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Some Sellers Misread The Signals

A report from Arlington Now in Virginia. “We’re seeing some significantly discounted homes for this week’s edition of Just Reduced, including a couple options reduced more than $100,000. It looks like some homeowners are starting their spring cleaning a bit early and are looking to sell quickly.”

A press release in Massachusetts. “A recent study by Sequel Residential of the residential real estate market for Newton and Brookline, MA reveals selling prices remained stable despite a sharp decline in the volume of home and condo sales over the past 3 months versus the same period last year, amidst substantial recent increases in listing inventory.”

“According to Jonathan Slater, President of Sequel Residential, we’re in a ‘slightly favorable’ buyers market, pointing to an increase in the percentage of listings that underwent price reductions (7.1% to 11.8%).”

“‘Some sellers misread the signals, especially the increase in inventory that has been occurring, and over-priced their original listings, leading to increased price reductions, but things are still moving,’ Slater says. ‘In general, buyers who are waiting for prices to drop significantly are getting shut out. There are just too many ready, willing, and capable buyers out there,’ he adds.”

“‘Last year during this period, buyers felt a greater sense of urgency. This year, buyers are more relaxed about timing,’ Slater explains. ‘For buyers, the strategy of trying to wait things out clearly hasn’t been working, and interest rates are predicted to go back up… so, home ownership is likely to get more expensive,’ he says. For sellers, Slater advises that there’s too much uncertainty to wait any longer than necessary. ‘We have a reasonable market right now. I can’t predict the future,’ he adds.”

From The Hill on New York. “The New York state charges that Vance filed against Paul Manafort appear to run afoul of state and federal protections against double jeopardy, or being prosecuted twice for the same underlying conduct.”

“The timing of the charges alone seemed right out of the playbook of ‘The Producers’ character Max Bialystock, the corrupt Broadway figure ‘ who insisted that ‘ in New York the rule is ‘if you got it, flaunt it, flaunt it.’ Accordingly, Vance waited just minutes after the Manafort sentencing to hit him with state charges, guaranteeing the maximum exposure and credit for his effort.”

“The problem is that the case appears not only constitutionally flawed but ethically challenged, coming right out of the Max Bialystock School of Prosecution.”

“When I read the complaint against Manafort, I was struck not only by the overlap but the overkill. I had never seen the Manhattan district attorney bring such a case, but I could be mistaken. After all, Vance proclaimed he had a sacred duty to protect the ‘integrity of our residential mortgage market.’ That was news in itself. The core allegation was that Manafort lied about a condo being used as a home by his family, as opposed to a rental property.”

“If that type of misrepresentation were truly prosecuted with vigor, New York would be a ghost town. In the land of rent controlled apartments, fraudulent practices are the norm. Indeed, Aaron Carr of the Housing Rights Initiative, a nonprofit housing watchdog group, declared recently that in New York ‘rent fraud is like finding rain in a rain storm.'”

This Post Has 36 Comments
  1. I’ll buy “ready” and “capable”, “willing” not so much, until sellers and builders stop being delusional about where the center of gravity in the market is.

  2. ‘For buyers, the strategy of trying to wait things out clearly hasn’t been working, and interest rates are predicted to go back up… so, home ownership is likely to get more expensive,’ he says.

    Actually, Jonathan, it’s working out quite well for me, thank you very much. I rather enjoy kicking back in my lawn chair, celebratory adult beverage in hand, and watching each month’s new data providing more evidence of a cratering housing bubble, notwithstanding the dissembling of REIC “experts” like yourself and your incessant, failed efforts to drum up a false sense of urgency. Sorry, John Boy, ain’t buying it. And as FB tales of woe start proliferating, your would-be knife catchers are going to get religion and decide they’d rather not join the sad panda parade of cautionary tales.

    1. Home ownership is not likely to get more expensive until there’s more wealth equality in this country, and incomes start to catch up to the ridiculous runaway prices this clown thinks sellers are now entitled to.

      1. I really wish that news outlets would publicize the very real mental health risks associated with marijuana consumption. For those predisposed to mental illness, marijuana has a very real causal effect on schizophrenia and mental illness. I saw this all the time in the ER. Decriminilization of marijuana is what I support, not legalization, but no one should be downplaying the very severe health repercussions.

    1. Dear Gawd…

      There was a need for an article like this?

