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There Continues To Be A Glut Of Inventory

A report from Crain’s New York Business. “While foreclosure activity decreased in three out of five boroughs during the third quarter of 2019, Staten Island saw a surge of 183% year-over-year, according to PropertyShark. Foreclosure cases in Staten Island went from 48 in Q3 2018, to 136 in Q3 2019. This was largely in part due to the high number of pre-foreclosures registered during the third quarter of 2018, some of which became foreclosed properties, according to PropertyShark.”

“On the island of Manhattan, foreclosures increased from 22 cases in Q3 2018, to 48 cases in Q3 2019—an increase of 118% year-over-year.”

The Wall Street Journal on New York. “A dispute over home conversions in suburban Rockland County threatens to upend Manhattan’s luxury condominium market. Lawmakers in the county drew up state legislation to prevent the anonymous purchase of homes through the creation of limited-liability companies. Federal officials say some buyers use LLCs to launder money or hide ill-gotten gains.”

“Donna Olshan, a broker who collects data on the luxury market in Manhattan, pointed to a new federal tax law that reduced the deductibility of state and local taxes, a change that raised the cost of owning real estate. She also cited new state taxes on the sale of mansions, and the stricter LLC reporting requirements. ‘At the end of the day they are strangling New York real estate,’ Ms. Olshan said.”

“The state law applies to sellers as well as buyers, and will require the disclosure of all the individuals behind complex layers of ownership of new condominium developments, said Stuart A. Saft, a condominium lawyer at Holland & Knight. ‘It will effectively kill real estate finance,’ Mr. Saft said.”

The Seattle Times in Washington. “It’s fall, and that means home sales are slowing down — except where Seattle-area buyers can get more house for less money. In tonier neighborhoods, though, prices and sales are stable or slightly down, according to the Northwest Multiple Listing Service. In King County, home prices in September remained nearly flat at $660,000, a 1.2% decrease from this time last year and down 6% from the seasonal peak in May. And in Seattle, prices dipped 3.2% over last year, to land at $750,000.”

From Crain’s Chicago Business in Illinois. “A 19th century Gold Coast mansion whose owners have been unable to find a buyer the conventional way are putting it up for auction with a minimum bid of less than half the roughly $6.9 million they say they spent to buy and renovate it.”

“It’s a response to the uncharted waters that the luxury home market is in these days, auctioneer Rick Levin said. ‘The stock market is at an all-time high and interest rates are near all-time lows,’ he said. ‘If the high-end market isn’t doing well right now, there’s something else afoot.'”

The Real Deal on Florida. “Condo sales in Miami surged last week. The second most expensive closing was for a rare trade at Faena House. D South Beach LLC sold unit 5C for nearly $4.6 million, or $2,044 per foot. The seller is tied to the Deighton family of London. Paul Deighton is a British politician and former investment banker. The family’s Faena House unit previously traded for $5.75 million, which means it just sold for 20 percent less.”

From KXNT in Nevada. “Home prices aren’t growing as fast as they have in recent years in the Las Vegas Valley, but a new report from the Greater Las Vegas Association Of Realtors says that the average price of a new home is near what it was before the Great Recession hit in 2008.”

“The Las Vegas housing market continues to be seen as a stable one, even if real estate values have cooled off recently following the end of the Great Recession. Part of the reason for that is that there continues to be a glut of inventory, meaning more choices for home buyers.”

From Fox 5 Vegas in Nevada. “Home prices in Southern Nevada are approaching their all-time high while the local housing supply remains tight, according to a report by the Greater Las Vegas Associated of Realtors. According to GLVAR, there are 7,334 single-family homes listed for sale without any sort of offer, up 19.3% from one year ago.”

The Desert Sun in California. “Hemet residents adorned their vehicles with ‘Hemet is Heaven’ bumper stickers to express their love for the city in the 1980s, but today the’ Inland Empire community is mostly known for high crime rates, unemployment and vacant homes. Hemet was one of 10 California cities to appear on a list of the 50 Most Miserable Cities in America published Sept. 28 in Business Insider, reflecting the struggles that continue to plague the city more than a decade after last decade’s Great Recession.”

