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This Is No Longer A Market Where Homes Sell Significantly Above Listing Price

A report from the Naples News in Florida. “The year is off to a good start for homebuyers. Visitors looking to purchase a home in the Naples area during January were pleasantly surprised with their options as inventory levels increased 7 percent to 8,154 homes for sale in January 2019 from 7,605 homes for sale in January 2018.”

“Overall, there were 549 more homes for sale in January 2019 than in January 2018. The Naples area has seen its resale market inventory climb over the last few months. As such, there was 8.4 months of inventory in January 2019, typically indicating a buyer’s market, up from 6.3 months of inventory in January 2018.”

The Business Report on Louisiana. “Though housing sales rose last month for the first time since the summer, Baton Rouge’s housing inventory and average days on market are continuing to grow, suggesting the market continues to be shifting in favor of buyers. The month was marked by higher inventory (4,168, up 11.3%) and houses remaining on the market for more days (up nine days to 78, a 13% increase).”

“‘I’ve been telling all my buyers, this is the best time for them,’ says Keller Williams agent Kyle Peterson.”

From KVOA in Arizona. “New statistics from the Tucson Association of Realtors show housing sales are both up and down. Total sales volume fell 11.33 percent. The total number of new listings went way up, rising 68.72 percent. With the jump in the number of listings, the time it takes to sell a house has gone up, going from 40 to 44 days.”

The Arizona Republic. “The price for the Phoenix spiral house Frank Lloyd Wright designed for his son David has dropped by almost $3 million to $9.999 million. The 2,553-square-foot house built in 1952 was listed last September for $12.95 million.”

From Community Impact on Texas. “A rise in both active listings and housing inventory signals the area housing market ‘continues to move toward greater balance,’ per the report from the Austin Board of REALTORS. ‘While demand remains strong due to population growth, this is no longer a market where homes sell significantly above listing price,’ ABoR President Kevin Scanlan said. ‘Housing affordability challenges might be limiting what consumers are able to pay for a home.'”

From Celebrity Net Worth on California. “Mansour Ojjeh, part owner of TAG and its McLaren Formula One team, is selling his Santa Barbara estate for $110 million, and if he gets a buyer for the property known as El Rancho Tajiguas at that asking price, it would mean a new record for the Santa Barbara, California area.”

“Forbes reports that the current record for most expensive property in Santa Barbara belongs to a 22,000-square foot home that went for $35 million last year, compared to its original listing price of $45 million.”

“But Ojjeh’s isn’t actually the most expensive Santa Barbara property listing. That would belong to one Rancho San Carlos, that was originally listed at $125 million before its price dropped down to $85 million (side note: Rancho San Carlos is being listed by one of the same agents as the infamous Neverland Ranch that once belonged to the late Michael Jackson, now seeing troubles of its own in finding a buyer).”

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This Post Has 47 Comments

  1. ‘part owner of TAG and its McLaren Formula One team, is selling his Santa Barbara estate for $110 million’

    I watched a documentary including this racing team. Seems this guy likes throwing money away on real estate and cars.

    1. Montecito/SB is in big trouble, none of the multi-million dollar estates selling, fires and mudslides and SB is getting too crowded, it lost a lot of its charm. The service jobs are going unfilled as rents are nuts!

      1. The homeless population 9.5 years ago was pretty bad. I can’t even imagine what it must be like now.

    2. Mansour made his money from weapons and defense deals between our Saudi friends and France. He made his billions with daddy’s help.

  2. ‘The total number of new listings went way up, rising 68.72 percent. With the jump in the number of listings, the time it takes to sell a house has gone up, going from 40 to 44 days’

    On again, UHS demonstrate the days on market statistic is manipulated bunk.

    1. ‘Overall, there were 549 more homes for sale in January 2019 than in January 2018. The Naples area has seen its resale market inventory climb over the last few months. As such, there was 8.4 months of inventory in January 2019, typically indicating a buyer’s market’

      How many days on market is that, 30?

      Where are all these shacks coming from?

      1. “…there was 8.4 months of inventory in January 2019,…”

        Isn’t that saying the average days on the market are more like 8.4 × 30 = 252?