      ++++

      “New homeowners will buy things they never needed before. That may include items such as a screwdriver set…”

      “Once you’ve officially moved and sent out your change of address announcements, you’ll quickly realize you’re responsible for upkeep. That means you’re on the hook when the water heater breaks or the air conditioner goes out.”

      1. come on – an article with reasonable (albeit obvious advice) rather than real-estate industry blather

        Its a start …

      2. Or you can buy a home warranty for $500/year and not worry about water heaters or A/C units breaking.

        And sadly, yeah there is a need for an article like that. Milenials have no idea how the real world works.

  3. “…According to Jonathan Slater, President of Sequel Residential…”

    “… There are just too many ready, willing, and capable buyers out there…”

    Last of the knife catchers?

  4. I’m re-posting this comment from last night:

    “I have been an appraiser for over 45 years. Both commercial side and residential side. The residential appraiser is doomed as of Dodd Frank. They basically stated no one but certified appraisers could do work. At this point the number of appraisers has dropped to ridiculously low levels. You cannot build a firm nor make sense of an office environ. The government in an effort to keep the banks from pressuring the appraiser made Appraisal Management Companies act in between. The fees are no through the roof. $500-$600 per house. Pre DF they were about $300. The AMC’s put their snoots in the trough and sucked out all they could. At this point the appraiser gets $225-$275 and is told to hit a 2-3 day turn around. Then the lender dictates all these stupid stipulations they want answered to cover their azzes. Most are foolish and are regurgitating the data which is obviously in the report if one can read them. The reports go through several levels of review and then the dat in them is fed to the government for stockpiling. They are building a database from the appraiser’s work product which by the way is a violation of confidentiality and a couple of other things in our code of Conduct. But the rules are different aren’t they. Now the best part. Let’s say that based upon years of practice you raise an issue or fifty with the lenders request, through the AMC you are blacklisted for being a problem child. In other words for good sense and practice you are cut-off. The bank says, not us, the AMC uses who they want to use. All the while the Bank is calling the shots hiding behind the AMC’s. To that I had a job wherein I told them the value was not there and I would not waste my time nor the borrowers money. The AMC rep. said, “no worries we’ll find someone who will do it.” He meant hit the number. They did just that as he called me to let me know. I no longer work for them and I am glad to have fired them. The question was raised as to how the appraisals all come in so close to contract price. Some appraisers are lazy and others are good. The government makes the agents supply the appraiser with the contract. I never run that into a PDF until I finish my report. At times I nail it. In fact most of the time I am within 5 % of the purchase price. Sometimes I am way off the contract price and I call it as I see it. I double work these to see if I missed something but usually it is a situation wherein there was a bidding contest. This is a bad thing to allow. Once a contract selling price is set at listing it should be the first to hit the number gets the house but the Realtors like to set up a damn casino and they keep letting the price rise while dumbazz buyers compete. This is a huge red flag and one of the reasons we get into boom cycles. Prequalification is another issue as far as I am concerned. It is like the house gives you so many chips and you keep bidding till you run out of chips. And there is a problem too as the Realtors drive up the prices. I am worn out with the whole process and with the evident lack of dedication on the part of lenders and government. I will say it as most people are loathe to come right out with it. The difference between now and 2007 is 12 years. Every other aspect is right back where we started. In fact banks claim that appraisers are so in demand they can’t get timely appraisals and they should get a pass of a true appraisal. The government is giving blanket relief to them and no appraisal is required. By the way most sales have dried up and all we are seeing is refi’s. Another great sign. If I were a sheep dog I would eat the sheep and save them the pain of waiting.”

    1. I find this interesting on the heels of a lawsuit that claims, what pretty much everybody knows: the shack markets is fudged up with anti-competitive fraud. Plenty of people have no problem with it. But one might think that given what’s at stake, someone somewhere might want to interview scores of appraisers and find out how prevalent these claims are. Why does it take big money lawyers to challenge a MLS system that has been the same for decades? Oh, and lenders seriously manipulated foreclosures, to their direct benefit, with the open assistance of the government! Joy! Joy and at the same time, what are we going to do to help these poor people who haven’t yet sunk into tremendous debt so they too have a slim chance at winning the shack lottery?

      1. The damage to the US economy is massive. Just massive. Unintended consequences in every direction, the dislocation of entire business sectors, etc.

        “open assistance of the government!”

        They created it. Just like the unmitigated disaster on the south border, globalization, record high unemployment, collapsing housing demand, etc.

