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The Market Is Shifting And Everyone Is Looking For A Deal

A report from Bowery Boogie on New York. “For many on the Lower East Side waterfront, Extell’s purported woes are a lesson in schadenfreude. Especially given the years of construction hell endured by those in the vicinity. No sooner do move-ins happen at Extell’s One Manhattan Square than residents start renting out their pricey new pads. That in and of itself is not totally out of the ordinary. More telling, rather, is the apparent rental listing on Extell’s official marketing website.”

“Update: a spokesperson for Extell corrects the record, and states that ‘These are investors’ units that have closed and are trying to rent the unit.’ The studio apartment ‘8G’ is going for $4,246 amidst a sea of other listings in the multiple millions. Is this an admission of a problem or simple typo?”

“Probably the former, as there are at least five rental listings on StreetEasy. If this listing is intentional, and a rental, it would further lend credence to the argument that the 850-foot skyscraper is on shaky ground. Also remember that Extell is offering up to 10 years of free common charges to prospective condo buyers who purchase before July 4.”

From Chicago Agent Magazine in Illinois. “It’s important to set clients up for success by establishing expectations up front, according to Tommy Choi, president of the Chicago Association of Realtors. He gives buyers and sellers an ‘under the hood look at the market,’ letting sellers know they need to be patient as luxury properties can take from nine months to a year to sell.”

“The market is shifting and everyone is looking for a deal, according to Kim Alden, broker and luxury specialist with Baird & Warner in Barrington. ‘In my past recent sales, all of the purchase prices were well below the construction price or the last sold price. Buyers are trying to make up for the tax ratio by going in lower with price and attempting to get their taxes reassessed at the new purchase price,’ she said.”

From Atlanta Agent Magazine in Georgia. “The residential real estate market for March was promising, with prices increasing and more inventory opening up, according to Atlanta Realtors’ March 2019 Market Brief on sales activity for 11 counties in the Atlanta region.”

“First, the less-encouraging news: Residential sales were at 4,699, a 25 percent drop from March 2018. New construction in Atlanta has been robust, and is a contributor to the area’s housing inventory increasing. The area’s inventory totaled 13,046 in March, an increase of 12.1 percent over 2018’s figure.”

A press release from the California used house salespeople. “‘The median price has been softening since it reached a peak last summer, and March’s year-over-year price increase was the smallest in seven years,’ said C.A.R. Chief Economist Leslie Appleton-Young. ‘The flattening home prices, coupled with low mortgage rates, bode well for housing affordability and may bring more buyers who may have given up back to the market.'”

“Sales dropped on a non-seasonally adjusted annual basis in all major regions, with double-digit sales declines in the Los Angeles Metro, Inland Empire regions and San Francisco Bay Area while the Central Coast and Central Valley regions experienced single-digit declines. Home sales in all of the nine Bay Area counties fell from a year ago, especially in Napa and Sonoma counties, which suffered the largest decreases.”

“The Los Angeles Metro region posted a non-seasonally adjusted year-over-year sales drop of 12 percent, with home sales falling in every county. Ventura had the biggest decline in sales, while San Diego dropped the least.”

“On a year-over-year basis, the Bay Area median price dipped 4.1 percent from March 2018. The decline was the largest year-over-year drop since January 2012 and the first back-to-back decrease since early 2012. Only Napa County recorded an annual price increase. In the Southern California region, home prices increased in San Bernardino, Riverside and Ventura while they declined in Los Angeles, Orange and San Diego counties.”

“Active listings continued to climb from the prior year, increasing 13.8 percent from last March. It was the 12th consecutive month active listings rose year-over-year and the ninth month in a row they grew double digits from the prior year.”

The Sacramento Bee in California. “A growing grassroots neighborhood campaign in Natomas hopes to rally enough support to bring the Sacramento Zoo to the Sacramento Kings’ old haunt, redevelopment plans remain murky for Sleep Train Arena.”

“Since a building moratorium related to flood risks was lifted in Natomas in 2015, several housing projects have gotten underway, said the group’s founder, Brandy Tuzon-Boyd. ‘So while there is a housing shortage in Sacramento in general, for the most part in North Natomas we don’t see that there is an additional need for housing,’ she said.”

From Mansion Global on California. “We caught up with broker Tami Halton Pardee to discuss why she thinks buyers are going back to nature, and more. MG: What’s the biggest surprise in the luxury real estate market now? THP: The overabundance of house is shocking to me. Who wants to live in a 40,000 square foot house? It creates a disconnect, and you can’t even find anyone.”

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This Post Has 25 Comments

  1. ‘In my past recent sales, all of the purchase prices were well below the construction price or the last sold price’

    Oh dear…

    1. THP: Go with your gut, not your mind. If it’s an extra $50K, just do it. Don’t lose a home over that.

      I guess Tami’s advice would hold on the selling side as well. Just do it. Don’t lose a sale over money!

