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It’s Starting To Look Like 2016 Was Peak Boom

A report from Curbed on Texas. “Candy Evans, a Dallas real estate writer who runs a local site called CandysDirt.com, says the naysayers, including the author of a recent Wall Street Journal piece identifying Dallas real estate as a ‘canary in the coal mine,’ are overtly negative. ‘The north part of the Metroplex [the Dallas-Fort Worth area] is where you have open land and crappy developments having a tough time selling,’ says Evans. ‘Our city was built on cheap land, and that land is simply getting more scarce.'”

From KDVR in Colorado. “For the first time in seven years, the price of a home in the Denver metro area dropped year-over-year, according to the Denver Metro Association of Realtors. Experts say this could be due to the fact that a year ago there were only 3,015 active single-family home listings in February while this year there were a thousand more listings – up 36 percent.”

“‘For nearly a decade buyers have been overpaying because that’s what the market has dictated,’ said Denver real estate expert Clay Short. ‘Now it looks like it has kinda turned a corner, at least the buyers hope so.'”

From Globe St on California. “At the end of 2018, home sales in California fell, according to Pacific Union, particularly in the San Francisco and Los Angeles markets. Starting in April 2018, home sales in Los Angeles fell dramatically, and in January 2019, they were down 18% year-over-year. In San Francisco, home sales fell during the same period, down 16% as of January 2019.”

“The decrease in home sales has also triggered falling housing prices in both Los Angeles and San Francisco. This could lead to fewer owners willing to bring homes to market, exacerbating the housing shortage. However, in the early months of the year, for-sale home inventory has increased.”

“‘While inventory of homes of sales has jumped in recent months, it’s still from a very low base so we are still in very undersupplied market,’ says Selma Hepp, chief economist at Pacific Union . ‘However, I think sellers are seeing their opportunity to sell at the peak of price growth. If they don’t get the price they want, they may pull out their off them market. However, based on recent inventory numbers, I think sellers are seeing this period as a great opportunity to sell.'”

The Seattle Times in Washington. “Is this decade’s unprecedented Seattle boom in its final throes? Since 2010, Seattle has been the fastest-growing big city in the U.S., and the cost of living here has risen more rapidly than anywhere else. But we’re beginning to see signs of change.”

“Real-estate prices in King County dropped by more than $100,000 since last spring (though they recouped some of that loss with a strong February), and the number of homes sitting unsold has more than doubled in the past year.”

“For the second consecutive year, the number of driver’s licenses issued to new King County residents from out of state declined, according to records from the Washington Department of Licensing. It’s starting to look like 2016 was peak boom. That year, more than 76,000 licenses were issued to folks moving to the county from somewhere else in the U.S. or from another country.”

From Inside NOVA on Virginia. “Homes that sold in Arlington in February had the highest per-square-foot value across Northern Virginia, although Arlington and most other local jurisdictions posted declines from a year before, according to new data.”

“Arlington’s per-square-foot sales price was, on average, down 15 percent from the $472 recorded in February 2018. And the community wasn’t alone; declines were reported in may localities.”

“Falls Church saw its average per-square-foot cost decline 2.8 percent to $378. Alexandria’s per-square-foot cost declined 9.9 percent to $365. Fairfax County’s per-square-foot cost dropped 9.7 percent to $278. Loudoun County’s per-square-foot cost was down 10.4 percent to $198. Prince William County’s per-square-foot cost dropped a sizable 21.4 percent to $165. Stafford County’s per-square-foot cost was down 15 percent to $142.”

“Across the Mid-Atlantic as a whole, the average per-square-foot cost of $206 for residential properties that sold in February was down 11.2 percent from $232, based on ShowingTime data. The highest-priced major jurisdiction was the District of Columbia at $483, down 5.7 percent from $512 a year before.”

From the Oregonian. “Lawmakers have proposed eliminating the state’s piece of the popular mortgage interest deduction for second homes and reducing it for high earners. James Marshall, who owns a home and several rental properties in Marion County, told lawmakers they would be taking away one of few tax benefits available to ‘common Americans.'”

“‘To change this midstream for all of us who made the decision to purchase based on the tax advantage that was available … would be devastating to me personally and would probably cause me to sell my investment properties and perhaps my principle residence as well,’ he said.”

This Post Has 53 Comments
  1. ‘Falls Church saw its average per-square-foot cost decline 2.8 percent to $378. Alexandria’s per-square-foot cost declined 9.9 percent to $365. Fairfax County’s per-square-foot cost dropped 9.7 percent to $278. Loudoun County’s per-square-foot cost was down 10.4 percent to $198. Prince William County’s per-square-foot cost dropped a sizable 21.4 percent to $165. Stafford County’s per-square-foot cost was down 15 percent to $142’

    Eeee-bola wowsa!

