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Pricing Has Now Been Adapted

A report from Inman News. “Overall delinquency rates have risen somewhat in 42 percent of the country. Panama City, Florida and Albany, Georgia saw some of the highest rises in serious delinquency rates, or payments that are due by more than 90 days, across the country. According to CoreLogic, such numbers are the result of homeowners getting caught off guard with higher-than-expected payments in certain times of the year.”

“The largest gains in foreclosure and delinquency rates came from areas that have been hit by natural disasters in the past two years. Houston, which was ravaged by Hurricane Harvey in September 2017, and southern Florida, which was hit by Hurricane Michael just a few weeks later, both have some of the highest delinquency rates in the country. In many cases, homeowners whose property suffered damage fall delinquent on their mortgage as they take time to figure out whether to make repairs or sell.”

The News Press in Florida. “Gerda Graf was plagued with financial woes when she took out a reverse mortgage 10 years ago. Earlier this year, the 83-year-old lost the home she has owned for more than 40 years. She is one of thousands of senior Floridians facing the same outcome.”

“Nearly 15,000 older Floridians out of the 85,000 currently holding reverse mortgages are in danger of losing their homes in the coming years, according to data from the U.S. Department of Housing and Urban Development.”

The Real Deal in Florida. “A former managing director of an investment management firm in Indiana sold his Miami Beach condo for $7.1 million, a slight loss from its previous sale four years ago. Property records show that Egan paid $7.85 million for the condo in 2015. The unit first hit the market in 2017 for $9.25 million. It was reduced to $7.95 million by December 2018, according to Realtor.com.”

From Creative Loafing on Florida. “Vinny Testaverde is having a hell of a time selling his Tampa area home. The former Tampa Bay Buccaneer unsuccessfully put his lakefront Odessa home up for auction last March, and is now putting it back on the market for $3.95 million, reports the Tampa Bay Times. According to the online listing, the home has been price slashed by over half a million dollars.”

From Mansion Global on New York. “The crowning triplex at the only Zaha Hadid-designed condominium in New York City has gotten a nearly $10 million price cut, as developers citywide adjust expectations amid a cooled luxury market. The two-unit spread is now asking $48.75 million as of this week, according to a spokeswoman for the building, about 16% off the most recent asking price of $58.5 million.”

“Greg Gushee, executive vice president of The Related Cos., the building’s developer, said the reduced price is more in line with buyer expectations. ‘Pricing has now been adapted appropriately to where serious buyers have expressed interest, and there remains tremendous demand for best-in-class properties like this one,’ Mr. Gushee said.”

From Patch Sugarland in Texas. “This home exudes luxury and features lavish attention to detail in every corner of this estate. Price: $4,495,000. Features: Price Reduced over $700, 000!”

The Orange County Register in California. “More choices for house hunters is translating to fewer buyers willing to pay up. ReportsOnHousing has detailed the rush of sellers by tracking what’s for sale within broker listing networks. As of May 30, the report found 36,335 existing homes, an 18% uptick in a year, listed in Orange, Los Angeles, San Bernardino and Riverside counties. That’s well above the average inventory of 31,979 at this time of year since 2012.”

“Perhaps the most worrisome trend is what’s happening with ReportsOnHousing’s metric for demand. If you could tell me WHY house hunters are pulling back when the job market is strong and mortgage rates are back to near historical lows, we could accurately grade this bubble-ish evidence.”

“If potential buyers think the cooling appreciation will soon turn to depreciation, they may wait for the hoped-for seller discounting to begin. And that delay alone could make price-cutting a self-fulfilling wish. Of course, if/when prices are significantly falling … these same bargain hunters will likely get skittish about ownership and further put off a purchase. That’s when a minor course correction for prices could turn into something far uglier.”

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This Post Has 55 Comments

  1. ‘If you could tell me WHY house hunters are pulling back when the job market is strong and mortgage rates are back to near historical lows, we could accurately grade this bubble-ish evidence’

    You could ask Thornberg. He said this was unpossible.

    Here’s a tip though. It’s happening all over the world.

    1. I don’t believe the job market is as strong as everyone says. All that “full employment” is lucky-ducky jobs, or more likely jobs with no staying power. No one is going to buy a house if they change jobs and/or locations every 2-3 years. Heck, even I rented until I knew I had a 10-15 year job.

      2. “Heck, even I rented until I knew I had a 10-15 year job.”

        Unfortunately identity politics and virtue-signaling are more important than your employment. Watch your six-o’clock!

