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A Little Shock Of Reality To Sellers Who Need To Readjust Their Expectations

A report from Boise Dev in Idaho. “First they planned 126 apartments. Then, after pushback, 47 homes. Finally, after more changes and hearings, a plan for 42 homes won approval. A year later, the project is stopped, and the property is for sale. Will a new project near Harris Ranch in Barber Valley ever come to fruition?”

“Jared Sherburne told the Barber Valley Neighborhood Association they could not obtain full financing on the project. He told the BVNA board that the investor decided not to move forward with the project.”

The Herald Mail in Maryland. “Home sales and average prices sagged in Washington County in January. According to the monthly report, the number of home sales in Washington County fell 35.9 percent, from 117 in January 2018 to 75 in January of this year. The median price dropped 2.8 percent, from $185,000 to $179,900.”

From Hartford Business in Connecticut. “Connecticut home sales began 2019 on a sour note, falling to their lowest one-month total since the Great Recession, according to fresh data. Median prices remain flat. It was also the largest one-month sales slide since the 35.3 percent drop posted in Jan. 2009.”

“‘Last year the number of home sales fell in nine of 12 months and for the entire year sales fell by 1.9 percent,’ said Warren Group CEO Timothy Warren. ‘However, no month in 2018 had a decline approaching the 14.5 percent decline that we saw last month.'”

The Real Deal on New York. “The latest condo to close at Related Companies’ 70 Vestry Street is a sprawling combined unit that sold for $39.3 million. Unit 12S sold to ’70 Vestry 12S LLC,’ according to records filed with New York City’s Department of Finance. The unit, previously listed at $28 million, was later combined with Unit 11S — with an asking price of $48 million. The deal closed at at $4,707 per square foot, a 19 percent discount.”

“Another pricey deal at the development was the $55 million penthouse. The unit was once expected to be the priciest sale in Downtown Manhattan but instead sold at a steep discount from its $65 million asking price.”

The San Francisco Chronicle in California. “The median Bay Area home price rose at its slowest year-over-year pace in two years in January as a slowdown that hit the real estate market in September continued into the new year. The median price paid for a new or existing home or condo in deals that closed in January in the nine counties was $730,000, down 7 percent from December and up 2.2 percent from January of last year, according to CoreLogic.”

“‘Buyers are definitely being a little more picky; there is more to choose from,’ said agent Alexander Clark. Clark said he’s getting a lot fewer emails with subject lines such as ‘Still available,’ ‘Motivated seller,’ and ‘Can’t believe it’s still there’ than he was getting from November to January.”

“Instead of listing homes far below the expected sales price, hoping to incite a bidding frenzy, agents seem to be setting prices closer to what sellers hope to get, in case they get only one offer, he added. ‘What the downturn in September did was give a little shock of reality to sellers who need to readjust their expectations a little bit,’ said Judy Citron, an agent with Compass in Palo Alto.”

From Realtor.com. “Elizabeth Taylor’s former estate in Beverly Hills is ready for its close-up, this time with a price cut. Originally on the market for $16 million, the home has returned at $12 million, the Los Angeles Times reported. ‘It’s a wonderful buy,’ says listing agent Joyce Rey.”

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  1. ‘they could not obtain full financing on the project. He told the BVNA board that the investor decided not to move forward with the project’

    When this is going on the market is deader than a door nail.

    ‘the number of home sales in Washington County fell 35.9 percent, from 117 in January 2018 to 75 in January of this year. The median price dropped 2.8 percent, from $185,000 to $179,900′

    Eeee-bola Washington County! Good ol’ Herald Mail. Lot’s of FB articles back in the day.

    1. And so the project will sit on the market for years at a nosebleed price as the “infestor” tries to get their money back and then some. Drip, drip, drip….

    3. This part of Boise- Harris Ranch is a hot spot for California equity locusts. There is no grocery store there and one pizza place that actually has “market price “ pizza.

      The California people were the ones complaining about the apartment proposal.

