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Buyers Understand That The Market Is Shifting In Their Favor

A report from Forbes on New York. “Though New York already has a ‘mansion tax’—a 1% tax on homes over $1 million—support for the pied-a-terre bill is gaining. ‘Because many of these expensive properties are effective ways for foreign buyers to park capital in a stable region, they are often viewed as fancy safe deposit boxes rather than as residences,’ said Constantine Valhouli, director of research at real estate analytics firm NeighborhoodX.”

“It could hurt sellers, too, with buyers asking for additional contributions or negotiating more. Broker Bonnie Lindebaum at Warburg, already has one seller ready to reduce her home’s listing price if the tax is enacted. ‘I have a seller who was vacillating on the price, but if the tax is implemented, she will definitely reduce it and cut her losses,’ Lindebaum said.”

From Westport Now in Connecticut. “Westport real estate price changes over the past week: I3 Hills Lane $355,000->$347,500, 9 Tiffany Lane $690,000->$670,000, 6 Lyndale Park $749,000->$729,000, 4 Wake Robin Road $999,000->$899,000, 5 Marsh Road $975,000->$925,000, 45 Marion Road $1,065,000->$995,000, 29 Blue Ribbon Drive $1,349,000->$1,299,000, 20 Pequot Trail $1,499,000->$1,450,000, 30 Grassy Plains Rd $1,539,000->$1,495,000, 4 Tamarac Road $1,599,000->$1,575,000, 3 Eno Lane $1,875,000->$1,798,000, 6 The Mews $2,395,000->$1,895,000 *, 3 Pleasant Valley Lane $2,299,000->$2,099,000.”

“*While it is very rare that a single price adjustment is more than 10 percent, a 21 percent price reduction was instituted at 6 The Mews.”

The Bradenton Herald in Florida. “The median price in the Bradenton area has been at or above the $300,000 mark for all but four months of the past year. A bit of encouraging news for prospective home buyers could be found in the latest batch of statistics. There was a jump in inventory and new listings, pointing to a more-balanced market.”

“Single-family home inventory in Manatee County increased by 5.7 percent from last year, while Sarasota County increased by 18 percent. Condo inventory increased by 5.5 percent in Manatee and by 15 percent in Sarasota. ‘Additional inventory could ease rising prices, creating a more balanced market between buyers and sellers,’ said Amy Worth, 2019 president of the Realtor Association of Sarasota and Manatee.”

From Curbed Chicago in Illinois. “After listing for a record-shattering $50 million back in 2016, the ultra-opulent Lincoln Park mansion of insurance magnate Richard Parrillo returned Wednesday with a new asking price of $45 million. The Parrillos claim to have put $65 million into acquiring the land and constructing the palatial residence over the past ten years, says Crain’s. Will the new price tag see the couple recoup $45 million of that investment, or is this latest figure another case of wishful thinking?”

The Denver Post in Colorado. “Mayor Michael Hancock sat and listened for 45 minutes on a recent Saturday morning as three people explained why he should lose his job. The challengers’ attacks were plentiful, but they shared one common theme: the city’s explosive development. They said the city was on ‘an unsustainable path of growth and development,’ that ‘residents have felt ignored,’ and that Denver is ‘dramatically out of balance.”

“‘The density doesn’t bother me. It’s the affordability that makes me sad,’ said Jessica Dominguez, a teacher and real estate agent in the district. ‘I just wish it wasn’t so ugly,’ said Mike Huling.”

“So, when it was finally his turn to speak, the incumbent grinned and adjusted his sport coat. ‘Well, that was fun,’ Hancock told the crowd of local politicos. ‘We suck in Denver, huh?'”

From Mansion Global. “New house sales in the U.S. slowed by 8% in January compared to last year, according to Redfin. January marked the fifth consecutive month that sales of newly built homes fell year-over-year. The slowdown in new-home sales mirrors the nationwide housing market, which saw sales decline 7.6% in January, according to Redfin’s figures.”

