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It Seems Like A Buyer’s Market Now

A report from Bloomberg on New York. “Amazon.com Inc.’s decision to drop its expansion plans in the Long Island City neighborhood of Queens plunged local real estate brokers into despair — just months after the euphoria that followed the company’s announcement that it would open offices there and bring thousands of jobs. But not just despair. Also anger.”

“The sign displayed in the storefront of a Douglas Elliman brokerage in Long Island City summed up the real estate industry’s attitude toward the controversial deal. ‘This business supports Amazon,’ it read. Someone inside pulled the sign down after the company released a statement Thursday that it was pulling out.”

“Jason Haber, a broker with Warburg Realty Partnership Ltd., said at least 10 clients have already called to discuss what Amazon’s absence from Long Island City means for them. He said he hopes none of them back out of deals over the news, but ‘real estate is an emotional thing.'”

“‘We literally just threw the baby out with the bath water, Haber said. ‘You want the Rockefellers, the Carnegies, the Bezos coming to our shores and that economic growth that comes with them. We’re not setting up New York for success in the 21st Century. What happened today is a real tragedy.'”

The Houston Chronicle in Texas. “Houston-area home sales fell for the third straight month in January as buyers closed on 362 fewer homes than they did last year at the same time, further proof that the once-hot local housing market is returning to a more moderate pace.”

“Sales volumes fell in all segments of the market, from entry-level to luxury, which saw its first decline in 12 months, according to a the Houston Association of Realtors. Darel Daik, whose company makes loans to real estate investors, said he’s noticed a slowdown professionally and personally. He recently signed a contract for a home in Rice Military and said that since he began looking a few months ago, he noticed builders cutting their asking prices in the inner-loop neighborhood near Memorial Park.”

“Daik has agreed to pay $475,000 for a new two-story townhome with three bedrooms, three-and-a-half bathrooms and a small yard and covered patio. The list price was $499,000. ‘It seems like a buyer’s market now,’ he said.”

“On the for-sale side, buyers have more options than they did last year at this time. The number of properties for sale last month was up 16.8 percent to 38,872.”

From My News 4 in Nevada. “After a 14 percent climb in 2018 home prices dipped slightly at the end of last year. Experts refer to that dip as a small correction in an otherwise sizzling housing market here in Northern Nevada.”

“Angelica Reyes is President of the Reno Sparks Association of Realtors. She’s seen our market rise and fall over the years. Reyes says prices will likely continue to rise but at a slower rate than we’ve seen in recent years. ‘We don’t have a crystal ball but we don’t predict it’s going to be a bubble of any sort,’ said Reyes.”

“Lack of inventory and a shortage of labor continue to big challenges. But in Reno, city officials say they’ve approved more residential building permits than at any time in the last ten years.”

The Bay Area Newsgroup in California. “High home prices, expanding rush hours and maybe the futile search for a cheap cup of coffee and affordable avocado toast adds up to one thing — the Bay Area is getting more popular to leave.”

“An annual study by Joint Venture Silicon Valley confirms the steady migration away from the region. Silicon Valley gained roughly 20,500 foreign immigrants last year, while 22,300 residents moved to other regions and states.”

“Los Gatos agent Brian Schwatka has seen his business grow by focusing on older residents looking to leave Silicon Valley. The Sacramento region has been a favorite destination for several of his clients, he said, as well as Santa Rosa. ‘People are looking for some sort of equivalent to the Bay Area,’ he said. ‘It’s a mass exodus.'”

“Many of his clients, he said, share a common refrain: ‘It just doesn’t feel like the old Silicon Valley anymore.'”

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This Post Has 75 Comments

  1. ‘On the for-sale side, buyers have more options than they did last year at this time. The number of properties for sale last month was up 16.8 percent to 38,872’

    Is that a lot?

