skip to Main Content
thehousingbubble@gmail.com

The Glut Is Sparked By Sellers Who Are Finding It’s Harder To Be A Landlord Than It Used To Be

A report from the Wall Street Journal. “After a sluggish end to 2018, real-estate investment trusts are showing promise again. ‘When we look at these companies, we’re seeing what we would hope to see, which are well-capitalized businesses that aren’t making big speculative bets,’ says Todd Kellenberger, portfolio specialist for real-estate securities at Principal Global Investors. ‘That means they are positioned well if there is a slowdown and it means that we aren’t seeing many obvious bubbles in real estate overall.'”

The Seattle Times in Washington. “King County condo shoppers who tentatively reentered the market when it began to slacken in the spring have more reason to celebrate: A trend of falling prices and rising inventory solidified as spring turned into summer, according to monthly real-estate data.”

“Median condo prices across the county are down 3.4% year over year, to $400,000 in July. Condos are staying on the market for almost a month. And active listings are up by 39% over last year. That means buyers can afford to cool their heels before making an offer, said Windermere condo broker Jeff Reynolds.”

“The July glut in the resale market is sparked, in part, by sellers who are finding ‘it’s harder to be a landlord in Seattle than it used to be’ because of regulatory changes and pressure from falling rents, said Seattle Redfin agent Jessie Culbert, who specializes in condos.”

“Median home prices in King County continued a six-month decline, dipping by 2.7% in July to $680,000, according to the Northwest Multiple Listing Service. Within the county, there are pockets of stronger growth even as home prices in the city center have fallen in the past year by as much as 15.1%.”

The San Francisco Chronicle in California. “Rents in San Francisco may not be dropping, but they also aren’t zooming upwards the way they were even one year ago. Those in the apartment industry say they have begun to see a definite dip in demand, with fewer applications coming in for each new listing.”

“‘A slowing economy, coupled with proposed taxes on start-ups, will likely mean reduced job opportunities and thus a further slowing of the rental market,’ explained Eric Andresen, president of West Coast Property Management Company. ‘Add to this the fact that new units are still coming on the market, although not quite as rapidly as in the past few years, and I would expect that the market will stagnate for a while. Most owners and managers have adjusted to the change, realizing that the double-digit increases we were getting for a few years were unrealistic and unsupportable.'”

From Mansion Global on New York. “Not one New York City apartment has traded hands for more than $10 million since a hike in the city’s mansion tax went into effect July 1, according to a round-up of luxury deals on Monday. In the past five weeks, since a graduated tax was raised on New York City home sales over $2 million, only two townhouses have gone into contract for over $10 million, an amount that now creates a New York State lump sum tax liability of at least $390,000.”

This Post Has 48 Comments
  1. ‘Not one New York City apartment has traded hands for more than $10 million since a hike in the city’s mansion tax went into effect’

    Worser…

    ‘Median home prices in King County continued a six-month decline, dipping by 2.7% in July to $680,000, according to the Northwest Multiple Listing Service. Within the county, there are pockets of stronger growth even as home prices in the city center have fallen in the past year by as much as 15.1’

    Where is redfin with their “to the moon Alice!” BS? Eat yer crowz redfin, you rotten dogs!

    1. It is the lesson liberals/progressives never learn.

      Higher and higher taxes can actually lead to less and less revenue.

      People will change their behavior.

        1. Which is why a taxing real estate is better than taxing income. Real estate can’t walk.

    2. “…‘it’s harder to be a landlord in Seattle than it used to be’ because of regulatory changes and pressure from falling rents, said Seattle Redfin agent Jessie Culbert, who specializes in condos.”

      Unless they were so wealthy that a sizable drop in hiusing market values would not significantly dent their wealth, why would anyone in their right mind buy a place in Seattle now, with home prices and rents both on the decline against the backdrop of an economic boom? An obvious strategy is to wait until the incipient housing bust plays out for a few years, and never even dipping one’s toes into the purchase market until after prices stop falling.

    3. i am amazed with the number of people in downtown Seattle in their early 30s that still have roommates. And then their BF or GF have to move in when they decide to live together.

      Life is not like the Friends TV show – this must suck

      1. this must suck

        Yeah kinda. But if it’s all you know…and it can still beat the heck out of living with your parents in a place with no opportunity. If they squint they can still pretend they are on “Friends”. And sadly they may be old enough to remember it.

  2. ‘Most owners and managers have adjusted to the change, realizing that the double-digit increases we were getting for a few years were unrealistic and unsupportable’

    Stop yer whining and go hose off some poop Eric.

    1. “‘A slowing economy, coupled with proposed taxes on start-ups, will likely mean reduced job opportunities and thus a further slowing of the rental market,’ explained Eric Andresen, president of West Coast Property Management Company. ‘Add to this the fact that new units are still coming on the market, although not quite as rapidly as in the past few years, and I would expect that the market will stagnate for a while. Most owners and managers have adjusted to the change, realizing that the double-digit increases we were getting for a few years were unrealistic and unsupportable.’”

      But but but IPOs?

