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In The Past, It Might Have Sold

A report from the Orange County Register in California. “Southern California home sales hit a four-year low this past summer as rising costs and a lack of affordable homes cut into home shopper’s buying power, real estate data firm CoreLogic reported. ‘The number of listings is starting to increase, but the buyers are not there,’ said Newport Beach mortgage banker Kevin Budde. ‘Everyone’s feeling the pain and looking for reasons why.'”

“August’s sales tally of 22,261 transactions was down for the ninth time in the past 12 months, a sign that home buyers increasingly are being priced out of the market, analysts said. Sales for the June-through-August period fell 6.8 percent in the past 12 months, making the summer of 2018 the slowest since 2014.”

“August transactions were down from year-ago levels in all six Southern California counties. Orange County, the region’s priciest housing market, had the biggest decline. Transactions there were off 10.9 percent, followed by an 8.9 percent drop in San Diego County and an 8.5 percent decrease in Los Angeles County.”

“Home listings ballooned as sales slowed. Southern California had 45,187 homes for sale as of Sept. 20, the highest number of listings in three years, according to Reports On Housing.”

The Los Angeles Times. “Southern California home prices kept rising in August, but sales fell as questions grow over whether the torrid housing market is finally cooling. Some real estate agents said they are dealing with more supply and less demand.”

“Tregg Rustad, an agent who specializes in Los Angeles County’s Westside, said the dynamic is most noticeable on the high end — particularly for homes whose sellers are trying for what he called aspirational pricing. He said a house he listed in Santa Monica for $3 million has sat for two months with no serious bids.”

“‘In the past, it might have sold,’ Rustad said.”

“Agent Kim Ho, who finds fixer-uppers in more affordable communities in and around Downey for investors, said those investors are passing on more deals because the homes they have renovated are taking longer to sell. ‘I have seen them be a lot more cautious in the past couple of months,’ Ho said.”

“As inventory grows, price cuts are becoming more common in all six Southern California counties compared with a year earlier, Zillow data show, indicating more than seasonal factors could be at play.”

“In Los Angeles County, 15.9% of listings had at least one price cut in August, compared with 10.6% a year earlier. The share of listings with price cuts rose in Orange County to 19.2% from 12.7%; in Riverside County to 19.8% from 13.4%, in San Bernardino County to 17.5% from 12.6%, in Ventura County to 18.9% from 13.8%, and in San Diego County to 22.9% from 12.9%.”

From Mansion Global. “A 100-year-old bungalow so small it could fit inside a regulation basketball court five times has sold in Palo Alto, California, for $1.78 million. The buyer, a software engineer at Google, closed on the home at the end of August, property records show.”

“He bought the property straight from the lender, who repossessed the property through foreclosure auction in May, a legal representative involved in the foreclosure confirmed.”

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This Post Has 26 Comments

  1. ‘He bought the property straight from the lender, who repossessed the property through foreclosure auction in May’

    Oh dear!

    1. Inventory doubled, price per square foot down 9% YoY. I don’t know that you need to blame tech layoffs for this, just standard issue gravity.

  4. ‘The number of listings is starting to increase, but the buyers are not there,’ said Newport Beach mortgage banker Kevin Budde. ‘Everyone’s feeling the pain and looking for reasons why.’

    Annnd the gravy train starts to reverse. Kevin needs to sell his rental, gets laid off, walks away, etc. Not to mention all the construction related people about to get canned.

    1. but the buyers are not there,’ said Newport Beach mortgage banker Kevin Budde. ‘Everyone’s feeling the pain and looking for reasons why

      Well I can take a guess here, maybe back in China trying to figure out how to unload the shack they bought months before as an “investment”

    3. “…said Newport Beach mortgage banker Kevin Budde.
      ‘Everyone’s feeling the pain and looking for reasons why.’…”

      Kevin, let me refresh your amensia

      As recently as a few months ago,

      1. They are running out of land.
      2. Housing has reach a new permanent plateau.
      3. Buy now or be priced out forever.
      4. Prices will rise 20% for ever.
      5. Boatloads of Chinese are bringing in boatloads of cash.
      6. Low interest rates will stay low forever.
      7. Renting is for losers.
      8. Real estate NEVER goes down in value.
      9. Lawrence Yun said….
      10. Suzanne said we can do this.

    4. The solution to rising inventories and a dearth of buyers is mindlessly simple: LOWER THE PRICES, AND HOUSING WILL START TO SELL LIKE HOTCAKES AGAIN.

    1. Wow. Market temperature rated as cold. See difference between median list and median sales price. Median prices not entirely precise and succeptible to bias, but that is a pretty significant difference.

  6. ‘Tregg Rustad, an agent who specializes in Los Angeles County’s Westside, said the dynamic is most noticeable on the high end’

    I was thinking about this. Where’s the housing bubble ebola right now? San Jose, Palo Alto, Sonoma, Orange County, San Diego, expensive LA. What do they have in common? Pricey!

    You may convince yourself you need a one million dollar shack (in California). But no one really needs a three million dollar shack. So it’s a form of speculating. If you could have been fine at a lower level and you borrowed for the glam, you were likely expecting that sweet equity to walk into your bank account.

    1. Ben, your comment prompted me to do a little filtered search of two good West LA zip codes. They are both prime areas with some beautiful homes, some horrific McMansions and million dollar shacks galore, but they are not Bel-Air or the top areas of Beverly Hills where prices (and sizes) are truly stratospheric.
      I went on Zillow and searched “recently sold 3 bed house” in the 90064 zip code. A quick check of the original listing prize versus the actual sell price told me that most of the homes that come up in the first page sold for less than asking. There’s also a couple of strange things like a house that “sold” for $7,500 (??)

      https://www.zillow.com/homes/recently_sold/Los-Angeles-CA-90064/house_type/20463121_zpid/96045_rid/3-_beds/globalrelevanceex_sort/34.076656,-118.38348,33.994006,-118.47652_rect/13_zm/

      and one above asking
      https://www.zillow.com/homes/recently_sold/Los-Angeles-CA-90064/house_type/20464555_zpid/96045_rid/3-_beds/globalrelevanceex_sort/34.076656,-118.38348,33.994006,-118.47652_rect/13_zm/

      In the 90024 (super, super nice zip code, around UCLA) I see two or three that still sold above asking, but also several quite a bit below, which is definitely a change for this zip code, especially as it has a stock of really beautiful homes that people covet and are not ugly McMansions.

  14. I’m very impressed with Jerome Powell for not caving to political pressure to keep the punchbowl forever spiked.

    1. I’ll give Powell credit for attempting to regain some of the Fed’s lost credibility, after the enormous damage done by “Zimbabwe Ben” Bernanke and Yellen the Felon, who made no pretense of being anything other than craven toadies of the Wall Street investment banks.

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