      3. Even moreso in some fields, like tech where job turnover is high. The longest I’ve held a job was 9 years. We debated it before buying and the main conclusion was that we’re in the center of a lot of job activity in our respective fields.

        If I was in Omaha, NE or the like and there was exactly one studio in my line of work in the entire state, well .. I’d only purchase if I was financially independent enough.

        I deal with some people who have been at Microsoft for 20+ years. You have to have to be cold, cunning, perceptive and brutal when necessary bastard to survive there that long (can thank Balmer’s worship of Jack Welch for that). If you aren’t, you won’t be finishing your career there. Speaking of which, if you don’t make partner there, expect things to be made exponentially more difficulty for you once you pass age 50.

      4. “…or more likely jobs with no staying power….”

        Welcome to the ‘gig’ economy.

        In prehistoric times of 40 years ago, middle class jobs were stable and the notion of signing up for a 30 year fixed seemed a very reasonable thing to do.

        Nowadays, who wants to absorb over-priced market risk?

        Prices *have* to come down big time to create an incentive for any rational person to want to buy.

        The days of free Fed money are long gone.

      5. Just looked at a CNBC story, mortgage loans were up 10 per cent in one week for new purchases , refinancing loans up 47 percent. Never underestimate the power of the dark side.

        1. Unfortunately, I think it shows that plenty of people will borrow if the bank will let them. They really cannot afford the houses they are buying but if the monthly payments drop enough for them to qualify for a loan they will buy.

          1. Perhaps a HBB reader with retail banking experience could comment.

            It has always been my understanding that retail loans are sold on commission? In other words, the more money a loan officer sells the higher his commission?

            Is the “Wells Fargo way” still with us?

  3. ‘Overall delinquency rates have risen somewhat in 42 percent of the country. Panama City, Florida and Albany, Georgia saw some of the highest rises in serious delinquency rates’

    Is 42% a lot? Cuz yesterday a troll was sayin’ it’s from a low base or something.

    ‘The largest gains in foreclosure and delinquency rates came from areas that have been hit by natural disasters in the past two years. Houston, which was ravaged by Hurricane Harvey in September 2017, and southern Florida, which was hit by Hurricane Michael just a few weeks later, both have some of the highest delinquency rates in the country. In many cases, homeowners whose property suffered damage fall delinquent on their mortgage as they take time to figure out whether to make repairs or sell’

    See, these foreclosure numbers have been spiking for well over a year. And the REIC is still talking about hurricanes from two years ago. That’s how dumb they think people are. Some reading this may be that dumb, but don’t expect me to follow along. I know REIC horseshit when I see it.

    1. With rising delinquencies in 4% of the country we’d be talking about outliers, but 42%? That, friends and neighbors, is a national trend – one that belies the “Everything is Awesome!” narrative being relentlessly propagated by the REIC shills in the MSM.

      1. But in a completely stable environment, wouldn’t we expect foreclosures to rise in 50% of the country and decline in 50%?

        1. decline in 50%

          Do you have reason to believe that is the case? If so, why didn’t the article say that overall, it is stable?

    2. In many cases, homeowners whose property suffered damage fall delinquent on their mortgage as they take time to figure out whether to make repairs or sell’

      or walk away.

      1. I was affected by Hurricane Michael. I walked away from the house. Bank is now suing me. I decided “f it all” – stopped paying on all debt except my auto loan. Chapter 7 bankruptcy will be completed in September.

  5. “Egan sold his condo for a slight loss “

    Slight loss??
    The loss was $750,000!
    Maybe it is just me, but I think $750,000 is a huge loss!

    1. The Fed Needs to Be the Adult in the Economy

      Some adults are horrible. The Fed is like my ex. She should be sending money to my son in college but is trying to find a way to get his college money diverted in her direction instead. Seems like our government is starting to think the same way.

  7. “A former managing director of an investment management firm in Indiana sold his Miami Beach condo for $7.1 million, a slight loss from its previous sale four years ago. Property records show that Egan paid $7.85 million for the condo in 2015. The unit first hit the market in 2017 for $9.25 million. It was reduced to $7.95 million by December 2018, according to Realtor.com.”

    Well it was still much cheaper than renting….or just staying at a hotel

  8. I just wonder why the insurance companies aren’t fixing this damage . No doubt there must be disclaimers in small print getting them off the hook..

    Also, what did all the reverse mortgage people do with all the money they pulled out,?

