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There Are Too Many Properties On The Market, Too Many Sellers

It’s Friday desk clearing time for this blogger. “‘About 15 years ago – this is before the housing bubble burst – we had a similar situation where affordable housing was an issue,’ said Marty Olejniczak, community development director for the City of Sturgeon Bay.”

“They’re not calling it a buyer’s market. However the Honolulu Board of REALTORS says buyers have more options with more homes and condos newly up for sale. President Jenny Brady says, ‘In the single-family category in the month of March alone, there were 468 new properties that came on the market in the single-family category, so that gives you some perspective, right? And in the condo category, new listings are 712 new listing on the market.”

“The average size of Greenwich single-family homes that sold shrank for a third time, pulling the median price down 17 percent in the first quarter from a year earlier to $1.69 million, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report. Meanwhile, the number of luxury houses on the market jumped 68 percent to 232.”

“‘There’s been a steady shift in the mix,’ said Jonathan Miller, president of Miller Samuel. ‘There’s still demand for high-end homes, but nowhere near the density of a decade or so ago. There are too many properties on the market, too many sellers, and Wall Street isn’t the driver of demand it once was.'”

“Median condo prices in Boston tumbled 13.8% to $810,000 for the first quarter of 2019 compared to the previous year, according to Douglas Elliman’s Q1 2019 Market Report. The number of sales also decreased 22.8% and listing inventory increased 32.9% compared to the first quarter of 2018, the data revealed.”

“Last year’s record-breaking quarter was largely because of a number of legacy closings—contracts signed two to four years earlier but just now being completed—in high-end new developments, according to the report. ‘It’s a little hard to compare this quarter to that quarter,’ said Scott Elwell, senior executive regional manager for New England.”

“The home that began its life during the Roaring Twenties for the descendant of a Polish count has still managed to hold its charm over its New Jersey town less than ten miles from Manhattan. Its most recent sale history had it on the market for $39 million back in 2013, then nearly going to foreclosure a little while later, then almost finding a foreign buyer for $20 million. Throughout all this Gloria Crest is still standing, with its original Mediterranean style design intact now asking $9.99 million for the entire estate.”

“With little success in his attempt to sell his massive Bergen County mansion, Hall of Fame basketball player Patrick Ewing has now put the 10,524-square-foot home on the rental market for $25,000 per month. He purchased the Cresskill home in 2007 for $6.35 million and has since had difficulty offloading it. Originally listed for $7 million went it first went on the market in 2015, Ewing has since slashed the listing price multiple times, bringing the asking price down to $4.8 million.”

“A bankruptcy auction will be held on May 11 for a Georgian-style stone mansion in Chappaqua, Mansion Global reported. The 86-acre estate first hit the market seeking $30 million in 2010, but then saw its asking price reduced several times. The 19,000-square-foot home took a price cut to $19.9 million in 2014, according to a Curbed report at the time. Earlier this year, property records show that the home at 48 Haights Road had its price trimmed again, to $13.75 million.”

“Former Chicago Bears head coach John Fox this week sold a Lake Forest mansion for a $400,000 loss. He purchased the country-style estate in April 2015, spending $3.275 million on the property a few months after getting hired, according to property records. The home was listed last April asking for nearly $3.4 million and sold for $2.875 million on Monday after a price reduction earlier this year.”

“The luxury single-family market in Boca Raton saw signs of weakening. There were 49 luxury single-family homes sold in the first quarter of 2019, down 10.9% from a year ago. The median sales price dropped 14.9% annually to $1.83 million.”

“After several price reductions over the last year, Hong Kong-based filmmaker John Woo has finally sold his Los Angeles home—for $5.42 million. The house, which went on the market for $7.5 million in February 2018, sold on March 26, according to public records.”

“San Diego’s housing market is shifting towards a buyer’s market as housing on much of the West Coast hits an affordability ceiling, according to Trulia. For San Diego’s housing market, that means more prices are being cut and homes are spending more time on the market. According to Trulia, homes in America’s Finest City sit on the market for a median of 73 days, up from just 59 days a year ago. Similarly, the share of listings with their prices being cut increased from 11.5 percent to 20.2 percent with homes selling at four percent below the original asking price.”

“In January of this year, Trulia says nearly 95 percent of all zip codes in San Diego showed signs of shifting in favor of buyers. Throughout the rest of the country, the report points out that 50 major metros are showing signs of shifting in favor of homebuyers. A year ago, only five metros experienced a shift. The shift is most dramatic in Las Vegas, San Jose and Seattle where home values have risen more than 50 percent over the last six years. Over the last year, growth has slowed signaling that prices have exceeded what most buyers are willing or able to pay, according to the report.”