  3. Anecdotal regarding all the recent Denver articles posted:

    The local King Sooper’s (Kroger) grocery now has a security guard monitoring access to the customer restrooms. I asked him if the heroin/fentanyl has gotten that bad and he replied yeah, that and other things.

    Denver = the next San Francisco, overrun with junkies and homeless, and it’s a sanctuary city.

    I’ve been working from 6 to 2:30 the past few months and the traffic and road rage at 5:30am is the worst I’ve seen in the near decade I’ve been renting here.

    Don’t buy overpriced real estate here, Denver is a sh*thole.

      1. “Are the immigrants among the junkies and homeless?”

        I believe the point that the previous poster was making is that any city that ignores the law, as it relates to illegal aliens from third world countries, is more likely to also choose to not enforce the law on things like petty theft, pissing and sh*tting on the sidewalks, used hypodermic needles being discarded in the gutters and junkies/homeless people sleeping (or performing sex acts for cash) in Kroger’s bathrooms.

      1. Taxpayers – Both are small sample sizes so not much to gain from either data point. My observation from formerly 20001 and now 20009 is that DC metro real estate has ground to a halt as a result of higher interest rates and a disproportional impact from the tax code change.

        Demographics are also radically changing buyer behavior. My family can easily afford to buy, but we are opting to rent because owning a home ties people down and I see no indication that homes will go up in value over the next five years. If a house isn’t appreciating in value by 3-5% per year, it’s an enormous liability. We love the freedom and convenience that renting provides especially at a market top. We also don’t want to buy some tired baby boomer sh*t shack for $800K+ that they purchased for $150K 30 years ago.

  5. When I’ve been looking at housing near Ann Arbor MI, just outside where it’s a little cheaper and where the water is LESS POISONOUS at least for now, it’s been notable how impatient all the drivers are. I have no idea what their commutes before getting to their exits and subdivisions are like (I am sure that they include potholes galore, though!) but they are so fussy and unfriendly. I think overpaying for housing makes people very grumpy, even where it is not as over-priced as elsewhere.

    1. Crazyhouse – It’s not the overpriced housing but the horrible lifestyle decision of moving somewhere that requires dependence on an automobile as a form of transportation.

      My sister-in-law claims she can’t afford to live closer to work and can’t lose weight as two brand new compact SUV’s sit in the driveway. Suburbanites don’t understand that car commutes cost money and are terrible for your physical and emotional well-being.

      Two 20 mile car commutes in newish cars costs at least $1,200 a month which would go along way if you moved closer to work, ditched the car, and either walked or rode your bike.

      1. yeah, well, my husband wants to move out to this particular area outside of town because 1)it’s more reasonably priced (we could afford more than these cost, and live closer in, but he likes to save money rather than spend it and thus spending more than a certain %age of our take-home on housing becomes seriously health-endangeringly *stressful* indeed!) and 2) he could actually ride his bike to work from there, there are some dirt roads he’d feel safe-ish on, but it’s a 45-60 minute ride. He claims he would do this, but I think it’s unreasonable to imagine this would work for more than a couple times a week, even as enthusiastic about biking as he is. We have one car, 2004 we’re holding onto and saving from the landfill, he bikes from a 5 minute or less ride distance now, but anything close to town is waaaay overpriced in our estimation and has toxic water.
        I think these grumpy drivers may be unfit, perhaps, but some of them are likely also house-poor even living a car-commute away from work. There is also *nothing* but not-very-attractive farmland and sad grey subs around…to get to decent shopping for just food you have to drive on these nasty roads with these dots of subs of homes all up on top of each other. And some of them–as I learned when I checked utility records in the nearby ‘legacy’ neighborhoods of older cheaper homes–are paying their water $100 at a time on $400 charges, presumably hoping that will do because it’s either that or their car payment late again. And these are insanely cheap homes they must be somehow working for even *less* than $10/hour!

