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Things Were About To Peak

A report from CNBC on California. “The San Francisco Bay Area home sales numbers are in for August, and they continue to weaken. Total sales for the Bay Area fell nearly 10 percent compared with August 2017, according to CoreLogic. Sales did increase 1.8 percent compared with July, but the total volume was nearly 18 percent below the August average going back to 1988 and the lowest since August 2011. Sales activity for the summer, June through August, was the slowest in seven years.”

“San Francisco sales were down 6 percent annually. San Francisco was ranked the most overvalued housing market in the United States, according to UBS’ just-released Global Real Estate Bubble Index 2018.”

“The supply of homes for sale is starting to rise. San Jose saw a 67 percent increase in listings in the third quarter of this year compared with the same quarter in 2017, according to Trulia. Inventory in Oakland was up 26 percent annually.”

The Bay Area Newsgroup. “Matt Rubenstein, an agent with Compass Real Estate in Contra Costa County, said he’s seeing more price reductions, an indication that some sellers are being too aggressive in a strong market. ‘I’m not calling that a buyer’s market,’ he said. ‘I’m calling it a level market.'”

“Scott Bailey sold the family home in August, about a year after Bailey’s father died. Bailey’s parents bought their three-bedroom, two-bath house in West San Jose in 1967 for about $28,000. ‘It was just going to be too expensive to keep,’ said Scott Bailey, 62, now living in Everett, Wa.”

“The home listed for $1.7 million and drew 300 people to an open house. It sold last month for $2 million. Bailey had been watching the market closely. ‘Things were about to peak,’ he said. ‘We were lucky to get what we got.'”

From Realtor.com. “Tennis great Serena Williams is serving up a price cut on her Bel Air estate. The mansion in the Stone Canyon area of Los Angeles initially landed on the market about a year ago for $12 million. It’s now listed for $10 million.”

“So why has the mansion been on the market for nearly a year? ‘The grounds are fantastic,’ says Marshall Peck of Douglas Elliman. ‘But there are many homes for sale on Stone Canyon.'”

“The tennis legend purchased the 6,100-square-foot home in 2006 for $6,612,000. So even with the recent price cut, Williams stands to come out a winner.”

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This Post Has 19 Comments

  2. ‘Scott Bailey sold the family home in August…The home listed for $1.7 million and drew 300 people to an open house. It sold last month for $2 million. Bailey had been watching the market closely. ‘Things were about to peak’

    One, this shows how fast things have developed. Two, how would you like to be the buyer reading this in the paper today?

    1. Bailey got out while the getting was good. I pity the bag holder who bought at the peak of the bubble, but stupid should hurt.

    2. An increase of +7042.85% in 50 years for those fans of percentages out there. I sometimes wonder if buyers make that simple calculation and ask why they’re borrowing to pay for someone else’s multi-thousand-percent gain.

  4. “The tennis legend purchased the 6,100-square-foot home in 2006 for $6,612,000. So even with the recent price cut, Williams stands to come out a winner.”

    Allow me to point out that her overpriced shack hasn’t sold yet, and the market is cratering.

      1. “12 years of taxes, maintenance, insurance also.”

        Yah, these folks don’t care, until everything goes all Johnny Depp on them.

        1. One amazing thing about that Johnny Depp story was what a small amount of his expenditures went to his large staff. IIRC correctly even the wine budget was more than workers’ salaries put together. Quite a metaphor for this bubble especially.

          Is it me or have you not been around much lately, Palmy?

  5. “Heh, at least this guy didn’t suggest shiplap and a barn door.”

    What about adding another front door? I hear that’s all the rage these days, especially if you’re a research psychologist at Stanford.

  6. Prices getting a little ‘shaky’ in Contra Costa County? Palo Alto too? Realagators lie……..so do Damocraps!

    1. September 20, 2018

      From Palo Alto Online in California. “The residential property market in Palo Alto is showing multiple signs of a slowdown. The median price of all sold homes in Palo Alto from June to August was $2.86 million, an 8 percent drop from the first five months of 2018.”

      “The number of offers on a single property is dropping as well. The severe bidding war was a norm in the spring. Homes listed aggressively low compared with their fair market value could attract as many as 20 bids. Recently, many homes listed for $3 million only received one or two offers. At the high end, homes don’t seem to attract interest even after a $1-million price drop.”

      “What caused the market to shift? First, home prices may have jumped too high too fast. The median home price in Palo Alto in the first half of 2018 reached $3.1 million. It was a 15 percent increase from 2017 and 29 percent higher than 2016, on top of a long bull-market cycle that ran for five years from 2010 to 2015, when Palo Alto’s home prices nearly doubled. It’s hardly sustainable.”

      “Second, while we are still experiencing historically low inventory, the number of new listings increased by 11 percent over last year for the period from January to August, which helped slightly to restore the balance between supply and demand.”

      “Lastly, as uncertainties about the global economy are rising, potential buyers, both local and foreign, are in wait-and-see mode. The rising tension between the U.S. and China is affecting the entire global “tech value chain.” The depreciation of China’s currency by about 10 percent since February also negatively affected potential demand by Chinese investors.”

      http://housingbubble.blog/?p=56

  9. As more of these stories come out, people get nervous and decide it is time to sell despite capital gains (for investment properties). Very similar to 2006-7. This is when momentum builds. When Blackstone and other “bigs” do same, pin meets bubble.

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