Demand Went From Good To Horrible
A report from CNBC. “Sales of existing homes were weaker than expected in March. But behind the headline numbers, an even more disconcerting dynamic is playing out. Both the high end and the low end of the market are struggling due to completely different factors.”
“Sales of the lowest priced homes—those below $100,000—were down 13% in March compared with a year ago, according to the National Association of Realtors. In contrast, sales of high-end homes were soaring back in 2017. Million-dollar plus sales were up nearly 31% that year. This March, sales in that price class were down 11% year over year, even though there are plenty of those homes for sale. In fact, there is nearly a year’s worth of luxury supply available for sale now.”
“The impact is already pretty clear in New York city and in much of California, some of the priciest markets in the nation. Los Angeles home sales fell 12% annually in March, according to the California Association of Realtors, even as the supply of listings increased. Sales in the San Francisco Bay Area were down nearly 11%.”
“In Manhattan, the number of home sales in the first quarter of this year fell to the lowest level in a decade and was 16.4% below the two decade average of all quarters, according to Jonathan Miller, CEO of Miller Samuel a real estate appraisal and consulting firm. This as listing inventory jumped nearly 9%.”
From Reuters. “Last month, existing home sales fell in all four regions. There were 1.68 million previously owned homes on the market in March, up from 1.63 million in February. At March’s sales pace, it would take 3.9 months to exhaust the current inventory, up from 3.6 months in February.”
“First-time buyers accounted for a third of sales last month, little changed from February and up from 30 percent a year ago. Economists and realtors say a 40 percent share of first-time buyers is needed for a robust housing market.”
From Bloomberg. “Buyers in the tightest U.S. housing markets finally got what they’ve been looking for: inventory. But instead of sales surging as a result, they’re sinking. In Salt Lake City, where listings jumped 53 percent in March from a year earlier, transactions fell 21 percent, the biggest drop in the country, according to Redfin Corp. Utah’s capital was followed by Los Angeles, Las Vegas and Orange County, California, all previously hot markets where inventory has been rising.”
“‘Buyers are back, but they’re picky,” said Daryl Fairweather, chief economist of Redfin. ‘In order to get back to a balanced market, prices have to come down more.'”
“Demand in markets such as Orange County went from ‘good to horrible’ late last year, said Rick Palacios, director of research at John Burns Real Estate Consulting LLC, which tracks home construction. In the fourth quarter, sales of new homes in the area were the weakest since the Great Recession, he said.”
“‘We’re starting to hear that sales are picking up in Orange County and the Pacific Northwest,’ Palacios said. ‘The caveat is that builders are having to cut prices and meet the market to generate those sales.'”
A press release from Redfin. “Nine of the 85 largest metro areas Redfin tracks saw a year-over-year decline in their median price, including a 13 percent drop in San Jose and a 1 percent dip in San Francisco. These and other expensive West Coast markets, including Los Angeles, Orange County, and Seattle, posted double-digit year-over-year declines in the number of homes sold.”
From the Key News in Florida. “Key Biscayne real estate is on its fourth year of a down market, with many sellers hoping it’s hit bottom. Overall, Key Biscayne activity decreased 31 percent this first quarter of 2019 versus the same period last year, according to the Miami-Dade Multiple Listing Services. Properties are also taking longer to sell, with an average of eight months on the market prior to closing. Needless to say, it’s the market-priced properties that are selling.”
“The median sale price for condominium and single-family homes is $970,000. This represents a slight decline of 8 percent versus 2018 and a 24 percent decline versus five years ago.”
“A total of eight single-family homes sold in the first quarter, while 126 houses are actively listed for sale. Of the eight, five were priced between $2 million to $3 million. This price segment experienced the most activity in the last couple of years.”
“Two-thirds of the Key Biscayne condos sold were priced under $1 million, which seems to be the sweet spot for condo buyers. EWM Realty President Ron Shuffield told a recent Key Biscayne meeting that Miami-Dade County has more luxury inventory than it has ever had: 5,000 units (condos and houses) for sale above $1 million. Conclusion: it’s still a buyer’s market.”
