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It’s Starting Now

A report from the Los Angeles Times in California. “The Southern California median home price dipped slightly in March from a year earlier, the first annual decrease since 2012 and a sign of a remarkable downshift from the once-sizzling regional housing market. ‘It’s slowed down a lot from last year,’ said Andrew LePage, an analyst at CoreLogic. ‘That’s more important than whether we are north or south of zero by one-tenth a percentage point.'”

“Orange County’s median in March was $20,000 below its all-time high of $740,000 reached in May, June and September of last year. L.A. County’s median last month was $17,500 below its record of $615,000 reached in June. In L.A. County, March prices haven’t been below June levels since 2012, while in Orange County that last happened in 2016.”

“Sales continued their declines across the board and have now dropped in each county for at least eight consecutive months. Sales for the region fell 14.1% in March. The latest data show home inventory — the supply of property offered for sale — is rising. According to Zillow, there were 24% more homes for sale in L.A. County last month than in March 2018. In Orange County, listings rose 40%.”

“In L.A. County, the softening could also stem from people outright leaving the area or refusing to move here given high costs. According to the latest census estimates, L.A. County’s population declined by 13,000 in the year that ended July 2018. ‘It appears we may have hit an inflection point,’ in terms of population growth, said Richard Green, director of the USC Lusk Center for Real Estate.”

The San Francisco Chronicle in California. “San Francisco housing startup HomeShare has shut down just weeks after laying off the majority of its staff. HomeShare CEO Jeff Pang apologized to customers and employees in a blog post Friday, pointing to a lack of funds as the reason for the shutdown.”

“‘As mentioned in our previous blog post a few weeks ago, HomeShare made changes to our service and dramatically reduced staff in an effort to work past unexpected financial constraints,’ Pang wrote. ‘Unfortunately, these measures were insufficient and HomeShare no longer has funding to continue to operate.'”

“Louise Ho, who has been a HomeShare customer since she moved to San Francisco in February 2018, said she expects to lose about $2,000 to the company in service fees she’s already paid and the room divider deposit that won’t be refunded. ‘It feels like I just got scammed, and it’s fraud,’ Ho said after receiving the shutdown email.”

From 5280 on Colorado. “Buyers, take a breath. A small one. And make it quick, because you still can’t afford to take your sweet time deliberating over whether to stretch your budget to get that extra bathroom—even as the market will likely affect a slightly more leisurely vibe in 2019.”

“Multiple bids will continue to be the norm; however, come July and August, Heather Heuer, senior vice president of sales operations for Liv Sotheby’s, expects higher inventory to allow buyers a little more time for deliberation. That could be enough to temporarily slow the feeding frenzy around new listings.”

“Says Heuer: ‘The bottom dropping out isn’t going to happen.'”

From Preston Hollow People in Texas. “Real estate listings are up in Preston Hollow and the Park Cities, according to data the Texas A&M Real Estate Center. March saw 418 active listings in the Park Cities, up 50 percent from the same month a year ago, and 393 active listings in Preston Hollow, up 22 percent.”

“The price per square foot has dropped since December – from $341 to $297 in Preston Hollow and $396 to $392 in the Park Cities.”

The Minneapolis/St Paul Business Journal in Minnesota. “Chins up, homebuyers: Prices are still climbing, but not quite as fast. The Twin Cities set a single-month record in March when the median sales price for a single-family home hit $275,000, but there are signs the long-running seller’s market is beginning to turn. That’s the takeaway from the first three months of 2019, according to David Arbit, director of research and economics for Minneapolis Area Realtors, who said the Twin Cities market is ‘meandering back toward a middle ground.'”

“‘It is good and truly that demand is falling back,’ Skylar Olsen, Zillow’s director of economic research. ‘You had prices appreciate too far, too fast. Income did not keep up, and so homebuyers can’t outbid each other anymore.’ Olsen noted the most expensive of the country’s 35 largest housing markets, San Jose, Calif., saw home values drop 0.2 percent in March, the first year-over-year decline since 2012.”

