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It Won’t Cost You If You Wait It Out

A report from the Denver Post in Colorado. “Price declines are becoming much more widespread. A year ago, an unlucky seven Denver area ZIP codes failed to register annual home price increases in the first quarter, according to the DMAR data. This year, 26 lost value in the first quarter.”

“The shift shows up in homes spending more time on the market, more listings adjusting lower in price and more homes selling below the original asking price. And it is showing up in a wider inventory of homes to choose from, even among those once scarce homes priced in the bottom tier of the market.”

“Nina Kuhl, broker associate HomeSmart Cherry Creek, is seeing more buyers compare existing entry-level homes against what builders are offering and recalculating. ‘For about the same price or a little bit more, I can get a new home and pick out my finishes,’ she said of a view she is hearing more young buyers express.”

“‘Things are getting better for buyers,’ said Trulia senior economist Cheryl Young. ‘We are hitting a different part of the cycle. It won’t cost you if you wait it out.’ A year ago, only a quarter of metro Denver ZIP codes had momentum moving in favor of buyers. Now it is approaching 90 percent, she said.”

From CBC Los Angeles in California. “CBS2/KCAL9 reporter Jeff Nguyen spoke to some agents and real estate developers during this cooling off period. Jim Likens, a real estate developers, just remodeled a three-bedroom, two-bath condo in the San Fernando Valley. Likens said he’s been unable to close a deal on the property — similar properties were closing faster than you can say ‘escrow’ and not long ago.”

“He says there was a time when homes would get snatched up the very first day they hit the market. Now? Not so much. ‘This property has been on the market now for roughly two months,’ Likens says.”

“Realtor Jennifer Casteneda says she’s also lately been seeing more offers coming in at below the asking price. ‘There’s a lot of the going back and forth with negotiating. A couple of years ago – they were coming at asking or above,’ says Casteneda.”

“According to Zillow, there were 24 percent more homes for sale in LA County last month than in March 2018. In Orange County, listings rose by 40 percent.”

The Commercial Observer on New York. “In the first quarter, residential apartment sales slowed on the year in Manhattan in response to an uptick in new units coming to market. According to a joint first quarter report by brokerage Douglas Elliman and appraisal firm Miller Samuel, Manhattan sales were down nearly 3 percent on the year, and sales of units within new developments fell by just over 39 percent, while new inventory rose by 9 percent.”

“The median sales price fell 2.2 percent on the year in the first quarter, marking the sixth consecutive year-over-year decline in quarterly median sales price and increase in inventory, according to the report.”

“Meridian Capital Group‘s Ronnie Levine, opined on the state of the condo market in New York, saying lenders have become more aware of how to properly approach for-sale condos in this environment. ‘[We’re] watching the [for-sale] condo market in Manhattan, specifically absorption rates and what’s going on in the upper end of the market,’ Levine said. ‘Lenders are more cognizant,’ Levine added. ‘It used to be all about price per foot, and now, the first question we’re asked is how many units are above $10 million.'”

From Lehigh Valley Live in Pennsylvania. “Prices can drop in the housing market for various reasons, according to real estate agents. These run the gamut from homes being overpriced in the initial listing to buyers getting into financial binds and needing to sell faster than originally thought.”

“The Lehigh Valley has a great deal of properties dropping prices weekly. We gathered a sampling of some of the most recent reductions in Northampton and Lehigh counties and listed them from high to low,  according to Trulia. The steepest savings of the handful we found included a home reduced by $25,100.”

From Realtor.com on New Jersey. “Melissa Gorga is a popular cast member of ‘Real Housewives of New Jersey.’ But her home has proven to be less appealing. Gorga and her husband have been trying to sell their custom estate in Montville Township, NJ, since 2017.”

“Originally, the couple listed the mansion for $3.5 million. Last year, they dropped the price to $3.3 million, with no buyers in sight. This week, the mansion had yet another price cut—down to $2.95 million.”