“Real estate professionals attribute the weak market to a mix of factors. South Florida real estate boomed for several years; a price correction after the 2015 peak was bound to happen. In 2016, The U.S. Treasury Department began to aggressively track money laundering through Miami-Dade real estate, pursuing shell companies that bought homes for $1 million using cash. At the same time, currency devaluation in some Latin American nations affected the purchasing power of many potential buyers.”
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‘The median sale price for condominium and single-family homes is $970,000. This represents a slight decline of 8 percent versus 2018 and a 24 percent decline versus five years ago’
That’s right, five years of crater and decades of inventory sitting empty.
“…slight decline of 8 percent…”
More REIC spin machine lingo. When prices were moving *up* 8 percent it was all about ‘rockets to the moon’.
Proof positive: Radio silence from Lawrence Yun / NAR
It was a good thing everyone put 20% down with FICO score of 700+
Prospective buyers with good credit scores and positive net worths are advised to stay out of the market until after the present wave of subprime muppet buyers wipes out.
‘First-time buyers accounted for a third of sales last month, little changed from February and up from 30 percent a year ago. Economists and realtors…’
Hey Reuters, you didn’t used the royal “R” there.
‘Buyers in the tightest U.S. housing markets finally got what they’ve been looking for: inventory. But instead of sales surging as a result, they’re sinking’
But, supply and demand? Shortage!
Yeah, seems like the reporter is mixed up on what causes what. Sinking sales is what caused the inventory to become available.
Correction: Inventory in the tightest U.S. housing markets is surging, as a result of sinking sales.
‘Buyers are back, but they’re picky,” said Daryl Fairweather, chief economist of Redfin. ‘In order to get back to a balanced market, prices have to come down more.’
Translation: we’re burning through cash like Elon at a tequila bar, so drop your prices you greedy bashtards!
Don’t drink this and drive your Tesla…just in case it is ever produced.
Tesla
Mexico’s tequila council pumps the brakes on Elon Musk’s ‘Teslaquila’
Tesla CEO tweeted in October that the spirit would be ‘coming soon’ but the regulatory council says tequila is a protected word
Reuters in Mexico City
Tue 13 Nov 2018 20.35 EST
Last modified on Wed 14 Nov 2018 08.28 EST
Tesla Inc co-founder Elon Musk and Mexico’s tequila producers could be headed for a collision after the agave-based drink’s industry group opposed the flamboyant billionaire’s efforts to trademark an alcoholic drink dubbed “Teslaquila”.
One of the world’s richest people and chief executive of Tesla, Musk is known for ambitious and cutting-edge projects ranging from auto electrification and rocket-building to high-speed transit tunnels.
Now it seems that Musk could be setting his sights on disrupting the multibillion-dollar tequila industry.
Elon Musk says ‘Teslaquila’ is ‘coming soon’ as Tesla files trademark
Read more
On 12 October, he tweeted “Teslaquila coming soon” and an accompanying “visual approximation” of a red and white label with the Tesla logo and a caption that stated “100 percent Puro de Agave”.
Not so fast, said Mexico’s Tequila Regulatory Council (CRT). It argued that the “name ‘Teslaquila’ evokes the word tequila … (and) tequila is a protected word”.
…
“In fact, there is nearly a year’s worth of luxury supply available for sale now.”
I think it’s shifting to a buyer’s market? Where art thou buyers?
“…year’s worth of luxury supply available…”
Gee, Whatever happened to that flood of money from China?
Tariffs, [Chinese] gov’t export controls, not good feng shui , cold feet?
“Demand in markets such as Orange County went from ‘good to horrible’ late last year, said Rick Palacios, director of research at John Burns Real Estate Consulting LLC, which tracks home construction. In the fourth quarter, sales of new homes in the area were the weakest since the Great Recession, he said.”
Yes, but but but some Crow-boy named Chris “No Bubble” Thornberg said the economy is STRONG. What’s this “weakest since Great Recession” non-sense talk? We should be building millions more shacks! TO address the shortage!!!!