“‘It’s starting now,’ she said. ‘There are places that have already started to turn, that are certainly going, but Minneapolis should join them eventually.'”

“MAR President Todd Urbanski said Twin Cities real estate is still relatively inexpensive compared to other major markets, and a strong, diversified economy helps to keep demand for housing high. Urbanski said the inventory of larger homes in the $500,000-and-up range is growing — ‘but I wouldn’t call it a glut yet’ — and he noted competition for less expensive and especially entry-level homes remains fierce.”

From Curbed New York. “A new StreetEasy study on the rental market found that rents in neighborhoods served by the L train haven’t rebounded (as was expected) when the full shutdown of the line was cancelled and a ‘slowdown’—which starts today—was proposed instead.”

“Earlier this year, StreetEasy’s senior economist Grant Long predicted that rents would ‘rise sharply’ after the L train full shutdown was called off. But it has been the opposite, the new study found: In the first quarter of 2019, apartments that were previously off the market in neighborhoods like Williamsburg, Bushwick, and Greenpoint have now reappeared with lower asking rents.”

“StreetEasy economic data analyst Nancy Wu, looked at apartments listed in the first quarter of 2019 that had been on the market during the same period in 2017 and 2018. Of the roughly 4,200 units, 44 percent ‘appeared at a lower price this year than in past years.'”

“Neighborhoods with the highest share of apartments re-listed at a lower asking rent, according to the study, include Bushwick (77 percent); Williamsburg (59 percent); Greenpoint (57 percent); and Bed-Stuy (54 percent). ‘StreetEasy had predicted that rents in these areas would rise quickly,’ Wu said. ‘But residual inventory built up from the anticipation of the shutdown has led to a prolonged slump in the area.'”

From The Tribune in Utah. “Salt Lake City is the envy of other mid-size cities for having single-family housing close to the City Center. Ironically, demolition, not preservation of this rich heritage is the growing trend. In 2018, the city approved 60 residential demolition permits, 37 of which were in three zip codes – 84102, 84105 and 84108. A 2018 Kem C. Gardner Policy Institute study says, ‘since 1991, housing prices in Salt Lake have increased at a faster rate than housing in San Francisco, San Jose and Seattle.'”

“Astoundingly, 91% of all the units approved for construction in Salt Lake City since 2014 were apartments, which a study claims is ‘the highest level of new residential construction in the City’s history.’ There are now more apartments in Salt Lake (53%) than single-family homes, despite statistics that show the city’s primary population growth from 1990-2010 was ‘large, younger families.’ How does the glut of apartments satisfy the family housing demand?”

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This Post Has 41 Comments

  1. ‘The Southern California median home price dipped slightly in March from a year earlier, the first annual decrease since 2012 and a sign of a remarkable downshift from the once-sizzling regional housing market. ‘It’s slowed down a lot from last year,’ said Andrew LePage, an analyst at CoreLogic. ‘That’s more important than whether we are north or south of zero by one-tenth a percentage point’

    ‘Orange County’s median in March was $20,000 below its all-time high of $740,000 reached in May, June and September of last year. L.A. County’s median last month was $17,500 below its record of $615,000 reached in June. In L.A. County, March prices haven’t been below June levels since 2012, while in Orange County that last happened in 2016’

    Andy, prices in southern California have been sinking like a turd in a well for months.

  2. ‘Olsen noted the most expensive of the country’s 35 largest housing markets, San Jose, Calif., saw home values drop 0.2 percent in March, the first year-over-year decline since 2012’

    Zillow is still flogging this fake news. It’s down over 10% Skylar.

  3. ‘San Francisco housing startup HomeShare has shut down just weeks after laying off the majority of its staff. HomeShare CEO Jeff Pang apologized to customers and employees in a blog post Friday, pointing to a lack of funds as the reason for the shutdown’

    ‘It feels like I just got scammed, and it’s fraud’

    Wait til these IPO buyers wake up.