“Dallas Morning News reports more evidence of DFW continuing to become more of a home buyers’ market. As of January, 78.9% of Dallas zipcodes reveal a shift favoring buyers, versus sellers. January – March sales have fallen 3% from first quarter 2018. The number of listed houses has jumped 24% from 1 year ago. Approx. 18% of listed DFW houses include the minimum of (1) price reduction. North Texas houses are taking 14% longer to sell versus same time last year.”

“When it comes to real estate, my father, with a 6th grade education, once had (3) houses simultaneously, and all were paid for. On the subject of North Texas house prices, he told me, ‘what goes up, must come down.’ I, continue to wait on purchasing a house.”

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This Post Has 66 Comments

  1. ‘He purchased the country-style estate in April 2015, spending $3.275 million on the property…The home was listed last April asking for nearly $3.4 million and sold for $2.875 million’

    Da bears…

    BTW, no room for international stuff with so much US crater. I’ll get caught up over the weekend.

    1. ‘Former Chicago Bears head coach John Fox this week sold a Lake Forest mansion for a $400,000 loss’

      Well John, it was cheaper than renting…

      1. How many years did he live there? It might of been cheaper than renting. Say $10K/month, $120K a year. If he was there for more than 6 years.

        1. How many years did he live there?

          I’d say it’s only been 5 years since April 2014. Don’t forget the transaction costs, maintenance, insurance and taxes!

          1. Housing depreciation is a painful thing.

            $4 per square foot per year….. Year after wallet draining year.

        2. “It might of been cheaper than renting”

          and here i thought all the FBs were gone. perhaps i can interest you in a used shack 100% financing via NINA loan (just tell me your name or nickname and your approved!)

    2. It is quite amazing how messed up Greenwich became after the 2007 financial meltdown. NYC jobs in finance never recovered, which was the big driver of estate values.

      This could be a true warning for cities like San Francisco, if the dot com industry takes a hit. It is not unreasonable to think about Uber & Lyft never seeing profits (or hugely struggling to make any money), Facebook getting regulated into Oblivion, and sites like Pinterest & Google becoming value diluted by kids in a Midwest garage!

      The big lesson in Connecticut is that value is set by transactions in the margin…..2-5% of actual inventory. When that margin is overrun by buyers, boom….huge price increases. When the margin is overrun by inventory, crater….it starts melting. It’s been 12 years since the financial sector in NYC melted down and Greenwich is still not found a bottom. It will only get worse with another recession.

      I remember the dot com bust in SF in the year 2000. Traffic gridlock evaporated as young tech dreamers paid with some now worthless stock options moved back to their parents houses in Des Moines to lick their wounds as they waited tables for minimum wage.

      Every downturn is different, just ask the NY banker who bought in Greenwich in 2006.

  2. ‘Median condo prices in Boston tumbled 13.8% to $810,000 for the first quarter of 2019 compared to the previous year, according to Douglas Elliman’s Q1 2019 Market Report. The number of sales also decreased 22.8% and listing inventory increased 32.9% compared to the first quarter of 2018, the data revealed’

    ‘Last year’s record-breaking quarter was largely because of a number of legacy closings—contracts signed two to four years earlier but just now being completed—in high-end new developments, according to the report. ‘It’s a little hard to compare this quarter to that quarter’

    First of all Scott, it’s not hard to compare cuz you just did.

    But when these “legacy closings” show big increases, you make no mention of the fact that deals were done years ago and suckers have to close at a loss or lose their deposits. Which is exactly what your company did in the Boca Raton article on lux condos!

  3. “Median condo prices in Boston tumbled 13.8% to $810,000 for the first quarter of 2019 compared to the previous year, according to Douglas Elliman’s Q1 2019 Market Report. The number of sales also decreased 22.8% and listing inventory increased 32.9% compared to the first quarter of 2018, the data revealed.”

    Ebolaaaa Boston!

    1. Whew, thank goodness everyone has been putting 20% down. We might have a real problem on our hands if that wasn’t the case.

    2. I just want to see the price fall on a chocolate chip cookie at Quincy market. That would be truly historic..

  4. The prolonged weakness in homebuilding is likely the result of land and labor shortages, as well as expensive building materials. A survey on Tuesday showed that though builders reported strong demand for new homes, they continued to highlight “affordability concerns stemming from a chronic shortage of construction workers and buildable lots.”