“Everybody talks about housing, and you should. But how we talk about it is fairly important,” said Thornberg. “It’s not a bubble; bubbles are over-building or over-borrowing; nothing like that is occurring.
“We need more housing, and we’re just not building it.”
http://www.thedowneypatriot.com/articles/key-to-unlocking-the-economy-is-asking-the-right-questions-says-economist
They do try to teach the very basics of supply and demand economics in real estate school. They don’t cover speculation-based economics at all.
Here’s what they’re building, Mr. Thornberg:
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/125757978_zpid/78902_rid/globalrelevanceex_sort/42.583548,-83.156419,42.507856,-83.279501_rect/13_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/24498341_zpid/78902_rid/globalrelevanceex_sort/42.583548,-83.156419,42.507856,-83.279501_rect/13_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/24497815_zpid/78902_rid/globalrelevanceex_sort/42.583548,-83.156419,42.507856,-83.279501_rect/13_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/24498311_zpid/78902_rid/globalrelevanceex_sort/42.583548,-83.156419,42.507856,-83.279501_rect/13_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/24531969_zpid/78902_rid/globalrelevanceex_sort/42.583548,-83.156419,42.507856,-83.279501_rect/13_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/24532376_zpid/78902_rid/globalrelevanceex_sort/42.583548,-83.156419,42.507856,-83.279501_rect/13_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/2091153459_zpid/78902_rid/globalrelevanceex_sort/42.545168,-83.224837,42.526242,-83.255607_rect/15_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/122270326_zpid/78902_rid/globalrelevanceex_sort/42.545168,-83.224837,42.526242,-83.255607_rect/15_zm/
https://www.zillow.com/homes/for_sale/Birmingham-MI-48009/24504565_zpid/78902_rid/globalrelevanceex_sort/42.54516,-83.224837,42.526234,-83.255607_rect/15_zm/
WTF is that THING on Pilgrim Avenue? (#4)
My question is, WHY are these designs so awful? I mean, they try to “approximate” Craftsman or cottage style but it’s just OFF. I mean really off. Proportions bad, materials bad. They can’t even get the stone facade right. What am I missing?
Fugly!
And look how long many of them have been on the market.
If you look closely at the photos for these, you’ll note what is happening — smaller, older homes that would be affordable to a lot more people (comps roughly $250,000-$350,000) are being bought by builders and demolished to put up these ugly monstrosities, because of their location in a desirable, “upscale” walkable urban area.
What idiots speculated that someone could possibly want to buy this, or that $5M white elephant (#1)?
I can’t make up my mind who the bigger liars are, the builders or the realtors. This is pure avarice, fueled by QE.
The hits just keep coming. Gosh, it’s good to be a renter and spectator as the cratering of Housing Bubble 2.0 gathers force.
https://www.zerohedge.com/news/2019-04-22/us-existing-home-sales-slump-13th-straight-month
“More inventory is needed at the lower end and a price reduction may be needed at the upper end,” she said
Sounds like a problem that might solve itself as the upper end prices fall to the point they are no longer considered upper end. Still might need a bulldozer for that very bottom tier if you’re not going to give it away though.
It looked like some price relief was on its way a few months ago in San Diego as the market was puking up inventory like a bulimic supermodel. But prices seem to be levitating in the stratosphere for the moment. Sellers holding out for top dollar. Maybe we’ll have to wait till the fall before the correction begins again in earnest.
Gee, all that money I’m “throwing away” on rent is turning out to not be such a bad investment afterall, while these shack owners could soon be lighting $100s on fire for heat in their overpriced shacks.
“NAR’s vice president of demographics and *behavioral insights*”?
US Mortgage Applications Fall To 1997 Level As Housing Demand Collapses
https://goo.gl/images/yrtPBK
“Buyers in the tightest U.S. housing markets finally got what they’ve been looking for: inventory. But instead of sales surging as a result, they’re sinking.
B…b…but the NAR assured us that if only they had more inventory to peddle, all that pent-up demand waiting impatiently on the sidelines would come rushing in to sign on Mr. Banker’s dotted line. And the NAR realtors are experts on market conditions, cuz they have research and models and stuff.
