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They Were Confident In These Investments, And They Paid The Price

A report from the Daily Republic in California. “The Solano County home market continues to be challenged by the lack of inventory – creating a sellers market that the president of the Northern Solano County Association of Realtors said has some interesting twists. Patty Hopkins, president of the Realtors association, said she has had to tell many of her clients that their original asking prices, despite the lack of inventory, have been too high for the buyers’ market view.”

“‘I think sellers were coming in too aggressive on their price, that they have wanted too much,’ Hopkins said.”

The Post and Courier in South Carolina. “An antebellum manor on the Charleston peninsula fetched less than half its original $12.95 million asking price in the fall. An over-the-water mansion sold in March for more than $10 million below the original list price when it went on the market a decade ago. A century-old home overlooking The Battery recently changed hands at a $1.5 million reduction.”

“The Charleston area is awash in pricey properties. And many are selling — at reduced prices. On Kiawah Island, luxury real estate agent Pam Harrington pointed to nearly five dozen houses above $2.5 million that are on the market. ‘All of these big houses got built, and now they want smaller houses,’ she said. ‘They built for their family and their extended family, and it appears millennials don’t want big houses.'”

From The Real Deal on New York. “Westchester developer Michael D’Alessio was sentenced to six years in prison on Friday morning after pleading guilty in November to defrauding investors in his New York development projects.”

“D’Alessio, the former CEO and president of Michael Paul Enterprises, was accused of funneling more than $58 million of his investors’ money to shell accounts under his control and using these funds to pay off gambling debts, cash out early investors and cover other debts.”

“D’Alessio broke down in tears while delivering a brief statement to the court saying he stood before the judge as ‘a broken man.’ Scott DeCarolis, a victim of D’Alessio’s Ponzi scheme, spoke at the sentencing as well. He asked Furman to remember the financial hardships D’Alessio’s decisions put his investors through, noting that the losses he suffered almost caused him to file for personal bankruptcy. ‘I’ll be suffering the rest of my life for this,’ he said.”

“Assistant U.S. Attorneys Amanda Kramer and Daniel Nessim acknowledged D’Alessio’s gambling addiction as well but said that this was not enough to excuse his actions, especially from the perspective of his investors. ‘They were confident in these investments,’ Nessim said, ‘and they paid the price.'”

From Miami Agent Magazine in Florida. “Miami has been a boon for homebuyers lately, as more developers work to move new homes and condos off the market in the wake of a yearslong building boom. To make it happen, price cuts have become common across the board, according to a recent analysis from online listing service Knock.”

“According to Knock’s nationwide report on price cuts, Miami ranked No. 1 in the country for the share of home listings sold at a discount early this year. A whopping 88 percent of Miami-area home sales in Q1 sold below asking price, with an average discount of 7.15 percent. This was also the largest average price cut among the metro areas surveyed by Knock.”

“Nationally, Knock found around 73 percent of Q1 2019 home sales came in below asking price, with an average discount of just over 4 percent. For comparison, at the same time last year, around 65 percent of home sales were under list price. Tampa, Jacksonville and Orlando also ranked in the top 10 for their rate of below-list-price sales, although they saw average discounts of closer to 5 percent.”

“Still, according to Florida Realtors Chief Economist Brad O’Connor, this is a natural consequence of typical seasonality as well as growing inventory levels, the latter of which is ultimately bringing balance to the market statewide. ‘Competition between buyers is clearly not as fierce as it was even a year ago. However, that doesn’t mean we’re quite in buyer’s market territory yet,’ O’Connor said.”

From Automotive News. “Five years ago this month, Toyota sprung a $1 billion surprise on the auto industry and economic development officials across the U.S.: The North American arm of one of the world’s largest automakers would strike its historic tent in Southern California and move to a palace near Dallas.”

“‘I think life is a little bit easier for people here, and as a result, I think the work-life balance is much better,’ said Jim Lentz, CEO of Toyota Motor North America. ‘I think people, as a result, have a lot more energy being here. If you live in Southern California, and you’re driving 2 or 2.5 hours each way, you’re leaving at 5 a.m. and you’re getting home at 8 or 9 — that kind of wears on you.'”

“Asked if there was any part of the move that Toyota might have done differently, Lentz was calm and confident. ‘Yes,’ he said. ‘We should have done it 10 years earlier.'”    

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This Post Has 38 Comments

  1. ‘Nationally, Knock found around 73 percent of Q1 2019 home sales came in below asking price, with an average discount of just over 4 percent. For comparison, at the same time last year, around 65 percent of home sales were under list price. Tampa, Jacksonville and Orlando also ranked in the top 10 for their rate of below-list-price sales, although they saw average discounts of closer to 5 percent’

    Seems kinda motivated.

  2. ‘If you live in Southern California, and you’re driving 2 or 2.5 hours each way, you’re leaving at 5 a.m. and you’re getting home at 8 or 9 — that kind of wears on you’

    But, weather?