“After decades of economic growth and housing construction, the city of tract homes and trailer parks located in the middle of Riverside County was hit hard by the 2007-08 economic downturn and the housing crisis that followed, which rendered many homeowners unable to keep up with their mortgage payments and ultimately forced them into foreclosure.”

“Despite its location between wealthy communities in the Coachella Valley and coastal California, today, 17% of the city’s 86,000 residents live below the poverty line, according to census data. Zillow estimates the city’s median home value to be $272,000, which is still 20% lower than it was in 2006, before housing values plummeted. “

This Post Has 52 Comments
  1. ‘At the end of the day they are strangling New York real estate’

    But, safe deposit box in the sky?

    1. Strangling by having to say who owns the property? The only shame is that you ever made a dollar off of money laundering in the first place.

  2. ‘there are 7,334 single-family homes listed for sale without any sort of offer, up 19.3% from one year ago’

    And a year ago they were way way up! Same with the Seattle numbers, prices way down last year and now down worser.

      1. Apparently bond traders are happy with the Fed’s announcement.

        What are Treasurys doing?

        The 10-year Treasury note yield (TMUBMUSD10Y, -1.91%) was down 2.1 basis points to 1.532%, while the 2-year note (TMUBMUSD02Y, -2.48%) rate fell 4.2 basis points to 1.424%. The 30-year bond yield (TMUBMUSD30Y, -0.98%) edged lower by a single basis point to 2.033%.

        1. The debt (bond) market used to be a reliable indicator for the true state of the economy. Now it has become completely distorted by the Fed’s repo operation and QE-to-Infinity, so it has become impossible to know what the debt market is signaling.

  3. Gah. Been so busy, I haven’t had the time to keep up with the blog.

    Seeing more for sale/lease signs popping up around the neighborhood – Gut feeling is we are in for a hard winter in multiple sectors of the economy (though that could be influenced by the cold blast of pre-winter weather hitting the area)

        1. Gas may be cheaper there, but traffic is far worse than in San Diego. You could easily make up the difference in price by sitting endlessly in Seattle traffic, burning fuel while idling and not moving.

          1. I can agree with you that Seattle traffic is bad, especially I-5 and I-405, but it’s still not as bad as the SF Bay area (based on my most recent trips there).

            Regarding that though, I’ve spent the last 3.5 years working out of my lovely home office (and Mrs. Spiffy has been WFH over 50% of the time), and that was the reason I moved to the oft maligned (here anyway) Mercer Island in the first place – It’s in the center of the places we’ve worked, minimizing commutes – which usually has been by Bus when we’ve had them.

            Since buying my latest wagon in 2012, I’ve put about 31K miles total on it – and maybe half of that from getting away to places like Ocean Shores or Leavenworth.

            To wit: We’ve put value on our time not spent stuck in traffic for some time now.

          2. while burning fuel while idling and not moving.

            I can’t stand traffic, but I don’t burn any fuel in my model 3 while not moving, and being on autopilot in traffic is really quite mentally relaxing as it basically gets rid of the lurch/stop pattern in gridlock.

        2. My mistake. That said, I did look on, and gas prices in Seattle are in the mid $3 range. Not quite California, but still pretty stiff.

  4. the city’s median home value to be $272,000

    Median household income in Hemet is reportedly $33,932 a year.

  5. It’s not just Boston. 2020 is going to be painful for those betting on the expansion continuing unabated.

      1. Business News
        September 29, 2019 / 5:09 PM / 9 days ago
        Snapback to higher bond yields? At least five years, strategists say
        Hari Kishan

        BENGALURU (Reuters) – A return to significantly higher yields will take longer than previously thought, according to a Reuters poll of fixed-income strategists who slashed their year-ahead major government bond yield forecasts to the lowest since polling began 17 years ago.

        With no resolution in sight to the U.S.-China trade war, the current modest global economic expansion cycle has taken a hit, prompting major central banks to shift to policy easing this year from a tightening view at the turn of last year.

