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The Events That Appear To Be Playing Out (Read: Glut)

A report from CNBC. “The nation’s priciest properties are in far less demand this year, and that is taking a toll on their values. Sales of homes listed at $2 million and above fell 16% in the first quarter, the sharpest annual decline since 2010, according to Redfin. This as the supply of those homes rose 14%, marking four straight quarters of annual increases in inventory.”

“The shift in the luxury market has been more pronounced in certain metropolitan markets. The average luxury sale price fell hardest in Boston (-22.4%), Newport Beach, California (-21.8%), and Miami (-19.3%). Miami’s drop may have been less about tax changes and more about overbuilding on the luxury end in recent years that has led to an oversupply of high-end homes for sale.”

“Greenwich sales in the first quarter of this year were down 25% compared with a year ago. The median price fell 17% to just over $2 million, according to Miller Samuel. The average number of days homes sat on the market before selling rose to 214 and there is now a two-year supply of Greenwich homes for sale.”

From Curbed New York. “The lights are rarely on in the sky-high condos of Billionaires’ Row, and that’s not only because their owners are seldom in town—it’s because many are lacking buyers entirely. A new estimate by real estate appraiser Jonathan Miller pegs upwards of 40 percent of Billionaires’ Row condos as unsold.”

“These buildings are not new to market: They include Extell’s One57, which officially unveiled its listings over seven years ago, where Miller estimates nearly 50 apartments have yet to find a buyer. (Extell disputed this finding, telling the New York Post that One57 is ‘over 85 percent sold in units and over 90 percent sold in value.’)”

“Prices in the buildings remain so high for a few reasons: Firstly, the cost of land acquisition, construction, marketing, and building maintenance all get factored into the condo costs. Secondly, such adept developers write clauses into their contracts that keep lenders from forcing them to drop prices in the events that appear to be playing out. (Read: glut.)”

The Augusta Free Press on Virginia. “According to the March 2019 Home Sales Report released by the Virginia REALTORS®, the pace of sales continues to slow down in Virginia compared to last year. The statewide March median sales price has now climbed more than $25,000 in the past 3 years; however, there may be signs that price growth is slowing in some local markets.”

“Virginia REALTORS® Chief Economist Dr. Lisa Sturtevant says, ‘Market slowdown is often the result of too little inventory. We will continue to monitor the slowdown in price growth as well as sales. If prices continue growing slowly, we will look to see if this reflects a softening of demand in some local markets.'”

From KTNV in Nevada. “Like a lot of millennial homebuyers, Agaton Ybarra-Rojas uses apps and websites to make his search easier. Kline and his wife did something a lot of baby boomers are doing. ‘We’ve downsized from a much larger home.'”

“According to the Wall Street Journal, homeowners of Kline’s generation are leaving a glut of those older homes that are just sitting on the housing market, especially in the sunbelt states like Nevada. Charmaine Prospero, a real estate broker at The Prospero Group, has noticed the trend here in Las Vegas. ‘We have about 1100 homes that are four to five bedrooms right now. That are 3500 square feet and larger. So, it’s a lot of homes.'”

From Palm Springs Life in California. “Palm Springs Life asked six local experts to explain where the market stands. Walter Neil, CEO of Franklin Loan Center, didn’t expect inventory to drop so low. ‘I think you have a lot of inventory on the sidelines because people think the market is going to go up,’ he says.”

“Keller Williams agent Brandy Sandahl was caught off guard by the high degree of price sensitivity in the past year. ‘We had a property listed at $589,000 on the market for three weeks with no offers,’ he remarks. ‘We lowered the price [by] $20,000 and got multiple offers.'”

“‘The biggest surprise to me was the way business dropped off in December and January, because everything was going strong until November,’ says president of HK Lane Ron Gerlich.”

From Capital FM on California. “Harry Styles has achieved a whole lot in his short 25-years of life, but it seems selling property might not be one of those things he’s good at. Yup, poor Haz has had to slash the price of his LA mansion, again, after failing to sell if for $8.495million (£6.57million) to $6.695million (£5.81million) after purchasing it in January 2016 for $6.87million (£5.3million).”

“The singer hasn’t been spotted much around LA lately, which has us wondering if he’s selling up from the mansion’s lack of use, or if he’s gotten into the celeb trend of flipping homes for a ‘profit’, or not, in this case.”

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This Post Has 39 Comments

  2. Blue skies ahead, or is the housing market falling off a cliff?

    excerpt:
    At 9 a.m. on Tuesday the S&P CoreLogic Case-Shiller index showed the housing market cooling for the 11th straight month. An hour later, the National Association of Realtors released its pending home sales report showing a spike in signed contracts.

    So, which is it? At the most critical time of year for the housing market – the onset of the spring buying season – is demand falling off a cliff or picking up speed?

  4. “‘The biggest surprise to me was the way business dropped off in December and January, because everything was going strong until November,’ says president of HK Lane Ron Gerlich.”