  3. Being a landlord is very hard work. If you have to make the place cash flow with no sweet appreciation.

    “sellers who are finding ‘it’s harder to be a landlord in Seattle than it used to be’ because of regulatory changes and pressure from falling rents…”

    1. How does landlording work when home prices and rents are falling? My guess is that owners will forego investing in maintenance, reducing the appeal of their rental units to customers who can afford better. A glut of unmaintained properties can eventually ruin the whole neighborhood.

      1. Nearly all landlords that I know that can make their properties cash flow, without any sweet appreciation, do nearly all maintenance themselves.

        They are fairly good jack of all trades.

        And as part of expenses, you need to calculate your own time. To include getting up at 2 am to fix a water issue for one of your renters.

        1. I don’t do any repairs or maintenance and have generous cash flow. The people you know paid too much.

  4. OCRegister
    Tax credits could help foreclosure victims buy homes
    again
    Tax credits could help foreclosure victims buy homes again … up to $484,350 in Los Angeles and Orange counties) at 3.0%, a 30-year FHA at 3.25%…

    1. Do you have to have been foreclosed to qualify for the tax credit?

      If yes, won’t such a policy encourage behaviors that increase foreclosures?

        1. (snip)

          “Others may be financially unable to get back on the homeownership path due to too little income, inadequate down payment or ongoing credit challenges.
          It’s important to note that most Americans gain family wealth through the forced savings and appreciation homeownership provides.
          One constant for many of those mortgage-meltdown victims and first-time buyers is sellers’ bias against small down payments versus all-cash offers or substantial down payments.”

          1. “It’s important to note that most Americans gain family wealth through the forced savings and appreciation homeownership provides.”

            Forced savings = Equity that can and will be cashed out asap.

          2. Who is the “seller” in this context, and what difference does it make to them what the buyer’s purchase / financing terms are? Isn’t the seller made whole at closing regardless?

          3. Banks don’t always approve the loan.

            Speaking of which, a month or two ago I told you guys about an OpenDoor place down the street that I wondered about the security when people could let themselves in with an app. Anyway, it only took a couple of weeks before it was sporting a “Sold” sign. It’s was like that for another couple of weeks. Now it’s for sale again.

          4. “…too little income, inadequate down payment or ongoing credit challenges.
            It’s important to note that most Americans gain family wealth through the forced savings and appreciation homeownership provides.”

            Oh, bullcrap. This is putting the cart before the horse.

            First you work on becoming a responsible adult by increasing your income, becoming a fiscally responsible adult, and accumulating enough savings to pony up a down payment. Once you’ve acquired these habits and continue to practice them, then you can begin to see the fruits of your discipline.

            It’s called living within your means in order to build a better future for yourself.

          5. It’s called living within your means in order to build a better future for yourself.

            The challenge is that, for many, living within one’s means doesn’t lead to any real amount of savings in order to build said better future. Working and saving seems like a fool’s game when housing prices outpace wage gains and rent increases for years on end, to say nothing of increased medical, education, and transportation costs.

            The way to live within one’s means and get ahead looks kind of drastic if you ask me. It makes me think of that girl from the south in an article posted a couple of weeks ago who took a security gig in Mountain View and was living in the parking lot in a van saving enough to go to firefighting school. She was saving over $2k a month by doing that, but she didn’t want to give her name because he was worried about what her employer (Google) would think.

          6. “Working and saving seems like a fool’s game when housing prices outpace wage gains and rent increases for years on end, to say nothing of increased medical, education, and transportation costs.”

            Eventually the decision to move to a lower cost area becomes reality for those not dependent on services only available from a metro area.

          7. decision to move to a lower cost area

            This is quite easy. Only when one discards the idea that owing overpriced real estate will make them rich.

        2. “It’s important to note that most Americans gain family wealth through the forced savings and appreciation homeownership provides.”

          IIRC it was falling home prices and negative appreciation that resulted in many foreclosed ‘victims’ walking away from their mortgages. And now the push is on to qualify them for more exposure to the same experience?

          1. “And now the push is on to qualify them for more exposure to the same experience?”

            These pukes are the same pukes that just cannot stand prosperity and will do whatever it takes to keep their finances in Poverty Mode. However our stupid consumer-based economy benefits from the spending that these pukes participate in using cash-out money thus it is all good.

          2. If our stupid consumer-based economy depended on the actions of financially prudent citizens then it would quickly enter the realm of collapse because Joe Prudent would not participate in the spending craziness that the vast multitudes of our dumbed-down population participates in.

            Luckily for all of us the stupidity is rampant.

  5. ‘Protests have erupted at one of the most affluent and liberal U.S. counties after a local government proposed increasing the availability of affordable housing in the area.’

    ‘The opposition to the affordable housing in Montgomery County, a Maryland county adjacent to Washington, D.C. that voted 76 percent for Hillary Clinton in the 2016 presidential election and where the median income is over $100,000, was voiced at a recent council meeting.’

