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We’re Now Dealing With A New Market, But You Don’t Want It To Seem Like A Fire Sale

A report from the South Florida Business Journal. “New foreclosure lawsuits increased by double digits in South Florida during the first quarter, according to Attom Data Solutions. The company found 2,860 foreclosure lawsuits started in the tri-county area, up from 2,444 in the fourth quarter and 1,716 from the first quarter of 2018. That’s an increase of 17% and 67%, respectively.”

“Foreclosure actions – counting lawsuit filings, notices of auction and repossession – numbered 5,537 in South Florida in the first quarter. That’s down 19 percent from the fourth quarter, but up 24 percent from the first quarter of 2018. There was one foreclosure action for every 453 homes, the 18th-highest foreclosure rate in the country. The highest foreclosure rates were in Atlantic City, New Jersey (one in 177 homes); Lakeland (one in 338 homes); and Trenton, New Jersey (one in 345 homes).”

From NUVO in Indiana. “Lawmakers in the Indiana House avoided all proposed changes to a bill to expand payday and subprime loan products as it was reviewed Thursday. Rep. Ryan Hatfield, D-Evansville, blamed the subprime and payday loan options that SB 613 seeks to expand for the 2008 financial crisis, which devastated the national housing market and disrupted individual lives.”

“‘Hoosiers in all of our districts lost their homes, had to file for bankruptcy and were caught in a downward spiral that this bill perpetuates,’ Hatfield said. ‘And this amendment speeds that up.'”

The Journal Sentinel in Wisconsin. “Just as the peak season for home buying and selling kicks off this month, a quarterly report shows sales were down 7.6 percent to start the new year in Milwaukee, Ozaukee, Washington and Waukesha counties. Sales fell in all four counties in the January-through-March quarter, with Washington County recording the biggest percentage drop-off as closings declined to 291 from 380 in the same period last year — a 23.4 percent slide.”

“Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, noted that while the market has slowed, it is coming off of several years of high levels of residential real estate sales. With a olid jobs climate and low mortgage rates, the metro area has enjoyed a strong sales market since 2015. But now, he said, the lack of listings under $300,000 is ‘throttling’ higher sales.”

“‘I think that buyers and people just in general — and maybe it’s a self-fulfilling prophecy — are kind of thinking everyone’s talking about a recession coming up in the next year, 18 months, two years,’ he said. ‘They are assessing where are we, where am I in my life, is there any danger of losing my job or being foreclosed on or whatever people consider when they think things that might be turning coming up.'”

“Prices now are higher than their pre-recession levels in all four metro Milwaukee counties. Higher home prices are another factor persuading some would-be buyers to keep renting, further contributing to the slowdown, real estate professionals say.”

“Said Ruzicka: ‘The real estate market is certainly not as efficient as the stock market. Prices don’t turn on a dime or a moment’s notice. And it takes 18 months to two years to move the ship in any direction. But what’s interesting is we’ve had this tight demand situation for a quite a while and there isn’t anybody or any organization or entity that can alleviate it. It’s almost like a certain dysfunction in the market right now that is going to take time to work out.'”

From The Real Deal on New York. “Some price cuts will be necessary to stay competitive. In the broader Manhattan condo market, the listing discount widened to 8.8 percent in the first quarter from 4.4 percent a year earlier, according to Douglas Elliman. And as sales fell 3.2 percent year over year, the entry threshold to the luxury market also dipped 3.2 percent to $3.825 million.”

“As the median closing price has varied quarter by quarter, the median asking price in the area has ranged from $5.3 million to $5.9 million between the beginning of 2016 through the beginning of last year, before dipping below the $5 million mark. To some, that’s a sign of more price shifts to come.”

“The market is in a different place now, said Sean Murphy Turner, a broker at Stribling & Associates. And projects like the Getty and HFZ Capital Group’s the XI, with 236 units, are going after similar buyers. ‘Maybe the timing’s a little bit off,’ she said. ‘There are so many options. Is it just too much ultra-luxury product for buyers to think about?'”

“There are more prices changes to come, Fran Katzen, a broker at Douglas Elliman predicted, but brokers have to strike the right balance. ‘It’s impacting developers’ bottom line,’ she said. ‘We’re now dealing with a new market, but you don’t want it to seem like a fire sale.'”

The San Francisco Chronicle in California. “The official listing for a 1912 home at 280 Panoramic Way calls the architectural style ‘custom.’ This thoroughly custom abode has been in the same family for three decades-plus. It could be yours now for $3.9 million. Update: this pretty home has had a price drop. As of 4/11/2019, the price is now $3.6 million.”

