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A Silly History Of Falling For Moon-Shotty Ideas

A report from the Washington Post. “While home sellers may enjoy the feeling of having the upper hand in the local housing market, buyers have been frustrated for several years by the limited number of homes for sale, rising prices and heavy competition from other buyers. Prospective buyers may feel somewhat less pressure this fall in Northern Virginia, where the market appears to be stabilizing a little.

“‘The housing market is strong throughout the D.C. area, especially in the city and Prince George’s County, but we’re beginning to see some early signs that it’s starting to transition to a more-balanced market,’ says David Howell, executive vice president of McEnearney Associates in McLean.”

“Howell anticipates a moderation in price appreciation, not a downturn, as well as increasing inventory that will result in a balance of power between buyers and sellers.”

“‘Other areas of the country are starting to see a balanced market, and I think that will trickle to our area, too,’ says Jennifer Halm, a real estate agent with Compass real estate in Alexandria.”

“‘Even though there’s competition, sellers need to realize that buyers aren’t biting on everything and they especially won’t bite on something that needs updates,’ says Halm. ‘Buyers are more value-conscious and more educated than ever, and they won’t overpay for a house.'”

From Inside NOVA. “A relatively ugly month of September, sales-wise, for the Northern Virginia market. A total of 1,427 properties went to closing across the region, down nearly 12 percent from a year before, according to RealEstate Business Intelligence, based on data from Bright MLS.”

“While the city of Alexandria recorded a year-over-year increase in sales, the other localities in the report – Arlington and Fairfax counties and Falls Church and Fairfax cities – saw double-digit declines. Though inventory remains tight, buyers are not rushing to pull the trigger to purchase right now, said Gary Lange, managing broker of the Vienna office of Weichert, Realtors.”

“‘Buyers are looking for move-in-ready homes with all the bells and whistles,’ Lange said. ‘If a home isn’t in tip-top shape, it is sitting. Sellers are trying to get top spring-market prices, and that just isn’t going to happen in fall and winter months. Sellers need to temper their expectations and be willing to do necessary updates to compel buyers to look at their property as ‘the home of choice.'”

The Brown Daily Herald on Rhode Island. “The Superman building has some competition as an icon in the city skyline if New York developer Jason Fane receives approval to build the Hope Point Tower, a 46-story luxury apartment building proposed for downtown Providence.”

“Some residents question if there is a market for the luxury apartment complex in Providence. A feasibility study by New Jersey-based Real Estate Solutions Group found that Fane will have to price the luxury apartments at higher than typical Providence rates to make a profit, which suggests that Fane might struggle to find tenants and get a return on his investment.”

“Professor of American Studies and Urban Studies Samuel Zipp also questioned whether downtown Providence can support multiple luxury apartments. ‘In the end, it wouldn’t be the end of the world if the tower is built, but I also wonder if it might never get built even if it were approved,’ Zipp wrote, describing the project as an ‘over-the-top scheme’ and ‘obviously out-of-scale’ with its surroundings.”

“‘We have a silly history of falling for moon-shotty, one-size-fits-all ideas in economic development when a more human-scaled, gradual and achievable program would be much more successful — if only it could find funders and political sponsors,’ Zipp wrote.”

From Realtor.com. “Kyrie Irving is one of the NBA’s brightest stars. But his real estate game definitely needs work. After being traded to the Boston Celtics from the Cleveland Cavaliers in 2017, the 26-year-old point guard placed his home in Westlake, OH, on the market for $1.7 million last fall. With no buyers taking a shot, the price dropped in July 2018 to $1.17 million.”

“In the end, Irving got posterized—the home sold in early October for the much, much lower price of $755,000. Not only did Irving fail to get anywhere close to ask, he didn’t even break even. The five-time All-Star purchased the upscale abode in 2014 for $800,000.”

“On the other hand, given that the athlete is long gone, we’re guessing he was a very motivated seller.”

“It’s also not clear why Irving thought he could double his money on the home just three years after he bought it. The area, while certainly nice, isn’t exactly a million-dollar home market. According to realtor.com®, recently sold homes in Westlake have a median listing price of $325,000, and a price per square foot of $113.”

“And of the 368 homes sold in the home’s ZIP code over the past six months, only eight sold for a higher price than Irving’s listing.”

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This Post Has 25 Comments

  1. ‘It’s also not clear why Irving thought he could double his money on the home just three years after he bought it’

    Ahem…

    ‘Though inventory remains tight, buyers are not rushing to pull the trigger to purchase right now’

    Check out the median prices on the graphics at this link.

    BTW I forgot to mention yesterday that I flew out to Texas for the week, so posts and moderation will be a little slow.

