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We Do See Sellers Start To Panic A Little Bit After A Couple Of Weeks

It’s Friday desk clearing time for this blogger. “In April, there were 1,852 more homes on the market than the same time in 2018, according to the Denver Metro Association of Realtors. That’s a 36 percent increase and the most active listings in five years. But as the supply grows, demand has fallen in Denver. The number of sales dropped 7 percent in April. This is a phenomenon playing out across the country.”

“For some sellers, that has been a tough transition. ‘We do see sellers start to panic a little bit after a couple of weeks on the market if they don’t have it done. If they don’t have a contract they start to flip out,’ said Justin Knoll, a longtime metro Denver real estate agent.”

“In previous years, Knoll said, supply was at or near record low and demand was frenzied. ‘You had to make a decision on the hood of the car right now,’ Knoll said. “If you’re going to sign this contract or make an offer on a property, you had to decide right then, because five other people, at least, we’re doing the same. But now it’s like, ‘let me think about this overnight, let me talk to my lender again, let me talk to my financial planner.'”

“For the past five months, homes values have fallen in the Bay Area, breaking a seven-year record of insane gains where prices reached unsustainable levels. New homes are under construction and more homes are for sale, but buyers are not out bidding each other anymore. ‘It is less about job loss, less about recession, this is a housing market correction,’ said Skylar Olsen with Zillow.”

“A report from Redfin reveals that while significantly more homes are available for sale in Seattle, the city is still seeing a decrease in prices over last year. The buyer’s market in Seattle tracks with larger trends in the rest of King County, where inventory increased 78.5 percent over last April, while prices dipped 4.83 percent.”

“That’s a downturn Windermere Chief Economist Matthew Gardner labels ‘a move back to reality’ that the region has been awaiting ‘for almost 20 years.'”

“Sale prices in Southwest Washington have generally trended upward each month in the past year, though April was an exception, according to the RMLS data — the average residential sale price dropped. New listings jumped to 1,140 in April, a 10.9 percent increase over the 1,028 new listings the month before and a 14.3 percent increase over the 997 in April 2018. In fact, the report said, it was the strongest April for new listings since 2008.”

“Looking at the near-term future of the housing market, Gardner said he expected to see a similar pattern in Clark County and much of the western United States — ‘a move back to a more balanced housing market.'”

“It’s no longer just a slowdown: Portland-area home prices have begun to slide after a long post-recession boom, according to one industry measure. Home prices have slowed across the country but overheated West Coast markets have seen a more dramatic turnaround. According to Zillow, home values in Southern California, the Bay Area and Seattle all turned negative before Portland.”

“Tim Duy, a University of Oregon economist, said the decline reported by Zillow tracks with other indicators. ‘This is broadly consistent with other price measures which show that housing price growth in the Portland area slowed to a crawl beginning in the second half of last year,’ Duy said.”

“The air is starting to come out of Houston’s robust housing market. The number of homes on the market has been rising, and the average time it took to sell a home has been growing longer. In addition, a large numbers of homes have been selling for less than their list price. These indicators come as mortgage rates have been in decline since November, a factor that should spur homebuyers to enter the market.”

“‘This most certainly hasn’t happened in a long time,’ said Skylar Olsen, Zillow’s director of economic research. ‘It’s not common. And it’s definitely not common for it to happen without a recession to match it.'”

“In the usually high-flying Hamptons, the housing market is in a rut. Inventory is up; prices are down. As Aspasia G. Comnas, the executive managing director of Brown Harris Stevens, observed, ‘Sellers in the Hamptons are used to the market always going up every year, and if they priced aggressively it didn’t matter.'”

“But in today’s market, homes that are not priced competitively ‘are going to have to go through a series of price reductions’ before they sell, she said — at all levels of the market, not just at the high end.”

“‘The Hamptons are trending much like the New York City metro area,’ said Jonathan J. Miller, the president of the appraisal firm Miller Samuel, noting that the situation is similar in other parts of the Northeast and in California, where real estate is pricey and property taxes are high. ‘The slowdown in sales represents the disconnect between sellers, who are anchored to better times, and buyers, who have a lot of changes to process.'”

“Marvin Arrieta, a broker associate at Century 21, said he received seven offers from buyers the first week after he listed a four-bedroom, three-bath home on a corner lot in South Miami Heights. But Arrieta said the seller had to lower his asking price to $320,000 because banks declined to finance any of the offers received from buyers, many of whom were using FHA loans.”

“‘Every buyer loved the house and qualified for the loan, but the banks are tough about appraisal,’ Arrieta said. ‘They are concerned about the value of the house, even though it’s rare to find a single-family home near Kendall at this price. Usually it’s $400,000 or more.'”