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  1. ‘The company found 2,860 foreclosure lawsuits started in the tri-county area, up from 2,444 in the fourth quarter and 1,716 from the first quarter of 2018. That’s an increase of 17% and 67%, respectively’

    Ahem…

    1. Say, according to my calendar Spring started on March 20th, but I’m still not seeing those green shoots of Spring that that earnest young housing analyst on CNBC assured me would be sprouting up any day now.

    2. Good thing it’s different this time! Didn’t Florida kick off the first major wave of foreclosures last bubble?

  2. ‘In the broader Manhattan condo market, the listing discount widened to 8.8 percent in the first quarter from 4.4 percent a year earlier, according to Douglas Elliman. And as sales fell 3.2 percent year over year, the entry threshold to the luxury market also dipped 3.2 percent to $3.825 million’

    ‘As the median closing price has varied quarter by quarter, the median asking price in the area has ranged from $5.3 million to $5.9 million between the beginning of 2016 through the beginning of last year, before dipping below the $5 million mark’

    Well, it was cheaper than renting.

    ‘It could be yours now for $3.9 million. Update: this pretty home has had a price drop. As of 4/11/2019, the price is now $3.6 million’

    But, IPO?

      1. Time to Get Shorty (again)?

        The Financial Times
        Lyft Inc
        Short selling against Lyft increases as its stock hits new low
        Bearish bets against the ride-sharing company are up to 65 per cent of the free float
        Lyft co-founders John Zimmer (front, third from left) and Logan Green (front, third from right) rang a ceremonial opening bell in Los Angeles on Lyft shares first day of trading on March 29 © AP
        Nicole Bullock in New York yesterday

        Investors extended their bets against Lyft shares in recent days as rival ride-sharing business Uber moved closer to its own stock market listing.

        Short selling interest had risen to nearly two-thirds of the shares that Lyft floated at the end of March, according to the research group S3 Partners, helping push the stock down as low as $57.66 on Friday, versus its offering price of $72.

        After an initial pop at its Nasdaq debut two weeks ago, Lyft shares have performed badly, leading to recriminations and stoking a debate about the heavily lossmaking company’s long-term prospects.
        …

  4. ‘Prices now are higher than their pre-recession levels in all four metro Milwaukee counties. Higher home prices are another factor persuading some would-be buyers to keep renting, further contributing to the slowdown, real estate professionals say’

    ‘Said Ruzicka: ‘But what’s interesting is we’ve had this tight demand situation for a quite a while and there isn’t anybody or any organization or entity that can alleviate it. It’s almost like a certain dysfunction in the market right now that is going to take time to work out’

    This article is like many we’ve seen over the years. Prices have never been higher but boomers can’t afford to sell! How am I gonna make my BMW payments?

    1. ‘Prices now are higher than their pre-recession levels in all four metro Milwaukee counties.’

      Before the dawn of the Housing Bubble (e.g. pre-1996), Wisconsin house prices were at a long-term stable ratio of about 2.2 times income. The Bubble has blown that ratio to historically unprecedented heights, which can continue so long as the Fed maintains ultralow interest rates and the GSEs keep pouring our tax dollars down the federally guaranteed mortgage lending rat hole.

  5. “SB 613 will face a final vote on Monday.”

    It seems very mysterious for all those Hoosier lawmakers to cast aspersions on this subprime lending revitalization bill, yet secretly support its passage. I wonder what my$teriou$ for$e po$$ibly explain$ thi$ apparent di$connect? $ound$ like we’ll have to $tay tuned through next week to find out how thi$ turn$ out.

    1. You mean of a major quake?! The Cascadia fault is WAY overdue too, and they’ve not come close to prepping for it building-code-wise!!

        1. Trumpsis Tantrumois Chaotica is gonna bu$ many many workers to lend thousands of tirele$$ helping recon$tructive hands to help out in Sanctuary $FO!

  7. In the broader Manhattan condo market, the listing discount widened to 8.8 percent in the first quarter from 4.4 percent a year earlier, according to Douglas Elliman.

    So maff is hard and all, but looks to me like the listing discount just doubled. Oh dear. The downward trajectory is accelerating.

  8. A Once Fast-Growing Chinese Tech Giant Cuts Back
    Hard-charging JD.com rolls out layoffs, closes offices abroad

    ‘On Friday, founder and Chief Executive Liu Qiangdong, who also goes by Richard Liu, said on WeChat that JD.com hasn’t implemented layoffs in four or five years. During that time, the ranks of employees who don’t work hard have grown rapidly, he said.’

    “If we keep going this way, there definitely won’t be hope for JD!” he wrote. “The company will be cruelly eliminated by the market eventually!”

