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It Hurt, I Just Wanted Out Of There, Honestly

A report from Marketplace. “It’s never easy to set the price of a home. It gets even trickier in a cooling housing market. Nancy McInerny of Aberdeen, Maryland listed her four-bedroom house for $399,000 in January. Four months and two price cuts later, she sold it for $375,000. Her husband had already moved to Indiana for a new job and she was anxious to join him.”

“‘It hurt,’ she said. ‘I just wanted out of there, honestly.'”

“As the housing market slowdown officially passes the one-year mark, more sellers like McInerny are having to lower their expectations. Lisa Lynn worked with a local broker who knew the market when she listed her home in suburban Chicago in March for $389,000. After it failed to sell, she dropped the price twice before accepting an offer for $357,000. That was $20,000 less than she’d paid for the house in 2007.”

“‘Could we have set the price lower? I guess,’ she said. ‘And then if we had sold that first weekend we would wonder, ‘well could we have gotten more for it?'”

From Jim Cramer. “Mixed. It’s all so mixed it’s hard to know what to say or where to begin. Take housing: It’s completely mixed. There are some areas where prices continue to increase nicely — and then there are others, like the Bay Area and New York City — where prices have clearly peaked.”

From Wood Business. “Couched between the Canadian long weekend for Victoria Day and this Monday’s Memorial Day in the U.S., the entirety of the North American sawmilling and lumber sales industries were last week at a total loss for why demand for solid wood construction framing dimension softwood lumber products was so low. Wholesaler prices (net FOB sawmill) of almost all standard lumber prices fell last week.”

“With production order files at sawmills ‘prompt on everything,’ sellers could do little but drop prices in an effort to get buyers to even pick up the phone and talk. It is really very unusual to be able to get any prompt wood at this time of year — apart from extremely specific higher-value specialty products — so for a sawmill’s entire range of products to be immediately available upon ordering during this normally high-volume production time of year could be troubling.”

“Sawmills couldn’t gain traction selling into any markets and barely even sold their daily production volumes. Buyers continued to sit on their hands, only stepping in to order what they absolutely needed. Veteran traders of kiln-dried Douglas-fir lumber and studs were agog at this ‘historically bad’ spring building season. Sales activity just couldn’t get going and players were sick of the ‘one step forward, two steps back’ scenario they were faced with each week.”

“After purveyors of Eastern Spruce-Pine-Fir commodities in Canada got back from their long weekends on Tuesday last week they were treated to a small spike of demand that quickly fizzled out. Wholesalers and distributers described ‘bleeding out on pricing’ when they put in orders for lumber.”

The Orange County Register in California. “The heart of the city of Riverside is getting 63 new homes, priced in lower-$400,000 range. KB Home has begun selling Primrose, a project located between the city’s Arlington Station and the Galleria at Tyler shopping center. The neighborhood will have two-story homes ranging between 1,700 and 2,100 square feet with up to five bedrooms and three bathrooms. The Primrose website cites pricing of $419,990 to $445,990.”

“Primrose has plenty of competition as the Inland Empire has a large inventory of new homes for sale. At the end of the first quarter, 1,707 finished homes were unsold, according to MetroStudy. That’s up 29% over 12 months and 25% above the five-year average. Primrose comes to market as homebuying has cooled. CoreLogic reports 1,082 new homes sold in Riverside County in the first quarter, down 2% in a year. The median sales price? $434,250.”

From The Real Deal on Florida. “One Thousand Museum, the Zaha Hadid-designed skyscraper in downtown Miami, is seeking a $331 million condo inventory loan as the project’s completion date nears, The Real Deal has learned. Developers take out condo inventory loans to pay off construction lenders, pull out equity and cover carrying costs of the units they have not yet sold. Regalia Group, one of the building’s developers, has secured inventory loans for Regalia in Sunny Isles Beach.”

From Jersey Digs in New Jersey. “The best news in Pure Properties’ 2019 Q1 market report probably comes out of Bayonne. But it’s worth noting that the total sales volume of 1-4 family homes in Bayonne decreased 31% in 2019’s first quarter, while condo transactions were off 16%.”

“Condominiums in the neighborhood faired poorly in the quarter, with average sales prices clocking in at $225,950, a 43% dip in the quarter and off 27% year-on-year. Like most of Hudson County, total transactions in both neighborhoods were down in the quarter, with the biggest drops hitting condos in both neighborhoods at over 45%.”

This Post Has 34 Comments
  1. ‘With production order files at sawmills ‘prompt on everything,’ sellers could do little but drop prices in an effort to get buyers to even pick up the phone and talk’

    I guess the spring souper bowl thing fizzled out.

    ‘Primrose has plenty of competition as the Inland Empire has a large inventory of new homes for sale. At the end of the first quarter, 1,707 finished homes were unsold, according to MetroStudy. That’s up 29% over 12 months and 25% above the five-year average’

    I thought California needed millions of shacks?

  2. ‘Could we have set the price lower? I guess,’ she said. ‘And then if we had sold that first weekend we would wonder, ‘well could we have gotten more for it?’

    Sounds like a day trader.

    ‘That was $20,000 less than she’d paid for the house in 2007’

    DONG!