  3. Zillow executive is a lying scum bag. He claims:

    1. Affordability is at historical highs given low interest rates.
    2. Their new model of buying houses and selling them for a profit after a few repairs is not “house flipping.” Instead it is “housing on demand” because they don’t focus on distressed properties and make major repairs. They are just providing a service to sellers that want a fast out to buy a new property.
    3. Housing is still appreciating, as proof look the year-over-year numbers. Refuses to discuss recent month-to-month changes.
    4. All real estate is local, despite the fact that rising interest rates and inventory is a national phenomenon.

    https://finance.yahoo.com/news/zillow-exec-wall-street-arent-flipping-houses-174806030.html

  4. ‘Some residents question if there is a market for the luxury apartment complex in Providence’

    It should say even more luxury apartments.

    ‘A feasibility study…found that Fane will have to price the luxury apartments at higher than typical Providence rates to make a profit, which suggests that Fane might struggle to find tenants and get a return on his investment’

    Even at this late date, this article shows the push and pull of developers fighting for the chance to throw somebody’s money down a hole.

  5. CD rates still less than half what they were in 2006 at about his same juncture in the housing bust. I wonder if grandma will ever get to enjoy anything else other than dog food…

  6. The stock market and crude oil are looking a little plunge-Y today. Crude is down over 3% to $69.72 as I type. The DOW is down 255.

    1. Oil build, Saudis are helping Trump keep gasoline prices down prior to the election speaking of that for the second week Rasmussen had the generic ballot around tied, last week was not an aberration. The blue wave looks more like a ripple.

      1. Hopefully for the Republicans, the voters will ignore the plunging stock market, or at least place blame on the Fed rather than Republican economic policies.

        1. Plunging stock market, your funny. What you are seeing is a stock maker that looks normal. It goes up some days and it goes down some days. It is just a little off an all time high. It is not Obama’s market which was just propped up by funny money.

          1. You are also ignoring close to 4% growth for the third quarter which is probably why the stock market seems to be recovering today from a very small downturn. Less than ten percent downturns, periodically, are actually very healthy.

          2. ignoring close to 4% growth…

            You are ignoring the increase in debt it took to achieve that, which is larger than the GDP growth.

  7. I just saw this.
    Excerpt:
    Pretium could sell as many as 20,000 homes valued at as much as $5 billion […]
    Pretium owns more than 26,000 rental homes in 15 markets, which it operates through its property-management arm, Progress Residential. Even a partial sale could wind up as the largest transaction in the industry since Invitation Homes Inc. and Starwood Waypoint Homes agreed to merge in August 2017.

  8. “Howell anticipates a moderation in price appreciation, not a downturn, as well as increasing inventory that will result in a balance of power between buyers and sellers.”

    That’s not how speculative manias have ever previously ended. Perhaps this time is different?

    1. How will “increasing inventory result in a balance of power between buyers and sellers” if the price doesn’t go down?

    1. “We continue to believe we are in the midst of a rolling bear market across all global risk assets caused by a drain in liquidity and peaking growth,” Wilson said.

      “Sooner or later, the rolling bear will likely be back for more.”

  10. “‘The housing market is strong throughout the D.C. area, especially in the city and Prince George’s County, but we’re beginning to see some early signs that it’s starting to transition to a more-balanced market,’ says David Howell, executive vice president of McEnearney Associates in McLean.”

    Everything is just awesome! And then…….

    President Donald Trump says that he will ask each of his Cabinet secretaries to cut 5 percent of their respective budgets, shortly after he pledged to cut spending and lower the U.S. budget deficit.
    “It’s not as tough as you think, and frankly there’s a lot of fat in there,” Trump said in an earlier television interview while noting that “we had to get the military done last time.”
    Trump’s comments follow remarks from Senate Majority Leader Mitch McConnell, who blamed rising budget deficits on social safety net spending rather than tax cuts.

    And this is why the D.C. Market will slow down. Fear of budget cuts and being left holding the bag.

  11. “Buyers are more value-conscious and more educated than ever, and they won’t overpay for a house.’”

    Yeah recently buyers. YOU ARE FROOOKEEDD

    1. If buyers were previously uneducated and making bad decisions, why didn’t their real estate agents say anything? Did the person that made the quote ever try to educate anyone, or did he keep them in the dark?

    2. How much education do you need to not want to overpay for anything? You just need to be a cheapskate.

  12. I think the “return to balance” argument is a bit naive. Rentals have been a big driver for sales. If the bigs start dumping, or even stop buying, that shows that the rent boom is over. Smaller investors will stop buying. In investing thier is no balance. If property is not appreciating, it is a negative and demand will falter

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