    1. I have a sneaking suspicion these “IPO buyers” are pension funds and all sorts of institutional investors who are basically patsies for all of this garbage. I’m not even a stock market guy and I wouldn’t touch this crap with a ten foot pole. Who invests billions into sham companies which lose billions of dollars per year? It makes ZERO FINANCIAL SENSE.

      1. Who invests billions into sham companies which lose billions of dollars per year?

        Financially illiterate millennials with Robinhood accounts???

      2. “I have a sneaking suspicion these ‘IPO buyers’ are pension funds and all sorts of institutional investors who are basically patsies for all of this garbage.”

        These pension funds and all sorts of institutional investors aren’t the patsies; Whoever it is that the money belongs to are the patsies.

        The pension funds and institutional investors get to collect some very hefty fees for handling huge gobs of money that belongs to somebody else. If things go right then they get to keep the hefty fees they made. If things go wrong, hey, they still get to keep the hefty fees they made.

        As for the money that is lost when things go wrong, hey, it’s not their money.

        1. The main thing these pension funds and institutional investors need to be careful of is doing what all the other pension fund and institutional investors are doing. If they all do the same thing and they all go down together then they get to claim that “Nobody could have seen this coming” and thus they get to enjoy a pass. But woe to the money handler that dares to stick his neck out and do something differently; These guys get to enjoy the pain that accompanies the question “What were you thinking?” if things go wrong. Hence one finds lots of conformity and very little innovation.

          1. I used to work in an IT shop and we would look for multiple vendors for new technology solutions. At one point we were looking at a new corporate IP telephony solution. Lots of big players gave quotes. I liked one of the smaller guys. We went with the incumbent. One of the mid-level managers said to me, “No one ever got fired for going with Microsoft.” Probably not true, but I got his point. He just wanted to be doing what everyone else was doing, not sticking his neck out.

      3. Who invests billions into sham companies which lose billions of dollars per year?

        How about underfunded pension funds like Calpers that are rolling the dice because their portfolios didn’t perform as well as the wildly optimistic projections they used after the state either raided their funds or didn’t make contributions… ?

        There are so many entities that are depending on outsized returns to make up earlier problems that they are rolling the dice on anything they can find to kick the problem down the road a bit longer.

        When it finally crashes, it’s going to be ugly, ugly, ugly.

      4. It might be viewed a good short to medium term trade. If you can pocket a quick 20% or so, why not. I’m sure that a hedge fund or some such would be financially sophisticated enough to hedge their bets 😉

  4. ‘Urbanski said the inventory of larger homes in the $500,000-and-up range is growing — ‘but I wouldn’t call it a glut yet’

    https://grief.com/the-five-stages-of-grief/

    ‘Denial is the first of the five stages of grief. It helps us to survive the loss. In this stage, the world becomes meaningless and overwhelming. Life makes no sense. We are in a state of shock and denial. We go numb. Denial helps us to pace our feelings of grief. There is a grace in denial. It is nature’s way of letting in only as much as we can handle. As you accept the reality of the loss and start to ask yourself questions, you are unknowingly beginning the healing process. You are becoming stronger, and the denial is beginning to fade. But as you proceed, all the feelings you were denying begin to surface.’

  5. Sponsored content narrative as provided by the National Association of REALTORS, flowery prose can’t mask the steaming turd that is the Denver real estate market:

    “Buyers, take a breath … you still can’t afford to take your sweet time deliberating … the market will likely affect a slightly more leisurely vibe … Multiple bids will continue to be the norm … temporarily slow the feeding frenzy around new listings”

    A slightly more leisurely vibe? Yeah, REALTOR, great description of all the non-buyers attending your almost empty open houses and walking away without buying.

    Be sure to donate all those uneaten fresh baked cookies to a homeless shelter, because Denver’s homeless problem is almost as bad as San Francisco and Seattle 🙁

    1. Translation: “I’m about to fawking starve because the sales volume has dried up, so buy some goddamned houses already, and quick!”