  2. There’s data at the bottom of the UHS press release. YOY prices:

    San Francisco Bay Area -4.1

    Santa Clara -10.6%

    Monterey -7.4%

    Santa Barbara -20.5%

    1. and March’s year-over-year price increase was the smallest in seven years,’ said C.A.R

      Still on target for year over year price declines to swamp SoCal in early summer.

      1. Just waiting to see how they spin declining sales, rising inventories, AND falling prices as “returning to a normal market”.
        Can’t remember how they approached that stink bomb when the last bubble popped, but I’m sure they have some ready made talking points in the NAR playbook.

        1. Can’t remember how they approached that stink bomb when the last bubble popped,

          IIRC, the favored phrase was “soft landing.”

    3. Chris, where are you boy? Where is Chris “No Bubble” Thornberg? Come home for dinner dear! Your favorite on the menu again: Crow BBQ!

    5. Think someone else on here already called the dead cat bounce which seems to have happened to most of the coastal CA markets in march. All downhill from here! Santa Barbara is somewhat surprising to me as it is one of the markets i follow. Guessing the dream prices have been getting low balled and the reported sales are way below what we see when window shopping.

      1. A reader sent this is:

        720 24th Pl Hermosa Beach, CA 90254
        $3,200,000

        “This lot combined with apn# 4184-019-001 makes a total lot size of 9475. Located on one of the highest points west of PCH in beautiful Hermosa Beach with potential panoramic ocean views from Malibu to Palos Verdes. The home is a tear down so bring your builder and build your dream home. You may check with the city of Hermosa to verify potential lot split! * * * PLEASE DO NOT GO INTO HOUSE * * * ”

        https://www.redfin.com/CA/Hermosa-Beach/720-24th-Pl-90254/home/6715258?utm_source=ios_share&utm_medium=share&utm_campaign=copy_link&utm_nooverride=1&utm_content=link

    6. Low inventory might skew numbers, but a massive drop is a massive drop. Why isn’t the press covering this? My guess is that FBs are able to absorb the price drops. Not many stories of kids being tossed onto the sidewalk.

  3. From the NY link. An apartment on the 8th floor is listed for rent at $3,667. An apartment a few doors down with the same square footage is listed for sale at $1,197,000. Per a mortgage calculator the monthly nut on that thing with 20% down is $7,190. Not including Condo fees.

  5. “Sales dropped on a non-seasonally adjusted annual basis in all major regions, with double-digit sales declines in the Los Angeles Metro, Inland Empire regions and San Francisco Bay Area while the Central Coast and Central Valley regions experienced single-digit declines. Home sales in all of the nine Bay Area counties fell from a year ago, especially in Napa and Sonoma counties, which suffered the largest decreases.”

    Looks like the troll that was on here just a month ago cheering the lower interest rate didn’t help sales much! I’m sad that he/she is gone as I am running out of funny materials to post here. I hope they didn’t buy LYFT stocks either as they may need to drive LYFT/UBER soon to make money to eat! US East Coast, heading soon to Y’ALL!

    1. “Looks like the troll that was on here just a month ago cheering the lower interest rate didn’t help sales much! I’m sad that he/she is gone as I am running out of funny materials to post here.”

      cheer up butter cup! Your #1 troll realtor is here to keep the troll comments alive. #buyNowOrIstarve #realestategoesUPalwaysEvenwhenItsGoingDown #SALTisAspice #believeSusanne #buyLyft #itsDifferentThistimeTrustmeImArealtor #60minuteCrashcourseOnlineRealtorUniversityGraduate #realtorsDeserve6%OrMoreOfYourMoneyForBakingCookiesAndHandingOutFlyers #BelieveNARtheyDontLieThatOften #Yun4pres

  6. “Three New Jersey men have been arrested and charged with running a counterfeit drug storefront on the dark web that sold hundreds of thousands of narcotic pills nationwide in exchange for cryptocurrency, according to Manhattan District Attorney Cyrus Vance’s office.

    The trio of suspects laundered more than $2 million in cryptocurrency, officials said.”

    https://www.yahoo.com/gma/trio-allegedly-operating-dark-drug-storefront-arrested-largest-193900344–abc-news-topstories.html

    1. I don’t understand why the government has not shut down this whole crypto scam. It’s essentially a scam tool for money launderers and those seeking to cheat the tax man.

      I suppose now that Marketwatch embedded a “crypto” heading into its stock ticker due to Wall St. banker/grifters getting their meathooks into it, it’s now beyond reproach.

      1. It’s kind of the same problem that Vancouver politicos had: they actually benefit from this illegal money because it props up home values which gives them more of a tax base. So they are somewhat complicit in allowing this dirty money to be laundered in real estate. They might grandstand about the need to do something, but they aren’t going to do much because they benefit from the system.

  9. “The median price has been softening since it reached a peak last summer”

    There’s that “peak last (month/summer/year)” thing again. Translation: it was a bubble after all, the top is long gone, and it’s been deflating all year.

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