    2. it’s been notable how impatient all the drivers are. Many/most Michigan drivers are like that. I was born there, lived years there & return several times every year & stay weeks at a time. The basic rules of Michigan drivers are to go as fast as you can until (1) you get there or (2) your vehicle is no longer capable of self-propulsion. In bad weather or with limited sight distance, go even faster. That explains the massive mjulti-car pileups that occur during winter weather events. After spending most of last September driving around the state, I drove to eastern Massachusetts & camped out at Hingham. I drove several times into the heart of downtown Boston during MLB finals at Fenway Park. Traffic was tight and congested, the drivers were attentive & courteous in their own way — much better than the average Michigan driver in rush hour traffic. One thing I particularly noted, Mass. drivers are much less prone to cut off people in multilane traffic, and much less prone to weave from one lane to another unless it actually results in their forward progress. Mich. drivers seem to like cutting off other drivers and weave from lane to lane for the sheer cussedness of it all. Has nothing to do with Ann Arbor in particular, it’s like that all over.

    1. wow student housing makes for 1000/bedroom even without a view here in MI, with ocean and campus right next door, I guess you’re talking double that!
      College loans means student housing isn’t “real money”, or else it is and UCSB is such a bargain for in-staters who can get in the ‘rents are happy to pay 20k a year for rent because the total bill is still way less than private school

    2. I had to laugh at the first garbage day in Isla Vista after the Spring quarter was over. The trash piles even had furniture, refrigerators, televisions, etc., anything that wouldn’t fit in (or on) the car. Lots of tanned eye candy too in worn denim shorts frayed right up to the bottom of the back pockets. Sunny California!

        1. In the Boston area end of semester is called the “Alston Christmas” owing to all the stuff left on the street. Lots of students from Boston university, MIT, and Harvard in that area.

      2. That’s been the uniform even in never sunny AA MI lol, I’m guessing just lots paler and a tad chunkier after the lululemon yoga pants under Canada Goose 50 lb down coat uniform for the 6 month winter is finally discarded! I think the local goodwills have cut down on the dumpster opps by arranging to take stuff … the streets are tight near campus and dumpsters are really not a thing so the sidewalks used to be piled high to a dangerous point for pedestrians!

    3. I remember the couches burning on Del Playa back in the day. Wasn’t much cheaper. Bunk beds in most rooms.

      1. Spent many Halloweens in IV sleeping in my 1969 Westfalia or on the floor at a strangers place. Getting up and surfing campus point.

  7. “prices will likely continue to rise but at a slower rate than we’ve seen in recent years. ”

    It’s like a broken record. You read similar lines in other articles, in other areas, when the decline starts become obvious in the data. This is what Seattle and Denver “experts” where quoting not too long ago.

  8. I’m hearing the term “plateau” here in MI from the realtors. Which is big! They had been saying well, you know, we’re so hot right now. Now they’re shocked at the levels of increases people were asking for and getting as recently as spring and summer 2018. Maybe the “plateau” is in part because of the poisons in our environment that the GOP controlled state legislature just voted to not only not even observe EPA guidelines for, but to have business-panels decide which toxins they feel they need to clean up and which they don’t. We are the stewards of a couple large fresh-water bodies, but you know, the science isn’t completely ‘clear’ yet how much of each substance will definitely cause disease so we can dump in the meantime.

    1. ” … busine$$-panels$ decide which toxin$ they feel they need to clean up and which they don’t. ”

      Bidnes$$.panel$ are re$pon$ible $elf.regulators$ & public.benevolent over$eer$, tru$t them, unque$tionably!

      Go Flint, Michigan!

    1. When you buy a house, you might as well consider it an anchor in the ground on a plot of earth which you are tethered to until the day you sell it – an anchor which needs eternal maintenance and repair.

      You also better hope you never lose your job, because that anchor is not moveable, so you are forced to find an equal paying job in the same anchorhood or you’re screwed.

  11. “Haber said. ‘You want the Rockefellers, the Carnegies, the Bezos coming to our shores and that economic growth that comes with them.”