    2. “temporarily slow the feeding frenzy” it will pick back up heather don’t worry but this time it will be realtors feeding frenzy on squirrel meat

  7. “The Southern California median home price dipped slightly in March from a year earlier, the first annual decrease since 2012 and a sign of a remarkable downshift from the once-sizzling regional housing market. ‘It’s slowed down a lot from last year,’ said Andrew LePage, an analyst at CoreLogic. ‘That’s more important than whether we are north or south of zero by one-tenth a percentage point.’”

    My wife commented this morning that she saw in the news that SoCal home prices were declining. I retorted, “Impossible. California real estate always goes up.” (Sarcasm tags were on…)

    Looks like our poor landlords missed the boat for selling in this turn of the cycle. Maybe there will be another chance to sell at recent peak bubble prices in our lifetimes, though history suggests otherwise.

  8. The “prices are still going up, just not as much, don’t panic anyone” echo that these articles keep perpetuating is really starting to get tiresome.

    1. It’s instructive as to the level of attempted behavior shaping and propaganda we are seeing in the media. The other day I mentioned a lack of curiosity about the apartment market in the media given the potential consequences. And why have they chosen to ignore the rising foreclosures? The REIC is a real thing. There’s very little journalism when it comes to shacks.

      1. ‘Valley real estate experts say our real estate market has been hot and it could get “hotter.” “I would say the market today is amazing. We’re busy,” said Valley real estate agent Nate Martinez. Make no mistake about it, the Valley real estate market is hot right now.’

        ‘And, Martinez suspects the market is just heating up. “There’s a lot of employment in Phoenix. People are migrating into Phoenix. So as long as we have net in migration, it’s always gonna be a strong real estate market,” said Martinez.’

        ‘Which means he doesn’t believe the market will tank like it did a decade ago when we saw a nationwide housing crisis. At that time, homeowners bought in a hot market, but the value of their home eventually plummeted. As a result, homeowners were considered “underwater” and simply walked away.’

        ‘Could the same thing happen now? “I do think that market will plateau sometime in the next six to 12 months, but I don’t have a crystal ball. But I don’t think we’ll have a correction like we did in the crash,” said Martinez.’

        https://www.azfamily.com/news/investigations/3_on_your_side/originals/phoenix-area-real-estate-now-is-the-time-to-sell/article_21f2ecae-678a-11e9-8a74-07c32faa50ac.html

        How many times can we work hot or heating up into a puff piece? The ebola came to Phoenix months ago.

          1. March 22, 2019

            “Anyone in the Valley waiting for the housing market to tilt toward buyers may be waiting a while. Experts say the Phoenix market remains a sellers’ market and they see no end in sight. ‘Anyone who is expecting prices to fall is likely to be very disappointed by the current state of affairs,’ said the Cromford Report, noting: ‘Asking prices are being cut at quite a high rate, but asking prices are often overly optimistic anyway, especially for homes that have just been listed.’”

            http://housingbubble.blog/?p=1292

            March 4, 2019

            “The number of new home listings in the Phoenix area jumped 78 percent from December, according to ARMLS. Valley home sales fell 16 percent in January from December. ‘January’s numbers are in, and we are off to a roaring mediocre start,’ said Arizona housing analyst Tom Ruff with The Information Market. ‘Not good, not bad, just slightly above average.’”

            http://housingbubble.blog/?p=1147

            February 13, 2019

            “On a mission to make trading-in your home as easy as trading-in your car, Knock announced the expansion of its revolutionary Home Trade-in platform to Phoenix.”

            “Signs are pointing toward buyers increasingly being deterred by overvalued home prices: In January closed sales were down 12.6 percent year over year, and listings under contract were down 15 percent. In 2018, 66 percent of listings that did sell did so for less than their original asking price, according to the latest National Knock Deals Forecast.”

            http://housingbubble.blog/?p=1006

          2. It’s a tale of two markets, in my opinion.

            The homes priced at the FHA loan limit (~$315k) and below sell relatively quickly. What you get for that with a reasonable commute is pretty low quality. We rent in that zone and get ocasional gunshots, police helicopters, and roaring freeway noise. I would not spend $300k+ on a home here.

