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We’re Calling This The Supply Shock

A report from Market Watch. “Pending home sales fell a seasonally adjusted 1.5% in April and were 2% lower than a year ago, the National Association of Realtors said. The trend is solidly downward. April marked the 16th-straight month of annual declines. Housing seemed to be bouncing back from the rough patch at the end of 2018, but as 2019 winds on, that picture is becoming more blurry. On Tuesday, the widely-followed Case-Shiller index showed home prices had risen at the slowest pace since mid-2012 in March.

“‘Real estate agents throughout the U.S. may have to brace for a more sluggish market than anticipated based on last month’s decline in home showing activity, the ninth consecutive month of a nationwide year-over-year decrease,’ according to an index from ShowingTime, which compiles data about property showings.”

The New York Post. “Actress and director Lena Dunham is in contract to sell her Gretsch condo, at 60 Broadway in Williamsburg, for less than she paid for it. The home was last asking $2.65 million — down from its original $3 million asking price. (She bought it last year for $2.9 million.)”

From The Real Deal on Florida. “Developers currently have 2,101 new development units left to sell in Miami from this cycle, according to ISG Miami’s latest report. The current cycle began in 2012, and the pipeline of new units excludes projects that have been shelved over the past seven years. The report also does not include units available on the MLS.”

“‘We’re calling this the supply shock,’ said Craig Studnicky, CEO of ISG World, which authored the report.”

The Los Angeles Times in California. “The sluggish Southern California housing market showed signs of perking up in April, as prices ticked up one month after they fell for the first time since 2012. However, the annual gain in prices was far smaller than in recent years and the median remains $7,500 below the all-time high reached in June.”

“That raises the prospect of declines in the future. And it suggests that while falling borrowing costs may have attracted more prospective buyers, they haven’t been spurred to engage in aggressive bidding wars.”

“‘Buyers are being pickier,’ said Michael Nourmand, president of L.A. area brokerage Nourmand & Associates Realtors. ‘They think they can negotiate more than they could before.'”

“To make deals go through, more sellers are trimming their asking prices. In Los Angeles County, 13.5% of listings had at least one price cut in April, up from 10% a year earlier, according to Zillow.”

“Richard Green, director of the USC Lusk Center for Real Estate, predicted Southern California homes prices will be flat or down a bit over the next year. ‘Prices,’ he explained, ‘got too high.'”

The Orange County Register in California. “Homebuying in Chino, Rancho Cucamonga, Ontario, Upland, and Fontana started 2019 by falling 8.7% as the county suffered the largest sales drop in over four years. A large jump in the supply of homes — existing and new — available for purchase plus a significant dose of economic uncertainty led to San Bernardino County homebuying’s biggest chilling since the end of 2014.”

The Hometown Station in California. “A Santa Clarita realtor is encouraging the community to ‘make noise’ about the rising number of seemingly unjust foreclosures he believes are set in motion as a result of banks and servicers no longer having any ‘oversight’ forcing them to behave ethically today.”

“‘Because there is no oversight, these guys can do whatever the heck they want,’ said Richard Szerman of Alta Realty Group, who offers free foreclosure defense services to the public.”

“Szerman noted that in previous years, the Consumer Financial Protection Bureau and Keep Your Home California helped ensure banks and servicers followed more ethical practices, but that these organizations were shut down, and the consequences have been evident.”

“One of Szerman’s current clients is facing foreclosure after her bank denied her a loan modification, requested in writing that she do a short sale on the house instead, and then declined the short sale offer while repeatedly refusing to give any reason why, according to Szerman.”

“Szerman pointed out that in this case, his client’s bank will likely lose about $100,000 by foreclosing instead of accepting the short sale offer, but that this type of ‘incompetent,’ ‘foolish,’ ‘mammoth’ mistake likely won’t cost anyone at the bank their job.”

“‘This is the same kind of nonsense we saw in the banking industry leading up to the 2008 crash, and that is the exact same attitude we’re getting now,’ Szerman said. ‘We see this across the board. The servicers act this way, the banks act this way, and (it’s) because there is no oversight, even by their own shareholders, it would seem.'”

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This Post Has 36 Comments

  1. ‘The home was last asking $2.65 million — down from its original $3 million asking price. (She bought it last year for $2.9 million.)’

    Well, it was cheaper than renting Lena.

    1. “Actress and director Lena Dunham is in contract to sell her Gretsch condo, at 60 Broadway in Williamsburg, for less than she paid for it. The home was last asking $2.65 million — down from its original $3 million asking price. (She bought it last year for $2.9 million.)”

      Let’s say she sold if for $2.5 million. How the hell is anyone under 45 expected to get by in this country if a mere apartment in a neighborhood built for the working poor and later occupied by the flat poor costs that much?

  2. ‘One of Szerman’s current clients is facing foreclosure after her bank denied her a loan modification, requested in writing that she do a short sale on the house instead, and then declined the short sale offer while repeatedly refusing to give any reason why’

    Hey Dick, have you tried stamping your little feet?

    Stop paying your car loan, they come and take. Stop payments on hundreds of thousands of shack loan in California, and you are entitled to a do over. Oh, and lop off a hundred grand of the tab while you’re at it.

    1. “and then declined the short sale offer while repeatedly refusing to give any reason why“

      Why does the FB care? She is getting out of the commitment either way. It’s almost like she is already planning for her next purchase of a home she can’t afford and is concerned that the foreclosure on her credit report will delay the process. Take some accountability he dumb FB. Be thankful your not sent to prison for the fraud you likely committed on your loan application

        1. Tax implications on short sale

          Yes there are: you owe tax on the money you were short.
          I believe it is treated as earned/ordinary income for tax purposes.
          Congress excluded that loss from being taxable when the last bubble crashed. This special treatment on short sales ended EOY 2017.

