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Overpriced Homes Continue To Languish On The Market For Months If Not Years

A report from Sonoma News in California. “Build 3.5 million new dwelling units by 2025 and California’s housing shortage will be solved, Gov. Gavin Newsom prescribed during his campaign last year and several times since. But the simple formulae peddled by many state politicians may not hold water.”

“That’s the startling upshot of statistics reported the other day by the MetroStudy. First-quarter data from the usually accurate company showed 3,750 newly-built homes went unsold in Orange, Los Angeles, Riverside and San Bernardino counties during the first quarter of this year. That left unsold housing inventory up 22 percent from last year and 37 percent above the five-year average.”

“Then there’s the steady increase in the number of existing homes listed for sale, up this spring by about 23 percent from last year as owners try to cash in on boomtime real estate prices.”

“Then there’s the Newsom/Wiener theory that denser housing can lessen traffic because virtually all new residents will ride mass transit. This has never happened in California, but the idea nevertheless persists. It will soon get a major test in both Northern and Southern California, where big new apartment and condo developments are nearing the sales and rental stage very near Bay Area Rapid Transit stations in Oakland and Metro Rail stops in Los Angeles.”

The Herald Mail in Maryland. “Washington County and the state of Maryland moved in opposite directions for home sales in May. In the county, home sales rose 12%, from 158 in May 2018 to 177 in May of 2019, according to last week’s report from Maryland Realtors. But the average price dropped 11.3%, to $206,233. And the median price fell 11.7%, to $189,950.”

The Citrus County Chronicle in Florida. “ATTOM Data Solutions reported last week that foreclosure starts in the Sunshine State increased by 23 percent last month compared to May 2018. It was the 12th month in a row Florida had seen double-digit annual increases in foreclosure starts.”

“In May, 1 in every 1,238 homes had a foreclosure filing in Florida, the third highest in the nation. Only New Jersey and Maryland had higher rates. Among metro areas with more than 200,000 residents, Jacksonville had the second highest foreclosure rate, with 1 in every 764 homes at some stage in the foreclosure process.”

From Atlanta Agent Magazine in Georgia. “May brought more than a temperature boost to Atlanta. Atlanta Realtors announced the metro area’s housing inventory saw significant gains. New listings climbed to over 6,000, an increase of 17.2 percent year-over-year and a jump of 11.3 percent month-over-month. This resulted in an inventory growth to 3.1 months’ supply—the highest level since 2016.”

“For five years, the metro Atlanta housing market has favored sellers through an increased buyer demand and lack of supply. This year, the playing field is starting to level with a spike in housing inventory totaling 14,827 units in May, an increase of 12.7 percent from May, 2018.”

From Go Skagit in Washington. “After a slow start to the year, activity is picking up in Skagit County’s real estate market, according to the Northwest Multiple Listing Service. The number of homes listed jumped from 357 in April to 443 in May, according to the report.”

“‘All of a sudden we’re seeing a little uptick in inventory, and there’s more active buyers and sellers,’ said Lana Thompson, principal managing broker at Coldwell Banker Bain in Anacortes. Thompson said while the market is less ‘frenzied’ than last year, lower mortgage rates are attracting buyers.”

From Mansion Global on New York. “Manhattan’s luxury housing market logged another moderately strong week, though overpriced homes continue to languish on the market for months if not years, according to a roundup of pending sales from Olshan Realty.”

“A total of 22 homes priced at $4 million or more went into contract in the week ending Sunday. While it was the eighth straight week of 20 or more luxury deals, the average home took over 16 months and a 15% discount to attract a buyer.”

“‘Last week’s figures are a snapshot of a luxury market that continues to be overpriced—and that attracts a smaller pool of buyers,’ wrote Donna Olshan, president of Olshan Realty and author of the report.”

“The biggest deal was a deeply discounted unit at Trump International, a tower at the southwestern edge of Central Park. The unit went into contract asking nearly $19 million, two-thirds of the original $30 million asking price.”

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This Post Has 59 Comments

  1. ‘3,750 newly-built homes went unsold in Orange, Los Angeles, Riverside and San Bernardino counties during the first quarter of this year. That left unsold housing inventory up 22 percent from last year and 37 percent above the five-year average’

    Wa happened to my shortage California?