My illusions, they be shattered.
Seattle, WA Housing Prices Crater 17% YOY As Vancouver, BC Housing Market Tanks
https://www.movoto.com/seattle-wa/market-trends/
EEEEEEEEEEEE-BOLA USA! And this is with artificially low interest rates, Yellen Buck$ injected into the economy, and a (fake) robust job market. Just wait until the coming recession when Pappa Powell can’t refill the punchbowl. All these 3.5% down FHA, 50% DTI shack and airbox purchasers are going to lose their shirts.
How’s Lawrence “Larry” Yun and Danielle “the next David Lereah” Hale going to spin this one? “Returning to a normal market”????
They’ve been calling this a “Shift” or “Slowdown”. Like a deceleration of price gains but everything is still looking GREAT! It’s now a “balanced market” between sellers and buyers so get to it! We are starving here -Realtors(R)!
https://www.wsj.com/articles/u-s-existing-home-sales-declined-in-march-11555941842
‘Sales of previously owned U.S. homes sputtered in March, failing to build off strong gains in February, despite lower mortgage rates and a strong job market.’
‘U.S. existing-home sales fell 4.9% in March from the previous month to a seasonally adjusted annual rate of 5.21 million, the National Association of Realtors said Monday. Sales were down 5.4% from a year ago, marking 13 straight months of annual declines.’
DONG!
crushing.housing.losses.
B…bb..bbbbut housing only goes up. The liars, I mean, REALTORS(R) told me so. 2008 was a once in a lifetime event and tHiS TiMe iTs DiFfErEnT. Millenials totally want to pay 4x what their boomer parents paid for their McMansion shacks out in the sticks, except they want them 30 years old with original roof, furnace, kitchen and bathrooms.
““Buyers in the tightest U.S. housing markets finally got what they’ve been looking for: inventory. But instead of sales surging as a result, they’re sinking. In Salt Lake City, where listings jumped 53 percent in March from a year earlier, transactions fell 21 percent, the biggest drop in the country, according to Redfin Corp.”
Well, prices in Salt Lake City have inflated by roughly 100% in the past 7 years. Meanwhile, wages have barely nudged up 8.5% in that time.
Amazing those data points are never discussed together. In 2006, average household income was $65,000; in 2017 it was only $71,000. In January 2012 the average home value was $200,000; by January 2019 that had skyrocketed to $400,000! It is amazing that realtors can argue with a straight face that this does not cause any affordability problems.
I live in the area and occasionally attend open houses. Realtors always say the same thing — prices will always appreciate in Salt Lake Valley, the Californians are moving here with tonnes of cash thus driving prices, everyone has a high tech job that pays really well so affordability isn’t a real concern, and my personal favorite, that we are cheaper than Seattle so buy now because prices for a dumpy starter will be over $1 million in two decades.
Paoburen, NOW is the BEST time to BUY!
– Local Realtor/Starving Lyft Driver
COO of a local tech company I worked with said to me a couple of months ago, “Salt Lake City is going to become like California when it comes to house prices.”
He bought 2 houses with some of his vested stock options in West Valley. He’s a heck of a lot wealthier than I am, but I wouldn’t be speculating on real estate in West Valley!
“Salt Lake City is going to become like California when it comes to house prices.”
I don’t think he exactly realizes why he is right.
House prices drop in three Southern California counties
Single-family home prices fell in Los Angeles and San Diego counties for the first time in seven years, California Association of Realtors figures show. Orange County’s median house price fell for the third time in the past four months.
Price reduced signs have been making a comeback in Southern California since sales began falling last year. Los Angeles metro area sales have been down in 16 of the past 17 months, California Association of Realtor figures show. (Photo by Jeff Collins, the Orange County Register/SCNG)
By Jeff Collins
Orange County Register
PUBLISHED: April 16, 2019 at 1:57 pm | UPDATED: April 16, 2019 at 10:05 pm
House prices fell last month in Los Angeles, Orange and San Diego counties and in half of all counties included in the California Association of Realtors’ latest housing report, released Tuesday, April 16.
