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Buyers Are Taking Their Time, There Is No Sense Of Urgency

A report from Fox San Antonio in Texas. “Clayton Pickens has been buying and selling homes in San Antonio for years. He said dream homes in San Antonio used to be a lot cheaper. Not so much anymore. ‘Now those dream houses that people think are on the higher end, they’re up towards the five hundreds,’ said Pickens.”

“You might think there are plenty of homes to choose from here in San Antonio. After all, there’s new construction all over the city. But Pickens said, that’s not necessarily the case. ‘When it gets down to your pool of what you like, you won’t find as many choices as you might think,’ said Pickens. He said builders are keeping the supply of homes in San Antonio relatively low. That means as the demand for homes continues to rise, so will the prices.”

From Loop North News in Illinois. “Stroll down any side street in the Lincoln Park and Lakeview neighborhoods and you will see lots of McMansions, those gaudy multi-million-dollar homes that take over two or three 25-foot city lots. But how much house do you really need? Chicago’s rising wealthy class wants it all. They consider 5,000 square feet a small house. Why not 10,000 square feet if you can afford it?”

“With thousands of city-owned vacant lots sitting unused on the South Side and West Side, perhaps our next mayor should focus on incentives to lure builders and young first-time buyers to affordable smaller homes in these areas.”

From Ocala.com in Florida. “It’s a buyer’s market when it comes to choices, said Robert Goldman, an agent with Michael Saunders & Co. in Venice. ‘There are more homes for sale,’ he said. ‘Inventory has increased. It is taking longer to sell a home. The ratio between sold and original list price is falling. Buyers are taking their time. There is no sense of urgency.'”

From The Spectrum in Utah. “Several new reports on housing affordability in the St. George Metro Area were released this month and it’s not good news for homebuyers. It now takes 5.3 years of income to pay off the median home price. The survey considers any number under 3 affordable.”

“Neil Walter, CEO of ERA Brokers in St. George said that inventory levels are rising, and home prices are expected to continue to rise in 2019, although at a slower rate. ‘This is good news for buyers, who have more inventory to choose from and encounter fewer competing offers,’ he said. Sellers can expect to still sell quickly, but will need to be more patient than in 2018, he said.”

The Press Democrat in California. “Property managers say apartment rents in Sonoma County have stopped the dramatic monthly increases that followed the October 2017 wildfires and subsequent housing market upheaval. There are even areas where rents have begun to decline.”

“Scott Gerber, managing director of Meridian Commercial Property Management in San Rafael, surveys more than 18,000 rental units in Marin and Sonoma twice a year. He said monthly apartment rents are now stable and, in some cases, declining because there’s been pushback from renters. Over the winter, the rental market got ‘really soft’ and rents at the high end started flattening out and declining, he said.”

“‘Two years ago, no one was decreasing rents,’ Gerber said. ‘We had a little dip in the winter.'”

“Construction of new units also has helped to stabilize the apartment rental market. Gerber’s recent data show that 871 new apartments have been built in Sonoma County, with another 1,734 units either approved or proposed. ‘You’re going to be seeing significantly more availability than you did 12 months ago,’ he said. ‘I’m not characterizing it as a renter’s market, but it’s more of a renter’s market than it has been in five years.'”

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This Post Has 43 Comments

    1. And active inventory up +72%.

      As Ben said, there was never any shortage.

      However, where is your source of mortgage fraud? Or was that a general statement?

  3. ‘I’m not characterizing it as a renter’s market, but it’s more of a renter’s market than it has been in five years.’”

    You ain’t seen nothing yet, Scottie. The implosion of the Fed’s Everything Bubble is going to lay waste to the housing bubble and inflated rental prices.

  4. Even returning to a “normal” market sparks fear…

    ****

    “Buyers are taking their time. There is no sense of urgency.’”

    1. More like a sense of trepidation over the grim prospect of catching a falling knife at the onset of a protracted housing bust…

  5. The property taxes on these places are already insane and will increase exponentially as the city implodes with debt.

    No resale value. In fact, it is a massive tax liability. You would have to pay me to take ownership….

    *****

    “Lincoln Park and Lakeview neighborhoods and you will see lots of McMansions, those gaudy multi-million-dollar homes that take over two or three 25-foot city lots.”

    1. Check out this screenshot of a suburb of Oregon with 2% property taxes. It’s almost laughable how list prices haven’t budged in the face of collapsing prices. A $501k house with 2% property taxes puts you over the SALT limit.

      https://imgur.com/a/8ZMY4Wd

  6. Always throwing more tax money at the problem in order to keep prices high.

    You want to “lure” new people to move to your city?