“The fact that this condo sold at a loss may indicate a weakness in the luxury condo market in Miami-Dade County. A condo at Porsche Design Tower in Sunny Isles Beach sold for $10 million, which was less than the price it traded for as a brand new unit. It last traded in 2017 for $11.23 million.”

“The number of new foreclosure filings in the Tampa Bay area jumped in April. According to ATTOM Data Solutions, filings rose 9.15 percent in Hillsborough, 15.6 percent in Pinellas and a whopping 112 percent in Pasco. On an annualized basis, foreclosure starts in Florida jumped 34 percent.”

“One in 290 properties in Osceola County, Florida started the foreclosure process during the first quarter of the year – the 16th highest foreclosure rate among U.S. counties with at least 100 foreclosures nationwide, according to an ATTOM Data Solutions. Osceola County’s foreclosure rate was the highest in the Sunshine State. The foreclosure rate in the county was up 79.9 percent from the same period a year earlier.”

“Those major metropolitan statistical areas with a population greater than 500,000 that saw a large annual increase in foreclosure starts from last year included Orlando, Florida(up 90 percent); Miami, Florida (up 45 percent); Columbus, Ohio (up 35 percent); Portland, Oregon (up 31 percent); and El Paso, Texas (up 22 percent). 17 states had an annual increase in foreclosure starts. Those states included Washington (up 38 percent); Florida (up 34 percent); Oregon (up 22 percent); Louisiana (up 12 percent); and Georgia (up 11 percent).”

“States with the highest foreclosure rates were New Jersey (one in every 980 housing units with a foreclosure filing); Maryland (one in every 1,218 housing units); Delaware (one in every 1,249 housing units); Illinois (one in every 1,371 housing units); and Florida (one in every 1,415 housing units). Among 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in April 2019 were Atlantic City, New Jersey (one in every 702 housing units with a foreclosure filing); Fayetteville, North Carolina (one in every 732 housing units); Clarksville, Tennessee (one in every 853 housing units); Columbia, South Carolina (one in every 946 housing units); and Deltona-Daytona Beach, Florida (one in every 966 housing units).”

“10 states posted year-over-year increases in REOs in April 2019, including Washington (up 53 percent); Connecticut (up 22 percent); Kentucky (up 19 percent); and New York (up 3 percent).”

“Five years after the collapse, the rest of the nation had reduced its foreclosures to pre-crisis levels. That has taken New Jersey more than a decade — a period in which not only has it led all others states in the rate of foreclosures, but Atlantic County has led all other U.S. metropolitan areas in foreclosures. While court actions protected hard-pressed borrowers, they also helped prolong the damage to the real estate market caused by abandoned and foreclosed properties.”

“The New Jersey reforms will probably ensure that it doesn’t have America’s worst performance next time a recession is sparked by a housing crisis. Whether the improvements are enough to ensure the state doesn’t needlessly prolong foreclosures and the next downturn, only experience will tell.”

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This Post Has 73 Comments

  1. As the foreclosures spread out, the MSM won’t tell the public the bubble has popped.

    No room again for international crater. I didn’t even have space for all the US stuff in this lengthy post. I’ll catch up this weekend.

    1. It’s just getting started so they won’t announce anything until prices are down so far that there’s no way to keep a lid on it.

    2. And doesn’t the Hamptons have an MS-13 problem? Poetic justice for the cosmic Globalists that want to import the anybody from anywhere unless it hits their backyard.

  3. ‘Arrieta said the seller had to lower his asking price to $320,000 because banks declined to finance any of the offers received from buyers, many of whom were using FHA loans…‘They are concerned about the value of the house, even though it’s rare to find a single-family home near Kendall at this price. Usually it’s $400,000 or more’

    As I said when it first happened, the FHA changes are gonna kick the markets butt.

    1. Oh, so it’s the availability of money coupled with pukes willing to spend it that drives ever-increasing prices? Let me write this down before it slips my mind.

      So this means – what? – that yanking away the money results in (gasp) decreasing prices? Decreasing prices for … for … for even the comps? But … but … the wealth! The equity cash-outs! The spending! The economy! The horror!

  4. ‘You had to make a decision on the hood of the car right now…If you’re going to sign this contract or make an offer on a property, you had to decide right then, because five other people, at least, we’re doing the same’

    This behavior ensures later foreclosures. And no one had to do anything. One rule I use in negotiations is if a UHS tells me there are other interested parties, I say immediately, let em have it.

    1. Many years ago I made an offer on a total piece of crap foreclosure. It was on a beautiful 1 acre lot and the house was something I could fix, though it wasn’t for the faint of heart. It was a hand dug well, too, so the whole thing was a cash only deal.