      A bunch of NIMBY transplants.

      Now they have nothing. It’s sad because that property had a lot of big trees that were torn down for that development

        1. Honest question: OC-like in what respect? There’s not a ocean in spitting distance!

          1. Traffic, sprawl, mini-malls with chain stores, poorly built tract homes, fake people, neo-cons….
            East of the 405 in the OC where most people live cant find parking at the crowded, dirty beach.

          2. Reminds me of a comment I was reading one time on City-Data, where some CA transplant was asking which area in western Washington was “sunny like CA,” because she was going to buy a house there. You can’t make this stuff up.

      2. I’ll be one of those CA-expats later this year, thankfully. Currently ashamed to call myself a CA resident (self-loathing from taxes & expenses), but will be very happy to call myself an ID resident when it happens.

        Sadly it sounds like I’ll be merely a droplet in the flood of Clownifornians headed that way. I’ll definitely be renting the first couple/few years up there but eventually hope to find a permanent place and retire (something I can’t afford to do in CA).

  2. ‘Clark said he’s getting a lot fewer emails with subject lines such as ‘Still available,’ ‘Motivated seller,’ and ‘Can’t believe it’s still there’ than he was getting from November to January’

    I had a little exchange on the Friday thread this morning about the REIC and this article is an example. The Chronicle, like Redfin (which flips shacks BTW) is trying to beat the drum so people start gambling more. Note there’s no balance. No words of caution that these “motivated sellers” might default and create waves of collapse. Nope, it’s time to roll up you sleeves and get yourself up to the eyeballs in debt! This is the real estate industrial complex in action.

    2. Kind of like the Bitcoin shills who are desperately trying to lure in more suckers. There’s a dearth of FOMO out there.

    3. SoUtah: I use a really good work crew every so often on my volunteer (free) job working for a small water company. It’s always been difficult to get them on any job without considerable notice. They did some work for us a couple of weeks ago which took about 3 hours to complete.

      That was their only job for the day. The boss told me that local building business has slowed down to nothing and that the only construction work going on around our area is just completing projects that had already begun. He had recently lined up a bunch of guys for two major housing developments that have been going thru numerous approval processes over the last year.

      He told me that both big projects are now on hold, indefinitely. The men he lined up for the developments were released and are now looking for work “to get thru the slowdown”.

      While I was at our project site his workers were asking about any available work for the next week. He said that it didn’t appear that there would be any.

      1. We all know what starts unfolding after we hear this type of news. I recall back to the last big boom bust in Silicon Valley when all of as sudden all the projects came to a halt and buildings sat unfinished.

      2. I’m down here too SteadyKat. If they can build affordable apartments, they will rent them out all day. Legacy Ridge and Greyhawk just came online which are nice. Then there are tons of the student apartments being build for the university along with the stuff going up downtown around main street (this is where my wife and I want to move, right next to the tabernacle and children’s museum). So Utah needs far more multi-family and not endless sprawl in “Little Valley” and “Washington Fields”.

          1. My BFF from high school is Mormon. Utah is unquestionably unique among the 50 United States.

        2. I’m retired from 35 years in multifamily construction. Mostly in TX. After the “recession” and apt construction began to pickup in 2012, I never understood why no one was developing any “affordable” low-cost rental apartments.? Things rapidly accelerated, and everything was high-end, swanky, units. All the surviving subcontractors that were begging for work, suddenly became swamped with plans to bid.
          Granted, between affordable and high end projects.. concrete slabs, studs, trusses, windows, electrical, plbg all cost the same. Its the granite countertops, stainless appliances, hardwood floors, ten foot ceilings, and ultra lavish leasing offices that add useless costs…which equates to $1400 starting rents for a small 1BR.
          You walk into those luxury leasing offices a year after completion…you see NO ONE using the spaces. It’s all glitzy-glamour show glitter to entice the rental shoppers.

          1. Appliances and floor type don’t get you to $1400 a month any more than it gets you to $100/sq ft from actual construction cost of $50/sq ft (lot labor materials and profit) for a SFR.