“The western part of the U.S. saw the biggest decline in new-home sales, which plummeted 16.5% in January compared to a year ago.”

“‘Buyers understand that the market is shifting in their favor and have become more sensitive to high home prices. That added sensitivity could continue to put a damper on the sales of new homes, which tend to be more expensive than comparable existing ones,’ said Daryl Fairweather, chief economist at Redfin.”

This Post Has 51 Comments
  1. Obama legacies (really minefields) – so many we are still dealing with today.

    ++++

    Dems Nuked the Filibuster to Confirm Him, Then He Turned to Sexual Harassment (Mel Watt)
    Front Page | February 22, 2019 | Daniel Greenfield

    Republicans were concerned that Watt would pursue risky mortgage policies that were popular with Obama’s base, but that had contributed to the recession. Watt already had donors from national financial firms like Bank of America and Goldman Sachs, and had been accused of being bought by them.

    Reid pushed the nuclear button and Watt became the head the Federal Housing Finance Agency. And Watt repaid his Dem backers by announcing a “dramatic” shift to expand mortgages to unqualified borrowers proving that Senate Republican opposition to Watt had been based on facts, not fears.

    Obama celebrated by declaring that Watt was “the right person to protect Americans”.

    But who was going to protect Americans, especially FHFA employees, from Melvin Watt?

    Republican concerns were proven to be valid as risky loans were once again put on the table. Whistleblower complains alleged that the Obama appointee had slashed the FHFA’s auditors, forcing them out, and ruthlessly targeted whistleblowers reporting misconduct to investigators.

    Senator Democrats had killed the filibuster to unleash a reign of corruption and terror at the FHFA.

    https://www.frontpagemag.com/fpm/272898/dems-nuked-filibuster-confirm-him-then-he-turned-daniel-greenfield#disqus_thread

    1. Easy there, big guy. At least give Obama credit for coming through with the hope n’ change he promised the Millennials who flocked to vote for him, who are now prospering thanks to his policies that benefited the 99% over the financial elites.

      Oh, wait….

  2. No “pent-up demand” for $500,000 starter homes happening here:

    “Delinquent U.S. student loans reached a record $166 billion in the fourth quarter. But since “delinquency rates for student loans are likely to understate effective delinquency rates” by about half, according to the Federal Reserve Bank of New York, the figure is probably a far cry from reality. Factoring for understatement would imply that about $333 billion in student debt has not been serviced in at least three months.”

    https://www.bloomberg.com/news/articles/2019-02-22/u-s-student-loan-delinquencies-hit-record

    That’s a third of a trillion dollars, LOLZ.

    “This sucker could go down” — George W. Bush, 2008

    1. The answer is so simple but doesn’t buy the votes of the free sh*t army.

      1. Allow student loans to be discharged in bankruptcy.

      2. Get the US government completely out of the student loan business and guaranteeing student loans.

      3. If a college is expensive and the student needs a loan to attend – then he/she gets it from the bank or that same college. And they then carry risk of any default.

      Result:

      The free market begins to breath again. College tuition cost drop nearly overnight. Those colleges that can’t compete go out of business. Administration layers get slashed and “luxury” student housing becomes extinct.

      Prospective students actually will look at “value” and “payback” for thier decision to attend an institution.

      And students after graduation, if worst comes to worse, can at least get a fresh start and not be debt slaves for 50 years for a poor decision they made when they were a teenager/early 20s.

      1. Good solution. Another way to get a similar result would be to withhold federal grant monies to institutions with high delinquencies, effectively accomplishing the same thing. A billboard along where I drive to work says the following: “Learn to code. You pay $0 until you get hired.” I don’t know the details of this, but I like the general idea in that it seems to be tying the incentives of the education provider to the outcome of its students.

        1. “‘Learn to code. You pay $0 until you get hired.'”