It’s the first year-over-year price drop for Los Angeles and San Diego counties in seven years and the third in Orange County in the past four months.
…
@OneAgainstMany:
West Valley City does have a lot in common with Southern California:
1) Large illegal immigrant population
2) Failing schools (they are basically ESL centers)
3) Expensive housing inflating far faster than wages
4) Low paid jobs
5) Gang violence
The trend in that area is towards more illegals, worse schools, and more crime. It’s simply not a nice place.
Maybe rich speculators that live outside the area can clean it up with the power of rising asset values!
Good points! I kind of have some sympathy for Mike Winder when he wrote those fake op-ed letters under a different name to try to bolster the image of his city. Sure, it was deceptive, but the intent was to try to lift the standard of a city he cares about. I sure how that West Valley can make progress. Maybe the inland port will do it?
Something tells me the Inland Port is going to be an excuse to encourage more illegal labor as a means to lower the price of labor.
After all, Utah Business and the Legislature love to talk about our labor shortage. Meanwhile, wages are not rising nearly as fast as costs and the homeless population increases annually…
COO of a local tech company I worked with said to me a couple of months ago, “Salt Lake City is going to become like California when it comes to house prices.”
Let me guess, (s)he is from near-coastal California? They tend to make that assumption a lot, especially if it’s their first business cycle out in flyover. They’ve seen downturns but they’ve never seen everything dry up and blow away before.
Utah native actually. Lives in Highland/Alpine area. Surprising to hear what I consider his naivety because he’s actually a pretty savvy developer. It’s just a reminder that expertise in one field doesn’t transfer over to another.
Milpitas, CA Housing Prices Crater 15% YOY As California Staggers From Wave Of Mortgage Defaults
https://www.zillow.com/milpitas-ca/home-values/
*Select price from dropdown menu on first chart
In this week’s episode of…
Goon, how did you get that dog up there?
PHOTOS: STRANGE PHENOMENON LEFT DOG STUCK IN TREE FOR ALMOST 60 YEARS WITHOUT ROTTING
BY KRISTIN HUGO ON 1/19/18 AT 6:10 AM EST
The year was approximately 1960 when the dog ran into a hole at the bottom of a tree and shimmied 28 feet up. “He’s a hunting dog, so we assumed that he was chasing something in the tree,” Bertha Sue Dixon, who runs a museum called Southern Forest World, told Newsweek. (Southern Forest World is where the dog now resides.)
But as the tree narrowed, the dog became stuck. He never caught his prey and no one pulled him out. Unable to escape, he remained in the accidental trap and perished.
Twenty years later, loggers found the immobile canine. Instead of pulping the log, they donated it whole to Southern Forest World. “Stuckie,” as the dog would later be named, has been the star attraction ever since. Even today, viewers can see the hound through glass into the tree where he is still reaching out for freedom that will never come.
https://www.newsweek.com/photos-strange-phenomenon-left-dog-stuck-tree-almost-60-years-without-rotting-784863
Does anyone else find this incredibly disgusting?
Of course.
Even today, viewers can see the hound through glass into the tree where he is still reaching out for freedom that will never come.
Depressing and disgusting.
“Depressing and disgusting.”
If that’s the case we will just replay last week’s episode of…
Goon, how did you get that dog up there?
https://www.youtube.com/watch?v=04DAF_4RbC4
Not opening a link with that teaser!
That dog won’t hunt.
At least Stuckie’s demise was presumably accidental.
…
In 17th- and 18th-century England, for example, some builders would put a cat in the walls of a house to ward off witches, and the plaster wall would preserve the animal so it wouldn’t smell.
…
Electric vehicles emit more CO2 than diesel ones, German study shows
Wednesday, 17 April 2019 19:29
When CO2 emissions linked to the production of batteries and the German energy mix – in which coal still plays an important role – are taken into consideration, electric vehicles emit 11% to 28% more than their diesel counterparts, according to the study, presented on Wednesday at the Ifo Institute in Munich.