          1. The tax issue doesn’t really matter if you are insolvent. It’s another reason why none of this matters. Born into debt and will die with debt.

  5. “Given the strength of the economy and the region’s severe housing shortages, many experts don’t predict a housing crash. But they say prices aren’t likely to rise much, if at all, until incomes can catch up. In Los Angeles County, the median home price has risen 96% since 2012, while average hourly earnings rose 26%.”

    Reality Unchecked told me wages will increase by 70% next year. The GREATEST US ECONOMY in history!!!!

    3. When the rental units fill with MS-13 gang members, you will have to buy a house in a safe neighborhood. It seems like the only strategy the globalists can think of to keep housing high.

  6. I love how within an hour MW hides the “Pending down for the 16th month” article into the clickbait chum. You’d think declining prices with declining sales with declining interest rates would be a bigger deal.

    1. Sean you knucklehead! Don’t try to fool yourself or potential buyers on this useless blog! House prices can only go up. We have reached a Peak so the only place prices can go is UP! That is a definition of a peak (according to NAR).

      I’m tired of eating Ramen noddles … last year houses were flying off the shelves. Morons, I mean buyers, were tripping over themselves buying everything in sight or something unseen. I told them to write love letters to the sellers and skip unneeded inspection. This year I actually had to work! All because you idiot Bears and Master Housing Bear Ben here scaring away all my businesses! F*** Y**.

  7. ““Szerman noted that in previous years, the Consumer Financial Protection Bureau and Keep Your Home California helped ensure banks and servicers followed more ethical practices, but that these organizations were shut down, and the consequences have been evident.”

    I can hear brains attempting to reconcile the fact that bankers are out of control with their desire to shut down the CFPB.

  8. According to Zillow, excluding new construction there are 686 property listings in Santa Clarita. At this time there are 8 foreclosures and a whopping 160 pre-foreclosures. This during record low interest rates. But yet they say less than 1% are delinquent on their mortgage and this coming year prices will be flat. Hmmm?

  9. “Richard Green, director of the USC Lusk Center for Real Estate, predicted Southern California homes prices will be flat or down a bit over the next year. ‘Prices,’ he explained, ‘got too high.’”

    Richard must look quite dashing in his Captain Obvious costume.

    1. “Richard must look quite dashing in his Captain Obvious costume.”

      Gotta justify that tenure.

  10. “A Santa Clarita realtor is encouraging the community to ‘make noise’ about the rising number of seemingly unjust foreclosures he believes are set in motion as a result of banks and servicers no longer having any ‘oversight’ forcing them to behave ethically today.”

    Go ahead, Santa Clarita sheeple, stamp your little feet! Shake your little fists and shriek your indignant slogans! Meanwhile, the lobbyists for those unethical banks and servicers are drafting the legislation “your” representatives will sign into law, and telling their bought-and-paid-for political hirelings how to vote. But maybe they’ll throw you a bone by designating an official “Stamp Your Little Feet!” Day.

    1. What’s “unjust”? Don’t buy property you can’t afford. How difficult is that?

      If you need a loan modification to keep the place, you were in way over your head a long time ago.

      Maybe if people exercised some restraint, stopped listening to lying realtors about “buy now or be priced out forever”, and simply chose not to buy in the first place, the market would respond accordingly.

      But, you know, greed…

  11. “‘This is the same kind of nonsense we saw in the banking industry leading up to the 2008 crash, and that is the exact same attitude we’re getting now,’ Szerman said.

    B…b…but this is quite simply inconceivable. Senator Running Deer and Maxine Waters, valiant champions of the people, both occupy senior oversight positions for the banking sector and would most certainly not tolerate “nonsense” or shady practices of the sort Szerman alleges.

  12. “..A Santa Clarita realtor is encouraging the community to ‘make noise’ about the rising number of seemingly unjust foreclosures he believes are set in motion as a result of banks and servicers no longer having any ‘oversight’ forcing them to behave ethically today.”

    So, Mr. Santa Clarita realtor, let’s get this straight. Your telling us that if your client signs a contract to service a mortgage loan and then fails to do so, that the bank initiating foreclosure is “unjust”??

    What then do you expect? Free money from the bank?

    Oh, I forgot. Your a member of the “Free sh*t Army”.

  14. I don’t even think the jobs are stable enough for people to commit to a 30 year mortgage.

    Selling costs are high, therefore a novel idea would be to deduct a 10% cost penalty for engaging in a long term investment.

    When shelter costs were lower and jobs were stable you had less risk that you couldn’t sell if you needed to.

    My point is the real estate casino is high risk now and the job market isn’t such that 30 year shelter investments is a no lose situation like the old days.

    1. Yep, the more I think about it a 10% penalty for any dumb ass that buys real estate. You could put it in a account that grows so the buyer can move. If the buyer stays 30 years they get a big nest egg when they pay off the loan.

      This would also get rid of the equity locust that drive up the market.

      2. I think you are on to something here. I wouldn’t buy a house at these prices, no way. But even if the prices were reduced, buying is still a decision to lock in one’s future with the local economic prospects. Look at what is happening at Lordstown, OH with all the GM jobs being lost due to factory closures. Then there are the ancillary support jobs that vanish. When you have a mortgage and your job disappears, you may be forced to sell into a market that is not friendly.

  15. Inventory:
    Current One Month ago City
    ______ _____________ ____
    338 306 Bellevue
    273 237 Kirkland
    201 159 Redmond
    407 386 Portland
    99 81 Mercer Island
    Slowly but surely, inventory is growing…
    Inventory is still historically tight(low); Just not as tight as last year. Market wont be balanced until the summer of 2020.

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