          Hmmmmm … I just happened to have run across this …

          Bootcamps won’t make you a coder. Here’s what will | TechBeacon
          https://techbeacon.com/app-dev-testing/bootcamps-wont-make-you-coder-heres-what-will

          Here’s an interesting snippet …

          “The practice of bootcamps hiring their own graduates as mentors immediately after graduation is widespread, Farag claims. Not only does that help to fill a shortage of teaching assistants, but it’s also an easy way for bootcamps to improve job placement stats. ‘It’s a very common practice,”
          ‘ he says, it’s nothing new, and it’s not restricted to bootcamps. ‘We see law schools doing this all the time.'”

          Churn ’em and burn ’em.

        2. I like the idea of hiring just-graduated students (who probably don’t know nuthn’ in that they just graduated) to become (hopefully very low paid) instructors for two reasons:

          1. I get to snatch back a portion of their income as payment for their training.

          2. I get to pump up the stats of graduates landing a job soon after graduation.

          The perfect situation is to fire the employee the exact moment his debt to the school is paid off so that another graduate can replace him.

          Again, churn and burn.

          1. An article …

            Coding Academies Are Nonsense | TechCrunch
            https://techcrunch.com/2015/10/23/coding-academies-are-nonsense/

            (snip)

            “In 20+ years of professional coding, I’ve never seen someone go from novice to full-fledged programmer in a matter of weeks, yet that seems to be what coding academies are promising, alongside instant employment, a salary big enough to afford a Tesla and the ability to change lives.

            “It’s an ingenious business model. There’s a dearth of skilled coders in the marketplace to fill the five million computing jobs available in this country. For somewhere between free and $36,000, you learn to program computers in less than a year. If you’re one of the lucky few, you will hit your a-ha moment with programming and develop a personal passion for it, as well as land a real job.

            “In 15 years, those hard-won skills will be obsolete — if they ever stuck in the first place. Despite their promises, coding academies don’t manufacture coders. They cast wide nets to discover new talent that has not yet been exposed to code. Most people don’t find coding enthralling or interesting enough to continue to pursue it as a career. Given the changing nature of software, they probably shouldn’t.

            “The best advice for people wanting to learn code? Try before you buy, and by that, I mean figure it out for free. Otherwise, you might find yourself sideways on the career ladder and tens of thousands of dollars poorer. For a dying profession, that’s just not worth it.”

          2. “Old age and treachery will always beat youth and exuberance.” – David Mamet

            A favorite quote. Relates well to my opinion and observation regarding the very lucrative (and oh so easy!) exploitation of today’s youth.

            Nail ’em while they are young and dumb and convert their dumb asses into life-long debt slaves.

            The (oh so easy) road to riches. (Thank you No Child Left Behind.)

            😁

          3. Sumtin’ interesting …

            In October 1957 the USSR launched Spunick which was seen as a truly OMG! event and hence the Space Race was on. NASA was created in 1958 and was allotted a budget and this budget was increased every year until 1966 when NASA’s budget reached around 4.7% of the federal budget. Then … something happened.

            Go here …

            https://en.m.wikipedia.org/wiki/NASA#/media/File%3ANASA-Budget-Federal.svg

            What happened was Vietnam happened and inflation happened and The Great Society happened and all of these happenings sucked money out of NASA’s budget. Which meant … what?

            It meant that many (most?) of the young people who were sucked into Aerospace in the early Sixties due to the ever-expanding space program were getting laid off in the Seventies when the funding for aerospace was cut back. The average run for a career in aerospace was something like fifteen years. Go to college, study hard, get your degree in, say, engineering, then get laid off fifteen years later. This happened.

            Fast forward to today. Replace the term “aerospace worker” with the term “computer coder”. Think of what occurs when a career field gets flooded with graduates and then something happens to the field that causes this demand for coders to dry up.

          4. I suppose it’s different in the web companies like FB and Google etc., but in my field we hire engineers who know something about the product being developed. The fact that they may write some code as part of that development process is just a skill that’s expected, like being able to use Word and Excel. We don’t hire “coders”. From my perspective it sounds like a cargo cult thing.