From Patch Moorestown in New Jersey. “We first told you about this 4-bedroom Moorestown home that sits on 21 acres of land back in January. At that time, it was on the market for $3.7 million. Well, now it’s available for just under $3 million, at $2,950,000.”

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This Post Has 57 Comments

  1. ‘more buyers compare existing entry-level homes against what builders are offering and recalculating. ‘For about the same price or a little bit more, I can get a new home and pick out my finishes’

    When the builders undercut the existing market, you can stick a fork in it. Right Naples?

    1. At least in my area, it depends on location location location. Certainly, if you have the choice between a 2003 4-bed center hall Colonial in Centerville vs. a 2019 4-bed center hall Colonial in Chantilly, go for the new house. [those are VA bedroom communities near IAD.]

      But this article said “entry level,” which is laughable in itself. In the MD burbs, “entry level” — say, $375K — is a choice between a 1970 3/2 rambler or split-level on 0.2 acre in Hyattsville, or a shiny new 2000 sq ft townhouse in Beltsville. The new townhouse has no yard, a strangling HOA, and probably adds 30+ minutes to your commute.

      I also note that it’s the wives who want the shiny new house, but the husbands who pay for it with the commute.

      1. I also note that it’s the wives who want the shiny new house, but the husbands who pay for it with the commute.

        Yeah, my wife and I have argued about that in the past. She thinks a commute is no big deal. Yet somehow it’s always me that she is thinking will be doing it. I’m fine if she wants to do it. But I want to be close to work even if the house doesn’t impress anyone.

        1. I thought most wives are working outside the home these days.
          Don’t they have to commute?

          1. From the Department of Labor’s website:

            -Seventy percent of mothers with children under 18 participate in the labor force, with over 75 percent employed full-time.
            -Mothers are the primary or sole earners for 40 percent of households with children under 18 today, compared with 11 percent in 1960.
            -There are 74.6 million women in the civilian labor force.
            -Almost 47 percent of U.S. workers are women.

          2. Women are working outside the home yes, but they are closer to the home. Example: woman works in the local school system down the road, while hubby has the big lawyer job downtown, or gov worker in an office building 15 miles away. If it’s the wife with the big job and commute, she is less impressed about the newer house.

          3. If it’s the wife with the big job and commute, she is less impressed about the newer house.

            Funny how that works. Not really.

      3. “At least in my area, it depends on location location location.”

        Well of course, as everyone knows that all real estate is local.

  2. ‘[We’re] watching the [for-sale] condo market in Manhattan, specifically absorption rates and what’s going on in the upper end of the market,’ Levine said. ‘Lenders are more cognizant,’ Levine added. ‘It used to be all about price per foot, and now, the first question we’re asked is how many units are above $10 million.’

    This article is mainly about the former bank of the Ozarks dumping millions more into airbox financing.

    1. Something tells me we’ll be hearing a lot about Bank of the Ozarks in the not-too-distant future.

  3. “‘Things are getting better for buyers,’ said Trulia senior economist Cheryl Young. ‘We are hitting a different part of the cycle. It won’t cost you if you wait it out.’

    Cheryl is probably pounding the pavement looking for new employment right about now, after deterring knife catchers from engaging with the Always Be Closing sharpies.

    1. Nope – for deniability reasons, they need some of each of their folks on different sides of the analysis. They probably think that they are sabotaging Cheryl – but EOY 2020 she will be seen as right
      ———
      Cheryl is probably pounding the pavement looking for new employment right about now, after deterring knife catchers from engaging with the Always Be Closing sharpies.

  7. “Nina Kuhl, broker associate HomeSmart Cherry Creek, is seeing more buyers compare existing entry-level homes against what builders are offering and recalculating. ‘For about the same price or a little bit more, I can get a new home and pick out my finishes,’ she said of a view she is hearing more young buyers express.”

    Especially now that new home prices are cratering!