Mining and processing the lithium, cobalt and manganese used for batteries consume a great deal of energy. A Tesla Model 3 battery, for example, represents between 11 and 15 tonnes of CO2. Given a lifetime of 10 years and an annual travel distance of 15,000 kilometres, this translates into 73 to 98 grams of CO2 per kilometre, scientists Christoph Buchal, Hans-Dieter Karl and Hans-Werner Sinn noted in their study.
The CO2 given off to produce the electricity that powers such vehicles also needs to be factored in, they say.
http://brusselstimes.com/business/technology/15050/electric-vehicles-emit-more-co2-than-diesel-ones,-german-study-shows
The CO2 given off to produce the electricity that powers such vehicles also needs to be factored in
Even if it’s done hundreds of miles away?
I think the point is that carbon emissions have a global reach, wherever they originate.
But then…out of sight, out of mind…
New study claiming electric cars are dirtier than diesel debunked
4/22/2019
Elektrek
“The problem is that the IFO’s study makes many of the same mistakes as other studies used electric vehicle detractors in the past.”
“For example, they assume that electric car batteries become “hazardous waste” after 150,000 km or ten years, which simply isn’t the case. 150,000km is shorter than the warranty period for an EV battery (generally 100,000 miles or more in the US, which is 160,000km).”
“One of the biggest mistakes they are making is that they are comparing the full production and lifecycle of an electric vehicle, including the emission from the electricity uses, against the production and lifecycle of a diesel car without accounting for all the energy used to produce the diesel and supply it to the cars.”
“This isn’t the first time this has happened. Many years ago a “study” was released claiming that a ~50mpg Prius was more polluting than a ~9mpg Hummer H2. That study relied on one of the same tricks as this one – it estimated that the Hummer would last 300,000+ miles, whereas the Prius would last a fraction of that. There were many other issues with the study, of course.”
One should probably always check not only whether the methods were applied objectively, but also who requested and paid for the work, and why. Often a study is commissioned to produce a particular result, with the analysis conducted in a deliberately biased manner to support the foregone conclusion.
Often a study is commissioned to produce a particular result, with the analysis conducted in a deliberately biased manner to support the foregone conclusion.
There have been some really blatant studies that have come out in the past few years about how the sugar industry deliberately funded research that tried to blame “fat” for obesity.
Of course this is not new. The tobacco industry is littered with stories of obfuscation, denial, and hired scientists who tried to deny that smoking caused any negative health effects. All one has to do is watch “Merchants of Doubt” to see a very entertaining example of how this played out. There are parallels today in other industries, especially when it comes to electric vehicles.
Check your debunker
4/22/2019
Elektrek 🙂
The Electrek Podcast is Fred Lambert, editor in chief of Electrek, and Seth Weintraub, founder and publisher of Electrek and the 9to5 network, discussing all our top stories of the week about electric vehicles and green energy while taking questions from our readers and highlighting the most insightful comments on the site.
The show is live every Friday at 4pm ET on Electrek’s Youtube channel.
https://electrek.co/guides/electrek-podcast/
“Mining and proce$$ing the lithium, cobalt and manganese used for batterie$ con$ume a great deal of energy.”
What’s the energy footprint$ for ga$oline+ethanol+oil?
ga$oline+ethanol+oi
How do you think they get the lithium, cobalt and manganese?
“Electric vehicles emit more CO2 than diesel ones, German study shows”
LOL! But the self-righteous progressives will keep buying them.
Urban Institute: It hasn’t been this easy to get a government-backed mortgage for 10 years
Mortgage credit availability for government loans rises to highest level since 2009
https://www.housingwire.com/articles/48849-urban-institute-it-hasnt-been-this-easy-to-get-a-government-backed-mortgage-for-10-years
In Salt Lake City, where listings jumped 53 percent in March from a year earlier, transactions fell 21 percent, the biggest drop in the country, according to Redfin Corp.
We’re number 1! When CA catches a cold, Salt Lake gets the flu. Lots of CA money trying to escape here, but once home sales slow down in CA, we feel it.