    Worker shortage because everyone needs a college degree ?

    1. An equally chronic shortage of buyers with the same affordability concerns will take care of that problem.

  5. ‘They’re not calling it a buyer’s market. however the Honolulu Board of REALTORS says buyers have more options with more homes and condos newly up for sale. President Jenny Brady says, ‘In the single-family category in the month of March alone, there were 468 new properties that came on the market in the single-family category, so that gives you some perspective, right? And in the condo category, new listings are 712 new listing on the market’

    Wow, that’s some shortage Jenny! So where did these hundreds of shacks and airboxes come from? Were they just built? No that’s not possible. I guess they were there all along and the gamblers were waiting for the greatest fool.

    1. ‘There’s still demand for high-end homes, but nowhere near the density of a decade or so ago. There are too many properties on the market, too many sellers, and Wall Street isn’t the driver of demand it once was.’”

      Parsing “Realtor-speak”:
      1) “A fish rots from the head down”, meaning – in this case – high-end housing leads in both directions. This works its way down the housing ladder.
      2) Demand is weakening (and has been for some time now).
      3) Inventory is rising – see (2), and so the alleged “shortage” was another artificial, Fed-induced, massive RRE bubble, now popping, as specuvestors held properties off the market while riding the bubble up, but now dumping. It’s going to be tough to perpetuate this narrative going forward.
      4) Speculators, private equity (PE), “smart” money are exiting the market, as they all see that the top is in. This leaves retail “investors”, flippers, and various and sundry unfortunate bag-holders and knife-catchers. There aren’t too many “greater fools” left, as unconventional buyers exit stage right. This leaves huge “air pocket” in demand. Rinse and repeat. The Fed is a one-trick pony. Conventional buyers waiting at MUCH lower prices.

      Popcorn well stocked in the pantry. 🙂

      Also, housing starts kinda weak last month. “Ruh roh Shaggy!”

      BTW, I’m seeing a problem w/ Joshua Tree Extension for Firefox. Won’t allow comment to existing comments (?).

  6. ‘As of January, 78.9% of Dallas zipcodes reveal a shift favoring buyers, versus sellers. January – March sales have fallen 3% from first quarter 2018. The number of listed houses has jumped 24% from 1 year ago. Approx. 18% of listed DFW houses include the minimum of (1) price reduction. North Texas houses are taking 14% longer to sell versus same time last year’

    I have spoken on the phone with people I know in the Metroplex. They will go on at length about how prices are to the moon, and even mention “it’s less crazy now.” But they have every intention of cashing out and moving somewhere to buy land and build, with money left over.

  7. ‘homes in America’s Finest City sit on the market for a median of 73 days, up from just 59 days a year ago. Similarly, the share of listings with their prices being cut increased from 11.5 percent to 20.2 percent with homes selling at four percent below the original asking price’

    But, we were told by the Crow-meister himself that prices wouldn’t fall?

    ‘In January of this year, Trulia says nearly 95 percent of all zip codes in San Diego showed signs of shifting in favor of buyers’

    I’ve always thought calling ones city “America’s Finest” invites derision. Now, nobody wants to live there?

    1. Res. real estate, like most all assets, is cyclical, not linear. Prices don’t always go up, in fact, as shown by housing bubble 1.0, they can go down, a lot!.

      The fundamental problem in my view, is that the Fed and other central bank’s machinations have exacerbated the swings in prices. They are now primarily asset bubble blowers, with only negative financial impacts to Main St. Here we go again. Tar and feathers is too good for that lot. Drawn and quartered sounds about right!

      1. Read an argument today that Capitalism killed inflation via automation and globalization. Meaning rates will stay low for the foreseeable future because wages aren’t going up in the age of robots and sweatshops. Technology is now at the point where if workers go on strike they’ll just roll out the new bots. This happened at my local supermarket with the automated checkout machines literally a week after they went on strike.

        1. It’s sad what’s happened to grocery stores, and all retail stores for that matter. I like to shop for groceries in the evening during the week, when it’s slow. 8 pm is usually when I go. There are no checkers anymore at that time, only self check lines with a clerk helping people when the machines say “unauthorized item in bagging area,” which is generally 5 times per checkout, or some such.

          At any rate, I recall reading somewhere where it was cheaper for stores to go with a skeleton crew and suffer a much higher rate of “shrinkage” than it is to employ people. A person can pretty much just walk out of the store with whatever they want – there’s nobody really watching anymore.