    ‘Then there’s the steady increase in the number of existing homes listed for sale, up this spring by about 23 percent from last year as owners try to cash in on boomtime real estate prices’

    Here’s your speculators. Where are they gonna live? Are they crazy, after they sell, they’ll be priced out forever! It’s like they were gambling all along just waiting to cash out at the top.

    1. “…What happened to my shortage California?…”

      Well, around here, the “shortage” must have been in included in a Penn and Teller disappearance act.

      I track much of Irvine and Corona Del Mar. (zips 92603, 92604, 92612, 92625).

      Virtually all prices changes in the MLS have been on a downward slide for at least a year.

      Many properties have been listed, re-listed, re-re-listed for years.

      Of course, that doesn’t stop REIC agents attempting to gimmick up the prices by taking a property off the MLS, waiting a few weeks and re-listing at a higher price so a few weeks after that it can be “discounted” to fool would be buyers they are looking at some sort of great deal.

        1. …. and here’s a double order of CRATERTaters.

          eet up my good friend….. eet up. 🤣

      2. re-listing at a higher price so a few weeks after that it can be “discounted” to fool would be buyers they are looking at some sort of great deal.

        Yes this seems to be one of the snake oil tactics they use, but, it’s not working! The fact they are going to lower rates even more just adds more proof we are headed off a cliff. Realtors would sell there families off as slaves if it was legal. The numbers tell a lot and in RE they are all going down except for inventory which is toppling over itself and headed to the moon.

        1. Are realtors so stupid these days that they don’t realize how readily available the price history is? That tactic may have worked well in the past when listing details were less transparent.

          1. “…they don’t realize how readily available the price history is? …”

            I have often wondered about that.

            Who, in their right mind, would not do due diligence and obtain a full title search, price history/discovery, physical inspection, insurance claim history, etc on a property that costs many millions of dollars?

            On the other side of the coin, there is something about the human condition that short-circuits common sense.

            Witness crowds standing outside in freezing weather just to be first in line to fight it out [literally] with others just to save $50 on a X-box during a holiday sale at WalMart.

          2. And the price info is right in the listing on any of the major sites: Redfin, Realwhore, zilldow, etc.

            They do that in the Boise market too, but sometimes I have seen where the listing agent has done something to remove the price of a prior listing (ID is a non-disclosure state on sold house prices, not sure if the UHS can get away with that easier here…) or make it vanish all together. Shady AF.

          4. insurance claim history

            Thanks for the reminder. I didn’t know about Comprehensive Loss Underwriting Exchange (C.L.U.E.) reports before someone on this blog (rms?) posted about them.

          5. Properties with no price history are propagating on Redfin and realtor.com. I am seeing more and more properties in SoCal that were built decades ago with no property history in the listing. Any one have any insight into this? Especially properties that look like staged flipper jobs and the property history is blank.

      3. “I track much of Irvine and Corona Del Mar.”

        That’s some might tall cotton. The only thing missing is Robin Leach explaining why you can’t live there.

          3. I worked with a woman whose sister married into old money. They bought the son a Dana Point house, not a down payment…bought outright.

      4. I live in Simi (renting) and have been watching the market here very closely. I was wondering why a property that didn’t sell would be taken off the market and then re-listed even higher! There were a lot of houses on the market just sitting this spring but now a lot have sold. I still think the prices are ridiculous and the houses in Simi have a uniform ugliness to them that seems intentional.

      5. I’m seeing price history seemingly eliminated from some listings in mi too it feels like. I feel like some agents must know how to do this maybe? At least on realtor and such sites. There’s still the online property tax dAta but the way the realtwhore community is interwoven into town here I imagine they’d find a way to screw with that too lol. We had a reAltor mayor for a long while here in Ann Arbor. We just now had a city survey to gauge whether citizens would want to spend millions on creating quiet zones for the trains thAt blast their horns 4 times a night ( it’s bad ) . 3/4 of respondents said no way fix the third world roads instead , but the city is gonna proceed with taking steps anyway!!! We have lots of new high end condos and townhome coming in near Tracks and the city is utterly beholden to developers. And realtors lie about it soooooo easily lol, I’ve had multiple ones try and tell me no problem in various totally lying ways even though it’s featured in the newspaper and they know I live here; they have no moral compass at all, amazing.

  2. ‘The number of homes listed jumped from 357 in April to 443 in May’

    But shortage in Skagit?