    ‘JD.com, which is listed on the Nasdaq, grew rapidly alongside a ballooning middle class willing to shell out more for speedy delivery and name-brand electronics and other products. But the company has struggled to turn a profit, losing money each year since going public in 2014; in the fourth quarter, JD.com reported a net loss of 4.8 billion yuan.’

    https://www.wsj.com/articles/a-once-fast-growing-chinese-tech-giant-cuts-back-11555069699

    It’s gonna be another twitter…

    1. ‘But the company has struggled to turn a profit, losing money each year since going public in 2014; in the fourth quarter, JD.com reported a net loss of 4.8 billion yuan.’

      Days are numbered until unicorn roundup and slaughter.

  9. “Prices now are higher than their pre-recession levels”

    In other words, housing prices now are higher than the peak of what is widely acknowledged to be the biggest housing bubble in history. So that was a bubble, but this is not, because…. ?

    1. Price per square foot in Manhattan and Miami Beach are way higher than 12 years ago. And those bubbles popped years ago. Now we have defaults soaring. (They’ve been high in Queens for years, but oh well.)

      “A real estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, and typically follow a land boom. A land boom is the rapid increase in the market price of real property such as housing until they reach unsustainable levels and then decline. Wikipedia”

      Land prices in NYC doubled from 2014 to 2016.

      1. “Land prices in NYC doubled from 2014 to 2016.”

        I’ll never forget watching a CA condo go up +50% in 6 months back in 2013. It’s startling how fast the bubble inflated this time. And it almost deflated just as fast in 2014, until the Quicken Loans billboards went up.

      1. If you talk about them they will happen. Some meany posters here practice that voodoo magic, Crazyhouse and Professor literally just caused a earthquake…

        Buy stawk (don’t short), IPO’s only go up (like RE) it’s fuels the greater good for the MAGA economy. Please don’t use HBB special voodoo magic or else .001% may lose profits and edgimacated realtors will be forced to live in your walls or tree fort which could result in a fire.

        1. Owner Has Purchased Another and Says “SELL NOW”

          924 N. Hillcrest Rd, Beverly Hills, CA | $26,500,000

          1. From the listing: “this is the antithesis of the proliferation of modern boxes currently flooding the market.“

            Wait, the market is flooded?? But someone said there were bidding wars in the Beverly Hills $5mil+ market last year. Shortage??

  11. https://www.idahostatesman.com/news/business/article229189614.html

    Boise – Paywalled content below:

    After a brief lull, home prices are setting record highs again.

    The median house price in Ada County jumped $10,000 from February to March to $335,000, the Intermountain Multiple Listing Service reports. That’s the highest median price since a record $334,400 last August.

    In Canyon County, the median rose to $230,000, slightly above the previous record of $229,945 set last July.

    Rick Gehrke, a real estate agent with RE/Max Executives in Nampa who sells in both Ada and Canyon counties, said he expects prices will rise even higher during the busy spring and summer sales period.

    “You’d better hit the saddle and tighten up your seat belt, because it’s going to be crazy,” he said.

    Gehrke recently wrote an offer for a $172,000 house. The offer was $8,000 over the asking price, but the buyer lost out to someone offering more.

    “It’s just a precursor to what we’re going to have coming down the pipeline,” Gehrke said. “Rates are still really, really good, inventory is really skinny and buyers are coming out of the woodwork wanting to grab something.”

    In the past couple of weeks, Gehrke said he’s seen a flurry of activity, with three or four people a day looking to buy or sell a house.

    In March, existing-home sales in Ada County made up 60.5 percent of the 498 homes sold. There were 498 existing homes sold for a median price of $309,000, up from $290,000 in May 2018. A total of 325 new homes sold during the month for a median price of $377,630.

    Existing homes sold, on average, after 30 days on the market. New homes took longer, 80 days. Sometimes, that’s misleading, Gehrke said, because a number of new homes get listed before they’re completed, adding to the days listed.

    In Canyon County, it took 32 days on average for existing homes to sell and 74 days for new homes.

    Other details from the report:
    ▪ Highest median prices: North Boise, $575,000; Northeast Boise, $494,000; Eagle, $440,000.
    ▪ Lowest median prices: Northwest Caldwell $206,517, Southwest Caldwell $219,000, Northwest Nampa $229,774.

    1. **** the ****ing Fed and interest rates, already — it’s the prices of the homes now that’s the problem, not the loan terms.

      Were any of you alive back in the 90s, when 30 year fixed rate mortgages were 7-8%, and the economy was doing just fine? Because homes were affordable for the majority of Americans back in those days, before HGTV and before they became status symbols and luxury goods for the 1%.