            The $400k and above homes seem to just sit. Inventory appears to be building up. $700k spec homes in Cave Creek are sitting.

            Lots of the new, lux apartment buildings have high vacancies. All you have to do is look with your eyes. Lots of dark windows at night.

            I wouldn’t say Phoenix is in the toilet as there’s still a lot of in-migration but it’s definitely poised for trouble. We have the means but we’re not buying at these prices, that’s for sure. Price is what you pay, value is what you get.

          3. Yes, homes seem to be coming on the market at a faster pace but inventory does not appear to be growing that quickly, at least yet. I’m kind of rooting for it to happen, as I said, but the area economy has become more diversified and, as noted, people keep moving there from California. If California prices collapse, of course, that will have a big impact. https://www.movoto.com/phoenix-az/market-trends/

          4. ItsADryHeat

            Nearly everywhere it’s the same problem, just differences in degree and manifestation – developers focused on the ‘high end’ in an effort to Min-Max their profits in numbers far exceeding the pool of qualified buyers for those homes, while almost completely ignoring the lower-end/ entry-level because “it doesn’t pencil out” despite the abundance of buyers needing something they can afford. Everyone hopes they’ll be one of the lucky ones to make it out the exit before it all crashes down.

          5. “It’s a supply issue”. Of course the liars, I mean REALTORS like to think they know all about economics after taking their little 6 month course or whatever, but that article reads like it was written by a high schooler.

      2. I agree completely — I just don’t understand what their motive is to not report the truth here; is it some sort of “follow the money” scenario?

        You’d think that they’d want to warn people about it, like any other imminent danger.

        1. Or even merely entertain the idea that prices don’t only go up. That loans aren’t rock solid. They’ll say repeatedly, for years, that prices have gone way past incomes. But in the bizarro world of higher prices are an absolute good, they can’t go high enough. And then occasionally they’l bring out the “we need to build more shacks so prices come down.” They have no interest in lower prices. Look how they lie when price do fall. Like the LA Times above, focus on the YOY number when comparison to the peak is more relevant. And focus on price is deceiving, when sales and supply issues have told a much truer story about where this has been heading for well over a year. Notice the REIC has been forced to acknowledge price reductions since redfin first started to report it. Before about a year ago, almost no one reported these key, telling statistics.

          2. Yeah build more shacks that will do the trick. How about stop speculating in RE and treating it like the stock market. realturds and the REIC are the only ones profiting and coincidentally the only ones we hear all this rosy bs from on the msm. The income vs cost to buy thing seems to be mentioned more and more and has been noted here since I discovered the HBB.

            Breaking news: “Incomes aren’t sustainable for the median home purchase”, more and more I have been reading this as if they cracked the puzzle. Ok good job detective, now what? CR8 time

        1. I meant the east as a big region not just a city. Yes NYC and Miami have been cratering since 2015

    1. I have seen a few of those pop back up and wondered the same thing. My guess: The “expert” used shack dealer probably told them to pull it off after sitting months on end with a dream price no one wanted to pay and repost higher for the upcoming “frenzy” in spring.

  12. How does the glut of apartments satisfy the family housing demand?

    This SLC op-ed is kind of suspect in my opinion. It’s basically SLC Nimby-ism not wanting to change “the pioneer character” of the neighborhood. I’m sure some of the newer $1mil houses going up in the avenues are monstrosities, but this statement by the writer is absurd. Someone needs to let this writer know that families can live in apartments.

    1. Someone needs to let this writer know that families can live in apartments.

      It’s tough for families bigger than 4 or so to live in apartments. And we are talking about SLC :-). The writer may have some assumptions about family size.

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