        1. “…The damage to the US economy is massive. Just massive. …”

          Even more hideous is the dilution of trust in our society.

          Used to be that I could walk into a bank and a handshake was considered as good a gold.

          I am in my 70’s.

          Kids today grow up thinking the world is one giant, me-me-me casino.

          All very tiring to think about.

    1. Local credit union is doing 3.5% on 5 year certificates, and 3.25% on 2 year. Seems like the logical place to park some cash.

      1. Are those above-market rates federally guaranteed? (I didn’t realize this mattered until the S&L that issued my 5-year CD went BK circa 1988. It was federally guaranteed, though — both principle and interest.)

      2. One more thing…there are no capital gains to be made on CDs if yields fall, unless reflected in the form of a deflationary increase in the real value of the numéraire currency.

      3. I’ve seen a few examples of 1 year 3% CDs for $100K+. It’s a decent rate, if you know you’ll need cash in the short term and don’t want anything risky. But 3.5% for 5 years is insane. No way I’d ever lock up my money for that long, for such a low rate. Money markets are paying 2.25-2.5% APY with no commitment. To commit for 5 years in order to get an extra 1% a year is nuts.

        1. To each his own. I ladder, so I always have a constant flow of funds rolling over. To me a money market of 2% that risk to NAV and his not risk-free is much more risky because you are hardly getting anything above the CPI’s inflation number. If you’re not getting above the inflation rate, you’re losing purchasing power.

    2. T$k, t$k, t$k … Obvious, their hand$ are $ore from all their handwringin’!

      Row, row, row your boat
      Gently down the $tream
      Merrily, merrily, merrily
      Life is but a dream

      … Ver$es …

      Rock, rock, rock your boat
      Gently to and fro
      This way, that way
      Over the $ea we go

      America$ $trong! … Mexico Canada EU, bunch of grifter$! China = gro$$ para$ite$!

      Beggar thy neighbour

      The term was originally devised to characterise policie$ of trying to cure dome$tic depre$$ion and unemployment by shifting effective demand away from imports onto dome$tically produced good$, either through tariff$ and quota$ on import$, or by competitive devaluation. The policy can be associated with mercantilism and neomercantilism and the resultant barriers to pan-national $ingle market$. According to economist Joan Robinson beggar-thy-neighbour policie$ were widely adopted by major economies during the Great Depre$$ion of the 1930$t

      Global povertie$ vacuum$ equal land acqui$ition oppoortunitie$ for those so intere$ted in $eizing such a$$et liabilitie$.

      What happened AFTER the Great Global Depre$$ion?

    1. From the artist conception drawings – looks pretty cool.

      Lots of details left out of the lengthy article.

      How much will an average apartment cost?

      How much taxpayer money is involved?

  5. Opinion: When the U.S. falls into a recession, a credit bubble will explode
    Published: Mar 20, 2019 10:49 a.m. ET
    The U.S. economy, at its own peril, has been driven by cheap credit
    Getty Images
    As the economy enters recession, many companies will lose their ability to service debt, says John Mauldin.
    By John Mauldin
    Investment strategist

    The European Central Bank this month said it would keep record-low interest rates for longer. The news comes shortly after the U.S. Federal Reserve gave in to the stock market and held off on further interest-rate increases.

    While investors celebrate the policy reversal, they might soon regret it.

    This stimulus may indeed buy the market an additional year or two. But postponing the inevitable downturn with artificially low rates will come at a cost. The cost is a massive credit bubble that is already of biblical proportions. Its implications chill me to the bone.

    1. Captain Obvious flies again. The damage has already been done over the last decade (or 2 or 3). Maybe a few on the cusp will be able to get their heads above water if the economy limps along another year or two, but this being ‘murica they will probably just buy more junk they cant afford.

      The bigger issue is how many needless deaths will continue to occur due to Trump Derangement Syndrome? We need to take care of these sick, sick people – perhaps sending them to rehab in a plastic straw free migrant camp. Think of the virtue signaling photo ops!

    2. “The co$t is a ma$$ive credit bubble that is already of biblical proportion$”

      The Coast Guard’s service motto is Semper Paratus!

  6. and yet a scant 12 miles away in 22151 there are food fights over minimal inventory as Trump fails to cut fed workforce.
    HA!

  7. buyers who are waiting for prices to drop significantly are getting shut out

    They don’t seem too stressed about it or they’d raise their offers.

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