          5. Replace the term “aerospace worker” with the term “computer coder”.

            In the early ’70s we were having a nice little recession and had already met the big goal of the space program to put a man on the moon. The engineers who worked on the space program had transferable skills to other industries, for example the budding semiconductor segment.

            If all you know is how to write logical arguments in “code” I have no idea what that “technology” transfers to. I learned Fortran IV in the ’70s and never had a use for it later on.

          6. Fair points. I have not looked into the success rate of any of these code academies. I know some software engineers who speak fondly of places like DevMountain in my neck of the woods and Neumont University, which is a for-profit computer science school. I don’t know if these are good bets at all, but what I find interesting is the rise of educational establishments that are tying their pay based on their students’ job prospects. That seems to be a better aligned incentive and one would think the outcomes might be better than simply loading students up on debt with a degree that is useless in the marketplace.

      2. Hey 2 NOPE on the bankruptcy for student loans…unless you return the degree and cancel it. There has to be some penalty for non payment, Again think of the consequences you wont be able to apply or get interviewed for a job that requires a BA or MA because of company or union rules.

        Im ok with working at $12 hour for 10 years in a non profit in exchange for a big reduction or dismissal of the loan. But outright bankruptcy and keeping the degree is just too big a scam waiting to happen.

        1. Then don’t loan the money in the first place.

          Federal backing of student loans, combined with protection against student bankruptcy has but one outcome: literal debt slavery.

          So we end up with these silly measures like student loan forgiveness programs.

          P.S. You might consider being insolvent when the tax bill comes due on that forgiven loan balance.

          1. “Federal backing of student loans, combined with protection against student bankruptcy has but one outcome: literal debt slavery.”

            I thought slavery was abolished by the 13th Amendment, but the banksters have brought it back in so many ways and guises. I suppose this voluntary debt slavery is somewhat different from the involuntary form prohibited under the scope of the 13th Amendment.

        2. aNYCdj… good points. Definitely lots of moral hazard if you let kids just declare bankruptcy to get out of their loans.

      3. Refusing to loan students money so they can pursue worthless BS degrees like Women’s Studies or Music Appreciation is a necessary first step. Only loan money for degrees that will be value-added in helping the special snowflakes get real jobs and be self-supporting (despite the best efforts of our public education system to ensure they graduate as half-educated dolts incapable of critical thinking or analysis, and enamored of the idea they are entitled to a free ride at somebody else’s expense).

        1. Let students pursue any degree they want, but if a significant share of those students graduating with said degree are not getting ROI in their field of study, then you cut off federal aid. Students could still go into any of these so-called BS majors, but they would have to self-fund. Some education is an investment that leads to higher earning power, other education is consumption.

      4. Why is Uncle Sam so opposed to allowing the free market to work its magic? Isn’t it clear that attempts to reward favored groups over others are intrinsically discriminatory, costly, financially destabilizing, and predestined for collapse at the expense of the general public?

        1. the general public

          We have several options to remove a government which does not serve the general public. Some are more pleasant than others.

        2. Why is Uncle Sam so opposed to allowing the free market to work its magic?

          Because that would make life more difficult for some People Who Matter?

          1. The system is designed to make a tiny percentage of the population incredibly rich and powerful. The ones that are rich and powerful like their position and will do anything to defend it. It’s naive to think any hierarchy isn’t subject to massive corruption.

            If our society was rational and efficient, power and wealth would be distributed much more equally than it currently is and the elites absolutely don’t want that.

      5. Multi million dollar boondoggles would be reduced in frequency as well. I hear from people in education that theres a ton of “programs” and “upgrades” that get rolled out and are failures from day one. Right now they just raise tuition and the fools go along. This needs to end. Go back to the days of an old musty gym, not some “modern recreation facility”. Nix the theater/performance halls too – play in the gym. Dont mind the smell of armpits!

    2. “Factoring for understatement would imply that about $333 billion in student debt has not been serviced in at least three months.”

      How many of these 90-day delinquent borrows are currently employed with the federal government?

  3. There should be a “truth in advertisement” law when those in power name a law. Like the “Affordable Care Act” and calling something in NYC a “mansion” if it is worth over $1 million.