    B…b…but I thought realtors were supposed to be experts on local market conditions. So why the “surprise” that overpriced shacks are starting to crater?

  5. its one thing if they paid with cash. It is another if they got a mortgage … I just heard of someone buying a very nice (flipped) retirement house on the WA coast … and only doing a 10% down payment. The bank is on the hook here

    ——————
    For their retirement in a suburb of Asheville, N.C., Ben and Valentina Bethell spent about $3.5 million in 2009 to build their dream home: a roughly 7,500-square-foot, European-style house with a commanding view of the Blue Ridge Mountains.

    The Bethells said they love the home but it now feels too big, especially since their adult son visits only about once a year. Plus, tasks like pulling garbage cans up the steep, 100-yard-long driveway have become onerous, said Mr. Bethell, 78. “It’s a lot to do.”

    The couple listed the home in 2015 for $4.495 million, and have since reduced the price to $3.995 million. When the house does sell, they plan to buy a newly constructed, smaller house nearby.

      1. Just a tad overpriced lol

        Tax history
        YEAR PROPERTY TAXES TAX ASSESSMENT
        2018 $12,928– $1,199,400–
        2017 $12,928(-0.9%) $1,199,400–
        2016 $13,048(-11.5%) $1,199,400–
        2015 $14,741(+1.2%) $1,199,400–
        2014 $14,561– $1,199,400–

        1. Zildo guestimate says 2.5m but you dont account for the added value of St. Josephs statue buried in front yard… also if this was my listing i would price it at a more sound 3,888,888.88 no more no less. that is the magic number TRUST ME -Realtor

        1. “2069 days on market. LOL.”

          It’s what’s on the menu…. Helpless DebtDonkeys.

        2. Ha, that was what jumped out at me.

          That, and the thought of keeping that place clean.

    1. Powell cites “lack of inflation pressure.” I guess these Keynesian fraudsters never leave their ivory towers long enough to pay rent, fill up their gas tank, visit the doctor’s office, pay for their kids’ college tuition, etc., etc.

      1. “my car payment is low…. I got a 108 month loan!” 😉

        Again, if the economy is so strong, why are we borrowing $1 trill a year?

        1. If the economy is so strong, why does the Fed not dare to normalize interest rates?

          2. “We’ve always been at war with Eastasia”

            No, we’ve always been at war with Oceania. You are committing thoughtcrime.

    1. Didn’t Michael Dell brought a penthouse there in 2015 for $100 millions. Bill Ackman for $91 millions? I mean these idiots are billionaires but they could have just waited and get the views for free (like the homeless folks).

      1. That is the interesting thing about housing: people of means often overpay for upscale housing. They have the money, want a nice place to live and want it now.

        Ackman and Dell are not concerned with cost or “good deals”.

  8. “Virginia REALTORS® Chief Economist Dr. Lisa Sturtevant says, ‘Market slowdown is often the result of too little inventory. We will continue to monitor the slowdown in price growth as well as sales. If prices continue growing slowly, we will look to see if this reflects a softening of demand in some local markets.’”

    Like I said, the east as a region is a year behind the west. Slowdown in sales will lead to inventory growth. Which will lead to slowdown in price appreciation. Which will lead to inventory growth until prices drop and sales go to hell.

  11. More Freebies…NYC becomes 1st major US city to make jail phone calls free

    Mayor Bill de Blasio said Wednesday that the city has fully implemented a law passed by the City Council last August to eliminate fees for inmate phone calls.

    The Democratic mayor says the free calls will help people in custody stay connected to their lawyers, families and support networks.

    City jail inmates were previously charged 50 cents for the first minute of a phone call and 5 cents per additional minute.

    Lawmakers in Connecticut are considering a bill to provide free calling for inmates in the state’s prison system. Connecticut would be to first state to make prison calls free if the measure goes into effect.

    1. Free room and board, free medical and dental, free job training and ongoing education, and now free phone plan. Once you get past the “initiation”, seems like a pretty good gig! Your average criminal might even be safer in there than out on the streets …

      1. You can go there too if you think it’s so wonderful. The barrier to entry is low enough.

    3. I had a friend in jail call me collect in the 1980s. The cost was $2.25 for establishing a connection and $.78/minute. It was $10 for a 10 minute call….30 years ago.

      I remember thinking how rediculously unfair it was. It’s good to see someone is taking action to correct the issue.

      1. +1. It’s a disgrace how the prison industrial complex exploits the incarcerated and their families. These are still human beings.

    3. Eventbrite? Jeebus I’m a dinosaur. Don’t companies make things anymore? This is just a bunch of overpaid ticket scalpers and the CEO is proud of her work on MTV’s “Jackass”.

    1. This would be an utter disaster for the city and would have a major (negative) impact on the work that I do. Last I heard, 300 was polling barely ahead. If it passes, the people who voted for it will be begging to fix it in under 6 months.

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