        2. “Read an argument today that Capitalism killed inflation via automation and globalization.”

          – 1) Automation (robotics) and globalization (global labor arbitrage) are drivers of productivity, not inflation. Stock buybacks killed productivity as more $ going into buybacks than capex. Buybacks driven by debt funded at low rates (Fed-driven). Buybacks drive compensation for insiders (1%).
          – 2) Inflation is by definition, the increase in the $ supply, which leads to a) higher prices for goods and services, which then b) drives inflation in wages. Since the fed is pro-capital (banks and business), but con-labor (wages), they’re OK with (a), but not (b).
          – A combination of (1) and (2) leads to growing income inequality, which is leading to rising populism globally.
          – 3) The ginormous steaming pile of global debt, including U.S. (ample) portion, is limiting interest rate increases. Reference the “Powell cave” late Dec., ’18/early Jan., ’19. Rates can’t go up because the economy “can’t handle the truth”. We have reached “debt saturation”. Rate hikes are likely done for this cycle, but not much room to cut either. The Fed is screwed either way, and since they control the $ supply and rates, but can’t really do much from here, we’re all screwed.

          BTW, I went to the grocery store this a.m. Had to go through the “self-checkout”. I had a couple of donuts (yeah, I know, but no Homer Simpson jokes, please!) , which aren’t barcoded. Needed a real person to help w/ checkout. Fruit and vegetables are another problem. I don’t think this is ready for prime-time yet until C3PO, or equivalent, is standing there to do it.

      2. “Prices don’t always go up…”
        Wrong. Wrong. 3X wrong. They always go up! Believe me. 🙂

          1. “…..Inflation is by definition, the increase in the $ supply…”

            I remember in 2008 & 2009 when the fed was pumping in stimulus dollars, many people forecast raging inflation. It never happened, except in housing.

            So inflation is NOT an increase in the money supply. It is a societal psychological disorder about believing you should buy now, before the price goes up tomorrow

  8. ‘A bankruptcy auction will be held on May 11 for a Georgian-style stone mansion in Chappaqua, Mansion Global reported. The 86-acre estate first hit the market seeking $30 million in 2010, but then saw its asking price reduced several times. The 19,000-square-foot home took a price cut to $19.9 million in 2014, according to a Curbed report at the time. Earlier this year, property records show that the home at 48 Haights Road had its price trimmed again, to $13.75 million’

    Hillary, is this your shack?

    1. The Clinton Foundation has peddled enough influence and looted enough Haitian reconstruction aid to ensure that Bill and Hillary need never worry about losing their shack to foreclosure or bankruptcy.

  10. BTW, I’m seeing a problem w/ Joshua Tree Extension for Firefox. Won’t allow comment to existing comments (?).

    I’m seeing that too. I sent drumminj an email in case he has time and desire to look at it. I don’t think he’s changed anything, so Chrome must have changed something that broke it.

      1. OK, thanks CM for the feedback! I’ve disabled it for now…

        It’s fixed now, btw. Sorry about that — blog software upgrade changed some behavior the extension was relying on

  11. “San Diego’s housing market is shifting towards a buyer’s market as housing on much of the West Coast hits an affordability ceiling, according to Trulia. For San Diego’s housing market, that means more prices are being cut and homes are spending more time on the market. According to Trulia, homes in America’s Finest City sit on the market for a median of 73 days, up from just 59 days a year ago. Similarly, the share of listings with their prices being cut increased from 11.5 percent to 20.2 percent with homes selling at four percent below the original asking price.”

    Just wait until the latest wave of subprime lending gets washed out of the San Diego market, and the post-2012 fly-by-night investors dump their HODLings. This is only the beginning.

  13. Lol. Looks like one West LA relator hasn’t gotten the memo about the luxury market glut. From a new listing:

    “PRICED TO SELL IN MULTIPLES. FIRST TIME ON THE MARKET IN YEARS. One of ONLY 24 apartments… of this square footage… LOOKING AT OFFERS OVER THE NEXT WEEK!”

    Price? $3,500,000. Yeah, this one will go fast. Bidding war! There’s only 23 others like it! And so many buyers at $3.5m+! Better get out the stationary for that love letter to the sellers about feeding the squirrels on the balcony. Shortage!!

    1. “It is hard to know what is ailing the home construction industry.”

      Easy — we’re not minting enough millionaires for your overpriced crap.