    2. 1. Do they average over actual time from when a home is first listed until when it sells, or does the average reflect downward bias due to the relisting scam?

      2. Are the lengths of time unsold homes have sat on the market taken into consideration in calculating average time to sell? If not, then this is a further source of downward bias in the average time to sell statistic.

      3. An increase from 40 to 44 days to sell seems quite inconsistent with the 68.72 percent inventory increase, leading me to believe one or both sources of bias are in play.

        1. I found this but it doesn’t go into the granularity

          https://www.thebalance.com/why-days-on-market-matter-to-home-buyers-1798769

          Average Days on Market
          Many agents refer to “average days on market,” a number that’s arrived at by adding all the days on market of each listing and dividing that by the number of listings. In a buyer’s market, the DOM is generally higher because inventory takes longer to sell. In a seller’s market, the DOM are fewer.

          Agents use the last 30 days to six months of sold listings. Let’s say that six listings entered pending status in December. Three of those listings were on the market for five days, one was on the market for 21 days, and two were listed for 30 days before offers were accepted.

          Add together all the days on market: 5 + 5 + 5 + 21 + 30 + 30. This equals 96 days. Divide 96 by six listings to determine 16 average days on the market.

      1. Lower lower lower…..Neverland Ranch, the former Santa Ynez Valley, Calif., estate of Michael Jackson, has returned to market for $31 million — nearly 70 percent less than it originally listed for in 2015. The 2,700-acre property holds nearly two dozen structures, a train station, equestrian facilities and an amphitheater. Tree-covered fields and fields surround the property, which also has a four-acre lake with a waterfall.

        https://pilotonline.com/life/home/article_622144fe-44ff-11e9-a4e9-134417dfde31.html

  4. Increasing listings and increased inventory? What is the difference?

    The realtor says it is best time to buy. Has there ever not been a time to buy in their eyes? Supposedly due to an initial uptick in the inventory. First round of realtor BS was in denying the shift, now that it is here, it is great time to buy. What’s next? Economic suicide is a sport?

    Rediculous.

    1. A high school acquaintance I knew became a realtor / broker back in 2005ish. He started a company that had a boiler room style operation to call FBs, qualify them for a loan, find the house for them and make all tiers of profits from the mortgage end and the agent end. His mantra was to tell the buyer anything to close the deal. He was definitely making a lot of money and had houses and cars from all his proceeds. He was getting death threats from some of these clients after they got foreclosed on and ended up relocating out of state with his family. These types of shady, no integrity UHS say whatever it takes to close. Be nice to see the whole real estate salesperson business evaporate someday, hopefully in my lifetime

      1. A friend of mine was building in 2005 right up into the housing mania. He was a developer/speculator and some of his spec homes blew up spectacularly. He had creditors coming after him claiming fraud and the like. He took is family and moved to Costa Rica and has been there ever since.

        2. I know a woman whose boyfriend was a Countrywide exec before they went bk. After the crash and the company disappearing, they walked away from a San Diego condo and moved to Costa Rico. Is that the go-to place for REIC refugees or something?

          2. Sounds like a paradise for expatriate real estate scam artists.

            Problems occur when the expat turns out either to be a Grifter, or realizing there is little or no way to earn a living, turns to hustling the other expats. Common scams include real estate frauds and boiler operations where victims in the United States are persuaded to send money.

  5. All the DOMs and months supply are generated in the MLS system. Typically relisting does not remove the days on market. In MLS systems there are 2 DOM figures. These are ADOM and CDOM. The first is active days on market which I believe are the days under current listing agreement and CDOM is cumulative days on market which is obvious.

    Months of supply is just the current inventory divided by the last month’s sales. I probably should ask our MLS provider’s tech support to see if the month’s sales are previous 30 days, previous calendar month, or an average of several months. Always something you do not think of. When I find out, I will report here.

    1. Thanks Jdog that’s a good overview. I am curious about “Typically relisting does not remove the days on market.” because I see many listings taken off only to be relisted a month later showing as new listings. Are you saying from the MLS it would be recorded as how ever many days it is actually on before selling or that it “should” shown the actual DOM on mls presented to the viewer? I know for my local mls it does not. A relisted listing will show as new at least on trulia / Zillow or mlslistings

      1. Each MLS service could be different. Not all original MLS data gets on external info sources such as Zillow and others. In fact, not all listings necessarily get to those sources.