  2. ‘For the first time in seven years, the price of a home in the Denver metro area dropped year-over-year, according to the Denver Metro Association of Realtors. Experts say this could be due to the fact that a year ago there were only 3,015 active single-family home listings in February while this year there were a thousand more listings – up 36 percent’

    ‘For nearly a decade buyers have been overpaying’

    If you say so Clay.

    1. is there a huge difference between middle class, and the upper class (not the rich). My BIL/SIL are in Lowry – and they are still seeing a good amount of sales at the $1M to $1.2

      It has to come down XX % – but what the heck

      1. Are you asking “is there” or stating “there is” ?

        I’d say that there is – and primarily it’s the result of the continuous increase in income stratification in the top 20 to 25% of earners vs the rest of the population.

  3. SALT – ah, I get it now. Cant deduct over $10k in state and local taxes including the big one, prop taxes in CA. Houses over $800k get hit. But the top bracket is now 37% from 39.6% and cap gains down to 21%. feels like a wash. All in all the nat debt still goes up and up each yr.

  4. “‘To change this midstream for all of us who made the decision to purchase based on the tax advantage that was available … would be devastating to me personally and would probably cause me to sell my investment properties and perhaps my principle residence as well,’ he said.”

    Tears in my eyes 🙁

    1. to sell my investment properties

      A tax cheat? MID isn’t supposed to be for “investment properties”.

    2. If the old tax breaks were make or break for a household, I’d say that household had other structural problems (perhaps something like my ex-wife, a true ‘structural problem’ if there ever was one) and should have never bought.

        1. Not doing so great. I need to call him tomorrow.

          Turns out he didn’t know that his wife/STBX had put tracking software on his phone that copies all of the texts he receives to her in real time. Our dad sent him a text about helping out with money and putting out of her reach and despite not being home whet came in, and deleting it moments later, she saw it and exploded on him.

          I got to see part of text she then sent him – it’s like my ex all over again – total narcissist with negative respect for him. He’s going to get destroyed unless he can find his balls. He’s hung up with fear of losing access to his son. I say ‘what sort of message are you giving him?’ by giving in.

          1. He’s hung up with fear of losing access to his son.

            Been there. We’ve all heard the horror stories about the legal system and when you’re in the middle of that much crazy it’s easy to assume that everybody is going to screw you over. But in general I’d say he should put his faith in judges and the legal system at this point. They can’t help but be more reasonable than her. In fact the longer he stays with her the more opportunity there will be for her to create a situation where his worst fears are realized. His best bet is leave now and take the son with him and let the legal system do its job from there. Beats the heck out of trying to work with her.

          2. grounds for blowing up at her

            Wouldn’t be helpful. Like Carl said safety should come first, as in removing one’s self physically. In my experience it is best to start with a lawyer.

            First thing my Ex did was to attempt to empty the bank account. She was too late. She kept writing checks though, which I covered to keep the kid’s mom out of jail.

          3. Time for a burner phone? I can’t emphasize enough how much he needs an attorney to navigate this nightmare!

  5. “The decrease in home sales has also triggered falling housing prices in both Los Angeles and San Francisco. This could lead to fewer owners willing to bring homes to market, exacerbating the housing shortage. However, in the early months of the year, for-sale home inventory has increased.”

    Or it could lead to panicked, overleveraged FBs stampeding for the exits. Which in turn could lead to soaring inventory and plunging prices.

    Oh dear…this could get cataclysmic….

    1. exacerbating the housing shortage

      There you go, Ben. Not only is there a shortage, but it’s going to get worse!

  6. “‘To change this midstream for all of us who made the decision to purchase based on the tax advantage that was available … would be devastating to me personally and would probably cause me to sell my investment properties and perhaps my principle residence as well,’ he said.”

    Boo f**king hoo, Speculator Boy. For far too long you and your ilk have made decent housing unaffordable for the prudent and responsible. It’s long past time to enact policies that treat housing as shelter, instead of rigging the game to encourage and reward speculation.

    1. Well said! Wouldn’t that be cool if housing affordability were addressed by acknowledging and disincentivizing speculation and acquisition of ‘investment properties ‘ ?! Instead of creating easier loans for people to buy unaffordable houses?!

  7. I see from the Texas woman that realtorbabble and rationalization is still at work.

    I do have to admit though that one of our prize zips here in Sarasota County had pretty large uptick in pending sales. Of course we are at peak season and red tide debacle of late 2018 is past.

    Guess I am priced out of a waterfront place just a little longer, but I know where it is heading. I think this was a reduction bounce similar to what I saw after first reductions in 2006. After that: armageddon. Will be patient and hopefully rewarded.

      1. Well now that’s a thought. Still waiting for that waterline to rise on the seawalls, but nothing yet. I think armageddon for waterfront prices might just get here sooner.

        Raising my wine glass in toast.

  8. “How America’s Most Hated Home Loan Is Staging A Comeback”

    America’s most hated home loan? My, my, my, what ever sort of loan could that Be?