    ‘All of a sudden we’re seeing a little uptick in inventory’

    Atlanta too?

    ‘New listings climbed to over 6,000, an increase of 17.2 percent year-over-year and a jump of 11.3 percent month-over-month. This resulted in an inventory growth to 3.1 months’ supply—the highest level since 2016’

    And of course the months inventory number is UHS garbage.

  3. “ATTOM Data Solutions reported last week that foreclosure starts in the Sunshine State increased by 23 percent last month compared to May 2018. It was the 12th month in a row Florida had seen double-digit annual increases in foreclosure starts.”

    I know the rent is in arrears
    The dog has not been fed in years
    It’s even worse than it appears
    But it’s all right….

    https://www.youtube.com/watch?v=mzvk0fWtCs0

  4. ‘foreclosure starts in the Sunshine State increased by 23 percent last month compared to May 2018. It was the 12th month in a row Florida had seen double-digit annual increases in foreclosure starts’

  6. There’s never been a better time for contrarians to buy stocks!

    Stock-market investors haven’t been this bearish since the 2008 financial crisis, says Bank of America
    By Mark DeCambre
    Published: June 18, 2019 10:12 a.m. ET

    The S&P 500 is within 1% of its closing record set on April 30
    Courtesy Everett Collection
    Bearish rally?

    The S&P 500 index stands less than 1% shy of a record but investors aren’t loving the climb, based on a recent fund manager survey from Bank of America Merrill Lynch.

    The survey of 179 global managers overseeing some half trillion dollars in assets told BAML that pessimism has been driven by concerns over U.S.-led trade-war fears and anxieties of an impending recession here and elsewhere in the globe.
    …

      1. Yeah, this whole trend of selling to the bank at the very peak and then living there for free as long as possible means that there’s plenty of blame to go around when the Fed eventually owns it all. The bank may have bought us our chains but we put them on in return for the chance to live in the manner we were accustomed to for just a little longer.

  9. Any thoughts on how Beggar Thy Neighbor works out, and what the implications are for housing?

    1. Dollar heads towards 3-month lows before Fed meeting; Draghi eyed
      Saikat Chatterjee

      LONDON (Reuters) – The dollar weakened against its rivals on Tuesday, heading back towards a recent three-month low before a U.S. central bank meeting gets underway with expectations growing the Fed will signal its first rate cut in a decade.

      A CME Fedwatch tool puts the probability of a quarter-point interest rate cut by the Fed at 20%, with a 70% probability of a rate cut at its next meeting in July.

      But with so much dovishness already priced into the markets and the dollar having weakened 1% over the past three weeks, some market analysts say the greenback may strengthen if the Fed signals a more neutral stance.

      “The majority view among the Fed comments does not suggest any particular appetite for an immediate rate cut, say in June or July,” HSBC strategists said in a note. “The balance of risks favours being long the dollar, not least because positioning is likely a little lighter after the recent sell-off.”
      …

    2. Trump says ECB’s Draghi is depressing euro to benefit trade
      By Rachel Koning Beals
      Published: June 18, 2019 9:22 a.m. ET
      Draghi’s surprise comments Tuesday on upcoming stimulus if necessary sent shared currency lower
      Reuters

      President Donald Trump may have a new target in his trade and currency war.

      With markets already moving — including a falling euro and advancing global stocks — in response to the largely surprisingly dovish comments from European Central Bank head Mario Draghi Tuesday, the U.S. leader weighed in, too.
      …

    3. The 10-year Treasury yield is a hair’s breadth above 2.00%. You can safely assume there will be a major market freakout the moment this level is breached.

      2. Gotta thank gawd’s children for supporting socialism, asset inflation and weak dollar policies! What’s next?

  10. Here’s to hoping Gavin Nuisance gets his 3.5 million new housing units, and forces the flippers who are currently trying to cash out of their investment properties to lose their shirts in the resulting CR8R.

  12. ‘According to data from the real estate website Zillow, home prices dipped in Orlando in May for the first time since 2012. This ends a whopping 86-month streak where the value of the median home shot up 94% to $239,200, Zillow said.’

    ‘The housing market is important to Florida’s economic outlook, so the report has raised some eyebrows. Economic analyst Hank Fishkind tells 90.7’s Nicole Darden Creston that sales and prices of existing homes are indeed flattening, but that doesn’t mean it is time to panic.’