  8. “‘Things are getting better for buyers,’ said Trulia senior economist Cheryl Young. ‘We are hitting a different part of the cycle. It won’t cost you if you wait it out.’ A year ago, only a quarter of metro Denver ZIP codes had momentum moving in favor of buyers. Now it is approaching 90 percent, she said.”

    Did you hear that? Those noises are all the recent buyers that got ran over the the semi-BUS!

  9. I’ve never put much faith in the home price estimates from Zillow or for that matter, Redfin and Realtor.com. Their algorithms don’t factor in micro-conditions for one. I understand all of this. What I don’t understand is how they revise their zestimate history.

    A case in point is that a home I’ve been watching in Maine recently sold for $850K (as noted on Zillow) and the zestimate is now $920K. The zestimate had been $1.1 million for the past two years. In fact, it was $1.1 million last week. So the zestimate dropped almost $200K overnight. OK, so perhaps Zillow saw the sale price and adjusted the zestimate to reflect the reality observed, i.e., the $850K sales price that just happened. But what bothers me is that their “last 30 day change” in zestimate shows only minus $14K. I observed firsthand it went down almost $200K within the last few days but they are saying it went down by $14K. In other words, they changed their zestimate history. I’m sure they would argue that they alter their algorithms and when they do, to ensure an apples to apples historical trend, they apply it retroactively which would explain their revisionist history.

    But think about it, there is no need really for historical zestimates. Why? Because there are actual sales histories. Why do an estimate when there ids an actual number? This leads me to believe that the revisionist historical zestimates simply make zillow look more accurate by cloaking gigantic changes in zestimates over time as reality supplants their zestimates.

    What am I missing?

    2. “Why do an estimate when there is an actual number? This leads me to believe that the revisionist historical zestimates simply make zillow look more accurate by cloaking gigantic changes in zestimates over time as reality supplants their zestimates.”

      Good hypothesis!

      1. Zillow will make statements about the accuracy of its Zestimates. I wonder if when calculating accuracy they compare the Zestimate they had prior to the sale with the actual sales price – or do they compare their revisionist history Zestimate with the sale price. In the case I described with the original Zestimate of $1.1 million versus the $850K sales price their Zestimate was high by 29%. The revisionist Zestimate of $920K is high by only 8%.

    3. I don’t think you’re missing anything — Zillow clearly manipulates their estimates to entice buyers.

      I just saw a home in my area have $50K added to its estimate one day for no apparent reason. It was sold late last year for $280K, a price that was not in the slightest way supported by the comps in its neighborhood. Over the next few months, Zillow dropped the estimate to $230K, where it belongs, as the buyer clearly overpaid for it. Then, lo and behold, the estimate is $277K now. There are homes on the sane street with more square footage, and significantly lower estimates.

      1. And I forgot to add that the dip down to $230K was completely scrubbed from the home value history.

    4. I’d guess it’s some kind of moving average… takes a while to catch up. FWIW, I have about 150 properties starred on Zillow, and it’s only been recently that the estimate and projections I get emailed to me have started to drop… but drop they have.

  10. “People really loved the home. But they would come back and say they’d wanted it at a much lower price,” says Casteneda.

    You just got to roll with it Casteneda!

    1. ‘People really loved the home’

      Does he know this cuz they wrote him letters saying how much they want to feed squirrels and include a crayon mess by little Jimmy of the family mutt? Funny how those letters go away in times like these.

      1. Realtors will be suggesting writing Hate letter. Here is a sample template!

        “Dear Seller,

        I really love the house but I just hate the facts that it’s
        – Overpriced
        – Old
        – Small
        – In bad neighborhood
        – Rodents in the backyard

        Thanks for your consideration but Chinese money launders you are waiting for are now gone. You need to drop the damn prices so my realtors can make a sales and use that money to buy food.