    Say there Ahh..bear. I think you were expecting some of that money to wash up over the transom into your greedy little hands. Some of the rest of us didn’t want to give Amazon and little grubs like you billions of dollars to infest our shores.

    1. “the Rockefeller$, the Carnegie$, the Bezo$ coming to our shore$ … ”

      Actually, eye don’t think any of.’em wish to live or build$ their Mega.Man$ion $helter.$hack Estate$ … in Queen$

    2. Amen Blue. Equal treatment for corporations is what I’m all about. Don’t give to one corporation tax breaks that you won’t give to all. Otherwise it’s unjust.

  12. “Angelica Reyes is President of the Reno Sparks Association of Realtors. She’s seen our market rise and fall over the years. Reyes says prices will likely continue to rise but at a slower rate than we’ve seen in recent years. ‘We don’t have a crystal ball but we don’t predict it’s going to be a bubble of any sort,’ said Reyes.”

    Angela – you’ve obviously learned nothing from the past decade, because if you had you’d not spew forth such foolish gibberish.

  14. ‘We don’t have a crystal ball but we don’t predict it’s going to be a bubble of any sort,’ said Reyes.”

    The bubble is in the rear-view mirror now, Reyes. As far as predictions, everyone who bought since 2009 is on that express train to Schlongville, population you.

  15. Hey All

    I am meeting with Thornberg next week … he is an old friend of mine from 2006.

    Any questions I should ask him? I know he has said there is no bubble and many here have been commenting about him. I usually only talk about family and fun with him but might be nice to understand why he thinks it is different this time around.

    Also not sure if you guys remember me… I was at the vegas meeting with my wife. I was around 30 at the time and still tall.

    Cheers

    1. “Any questions I should ask him?”

      Why has the federal debt been growing faster than the GDP while the economy is supposedly strong?

    3. Yeah, ask him how it might bee po$$ible for America to build affordable $helter.$hack home$ for the living survivors of a middle.cla$$ economic$ war that has raged on for the last 33 year$.

      Like was made po$$ible @ the ending of WWll , when 450,000 future wage earner$ returned state side in a period of 16 months.

      (What is his definition of luxury?)

      Iffin’ a saw a photo, eyes might remembers you … (That hotel is quite spooky to me now!)

      1. Correction: “when 450,000 (per month) future wage earner$ returned state side in a period of 16 months.”

    4. Is he still 100% certain that California housing prices won’t go down any time soon? And is this something he just says to the press, or does he really believe it?

      1. How ’bout$ To$$ing in some counter.point$?

        Blame ‘exhaustion,’ says Charles Hugh Smith:

        “He explains that conventional economics has no answer for “exhaustion,” so the government attempts to goose borrowing, lowering rates and sluicing limitless liquidity into the financial system.

        This time, “exhaustion” will be the culprit. “Exhaustion of the pell-mell expansion of credit, exhaustion in the household and small business sectors as real-world price increases continue exceeding wage and revenue gains, exhaustion of margin expansion in stocks, and exhaustion of Corporate America’s policy of masking inflation by reducing quality and quantity,” Smith writes.”

        Why a ‘sell everything’ rece$$ion could bring ‘horrendou$ con$equences’
        Published: Feb 14, 2019 | MarketWatch
        By: SHAWN LANGLOIS |SOCIAL-MEDIA EDITOR

        1. Corporate America’s policy of masking inflation by reducing quality and quantity,” Smith writes.

          Smaller and smaller ice cream tubs anyone?

        2. “He explains that conventional economics has no answer for “exhaustion,”

          Curiously, I always have assumed ‘Great Depression’ was a description of exactly this state of economic collapse, as a natural sequel to ‘The Roaring Twenties.’

      1. “How do you see this debt crisis ending in California?”

        My response would be: “Not a problem. We will just borrow our way out of it”.