    $1 million in NYC gets you a nice 1 bd condo in a OK to nice neighborhood in Manhattan. A 2bd in Brooklyn and a crack shack house on a postage stamp lot in Queens.

    ++++

    A report from Forbes on New York. “Though New York already has a ‘mansion tax’—a 1% tax on homes over $1 million

    1. I like it. Maybe overpriced homes should have to carry warnings similar to cigarette laws: “Going into debt for this property may be harmful to your mental health, finances, relationship, and life prospects.”

  4. She really can’t see the cause and effect on why she is sad.

    The public unions put obama in the White House. This unleashed zero interest rates, TARP, QE1, QE2, QE3, QE4, Operation Twist, HARP, HEMP, Mel Watt, nationalizing Freddie/Fannie, bailout after bailout, record trillion dollar deficits, etc.

    And she wonders why Denver is so unaffordable after generations of being VERY affordable. I know – maybe she can go on strike! It is for the children.

    ++++

    “‘The density doesn’t bother me. It’s the affordability that makes me sad,’ said Jessica Dominguez, a teacher and real estate agent in the district. ‘I just wish it wasn’t so ugly,’ said Mike Huling.”

  5. Can a REALTOR please explain how this jives with the narrative of pent-up demand?

    Existing-home sales fall for third-straight month, hit a 3-year low:

    “First-time buyers haven’t made any progress, and even took a step back in January, making up 29% of all transactions during the month, well below their long-term average 40% share.”

    https://www.marketwatch.com/story/existing-home-sales-fall-for-third-straight-month-hit-a-3-year-low-2019-02-21

    1. We are still in the first inning of the housing bubble v2.0 imploding.

      Average American housing prices are still increasing (YoY).

      So much more is coming…

      +++++

      The median price of a home sold in February was $247,500, up 2.8% compared to a year ago. That was the slowest annual price growth since 2012, and homes were on the market for an average of 49 days, up from 46 days in December and 42 days a year ago

  6. This article starts with a nugget of truth and then devolves into the usual scripted REALTOR-babble about “amenities” and living downtown:

    “A common misconception about renters is that they rent because they don’t have any other option. Given enough time and a high enough income, they will eventually buy a home or condo. But in metro Denver, it appears that isn’t the case for a growing number of people.”

    https://www.denverpost.com/2019/02/21/rich-renters-surge-metro-denver/

    I don’t rent because I’m rich, I’m rich because I rent, and I live 4 miles south of downtown Denver, LOLZ.

    1. I can still remember the days when renting actually cost more than owning and there were plenty of articles in the RE section of the paper describing (begging) people on why owning (even though more expensive) was a better way to go than renting.

      Owning has lots of risks/pitfalls.

      Ever rising taxes, expensive maintenance, being tied down if you have to move, liability, changing neighborhoods, etc.

      It used to be that a house basically appreciated at about the rate of inflation (if you were lucky). Adding in all the costs of ownership plus the costs or selling/buying, it was really never a money maker (or, at best, a very slow money maker).

      And then came the CRA, cheap/easy money, bailout after bailout, guaranteeing mortgages, and buying the votes of the FSA…

  7. There’s been a huge shift to multi-family (apartments) vs. single-family (houses) nationally. I think that this has been driven by 1) the Fed’s radical policies reflating housing prices after housing bubble 1.0 popped, and 2) progressive “social engineering” to align more with a) Socialist/Soviet-style block housing and b) elimination of private property via renting (a key tenet of Socialism/Communism). There’s no shortage of land in/near the Denver MSA, but water is limited. There’s always going to be “growth”, but urban sprawl isn’t a good solution. Urban planning has always been an issue, but independent of the water shortage, multi-fam. doesn’t make sense to me with so much land available close to Denver. I think millennials would chose a house vs. apartment hands down, if affordable. I blame the Fed and the progressive agenda for the current mess. This is only one view of many, of course, but is supported by national trends.

    https://www.westword.com/news/reader-denver-has-gone-from-queen-city-to-whore-of-the-rockies-8787300
    Reader: Denver Has Gone From Queen City to Whore of the Rockies
    Westword Staff | March 4, 2017 | 7:57am

    1. “I think millennials would chose a house vs. apartment hands down, if affordable.”