    ‘Some wealthy homeowners said during the meeting the measure could lead to “flophouses” and “boxcars” where residents play loud music, according to the Times. One resident even complained that the expansion of housing will lead to “strangers walking by your house all the time now.”

    ‘A similar standoff between wealthy residents and the local authorities has been brewing in House Speaker Nancy Pelosi’s district in San Francisco, where rich residents launched a crowdfunding campaign, raising tens of thousands of dollars, to fund a lawsuit against the city’s plan to build a homeless shelter.’

    ‘The opponents of the shelter argued that the new homeless shelter was detrimental to the public safety and last month filed a lawsuit claiming the shelter will also negatively impact the environment, the Guardian reported.’

    https://www.foxnews.com/politics/affluent-liberals-in-washington-dc-suburb-resort-to-racial-and-economic-stereotypes-to-protest-affordable-housing-proposal

    1. ‘the measure could lead to “flophouses” and “boxcars” where residents play loud music, according to the Times. One resident even complained that the expansion of housing will lead to “strangers walking by your house all the time now.”

      So I guess putting up several thousand recently arrived Guatemalans is out? Oh well, we’ll stick Arizona and Texas with them. Like we have for decades.

      1. 2banana’s Law:

        Conservatives are more than happy to live under the same laws and taxes they want for everyone else.

        Liberals/progressives expect to be exempted from the same laws and taxes they want for everyone else.

        1. ‘Conservatives are more than happy’

          Let’s not get carried away. For instance are these rich liberals wrong (or racist and evil!) for protesting affordable housing? I read hundreds of articles a week and see similar reports every day. Usually it’s about traffic or height etc. But it could just as well be about “their” music and smelly cooking.

          Can I not speak up if something is unacceptable? When I moved to Arizona the people her were fed up with illegal immigration run by the cartels. The politicians weren’t. When the first referendum to cut down on it was approved, by the people mind you, not a single politician backed it. It passed in a landslide, including a wide majority of Mexican-Americans. After that we had more referendums and as of now you don’t read of 18 wheelers with 100+ illegals inside sweltering in 120 degree heat anymore. (Texas still does, but not AZ). No more Phoenix houses with 150 people inside and a few guys standing around with automatic rifles. It’s still a problem, but we pushed the human trafficking off our immediate streets.

          Arizonans aren’t racists for wanting to end human trafficking. It’s a form of slavery. And the cartels who profit are some of the worst types of people on the planet. Everybody should be able to agree that enriching Mexican cartels is a mistake.

          1. The politicians weren’t.

            Likely paid off or assisting with trafficking. Follow the money, particularly Cindy McCain’s.

      2. Diversity is our strength. Gated communities should be required to have some low income housing. Places like Chappaqua and Martha’s Vineyard that are socio-economically segregated should be required to provide low income housing.

        1. The good news is that MS13 is already moving into the Hampton’s territory from an article posted here a few months back.

      3. I liked Trump’s idea of shipping them all to the sanctuary cities. Fill ’em up with that which they desire!

      4. Ben Jones if this blog was Reddit, this post would be downvoted into being hidden, with a little caption next to the hidden post reading “comment score below threshold.”

        Banning 8chan isn’t going to stop radicalized individuals from becoming violent, and neither will banning guns. See also the 7/14/2016 truck attack in Nice, France.

        Blame CNN and real journalists for creating this political climate, they OWN it…

  6. Chri$.Thorn.in.yer.$ide.berg: “No unemployment, NO HB.B ll $helter.$hack debacle$! ”

    (Hey Chri$, may bee you should give Mr. Fottrell a jingle.)

    Bankruptcy-related job lo$$es are rising at a rate not seen since the Great Rece$$ion

    MarketWatch | Published: Aug 6, 2019 | Quentin Fottrell

    In the first seven months of the year, U.S.-based companies announced 42,937 job cuts due to bankruptcy, up 40% on the same period last year

    “It is the highest seven-month total since 2009 when 50,258 cuts due to bankruptcy were announced,” according to the report by outplacement and business coaching firm Challenger, Gray & Christmas. “In fact, it is higher than the annual totals for bankruptcy cuts every year since 2009, when 50,911 were announced for the entire year.”

    Companies cited bankruptcy as the reason for 11.6% of all job cuts announced from January to July. That’s compared to 11.3% of all cuts for the same period in 2018. Since 2007, bankruptcy has accounted for approximately 6% of all job cuts every year. The Challenger report tracks planned job cuts publicly announced by U.S.-based employers.

    These job losses are gleaned from news reports, company filings with the Securities and Exchange Commission, annual reports, company press releases and, where possible, state Worker Adjustment and Retraining Notification (WARN) reports. Regardless of when the job losses actually occur, they are counted in the month they are announced

    1. This thing is turning like an aircraft carrier. Slowly and methodically, and taking forever, but turning nonetheless.

  7. If you have to do all of the maintenance to make an asset cash flow, you paid too much. You should buy when it cash flows and appreciates, and sell when it doesn’t.

    1. and appreciates

      There you go…know the future.

      Lots of people were absolutely sure that appreciation was the only possibility.

Comments are closed.

Back To Top