    1. “what did all the reverse mortgage people do with all the money they pulled out”

      Good catch. I saw that too. I looked up the article for Gerda Graf. She’s on Nettles Island, likely in a $150K double-wide. She had the house for 30 years when she took out the mortgage in 2009. The reverse mortgage company paid off her mortgage with the equity and left her $25K. After 30 years, she had only $25K equity? It should have been 4 times that at least. My guess is she cashed out in ~2006 and had to reverse mortgage in 2009.

      Meanwhile, she was “in and out of nursing homes” and couldn’t keep up with insurance, taxes, and HOA, which is about $300/month. She would have lost the house even if she owned it outright.

  9. “Greg Gushee, executive vice president of The Related Cos., the building’s developer, said the reduced price is more in line with buyer expectations. ‘Pricing has now been adapted appropriately to where serious buyers have expressed interest, and there remains tremendous demand for best-in-class properties like this one,’ Mr. Gushee said.”

    Let me remind Gushee-boy that the overpriced shackSTILL has not sold… It just went from stupidly, ridiculously overpriced to just slightly ridiculously overpriced

  10. WTF, you mean Mania can go BOTH WAYS!!!

    “If potential buyers think the cooling appreciation will soon turn to depreciation, they may wait for the hoped-for seller discounting to begin. And that delay alone could make price-cutting a self-fulfilling wish. Of course, if/when prices are significantly falling … these same bargain hunters will likely get skittish about ownership and further put off a purchase. That’s when a minor course correction for prices could turn into something far uglier.”

  11. Note to buyers of shelter,

    Boycott the prices. You don’t have to buy that overpriced shack. Exercise some power in your life. Casino Nation wants suckers.

      1. There is not a right or wrong time to buy a house. Just don’t miss out on the greatest wealth creation in our lifetime!

        1. When the Fed’s Everything Bubble finally implodes under the weight of its own fraud and make-believe valuations, the destruction of wealth and speculative excesses is going to be downright Biblical.

  13. Let me address the fact that once you overpay for shelter you become contorted and stressed out. You than start cheering for higher prices. You start hoping your fellow man will be a sucker and give you that unearned equity.

    Don’t get hooked in because it’s no different than any addiction. Easy money or being priced out forever are the biggest con jobs ever created.

    Don’t turn yourself into a hamster on a treadmill at the mercy of Casino Nation.

        1. I’ve seen a huge increase in for sale signs where I live.

          Zillow has updated itself, too. In January it forecast 6.1% price growth in Salt Lake City, but now in June it only lists 4.5%.

  19. Missed some of the comments yesterday re: MMT. Here is a list of the 5 worst hyperinflations. If the MMT people were exceedingly careful, they might thread the needle by increasing demand but not setting off an inflationary impulse. But when has the government done anything in an exceedingly careful manner?
    If the printing/spending overshoots, inflation will pick up but more importantly, inflation expectations will rise (much harder to rein in). And since raising rates to curb inflation would trigger waves of defaults, what options will they have?
    Likely, they will resort to Nixon era price controls except, of course, for housing. Because, as we all know, rising house prices are good (no doubters or questioners allowed).
    In my view, we are a year or two away from the moment when either the deflationary or inflationary spiral commences.

    2. we are a year or two away from the moment when either the deflationary or inflationary spiral commences

      We’ve been in an inflationary spiral for about 40 years. If it continued for another 20, most folks would think that’s just normal.

  20. Another one the Real Journalist won’t tell you about.

    Lesbian Couple Stabs Nine-Year-Old Boy To Death After Forced Botched Gender Reassignment Surgery

    10 JUNE 2019

    Rhuan Maycon, 9, was stabbed to death on May 31st by his mother, Rosana da Silva Candido, 27, and lesbian partner Kacyla Damasceno Pessao, 28. after suffering for a year after a botched gender reassignment surgery.

    According 22 to Brazil’s Child Protective Services, the boy had a “kind of a sex-change surgery. After removing the penis, they sewed the mutilated region and improvised a version of a female genital organ, making a cut in the groin”

    The surgery had apparently been performed with no medical supervision after Rhuan’s mother had decided to turn her son into a girl.

    https://halturnerradioshow.com/index.php/en/news-page/world/lesbian-couple-stabs-nine-year-old-boy-to-death-after-forced-botched-gender-reassignment-surgery

  21. I wish we could return to the job stability that USA had during a lot of my working years. These days people got to be nervous about making a 30 year loan commitment.

    The fact that the younger generations have a live for today being broke attitude is because it’s logical to do that in a unstable society.

  22. Oh my God. I just saw the article about the sex change surgery that lead to murder.

    Some people should never have children.

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