  17. Clinton Victory Party Turns to Sorry and Worry

    VOA News
    Published on Nov 9, 2016

    https://www.youtube.com/watch?v=D-CQc0VrDu4

    0:35

    “uneducated whites”

    ‘Voice of America (VOA) is a U.S. government-funded international multimedia agency which serves as the United States federal government’s official institution for non-military, external broadcasting. It is the largest U.S. international broadcaster.’

    https://en.wikipedia.org/wiki/Voice_of_America

    1. ‘Clinton Victory Party Turns to Sorry and Worry’

      It should be sorrow and worry, but who’s uneducated now?

    3. Seth Rich’s brother calls for those pushing conspiracy to ‘take responsibility’

      “I hope that the people who pushed, fueled, spread, ran headlines, articles, interviews, talk and opinion shows, or in any way used my family’s tragedy to advance their political agendas—despite our pleas that what they were saying was not based on any facts—will take responsibility for the unimaginable pain they have caused us,” Aaron Rich said.

      Mueller’s report released Thursday debunks the conspiracy surrounding Seth Rich’s death in 2016.”

      https://thehill.com/policy/cybersecurity/439793-seth-richs-brother-responds-to-mueller-report-debunking-conspiracy

      But, in case you forgot:

      “There was no hack of the Democratic National Committee’s system on July 5 last year—not by the Russians, not by anyone else. Hard science now demonstrates it was a leak—a download executed locally with a memory key or a similarly portable data-storage device. In short, it was an inside job by someone with access to the DNC’s system. This casts serious doubt on the initial “hack,” as alleged, that led to the very consequential publication of a large store of documents on WikiLeaks last summer.

      Forensic investigations of documents made public two weeks prior to the July 5 leak by the person or entity known as Guccifer 2.0 show that they were fraudulent: Before Guccifer posted them they were adulterated by cutting and pasting them into a blank template that had Russian as its default language. Guccifer took responsibility on June 15 for an intrusion the DNC reported on June 14 and professed to be a WikiLeaks source—claims essential to the official narrative implicating Russia in what was soon cast as an extensive hacking operation. To put the point simply, forensic science now devastates this narrative.”

      https://www.thenation.com/article/a-new-report-raises-big-questions-about-last-years-dnc-hack/

  19. “uneducated whites”

    She selflessly used her time to try to educate them. They were just too deplorable.

  20. Concern mounts about growing tent city in Curtis Park, residents ask city for homeless porta-potties:

    “DENVER — Residents in Curtis Park and Five Points say they’ve seen a dramatic increase in the number of homeless people moving into their neighborhoods.

    The evidence is apparent at the corner of 27th and Arapahoe St. and along the 2400 block of Lawrence street, where numerous tents have been set up on grassy areas between the sidewalk and curb.

    Residents are also seeing more garbage and human waste.

    “They’re going to the bathroom in our alleys, and on our parkways,” Curtis Park resident Matina Soutsos said. “It’s a health problem.”

    https://www.thedenverchannel.com/news/front-range/denver/concern-mounts-about-growing-tent-city-in-curtis-park-residents-ask-city-for-homeless-porta-potties

    2. If you draw a Venn diagram between “poop problem” and “progressive leadership,” there seems to be a 100% overlap/correlation.

  21. Who’s Really Buying Property in San Francisco?

    http://amp.theatlantic.com/amp/article/587389/

    It’s also possible that these IPOs could turn out to work differently from ones in the past. For one, the companies have been around longer, so early employees of Uber, for example, have had a chance to cash out. “I would say that everyone took at least some part in that,” says Josh Mohrer, the former general manager for Uber in New York, who now runs several Uber alum organizations. More of the companies’ shares are also held by major investors who put money in late than in previous IPOs, too. Or maybe a major global economic recession will send tech share prices tumbling and postpone this flood of money coming into the real-estate market.

  23. Marty Olejniczak, community development director for the City of Sturgeon Bay.”

    The real bubble is gov

    1. That site is rather politically incorrect and commits the heresy of challenging The Narrative purveyed by our Oligopoly media. Mind your social credit score, Mr. Banker.

        1. You can redeem yourself by being present and especially vocal at this afternoon’s Two Minutes of Hate session, Mr. Banker. I believe today’s event will be directed at those deplorable uneducated whites who failed to vote for the Oligopoly’s approved Tweedle Dee or Tweedle Dum “choices” back in 2016.

          https://www.youtube.com/watch?v=XvGmOZ5T6_Y&t=10s

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