed and ‘shrooms in Denver. That stuff gets into the water supply.

      1. “That stuff gets into the water supply.”

        Everything is in the water supply, e.g., agricultural, industrial and pharmaceutical. Despite having municipal water we installed an under-the-sink reverse-osmosis system.

    1. I’m in Boise. On the Nextdoor app transplants are complaining about their increasing property tax .. “it’s only supposed to be fixed at 3%”

      Um not if the assessed value goes up. Guess they didn’t read the tax rules correctly.

      Lot’s of these California transplants are seeing their property taxes go up 16% and now complaining.

      1. Guess they didn’t read the tax rules correctly.

        They’re used to California Proposition 13 that limits property tax increases here.

        1. One comment on the Nextdoor app actually said we need prop 13 in Idaho? You can’t make this shit up

          1. This kind of proves my point that one item in the toolkit for preventing housing bubbles is a property tax. Look at China’s massive overbuilding as a case in point. The have speculation in housing for many reasons, but one of the reasons I believe it is so bad is because they have no property tax which results in carry cost being so low to speculate.

      1. I don’t love or hate Uber. I’m merely a curious spectator as to how this unfolds. But I will say that I would never have gone into any major city pre-Uber and have pulled out a smart phone and been able to get the a ride from the same company all across the country. Also, I didn’t know many part-time taxi drivers who would drive < 10 hours a week. I've run into quite a few of those who genuinely just plug in a couple of hours here and there. Those seem like genuine differences from the localized taxi companies that pre-Uber/Lyft.

  10. “The Index’s scores approaching 1 indicate very little chance for families that own to outperform those that rent and reinvest in terms of wealth creation …

    Denver (.867)”

    Yeah, REALTOR, I’ll pass on your circus of hype and lies housing market.

    I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.

    1) Don’t live downtown.
    2) Don’t live in other hipster neighborhoods.
    3) Rent only as much space as you need (with heat included).

    It’s not that complicated.

      1. Eventually they’ll figure out that the MB, Audi, Volvo, BMW is a badge of financial poverty and insecurity.

        1. Not a badge of insecurity and poverty, necessarily. But anybody who consults the repair records knows that these brands are the worst-engineered and least reliable brands available in the US.

          So if somebody wants to overpay for a crappy car, they really either (a) have so much money that they prefer crappy cars, or (b) aren’t smart enough to know better.

          1. “But anybody who consults the repair records knows that these brands are the worst-engineered and least reliable brands available in the US.”

            Well said.

            And over-engineered comes to mind…just too many moving parts that are software controlled.

          1. Oh Lord, won’t you buy me a Mercedes Benz ?
            My friends all drive Porsches, I must make amends.
            Worked hard all my lifetime, no help from my friends,
            So Lord, won’t you buy me a Mercedes Benz ?

            Oh Lord, my F-250, is a 2004.
            Got dents in the fender, the bed and the door.
            Still does it’s job, hauls plywood me and more.
            So Lord keep it running, cause you know it’s paid for.

      2. Not a huge Benz fan, but since we got a 2001 E320 for free, I now have a more balanced view. It’s just passed 220,000 miles, and is still pretty solid – and is a really nice ride on the highway. And there are really good on line resources for maintaining it on the keep.

        Of course, if it ever requires any truly expensive work, it’s gone. But I’m hoping (and expecting) it to make it to 222,222 miles

        1. Once upon a time there was a poster here who went by WMBZ IIRC. I believe it referred to Mercedes Benz but whether it did or not he was a good dude.

    1. “Florida Lifestyles”

      A sunny place for shady people. That’s my next vacation. Yes, this is my next vacation, I miss that Florida…

  12. Home sellers still have control across the housing price ranges, but a little give and take makes buyers feel better.’”

    News flash, Jill: Mr. Market doesn’t give a rat’s ass about feelings. The hard data paints a picture of a bursting housing bubble and an accelerating downward trajectory. Anyone buying right now is an imbecile who will bitterly regret not waiting and letting the carnage play out before venturing into the market.

  13. The 16,931-square-foot, three-story Georgian-style mansion at 1721 River Oaks was listed at $16.95 million in 2015, then reduced to $14.95 million in 2017. It’s now being marketed for $9.9 million by Martha Turner Sotheby’s International Realty agent Walter Bering. The most recent reduction was a $1.1 price cut in March.”

    The Greedhead Chronicles: “I’m not giving it away” turns to chasing the market down as the galactic sense of entitlement evaporates and the grotesquely overpriced shack sheds millions in Yellen Bux valuations. Better double down on the sawin’ and slashin’, Walter, if you want to offload that white elephant.

  14. Dallas SUCKS. There, I said it. If what you’re selling is less than the FHA limit (386K) you can sell it here. Virtually nothing else. Bring it all down, this was a horrific bubble here.

  15. There are parts of Dallas that are as bad as San Francisco. Really? If you can pay $1.8M for a 2500 square foot house, why would you do it here.

    1. My BIL and SIL are moving from but keeping a Scarsdale roughly 18,000 square foot house on 2.26 acres to a Dallas high-rise condo for tax reasons. It’s all relative!

      1. When they bought the house in August 2007 then doubled the square footage, they put in an elevator for their golden years. Things change.

  16. “… they put in an elevator for their golden years. Things change.”

    ” you cannot directly pursue happine$$” Ari$totle

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