    Let prices fall, drastically cut spending on insane pensions/benefits, increase spending on infrastructure, ban public unions and cut property taxes to the bone.

    *****

    “With thousands of city-owned vacant lots sitting unused on the South Side and West Side, perhaps our next mayor should focus on incentives to lure builders and young first-time buyers to affordable smaller homes in these areas.”

    1. Nah bruh. The way to lure people to your city is create bike lanes nobody uses at the expense of car lanes, spend billions on transit nobody takes and make sure the fire department is 75% non-white male. After all the #1 goal of any city should be sustainability and diversity.

      Oh and don’t enforce any laws against homelessness or public defection.

      1. “Oh and don’t enforce any laws against homelessness or public defection.”

        And for Climate Change’s sake don’t tell ICE about any illegal immigrants you have taken into custody.

        “Despite having six detainers placed on him by ICE, Carranza was never deported.”

        By Paulina Dedaj | Fox News
        HOMICIDE Published March 12

        Police in California have arrested an illegal immigrant with known gang ties and an extensive criminal history in the February killing of a San Jose woman.

        Carlos Eduardo Arevalo Carranza, 24, was arrested Monday night in connection with the murder of 59-year-old Bambi Larson; police say he stalked her before stabbing her to death.

        Garcia declined to name the gang but listed the extensive criminal history of Carranza, who had six separate detainer requests against him via Immigration and Customs Enforcement (ICE).

        According to Garcia, the suspect was detained by the Department of Homeland Security at the border in Texas and deported in 2013.

        Two years later he was arrested and accused of possession of paraphernalia and convicted of burglary in San Jose. In 2016 he was arrested on charges of battery of an officer, resisting arrest and entering and occupying a property. That same year, in October, Carranza was arrested in Los Angeles on battery charges.

        His final arrest before the murder of Larson was in January, on charges of possession of methamphetamine and paraphernalia.

        https://www.foxnews.com/us/illegal-immigrant-with-criminal-history-arrested-in-california-womans-murder

        1. Alexander Hamilton on immigration (from a commentary on Jefferson’s Notes on Virginia):

          “The United States have already felt the evils of incorporating a large number of foreigners into their national mass by promoting in different classes different predilections in favor of particular foreign nations and antipathies against others it has served very much to divide the community and to distract our councils It has been often likely to compromise the interests of our own country in favor of another The permanent effect of such a policy will be that in times of great public danger there will be always a numerous body of men of whom there may be just grounds of distrust the suspicion alone will weaken the strength of the nation but their force may be actually employed in assisting an invader.”

          1. But alas, the only way to prop up our Ponzi scheme economy is by endless rapid population growth.

  7. ‘Now those dream houses that people think are on the higher end, they’re up towards the five hundreds,’ said Pickens.”

    ____

    I guess it depends on what his definition of a dream house is. But come on, $500K for a “dream house” is still pretty damn cheap. In coastal cities $500K gets you a studio apartment in the ghetto.

          1. So only 2nd home markets can have $500K homes?

            A couple each earning $80K can easily afford a $500K home. And yes there are people who make $80K in San Antonio.

            The point I was making, was for a “dream home”, $500K is cheap. San Antonio is a great place for an upper middle class professional to be. No state income tax, dirt cheap real estate. If you can put up with 95 degrees and 75% humidity for 2 months a year that is.

          4. Given the fact that the national median income is around $60,000 a year, not too many can afford to spend eight times their annual income on a rapidly depreciating asset like a house.

          6. I don’t know what the number is but that’s a broke ass city for wages. It’s basically northern Mexico. You have no facts. I lived near there for 15 years.

          7. I’m taking it the DegenerateGambler didn’t see it the first time so with your permission….

            Given the fact that the national median income is around $60,000 a year, not too many can afford to spend eight times their annual income on a rapidly depreciating asset like a house.

          8. San Antonio is a huge, Dallas-sized city of mostly working class, near poverty folks from across the Rio Grande. Most businesses in 3/4ths of the city don’t use English as a primary language.
            Its very similar to a border town, but its in the middle of Texas.

          9. Regarding the conversation about San Antonio, in particular the modern notions of affordability…I’m so old I remember when you could live comfortably in a Southern California suburb on a single income. I remember it because that’s how I grew up.

    1. It’s priceless (and instructive) watching the butt-hurt progressives in Congress, Hollywood, and the MSM have meltdowns over the FBI’s failure to railroad Trump. Stamp your little feet!