    1. It seems like there’s an increasing number of homes selling for below 2007 prices. Kind of makes you wonder whether full bubble retracement back to mid-1990s levels is in the cards…

      1. “…full bubble retracement back to mid-1990s$ level$”

        Professor Bear = eternal optimi$t!

      2. I don’t think that could happen unless we reverted to close to mid-1990s interest rates. And our govt can’t do that without putting itself in a world of hurt.

        1. Meant to add: But we could get a decent amount of the way there possibly, but I still see the best scenario for that leaving affordability for the average person somewhat worse.

        2. And our govt can’t do that without putting itself in a world of hurt.

          And they’ve had 25 years of warnings and opportunities to do the right thing since then. And every time chose instead to make People Who Matter rich at everyone else’s expense. I anticipate the number of Assanges in the world to multiply as more and more people figure that out. The social media giants may have monopolized and controlled the internet for lazy people, but it can still be a handy tool for those motivated and determined to share sensitive information.

    2. After it failed to sell, she dropped the price twice before accepting an offer for $357,000. That was $20,000 less than she’d paid for the house in 2007.”

      12 years of bubble gains wiped out….

    3. Sounds like LV. 100% increased in inventory YOY? Where did all these shacks came from? It looks like everyone was timing the market, AT THE SAME TIME!!!

      BTW, EAT YER CROWS SIN CITY SAINT

    4. Free markets are all about real time price discovery. We don’t have those anymore. However, historical metrics and mean reversion to them still apply. House price to income ~3:1. We might still be “just a tad” over this right now thanks to the Fed and GSEs. It’s going to get interesting as recession progresses. “Got to roll with it.”

      1. Price to income is still far higher than 3:1 right now. How soon will it get back to the long term trend of 2:1?

        We’ll find out soon enough.

    5. ‘That was $20,000 less than she’d paid for the house in 2007’

      DONG!

      Notice there’s no mention of how much money they sank into the house during the 12 years they owned it. Kitchen remodel? Backyard upgrade? Paint? So the loss could be bigger than $20K.

      1. Losses are far larger than 20%.

        -$4/sq ft/yr depreciation
        -yearly taxes
        -yearly insurance
        -interest(most of the payment is interest)
        -10% transaction loss going in
        -10% transaction loss going out

        Housing represents massive losses at any price greater than $35/sq ft.

    1. Not surprised, Reading is where you can pay $750k for a non-updated, 1,200sqft shack built in 1940, and get the privilage of a 90 minute commute to Boston in rush hour. Grossly overvalued.

    1. Flood$, tornado$, low commodity price$, delayed weather planting$, … $ad.

      U.$. banking regulator says strain$ growing in farm $ector

      Jason Lange | Reuters |BUSINESS NEWS MAY 29, 2019

      WASHINGTON (Reuters) – A U.S. banking regulator on Wednesday said more farmers fell behind on their loan$ early this year, a sign that international trade tensions could be weighing on a farm sector already beset by years of low commodity price$.

      In a quarterly report on the health of U.S. banks, the Federal Deposit Insurance Corporation did not directly refer to the Trump administration’s trade war with China which began in 2018. But officials at the regulator noted some farm banks were reporting a deterioration in asset quality.

  3. Ouch! Right when the Bubble was peaking

    https://www.cnbc.com/2019/05/29/millennials-are-ready-to-make-lifestyle-changes-to-buy-a-home.html

    So she and her fiance, Jason Ortiz, came up with a plan: move into a rental property together, pay down their bills and start saving. The couple also cut back on traveling.

    “The money I was using to pay for my own rent was basically going into paying off credit card debt,” the 31-year-old said, noting that when she was on her own she “had been living paycheck to paycheck.”

    Suckno and Ortiz, 37, were married in February 2018. In July, they bought their first home together in Rockaway, New Jersery.

  4. Chevy Chase, MD Rental Rates Plunge 13% YOY As Washington DC/Northern VA Housing Prices Crater

    *Select rental list price from dropdown box on rental chart

  5. According to Redfin today, Tacoma, WA is HOT HOT HOT!!! BTW: Redfin is one of those apolitical, unbiased publications, right?

    1. It’s ‘HOT’ only in the sense that a lot of people who have been priced out in Seattle have moved there out of desperation.

      The commute into the Seattle area from Tacoma, north on I-5, is hellish. The northbound lanes are very heavy with traffic by 4:30-5:00am. Not to mention the section(s) of I-5 through there that have been under construction/repair since the LBJ administration…

  6. New construction is noticeably quieter in this area (SE MI) this year, compared to last year same time. A small patch of luxury senior detached condos just broke ground nearby, an individual home just down the road from there just had its foundation poured. Flipper activity in Birmingham is dead as a door nail at the moment, the occasional contractor working here and there, but several homes built last year are still sitting unsold, a few dropping prices but most sellers digging their heels in.

    1. What’s the ‘boots on the ground’ feel for the area’s economy and general mood of people?

      I grew up off 23 mile rd, and remember how heavy the very mood was for years in the 70s and early 80s when the big 3 just kept getting smaller.

  7. for a sawmill’s entire range of products to be immediately available upon ordering during this normally high-volume production time of year could be troubling

    Mix problem?

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