    “Professor Chris Mayer has a lesson for ­homeowners: Reverse mortgages, which let older Americans tap their home equity without selling or moving, aren’t as risky as some say. In an online video, he brushes aside ‘common misconceptions,’ including fears about losing your home.”

    Liar.

    “Mayer, a real estate professor at Columbia Business School, isn’t an impartial observer. He’s chief executive officer of a company that sells reverse mortgages.”

    Bahahahahahahahahahahahahahahahahaha.

    “He’s trying to rehabilitate one of the U.S.’s most-­reviled financial products—part of a broader push that relies in part on academics with interests in the mortgage industry.

    “The host of Mayer’s talk was the American College of Financial Services, a school that trains financial planners and insurance agents. Until recently, it had a task force funded by reverse mortgage companies, which each contribute $40,000 a year. They include Mayer’s firm, Longbridge Financial, and Quicken Loans’ One Reverse Mortgage.

    “To show the need for reverse mortgages, industry websites cite a Boston College retirement research center run by Alicia Munnell, a professor and former assistant secretary of the Treasury Department in the Clinton administration. She once invested $150,000 in Mayer’s company, though she’s since sold her stake.”

    Bla, bla, bla …

    https://www.fa-mag.com/news/how-america-s-most-hated-home-loan-is-staging-a-comeback-43776.html

  9. OT, but worth posting.

    Boeing Co. (BA) stock performance today at close:
    377.14 +1.73 (+0.46%)
    BA ends UP for the day! I kid you not!

    Q: Based on GLOBAL grounding of the ENTIRE 737 Max 8 fleet TODAY, does this make any sense in terms of stock performance (rhetorical)?
    A: Of course not!

    My interpretation: The Fed has so conditioned market participants, that a “60 Minutes” Fed dog and pony show/jawboning session can elicit the desired Pavlovian response of “buy, buy, buy!”. Amazing!

    Not sure if “Twilight Zone”, or just another parallel universe going on here. We must now be in the “bad news = good news” universe I guess.

    1. If you look at the chart, the bounce has some room and there’s still a lot of money chasing any return. Boeing has a huge bloody nose, to be sure, and the huge drop in value is, IMHO, warranted. But it’s far from dead. The MAX line will have to sell cheap for some time to regain the buyers’ faith, but it is the future of air trans.

  10. Ben – how about a list of the greatest “quality of life” cities? I’ll start:
    Bend, OR

    1. LOL I read “Bobos In Paradise” just after it was published.

      These maggots can’t stop destroying everywhere they go 🙁

    1. We all know that’s fake news. RE only goes one direction #tothemoon #trustsusanne #buynoworisomtgetpaid-realtor

  11. “For the second consecutive year, the number of driver’s licenses issued to new King County residents from out of state declined, according to records from the Washington Department of Licensing. It’s starting to look like 2016 was peak boom. That year, more than 76,000 licenses were issued to folks moving to the county from somewhere else in the U.S. or from another country.”

    It should be noted that 76,000+ out-of-state inbound licenses was in itself a massive overstatement of how much King County population grew in 2016. Why? Because WDL does not keep track how many people surrender their Washington state licenses as they move to other states.. The net migration to King County in 2016 was 5932. Read that again: 5932. According to US ACS Survey. That is a far cry from 76,328 is it not?

    Reference:
    https://fred.stlouisfed.org/series/NETMIGNACS053033

      1. “It’s becoming next to impossible to find anywhere to park downtown, which in turn is forcing people to give up their cars, and hence their need for a license.”

        “… need for a license.”

        Hmmmmmm … a possibly related article …

        “The Decline of the Driver’s License”

        (snip)

        “The researchers didn’t look into what the reasons for this decline might be, but in an earlier study, they surveyed young adults ages 18 to 39 without driver’s licenses about why they don’t have them. The top three reasons were: ‘too busy or not enough time to get a driver’s license’ (37 percent), ‘owning and maintaining a vehicle is too expensive'(32 percent), and ‘able to get transportation from others’ (31 percent).

        https://www.theatlantic.com/technology/archive/2016/01/the-decline-of-the-drivers-license/425169/

  12. CNBC WED, MAR 13 2019 7:00 AM EDT

    “Total mortgage application volume rose 2.3 percent last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was essentially flat compared with the same week one year ago. Falling rates were likely behind a sizable jump in loan applications to purchase a home. They rose 4 percent for the week and were 2 percent higher than a year ago”

  13. Housing collapse will get much worse. Soon people need to move where jobs are but they are under water and unable to sell and relocate!

    The baby boomers retiring at a faster rate and need to downside soon due to reduced budget, health reasons and SALT caps will force them to sell their 2nd or so called vacation homes invested for capital gains!

  14. Can’t blame this move down on rising interest rates. Look out below the next time the Fed raises by a quarter point. Mortgage armageddon if they ever get to 6.0. But hey, on the bright side that home and HELOC only take 75% of some people’s income. But it’s a tax right off and prices never go down, so you can get out anytime, right?

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