        😁

      2. There’s no law on the books or in physics that says the dollar has to be the world’s reserve currency. For example, look at your own savings account… will it buy more house, automobile, college education or health care than ten years ago? Besides, California won’t be able to dig-out by selling bonds, and it doesn’t have a printing press.

    1. The amazon thing is like the Chicago Olympics. I know a few people that bought property on the South Side planning to cash in on the bonanza.

  18. Uh oh, National Emergency tomorrow! Gather up your scrap metal, turn down those thermostats…we will survive!

    Your country needs you!

  20. I’ve lived in Reno, Las Vegas, and LA. Reno is nothing more than a college town with old run down casinos strewn throughout the city. It’s like old Las Vegas vomited near a river and ski resorts and then passed out. There is open land from Stead to Sparks to Carson City and a population that is made up primarily of poor locals,drug addicts, retirees, college kids, and a small tech community. There aren’t enough rich locals to support prices in the area and UNR is about the furthest you can get from Stanford imaginable. Reno at this moment is a place where people think they want to retire because the river seems charming only to realize the only good walking areas are either filled with homeless (Downtown) or old people waiting to die (the mall). In California terms, it’s like Hemet and California City got married and highjacked Chumash and the Pala along the way.

    That whole area is going to be selling 50 percent of current prices within three to four years.

    1. “it’s like Hemet and California City got married … ”

      That’$ quite poetica! … (In a real e$tate link up $ick.$ort.way)

  22. US stock futures are up for Friday. Does this indicate that we are winning the trade war?

    Asian markets fall as global uncertainty grows
    By Associated Press and Marketwatch
    Published: Feb 15, 2019 3:35 a.m. ET
    U.S. retail sales tumble, while little headway apparent in U.S.-China trade talks
    Bloomberg News
    Visitors walk near the Eiffel Tower attraction at the Parisian Macao casino resort, operated by Sands China Ltd., in Macau, China. Sands China shares fell Friday.

    Asian shares were broadly lower on Friday, tracking a weak Wall Street session as traders awaited the conclusion of U.S.-China talks in Beijing.

    Japan’s benchmark Nikkei 225 (NIK, -1.13%) retreated 1.1% and the Kospi (SEU, -1.34%) in South Korea tumbled 1.3%. Hong Kong’s Hang Seng (HSI, -1.87%) gave up 1.9% while the Shanghai Composite (SHCOMP, -1.37%) closed down 1.4%.
    …

    1. Yeah, the downpour has been horrendous. From Apple Valley to Rancho Cucamonga were were going like 30 mph on I-15. Just pulled into Newport Beach yesterday. Off to Disneyland today. Hopefully all the locals stay home because of the rain!

  25. Does anyone have boots on the ground in Philly?

    We are considering a possible move and I’ve been checking it out via the interwebs. It seems like super high property taxes (I’m seeing $10k a year on $300k shacks) PLUS the 4% city wage tax (IN ADDITION TO Pennsylvania state tax) make Philly uniquely fooked.

    1. In Camden County, NJ, across from Philly, the property tax rate is 5.35%. That $300k house is taxed at $15,900/year.

      You pay the government $1325/Mon before you get out of bed….

    2. Just had this chat with a friend:
      ——————————————————-
      Friend: dude assumig the offers are reasonably comparable…philly is a no brainer

      Friend: it’s a far more interesting place and it’s not very expensive my friend just bought two houses there one of them only required like $16,000 down

      Me: is he gonna rent that one?

      Friend: yea that’s his plan

      ———————————————————-

      I sense this ends badly for my friend’s friend.

      1. srsly, do peeps when they move to a city buy *pairs* of houses, one to live in and one to rent out?! and with just a small percentage down?! I mean, I guess that’s what making money on leverage is all about lol but do people who do this have considerable reserves to deal with the possibility of….gasp…losses or inability to rent out as expected or at all?!

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