      1. It’s beyond moral comprehension but… it all makes sense when I think of it like this:

        Home values increased very rapidly over the last 5-6 years. This produced a mass of wealth out of thin air. Now with all this “wealth” can be borrowed and injected back into the economy. Higher values equal higher taxes. Lowering interest rates gives the optical illusion that the over priced home is affordable. Notice these rates keep going down the more the housing market suffers. Every hurdle that we cross in the housing market, the more they inject. Gov does not want a crash (yet) instead they want everyone to participate in the American dream. I know the end all will be bad and predict that, either our dollar tanks, or all the over priced shacks go back to more “affordable” levels (I would prefer this). All of the savers are the ones suffering and unwillingly participating. I’m not anti nor pro trump but I do feel he has a major influence in the prolonged bubble we NEED to pop. End rant

  15. How long until California housing prices decrease to reflect reflect the loss of SALT deductions?

    How Trump’s tax cuts are working out for Californians
    By Judy Lin | April 10, 2019 | ECONOMY, POLITICS

    For communications professor Jason Jarvis and his wife, Jun, California just got more expensive. The Inglewood couple, who last year paid $16,000 in state and local taxes, were only able to deduct $10,000 of it from their federal taxes this year.

    The federal Tax Cuts and Jobs Act—signed last year by President Donald Trump and cheered by Republicans in Congress—cost the Jarvis family between $4,500 and $5,000 in deductions, raising their bill from the Internal Revenue Service even after a larger child tax credit for their 15-month-old son, Kellar.

    The financial hit came with political bruises for Jarvis, a 45-year-old Democrat who disliked how the Republican plan slashed taxes for corporations and people making a lot more than he does.

    “The federal government really jacked us,” he said. “I don’t have a problem with my tax dollars going toward education, homelessness, I’m in favor of all that. But a tax cut for billionaires off my back? That’s too much.”

    While millions of California families saw their federal taxes fall this tax season, the Jarvis family is among an estimated 1 million households who are paying more—actually some $12 billion more, according to the Franchise Tax Board. That’s because the cap on state and local tax (SALT) deductions disproportionately impacted progressive states with high taxes by limiting the amount residents used to be able to deduct from their federal filings.

    Now, as the Golden State’s first Tax Day without the old SALT break approaches, that dear, departed deduction has been Topic A in California.

    “As taxpayers are filing their returns this month, many of them are discovering the bite the federally imposed SALT cap is taking out of their wallet,” state Controller Betty Yee, a Democrat, noted. In fact, the topic recently and randomly popped up in the middle of a discussion on the state economy sponsored by the Sacramento Press Club featuring Yee, state Treasurer Fiona Ma and Lt. Gov. Eleni Kounalakis.

    “It’s just scandalous that the Trump administration did away with our SALT deduction,” Kounalakis declared to a round of hearty applause from the Capitol audience.
    …

    1. How long until California housing prices decrease to reflect the loss of SALT deductions?

      Not soon enough!

    2. scandalous that the Trump administration did

      The solution is to get state and fed government to cut back on the wild spending, but that doesn’t occur to you.

    3. Mr. Jarvis wanted to pay more in taxes, “for the homeless”, and he got to…what’s wrong with that? (Oh, you mean OTHER people were supposed to pay more?)

      I’m very happy with the tax changes – first time I haven’t had to pay in over a decade – especially the 20% tax deduction for self-employed (the wife), which helps balance out the SS Self-employment tax.

    4. “It’s just scandalous that the Trump administration did away with our SALT deduction,” Kounalakis declared to a round of hearty applause from the Capitol audience.

      Stamp your little feet!

  17. No real moves away from fantasy pricing in Ann Arbor MI so far as I can tell .
    https://www.realtor.com/realestateandhomes-detail/423-W-Liberty-St_Ann-Arbor_MI_48103_M37180-26062?view=qv
    This listing did get reduced over the months from 1.1 million to 925k but it’s still $469 /sf and the old houses in that part of town have not only wet basements but with dioxane laden water! Never mind also that the state just created new Guidelines for when government should start *health effects screening* in people exposed to PFCs and Ann Arbor drinking water has been double to 10x those proposed new levels EVERY time they’ve tested water for 4 years or more. Niche.com does not include this in their “best cities “ ratings and word is being suppressed by the REIC which deeply includes the city government here.
    Still, inventory is piling up — 100 new listings at least in the last couple weeks to make 815 in the mls just for the mailing address district plus more in sprawl for school district.

    1. Is this price “appreciation” from 2012 normal there?

      Date Event Price
      04/10/2019 Listed $925,000
      10/05/2018 Listed $999,000
      10/04/2018 Price Changed $1,095,000
      06/25/2018 Listed $1,095,000
      06/25/2018 Listed $1,195,000
      04/02/2012 Sold $180,000
      02/02/2012 Listed $160,000

      I thought it was bad here…

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