  9. The taxman is coming. I have a new theory that the tax law changes are going to kill move up buying. The thinking is that most home “owners” are going to switch to the standard deduction for homes under the Fannie/Freddie conforming limit of $468k. The math gets really easy at that point when considering an upgrade, you just look at the Zillow mortgage calculator. Also, there are going to be a lot of contingent sales that never happen as move-uppers overprice their existing properties.

  10. Did anyone see the latest CAR data for February 2019? Multiple California counties with YOY price declines.

    The neighborhood I live in has the first foreclosure that I’ve seen in the 4 years I’ve lived here.

    The slowdown evidence keeps stacking up.

    1. Wow, this golden visa idea in Greece seems like a terrible idea:

      “Among them are a few hundred foreigners — mainly Chinese, Russians and Israelis — who tapped into a “golden visa” programme launched in 2013 that gives them residency rights in exchange for property purchases over 250,000 euros ($285,000), according to Lefteris Potamianos, head of the Athens real estate association.

      “In a few cases, they buy entire blocks of flats,” he said. “Home-sharing has certainly boosted the market.””

  12. Some thoughts on now and 2007…

    Now, supply is artificially constricted
    ———————————————-
    Hedge funds bought homes (Blackrock owns 82,000 homes )
    Mom & pop real estate investors own multiple rental properties
    Mortgage servicers are hesitant to foreclose because they don’t want to drive prices down in the rest of their portfolio

    Now, majority of demand is a function of debt
    ———————————————-
    Years of ZIRP and ~ $3.5T in printed money made borrowing fun.
    Corporations borrowed for stock buybacks, individuals borrowed for houses, cars, education, etc.

    How the 2007 bubble ended
    ———————————————-
    The last bubble was concentrated in housing and corrupt, speculative finance based on housing (MBS, CDO’s, etc).
    Mortgage defaults was the pin that pricked the last bubble.

    How this bubble might end
    —————————————-
    Money printing enriched the asset owners (mainly the top few percent) while depleting average folk.
    So now there is $1.5T student loan debt, $1.1T auto loan debt and total household debt at $13.5T.
    I believe we are reaching debt exhaustion. 58% of Americans have less than $1000 in savings.
    So the latest warning from FedEx and the sudden reversal by the Fed suggest we are at or near recession.

    This would suggest gradually decreasing aggregate demand, triggering gradually increasing defaults.
    As the everything bubble starts to deflate, the activist Fed will go to ZIRP/NIRP and print more.
    This should slow the rate of decline (but not reverse it)

    Over the next few years, defaults will snowball and it will become apparent that the Fed cannot backstop it all.
    So the gradual decline will steepen into something like 2007-8, causing speculators will try to preserve their gains ( sell, Mortimer, sell).
    At that point, the Fed starts buying ETF’s and corporate bonds.
    But since the crisis is global, this “Japanese solution” (massively print -> depreciate currency -> boost exports) will not work.
    When the impotence of the Fed is revealed, a depression ensues. Time frame 3 – 5 years

    Note:
    based on previous insanity, the possibility that the Fed might start buying houses has to be considered.
    I just can’t imagine the Fed becoming a landlord. Then again, based on previous insanity…

    1. 2banana – I think this is a pretty reasonable forecast of what might happen. Good insight, thanks for sharing. Got my popcorn ready.

  13. Love the article on St. George. Thought that this excerpt from the was relevant:

    “A recent survey of popular second-home markets using data from the Consumer Financial Protection Bureau and compiled by financial data company SmartAsset, showed St. George Metro Area in the top 50 of most-favored second-home hot spots. Ranked 27 out of 50, slightly more than 32 percent of mortgages were for second homes.”

    The thing about incomes to years of income to median home price is that it doesn’t take a look at those who are buying. Since a lot of the buyers coming in the St. George are cash-out CA buyers, St. George prices are actually quite good. I still remember treating the marketing exec who worked in LA but who lives in St. George. He gets LA pay but pays So Utah home prices and has a nice, family friendly city for his wife and children. Extreme, sure. But it is what is working in this distorted housing environment.

    1. Coastal income living in flyover is the ultimate arbitrage. And it’s not that extreme, it’s quite common actually. Which is why the median income to median home price doesn’t fit into a neat little box.

        1. Our country is fast devolving into a dystopian version of the Hunger Games where complete states and cities are homogeneous in their class makeup. Because of the way things shake out, you have complete cities that cannot/will not house the worker bees that run them. It is a really bizarre thing that is happening right now.

  15. Question about the inverted yield curve, for anyone who has an explanation:

    My recollection from previous inversions is that the 30-year Treasury yield dipped below the short end of the curve along with the 10-year.

    This time is different, with the 30-year stubbornly higher than all other durations. Why?

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