        Regards,
        Future FB”

        1. “Chinese money launders you are waiting for are now gone”

          Everytime i see these listings with all the 8’s i laugh. This one got the memo and reduced from 4,888,888 down to a lower dream price.

          https://www.zillow.com/homedetails/7016-Hollow-Lake-Way-San-Jose-CA-95120/124440881_zpid/

          Still hoping for it:

          https://www.zillow.com/homedetails/3524-La-Castellet-Ct-San-Jose-CA-95148/82962614_zpid/

          I noticed that listing is a “make me move” listing. Never noticed that one until searching for listings with all those 8’s

          A Make Me Move listing is a way for homeowners to test the market and gauge potential interest without officially listing their home for sale.

          How does it work?

          Once your Make Me Move listing has been posted, potential buyers can contact you via e-mail to discuss your home further. As the homeowner, your identity will remain anonymous until you wish to share this information. Then it’s up to you whether or not you sell your home. You can remove your Make Me Move listing at any time.

          1. You idiot! You need to bury the St Joseph statues in the front yard. The more you bury, the higher the prices!

  15. https://www.cnbc.com/2019/04/29/san-francisco-bay-area-home-prices-fall-for-the-first-time-in-7-years.html

    “Buyers overall, and especially in high-priced markets like San Francisco, are extremely interest rate-sensitive. The average rate on the 30-year fixed spiked to just over 5% last November, according to Mortgage News Daily, and then fell back again in December. In March it took a deep dive to around 4%, but has since climbed back to around 4.5%.”

    IPOs????????????????

    1. IPOs????????????????

      There was a good article recently that explained how most people making any real IPO money were already able to access it ahead of time and have already bought.

      1. Yep, that was on WolfStreet. It was an interesting article and seems reasonable, but Wolf has a tendency to take an idea, believe in it fully, and proclaim it to the masses as if it is beyond debate even if just speculative opinion. Seems clear to me that any IPO will leads to at least a few large home buys and, in a thin market, will have an impact on home prices.

    2. SF becomes more 3rd world every month. Stepping over the homeless after a night of drinking is not easy.

      1. Stepping on the bums doesn’t bother me much it’s there human waste and syringe piles.

        1. I live in Fremont and have there’s a shopping cart shanty town of 2 or 3 homeless types right off the sidewalk near the 24hr fitness gym on Walnut Ave.

          This is opposite corner from the County Courthouse and about a 1/4 mile from the Police Dept on Stevenson.

          Self-labeled Sanctuary City…

  18. The level of ground level corruption is amazing. /of course nothing like the money center banks.

    Had some casual friends mention that they got a HELOC to ‘improve their house’ (at least as mentioned to the credit union). They will not be doing any of it – they are using it to suppliment their living expenses.

    The credit union thinks that they are improving their house – which allows the ‘equity’ to drop significantly. Oh well! It is only the largest credit union in WA (BECU – Boeing employees – but basically available to everyone in WA)

    Are we back to 2008?

    1. We get harassed regularly to refinance what’s left of our mortgage — the non-bank that took it over from the bank wants us to pull the equity out and re-assume the debt donkey position.

    1. They support the ongoing, endless War on Savers without any qualms about routinely transferring wealth from creditors to debtors.

      At what point did bankers get into the wealth reallocation business?

  20. See today’s cnbc article about 1st yoy drop in prices in San Fran. After stating this fact it goes totally kid gloves. They dont tell you that in order to be yoy negative it had to be inching down for several consecutive months. They simply will not explain this part clearly. The yoy headgame continues but will bite them much harder as continued monthly declines progress and the negative yoy figure increases. Love to see them get tagged by their own weapon

    1. Yeah soon after I read that article the new version of QE hit the MSM…. someone is just waiting in the background to patch each bullet hole of this sinking ship

    1. And the weird thing is that China isn’t really an honor/shame culture compared to a lot of other places. It’s pretty tough to shame them into anything. Usually they don’t care. So I’m surprised that they would try that.

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