      After making my offer, the seller’s realtwhore countered and said they had a 3 person “bidding war” going on. I said that’s great, I’m out. A day or so later they contacted me to tell me another party had dropped out. I told them “looks like your 3 person bidding war is now one person.”

      They tried to get me to “improve my offer.” I laughed and told them there is no offer anymore, I rescinded it. It was take it or leave it. The house languished on the market for another month or two, then finally sold for a couple thousand less than I had offered.

  5. ‘That’s a downturn Windermere Chief Economist Matthew Gardner labels ‘a move back to reality’ that the region has been awaiting ‘for almost 20 years’

    I’m sure we could go back 6 or 9 months and find Matt telling people to sign on the hood of car.

    1. The problem with his comment is that it’s not a move back to reality at all. Prices are still at fantasy level. When you look at the median price vs. incomes, they’re delusional.

  6. ‘Tim Duy, a University of Oregon economist, said the decline reported by Zillow tracks with other indicators. ‘This is broadly consistent with other price measures which show that housing price growth in the Portland area slowed to a crawl beginning in the second half of last year’

    This guy, like Thornberg, used to be a somewhat sane voice. But he got sucked back into the REIC and shook his pom-poms for the past many years.

  8. ‘We do see sellers start to panic a little bit after a couple of weeks on the market if they don’t have it done. If they don’t have a contract they start to flip out

    Well, lower the price, Mr Seller. Get that bidding war started.

    1. A couple weeks? Pffft. What kind of idiot thinks you sell an asset of a half million dollars or more in a couple weeks?

  9. Banks are tough about appraisals? FHA loans are only about 3% LTV. this is pretty loose. Doubtful the appraisals would have come in below this supposedly “below market” asking price if other truly comparable properties were selling in the 400k range. I sense serious BS. The realtor types have a bad habit of being full of it.

    I appraised a lot of properties during the short sale period around 08 through 2010. Then the realtors were all griping about appraisals being too high.

    The reason this occurs is that lender order appraisals with short sales to see if the offer is consistent with what they can sell for if they go ahead and foreclose. An appraisal higher than the short sale offer would tend to discourage lenders from accepting and then proceeding with foreclosure, thus eliminating the short sale and the consequent commission for the realtor. Amazing how chameleons change their color. Probably headed there again soon.

  11. “It is less about job loss, less about recession, this is a housing market correction,’ said Skylar Olsen with Zillow.”

    But what if, and I know this is crazy but just bear with me for a minute, what if the housing market correction CAUSES a recession?

    Or maybe, possibly, the housing market correction is linked to another factor, like I don’t know a credit bubble, that is the real culprit. And what if THAT pops and causes a recession.

    I know, I know, I have a wild imagination.

    1. if the housing market correction CAUSES a recession?

      Biggest housing bubble in history and it’s global. Yeah, that could cause some cascading defaults in everything even remotely related to houses, things that go into houses, bubble jobs, materials and energy.

    2. When the Fed lowered rates to after the crash all other currencies followed so that they would not strengthen relative to the dollar thus allowing their goods to remain attractive as US imports.

      The $200 Trillion of stimulus has resulted in mal-investments in practically every asset class of consequence almost everywhere.

      These fiat cycles naturally have boom bust cycles but this one should be epic due to that shear volume of mal-investment.

      1. Did that same bartender major in international relations and economics at Boston University, graduating cum laude in 2011? Also, the youngest person elected to congress? What a slacker!!

        2. I realize you guys are a little short of ideas at the moment, but socialism got more people killed than anything else mankind has invented. You may be impressed but I’m not.

          1. I am for “Capitalism Plus.” We all agree we need to stop socializing losses and privatizing gains. Too big to fail was a joke, let em fail.

        4. All bartenders graduated Cum Laude at Elite Universities! I hired only the smartest people at the bar!

          1. Hired for a night?

            Capitalism defined as the market is nothing more than 2 people agreeing to a transaction for their own mutual benefit. Our nation has very little in the way of Capitalism left. You could say the US monetary system is run by private banks and you would be right via the Fed Member Banks but that is regulatory capture and maybe closer to Fascism + Oligarchy + Socialism with a dash of Communism if you read Marx’s 10 planks and apply them to the US economy.

          2. EOC was a bartender, and so maybe an outlier, since I heard her referred to as Alexandria Ocasio-Cortez (Occasional-Cortex). 🙂

      1. Maybe if livestock stop getting fed corn now, they can stop giving them antibiotics.
        What about ethanol? Whiskey?

          3. In fact, I don’t even own a credit card. It was actually a problem a while ago because I was trying to rent a car and they said “no.” I used to be able to use my debit card. I even told them, “look, I can show you my bank balance that would pay for this car cash” and they wouldn’t do it. I ended up not renting a car!