    ‘In fact, Fishkind says, there are different ways to look at the same set of facts. Click the Play Audio button to hear their conversation.’

    https://www.wmfe.org/fishkind-conversations-theres-more-to-existing-home-price-data-than-you-think/117908

  13. It seems to me that there ought to be a vacancy tax. This is after all one of the problems, folks with n houses leave them stand empty. If society doesn’t like that behavior then we can outlaw it (seems extreme) or tax it. This will raise the cost of sitting on an empty unit and tend to make them more available for rent or purchase

    1. I’ve wondered whether it would make a difference in the case of house flipping if sellers were required to pay taxes based on the currently appraised value at the moment the property is relisted, rather than what the property last sold at.

      When a smaller, older home is bought for the land it sits on, and is demolished to make way for a much pricier mansion, this difference is significant. But the seller is essentially only paying tax on the land, and does not incur any hardship in the home sitting unoccupied for months or even years because it now has an excessive speculative price on it.

    2. Going back to the old days of lending, when a project got to high of a non owner occupied ratio, the lenders would just stop lending in the project.

      The owner occupied dwelling was considered the least likely to go into default. This is especially true after the loan had become a ” seasoned loan”, meaning the end user had payed for two years or more on time.

      In my opinion , the lenders didn’t like speculation that much and saw it as properties that would go into default first over a owner occupied.

      Lending was just based more on a proper assement of risk say between 1945 and 1990. In large part that paper was considered pretty reliable.

    3. “It seems to me that there ought to be a vacancy tax.”

      Yes! We definitely need to be taxed more.

      “This is after all one of the problems, folks with n houses leave them stand empty.”

      These folks with houses are in desperate need of having strangers make decisions as to what to do with them.

      “If society doesn’t like that behavior then we can outlaw it (seems extreme) or tax it.”

      Damn right! Such excessive freedoms should be immediately stamped out!

    4. It seems to me that there ought to be a vacancy tax.

      Definitely. Vacancy tax, land value tax, and property taxes all keep speculation at bay to some extent.

      1. People love any tax they don’t have to pay (or at least think they don’t have to pay, but are paying indirectly).

        1. The point of such a tax is that it helps curb socially undesirable behavior (e.g. land hoarding) and it is easy to avoid the tax by building reasonably priced homes or not buying property to speculate on and leave empty.

          There are lots of ways to collect the revenue necessary for government. I think those taxes above are some of the least bad. Adam Smith would agree.

  14. A major point that always needs to be re-iterated:
    The builders are missing the market. They’re building luxury, buyers need affordable. (And, yes, eventually the “luxury” prices will come down, but that will take time, and probably some bankruptcies)

      1. I understand why these home owners would protest because once you are on the inside you belong to the home owner cartel. But I view that as a step in the wrong direction.

        2. I love it. Government regulations manipulate the market, artificially driving up the cost of housing through things like mortgage deductions, anti-deficiency statutes, gov’t guaranteed loans, land use restrictions and taxes, then when the market responds by driving up the price of the home, the response is to blame the market and propose more regulations. Brilliant, I say. The problem with the housing market, the health care market, the cost of education is we don’t have a big enough maze of regulations. Three cheers for regulations!!

          2. This is why I think what Minneapolis has done is so revolutionary. They eliminated single-family only zoning. That has its roots in discrimination and prejudice but ultimately drives up housing prices for the poorest, regardless of race.

  16. What ever happened to the days when people cherished stability.

    I have never seen people root for higher prices as they do today. It’s just nuts.

    1. “I have never seen people root for higher prices as they do today. It’s just nuts.”

      Higher prices make for equity wealth. Equity wealth is something that can be cashed out and spent. Spending is what drives our consumer-based economy.

      What’s not to like? It beats working.

      1. Fake equity wealth based on hyped false markets, with faulty lending, has to be one of the most destructive trends I have ever seen.

        Does it have to get to the point that the fallout is as bad as the 1929 crash.

        1. Does it have to get to the point that the fallout is as bad as the 1929 crash.

          Was that a rhetorical question? I think it will be worse because we’re willing to do *anything* (except the honest thing) to avoid that. We proved that in 2008. So first we’ll make it even worse until there are no options left. Then we go Weimar. The only question now is how long will it take?

          1. Yes Carl Morris the question is how long will it take given the course we are on.

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