        They way they do is by an IDX agreement that allows proprietary (mls) data to be shared. This is typically the option of the property owner. Listing agreements will contain the language for the seller to agree or not. Most do since it maximizes exposure. However not all the MLS data is exported. MLS is inherently and agent to agent service. When the agent elects to export MLS reports, they can elect to export a wide variety of report types.

        If they export a non agent report, it will not contain all the data. If they export reports to be sent to a prospect, it will probably not contain information about commissions or bonuses to agents or other data the agent does not want made public. There are many options. Unless you have agent access to the MLS system, you are not likely seeing all recorded data for a given mls record.

  7. “‘I’ve been telling all my buyers, this is the best time for them,’ says Keller Williams agent Kyle Peterson.”

    You’ve been beating that drum for as long as you’ve been selling shacks, Kyle.

  13. So now the Financial Times has repeated the B word and tied the central bank to it:

    The Fed has exacerbated America’s new housing bubble
    Financial Times-3 minutes ago
    Very simply, this means that the housing market is once again completely out of … but didn’t create meaningful new supply or, consequently, enough demand in …

    1. No bubble here, move along, fake news. #tothemoonrealestate #susanneforpresident

    2. It was lurking in plain sight all along, but the Financial Times calling it out will make it harder to deny.

    3. “What we have now is a form of inflation that’s never been seen before — it’s all concentrated in housing.”

      The Fed has a simple remedy for this: Simply define asset price changes as outside of the scope of what counts as inflation.

      2. It is not inflation, it is financial wealth creation.

        Inflation is measured by an increase of price without an increase in value. Financial wealth creation is measured by an increase in wealth brought about by an increase in price.

        Real estate financial wealth creation is brought about by the actions of strangers who decide to buy a house and pay a higher price than the previous going price for comparable houses. Most likely these buyers utilized money that belonged to somebody else, which means they DID NOT ACTUALLY BUY THE HOUSE but merely committed themselves to buying the house. Nevertheless, the sale of the house was recorded as such and the price of the house, being at a higher price of comparable houses, was also recorded as such. The result of this activity ended up CREATING FINANCIAL WEALTH FOR EVERY ONE OF THE COMPARABLE HOUSES.

        1. Again, this paying a higher price for a house is not inflation because the higher price created financial wealth for all the comps. If there are a hundred comps then each dollar paid above the previous going price created one hundred dollars of value for the comps.

          A true miracle.

          1. This miracle comes undone if/when the going prices of houses begin to decline. A decining price of one house will act to destroy the values of the comps. If there are a hundred comps then for each dollar of price decline for the house that is sold will destroy one hundred dollars of value, of wealth, for the comps.

          2. This miracle comes undone

            And falling house prices will not be Deflation, although the defaults on the debts will be.

          3. Excellent description Mr. Banker. It’s so clear, yet so clearly escapes the understanding of the average citizen.

  14. Some FIRE executives got burned in the college admissions cheating scandal. Bill Gross must be happy to have severed ties.

    FTfm Fund management
    US college cheating scandal snares fund sector executives
    Big names in asset management are among the accused
    Douglas Hodge, formerly chief of Pimco, is said to have used bribery (Anthony Kwan/Bloomberg)
    Jennifer Thompson March 16, 2019

    Hollywood actors grabbed the headlines but a clutch of big names in asset management featured in the group of wealthy parents accused of paying millions of dollars to buy places for their children at elite American universities.

    Those charged as part of Operation Varsity Blues include Douglas Hodge, former chief executive of investment manager Pimco, John Wilson, former independent member at one of Franklin Templeton’s fund boards, and Bill McGlashan, a former top executive at private equity firm TPG and poster boy for the impact investing sector.

    In a criminal complaint filed in Boston, the Department of Justice accused 50 individuals of engaging in a scheme to bribe college entrance-exam administrators and university coaches.
    …

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