          4. “I used to be able to use my debit card.”

            I recently rented at Enterprise, and they said, “No debt cards accepted.” Fortunately I had my AMEX card.

  14. These sellers are new to the Denver market. At one time it took up to two years to sell a property and at a loss also.
    This over priced very liberal town and state, traffic, crime, mini Ca. it is just the beginning folks, many are looking to move out, I suggest if you panic at two weeks you get a 1 year supply of Ativan?

    1. Denver = CRATER.

      Millennial loanowner snowflakes deserve everything they’ve got coming.

  16. A house next block over just sold almost immediately for 5% over asking.

    But a house I can see on the next hill over hasn’t sold yet after 4+ months and ~15% price drop over 3 cuts so far. A couple years ago, this just didn’t happen.

    As long as the former is there to point to, most everyone around here is going to make excuses for later listing, and not stop and wonder about what’s happening and why.

      2. Well.. Zillow price/history data.

        But also for the one a block over, the realtors (a husband and wife team it would appear) sent out postcards in the mail to the surround area in a hope to drum up business. They sent out one when it listed, and another arrived yesterday to announce the sale and sale price.

      1. Yes, It appears to have closed.

        I’ll note that for the neighborhood, the price is about ‘right’ but the premium over listing is smaller than what some other homes in the immediate area got in 2018 and 2017. And the price is about 20% ish below the ‘median’ that’s currently bandied about. Sales price is like elevation – the higher you go the colder the air gets.

      1. I think there’s a paywall, I wasn’t able to read. If Trump is catering to the NAR, I’m disgusted.

      2. “More than a decade after the financial crisis, Fannie Mae and Freddie Mac are still in conservatorship. Fannie and Freddie still dominate the market with no real competition from the private sector, and the taxpayers are still on the hook if another crisis should happen,” Trump said.

        “We’re looking at different alternatives. We have many geniuses looking at it, and we’ll figure something out. But Fannie and Freddie can do a lot better than they’re doing.”

    1. Could it be the houses glutting up the market are not the ones the mass of buyers are looking for??

      As the church lady said… Maaaaybeee…

      1. I listened to a segment on NPR this morning about the effective minimum wage. The economist took a look at the minimum wage by each state and locality and all the work being done at minimum wage and figured out that the effective minimum wage was $11.80, or almost $12 an hour. The increase in minimum wage in many areas is outpacing inflation, so I view that as good.

        What does that have to do with housing prices? We are seeing the biggest correction at the loftiest prices, the real high-end stuff. The starter stuff may be overpriced, sure. But I think the demand will still be there and smart builders will start to retool and build for boomers downsizing and millennials who don’t want a McMansion but are fine with a townhouse, rowhouse, or condo. If prices at the low end fall and the wages at the low end rise, you might get to something that looks like affordable.

    1. some folks work from home using the Internet

      I started doing that 18 years ago. Moved to a lower cost of living area, then when the kids got out of school did it from a boat (most of the year).

      1. That’s great for you. But not every job can be phoned in via the Internet.

        1. “think outside the box.”

          Choices.

          A long commute or living away from home for a job involves choices.

    1. “Are the Sonoma homeowners getting the $1 million payment? It’s confidential.”

      How convenient!

  22. 1. Dumb ’em down.

    2. Profit.

    “The mechanisms of state and corporate propaganda kicked in to ensure that the ordinary people were told that rather than having been robbed, they had been saved. In the ensuing decade the wealth disparity between rich and poor has ever widened, to the extent that this week the BBC announced the UK now has 151 billionaires, in a land where working people resort to foodbanks and millions of children are growing up in poverty.”

    😁

    The Global Pivot Point | Zero Hedge
    https://www.zerohedge.com/news/2019-05-17/global-pivot-point

    1. (snip)

      “With the mainstream media employed entirely in diverting them from the true causes of their difficult lives, it is hardly surprising that ordinary people do not necessarily understand why a society has arisen where working hard does not enable them to work, eat and stay warm, and why the economic prospects of their children look so bleak. But they know that something has gone very wrong, they witness the vast wealth disparities of our unequal society and the deliberate dismantling of communal and altruistic public provision in favour of privatisation, and they feel contempt for their ruling classes, be they political, media or just wealthy.”

      A nation of dummies: A “society has arisen where working hard does not enable them to work, eat and stay warm, and why the economic prospects of their children look so bleak.”

      These ignorant pukes were brought up to believe that work and the resulting production of work is what creates wealth while in actuality it is the ever-increasing prices of assets that creates wealth.

      Dummies, one and all. They are destined to work ’til they drop, then starve enmass.

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