    ‘Patty Hopkins, president of the Realtors association, said she has had to tell many of her clients that their original asking prices, despite the lack of inventory, have been too high for the buyers’ market view’

    ‘I think sellers were coming in too aggressive on their price, that they have wanted too much’

    Wa happened to my shortage Patty?

    3. Yeah driving that much is crazy. I’ve heard that there is a significant amount of people who do Sacramento to SF Bay on a daily basis. Which is beyond insane.

      I don’t care how many days of sunshine you have. Spending 4 hours a day in the car isn’t worth it.

      But…I suspect a lot of these situations are temporary. Something like couple moves to Sac from SF and wants to keep the old job for the stock options to vest. Or the wife got a job in Sac and the husband is keeping the old job until he can find something closer. I doubt anyone is doing the 2 hr commute each way with a plan to keep doing it for 30 years.

      1. I doubt anyone is doing the 2 hr commute each way with a plan to keep doing it for 30 years.

        “Everybody’s got a plan until you hit them in the face.”
        — Mike Tyson

  3. ‘Competition between buyers is clearly not as fierce as it was even a year ago. However, that doesn’t mean we’re quite in buyer’s market territory yet’

    You know Brad, prices in Miami have been sinking like a turd in a well for over 3 years.

    1. Hilarious — your year ago comparison involves one house on the market. You should at least briefly examine the data before posting.

  5. “‘I think sellers were coming in too aggressive on their price, that they have wanted too much,’ Hopkins said.”

    They probably thought housing only goes up, because that’s what you assured them when you were pitching overpriced shacks at the peak of the market, Patty.

  6. “Hopkins said any home priced below $450,000 is being gobbled up “like hot cakes.” As the price goes up, the pace of sale slows considerably.”

    Ms Hopkins has an entrepreneurial moment. Price!

  7. “An antebellum manor on the Charleston peninsula fetched less than half its original $12.95 million asking price in the fall.”

    Which poster dismissed the notion of 50% off sales? Your delicious baked crow dinner is under preparation.

    2. Yeah its like free now. And renting is throwing your money away and real estate only goes up (well most of the time like 99.999%). Now is the best time to buy!!!!

    3. For the 71st time….

      The article in question said houses were selling at 50% off what had been purchased for in 2012. And that is absurd. Mucho absurdo.

      And yes QT you are correct. Real estate goes up in the long run, while renting long term is a waste of money. Finally someone here gets it. 🙂

      Short term, real estate does go down. And short term renting is fine. I’ve rented several times in my life. But renting for 50 years vs owning for 50 years….throwing money into a fire pit.

      2. Owning is fine if you time your purchase for a trough. We did it twice. But thanks to the Fed’s post-2009 artificial housing market reflation, there hasn’t been a true cyclical bottom in real estate since 1996 or so.

      3. Who in the 21st century keeps working in the same metro area for 50 years? Mobility is a requirement now.

        1. “Who in the 21st century keeps working in the same metro area for 50 years?”

          Landlords?

          1. So the vast majority of people should be leery about homeownership in the current macro environment.

            Unless you’re a landlord or aspire to be become one.

        2. Mobility is easily doable until you’re raising a family, and as some guys around here will admit there’s no moving the wife too far from her mother despite our access to connectivity.

  9. “Asked if there was any part of the move that Toyota might have done differently, Lentz was calm and confident. ‘Yes,’ he said. ‘We should have done it 10 years earlier.’”

    Southern California is Paradise Lost. The flight of the productive and decent portion of the populace is going to turn into a deluge as the spiral into progressive utopia accelerates as Central American entitlement voters flood in from Tijuana and Mexicali.

    2. He belongs to the party of open borders and implacable hostility to blue collar whites. I’ll pass.

  11. Been out running errands today (just been slammed finishing a big project this month) and noticed the open house signs battling for position at key intersections. Definitely more signs (in one spot) than I’ve seen since I moved mid-island ~4 years ago. And they’re persisting for many weeks now. Zillow numbers don’t show a huge increase in listings.

    This is going to be a fun spring buying season to track.

    There’s a house on the other side of a nearby trail I like to walk that’s gone pending – but looking it up, it’s been pending since mid February… What does that mean when pending goes on 45+ days?

    1. Having a hard time selling the previous home for enough to make the deal work out, perhaps?

    2. I track local shack sales and have about a dozen of pending homes that are past 60 days. I like to see the actual sale price after they go into pending. Some just get removed which means the contract fell through. This one has been going for some time and went pending 2x and just recently got removed with no sale recorded.

      https://www.zillow.com/homedetails/123-Alamo-Ave-Santa-Cruz-CA-95060/16100954_zpid/

      This one has been fun to watch as the dream price keeps going down without a buyer in sight:

      https://www.zillow.com/homedetails/477-Sims-Rd-Santa-Cruz-CA-95060/2087985568_zpid/

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