          2. Excellent insight BigfootTX. The demand is there for affordable, but it isn’t being filled by the market, for whatever reason.

  3. ‘Originally on the market for $16 million, the home has returned at $12 million, the Los Angeles Times reported. ‘It’s a wonderful buy’

    Well it’s 4 million more wonderful than it was Joyce. Let’s make it 8!

      1. “The moment a socialist just realized he ran out of other people’s money…”

        Which comes after another socialist realizes there is no such thing as a tax credit account with $3 billion dollars in it.

        Ocasio-Cortez said: “If we’re willing to give away $3 billion dollars for this deal, we could invest those $3 billion dollars in our district ourselves if we wanted to.” She added: “We could hire more teachers. We can fix our subways. We can put a lot of people to work for that money if we wanted to.”

        1. Say what you will about this bug-eyed socialista chica, she overthrew a ten-term corporate stooge and seems to have a sincere desire to serve the people of her district, unlike her predecessor who got 99% of his campaign donations from his corporate pimps. AOC has also said a catalyst for her campaign was unaffordable housing due to speculation.

          1. 99% of his campaign donations from his corporate pimps

            If he was dishonest and all sorts of corrupt, that should be the reason people run him out. We do not need to surrender our liberties to the chains of socialism to purge the corrupt.

          2. I think it’s absolutely hysterical what AOC is doing. She’s literally tearing the Democrat Party in two.

          4. ” We do not need to surrender our liberties to the chains of socialism to purge the corrupt.”

            Well said.

          5. If he was dishonest and all sorts of corrupt, that should be the reason people run him out. We do not need to surrender our liberties to the chains of socialism to purge the corrupt.

            You go to war with the army you’ve got. She was the alternative. The right is frustrated that she got elected but they neglected to provide a better alternative that was electable in her district. Kinda like how the left thinks we should have all voted for Hillary just because Trump is a jerk. Nope.

          6. Kinda like how the left thinks we should have all voted for Hillary just because Trump is a jerk.

            Not just “thinks.” Strategized as revealed in the attachment to https://wikileaks.org/podesta-emails/emailid/1120.

            “We need to be elevating the Pied Piper [Cruz, Trump, Carson] candidates so that they are leaders of the pack and tell the press to [take] them seriously.”

            Kinda backfired, huh?

          7. Exactly. I don’t see why peeps are not seeing how the alleged socialists are some of the only people out there willing to talk about the problem of speculation in the housing market. Corporate welfare rigs our markets and I’m looking forward to some good devates

          8. “We need to be elevating the Pied Piper [Cruz, Trump, Carson] candidates so that they are leaders of the pack and tell the press to [take] them seriously.”

            Kinda backfired, huh?

            Doesn’t bother me until the part where the press actually seems to be willing to take orders from them. It wasn’t supposed to work like that.

          1. I like the idea of a hashtag for FBs My suggestion is the 4 letter acronym #MAGA
            Here are some combinations for the acronym:

            Mortgage Automatically Goes Away

            Mashing Another Greedy As^hole

            My Assessment Got Adjusted

            Monthly Accrual Got Axed

            More Automatic Government Assistance

            Municipal Assessors Go AWOL

            Mortgage Agents Get Arrested

            ( but ) My Aunt Gertrude Advised (me )

        3. “One suggestion: raise the minimum voting age to 30”

          How about raise the minimum voting IQ to 100

          2. Or over age 30 and pay taxes. The goobermint would look a lot different under those requirements.

          3. A limitation to those paying taxes would be sufficient for a different goobermint.

  6. “Instead of listing homes far below the expected sales price, hoping to incite a bidding frenzy, agents seem to be setting prices closer to what sellers hope to get, in case they get only one offer, he added.”

    I find this statement interesting in that it implies that the AGENTS are the ones who set the selling prices instead of it being the SELLERS who set the selling prices.