        That has not only pushed benchmark sovereign bonds yields to new lows this year, but has also resulted in over $17 trillion – a record amount – of debt securities pushed into the negative yields territory.

        And according to the Sept. 19-27 poll of over 100 strategists, that trend of subdued yields is here to stay.

        About 70% of strategists who answered an additional question said the era of low interest rates and sovereign bond yields will last at least another five years, compared to two years predicted just three months ago.

      2. Even Greece Is Getting Paid to Borrow Money in Debt Markets
        Michael Hunter
        Oct 09 2019, 4:20 PM
        Oct 09 2019, 6:02 PM

        (Bloomberg) — Greece, the one-time bond-market pariah at the heart of Europe’s sovereign debt crisis, just completed a transformative journey by joining the region’s negative-yield club. Investors are now paying for the privilege of lending it cash. A sale of 487.5 million

        Read more at:
        Copyright © BloombergQuint

  6. Well.. THIS is interesting…

    California governor signs statewide rent-control law

    The law limits rent increases to 5% each year plus inflation until Jan. 1, 2030. It bans landlords from evicting people for no reason, meaning they could not kick people out so they can raise the rent for a new tenant. And while the law doesn’t take effect until Jan. 1, it would apply to rent increases on or after March 15, 2019, to prevent landlords from raising rents just before the caps go into place.

    California’s rent cap is noteworthy because of its scale. The state has 17 million renters, and more than half of them spend at least 30% of their income on rent, according to a legislative analysis of the proposal.

    But California’s new law has so many exceptions that it is estimated it will apply to 8 million of those 17 million renters, according to the office of Democratic Assemblyman David Chiu, who authored the bill Newsom signed.

    Looks like there was some carving out by interest groups, which will probably only serve to increase the distortion between housing subject to rent control and those not.

    1. “Last year, voters rejected a statewide ballot initiative that would have expanded rent control statewide. For most places in California, landlords can raise rent at any time and or any reason if they give notice in advance.”

      1. yeah. I’m wondering if it will make loopholes that allowe bad tenants to stick around a lot longer.

    2. 5 percent plus inflation And only capped to 2030 when rents are softening? Appears to be Kubuki theatre to me. Drive up housing costs with your policies and then pretend to help. Yes, I am against rent control but honestly this is not real rent control since it allows rents to rise faster than the market will over the next ten years.

      1. Agreed. It’s not hardcore rent control – different interest have gotten to it.

        But I suspect it might help get Rent Control measures passed elsewhere. (like what Sawant is pushing for in Seattle). Any sort of meddling like that is going to have some unexpected side effects.

    3. It bans landlords from evicting people for no reason, meaning they could not kick people out so they can raise the rent for a new tenant.

      So landlords will annually increase rents on existing tenants.

    4. 5% each year plus inflation

      So if inflation is -4%, there could still be a rent increase of 1%?

      1. More likely you will see 2 percent inflation. Thus this is 7 percent per year which is just about a double in ten years. Wasn’t that the number used for houses just before the crash? Housing was going to increase by 7 percent per year forever. It is insane to think that this could occur. The only way you are going to see wages increase by 7 percent is if inflation is running above 5 percent and then under this rent control the rent could increase by over 10 percent per year.

  7. Seattle eastern suburb of Sammamish is now the highest in the nation (over 65K population). Lots of couples who work at microsft, tmobile, amazon etc.

    The intelligencia in Seattle is howling how they dont allow the drug dealers and criminals in – so of course.

    t’s rare to find a study about incomes where Seattle doesn’t place at or near the top of the list, but a recent U.S. Census study shows that Sammamish’s median household income is the highest in the U.S.

    The Eastside city just met the minimum population requirements to even make the list at 65,000, having grown past that figure last year. Sammamish clocked in at $183,000, highest among the 630 cities the census looked at, just above Bay Area cities like San Ramon and Palo Alto, reports The Seattle Times.

  8. Hillary is chomping at the bit to run again. Run Hillary run. After you lose we can send you to the glue factory.

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