      As an old millennial (or Gen X, depends on which definition you use), I would much prefer multi-family to a house. Granted, there are some crazy HOAs in some areas, but we absolutely hate doing lawn/yard word, plowing our own snow, or doing other maintenance. At the right property this is absolutely something we are willing to pay for. We have lived at several condo properties and apartment properties and we actually enjoy how much easier it seems for us to get to know our neighbors. We may be an outlier, but that is just us.

      1. I can agree until the day:

        You have insane, crazy or just hostile neighbors. They will destroy your quality of life in a multi-family housing arrangement. And there is no getting away from them. With your own house – you can at least mitigate this problem.

        You have kids. Especially more than one. There is a reason why a house, lawn and a picket fence comes to mind for the American family.

  8. REALTOR, does this look like a source of “pent-up demand” or have you just been lying all along?

    “If faced with an unexpected $400 expense, 4 in 10 adults said they would not have the money to cover it, according to a report last year from the Federal Reserve. To get the funds, they would have to sell something or borrow.”

    https://www.washingtonpost.com/business/2019/02/21/does-america-have-savings-crisis/

    I hope REALTOR reads the HBB to kill time while hosting open houses with no traffic all weekend long, maybe REALTOR will realize it’s time to learn some useful skills and get a real job, LOLZ.

  9. “So, when it was finally his turn to speak, the incumbent grinned and adjusted his sport coat. ‘Well, that was fun,’ Hancock told the crowd of local politicos. ‘We suck in Denver, huh?’”

    You most certainly do, Mayor Hancock. And with pothead riffraff and south-of-the-border dependency voters flooding in, it’s a matter of time before the rural Colorado counties vote to break away and form their own state rather than put up with the corruption and malgovernance of the collectivist cadres in Denver.

  10. “Though New York already has a ‘mansion tax’—a 1% tax on homes over $1 million—support for the pied-a-terre bill is gaining.

    First they came for the billionaires, and I did not protest because I was not a billionaire.

    Then they came for the millionaires, and I did not protest because I was not a millionaire….

    (The collectivist comrades will start by soaking the rich, but in the end every “kulak” who is productive and generates wealth will be targeted for the “redistribution of the wealth” so beloved by AOC and the takers.)

  11. REALTOR,

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

  12. Lot$ of way$ to make monies$ off of digital 1’$ & 0’$
    (this fella used his eBay market$ $kills!)

    FOLLOW THE MONEY —
    $100K Mario $eller: “It’s probably the wrong move, long term, to $ell”
    Now a “holy grail,” $ticker-$ealed box was valued at just $2,000 to $4,000 in 2012.
    KYLE ORLAND – 2/23/2019 | ArsTechnica

    Last week, a copy of the first printing of Super Mario Bros. in pristine condition sold for just over $100,000. This week, the collector who sold that gem told Ars that he’s been preparing for this moment for years.

    “I started fairly early on, and back in 2002, sealed game prices were nothing like today,” he continued. “Stuff that is worth 10, 15, 20 thousand dollars now was $200 to $400 then. The other people I was competing against… they were largely students maybe in fourth year university or something. I was a little older, 27, I had a bit of a job [in a financial field], so it was a little easier for me to afford.”

    By 2007, Bronty had amassed a near-complete collection of well over 600 NES games, all still sealed in their shrink wrap. And he said he knew he was well ahead of where the market would be. “I 100 percent just saw this as ‘A’ material. Not to this extent, but I saw this [increase in value] coming,” Bronty said. “I knew that these were special items and that my window to buy was now. I spent everything I could, sold all my good comics, went into debt, I went all out.”

    Even with his all-in approach, Bronty’s biggest single sealed-in-box find was still to come.

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