      1. Ebola, wildfire, black plague or whatever metaphor you care to use for a highly-contagious disease, will spread from the Case-Shiller 20 cities to the other smaller cities nationwide. Seattle and Denver are looking especially crash-y right now.

  9. This just in:

    Reduced $500K – 2510 ASTRAL DR, HOLLYWOOD HILLS, CA | $5,250,000

    ‘A newly remodeled and sophisticated private modern farmhouse located on the prestigious and celebrity-desired Astral Drive. Expanded to over 4,700 sq ft’

    https://www.zillow.com/homedetails/2510-Astral-Dr-Los-Angeles-CA-90046/20803147_zpid/

    3/1/2019 Price change $5,250,000 -8.7%
    1/17/2019 Listed for sale $5,750,000 +150%
    3/30/2017 Sold $2,300,000 -11.5%
    1/31/2017 Pending sale $2,599,000 —
    1/19/2017 Listed for sale $2,599,000

    2. Wow. Just wow. Ok so let’s say they sank 1m into this flip, that leaves a 2m profit they are attempting to chase. Hope to see this one sit and run them financially down to foreclosure along with all the other greedbag specuvestor flips in CA. Too much greed out here.

      Couple of other recent sales on the same street in the last 6 months around $2M, Mabye this one has an oil well underneath it??

      Pre flip ad for this property:

      https://www.coldwellbankerhomes.com/ca/los-angeles/2510-astral-dr/pid_16194748/

    1. So long as housing holds up, we’ll be just fine.

      “Reasons to worry: Gas prices no longer falling, Tax cut boost over, [capital spending] orders dropping … slow global growth hitting exports,” Pantheon Macroeconomics chief economist Ian Shepherdson tweeted. “Reasons not to worry: Housing not so bad. Net: It’s not great.”
      …

  14. “The median price paid for a new or existing home or condo in deals that closed in January in the nine counties was $730,000, down 7 percent from December and up 2.2 percent from January of last year, according to CoreLogic.”

    There seems to be an implied market top somewhere in the January-to-January period which they are neglecting to mention. I may try fitting a parabola to the data later and using the fitted curve to estimate the peak value and how far the market has already dropped from the peak.

      1. Maybe. It does only take three data points to fit a parabola, but the assumption that a parabola will perfectly fit the price trajectory of a bubble peak is a simplification.

        1. I ended up fitting a parabola to the log of price, which adds the realistic assumption that prices will always remain positive. This model results in an estimated peak of $920,990 in July 2018, suggesting current prices are 20.7% lower, and predicting that they will be 61.4% below peak in July. The parabolic model prediction seems overly dire, as it doesn’t model the forces which eventually put a bottom under prices.

          1. “as it doesn’t model the force$ which eventually put a bottom under price$.” I

            1. End of Thee Korean War is … just.around.the corner!

          2. Very interesting. The 61.4% below peak you refer to is for July 2019? Nice work professor

    3. Just contact a data source for month by month median home sales price and graph the data vs time. The outcome is obvious when you see how they describe “you prices increasing just at lower rate than previous months”

      Complete nonsense. As I have been saying, ad nauseum, in these pages, the YOY reporting is just a smokescreen to hine the truth about price direction.

      If median prices rose $5,000 per month for 6 months starting a year ago, but then fell $4,600 per month for the recent 6 months, then they are currently FALLING, event though they may be 1.5% higher YOY.

      The press is saying crap like “despite recent monthly declines, fortunately prices are still appreciating as evident from YOY data. While not a lie, it is extremely and deliberately misleading. Fortunately, this will not work much longer as subsequent YOY reports will rapidly increase in their downward direction. Then panic ensues and the downward slope of your parabola steepness. Each month will shock greater.

      My popcorn is in the microwave.

      1. The parabola fit to three data points is likely to better explain current price dynamics than the lies served up by REIC spokesmen in the MSM.

  16. Sorry about the autocorrect making nonsense words in previous post. My grammar is not as bad as it appears. Will try to proofread better next time.

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