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Offering Token Slivers Of Price Reductions Won’t Do The Trick

A report from KOMO News in Washington. “Sale prices for new homes fell 12.1% year over year in the Seattle metro area in the third quarter, according to a new report. The report also found the price per square foot for new homes fell 7.1% year over year in the third quarter to a median price of $285 per square foot. There was also a significant year over year increase in the number of residential building permits.”

The Oregonian. “With a slower market, buyers feel they have more power than in the past to negotiate on price, repairs or closing costs, especially in the condo market. Condo shoppers have more to choose from, are spending more time looking and are writing lower offers, said Tanya Smith of Redfin, who has listed a 907-square-foot condo in the Meriwether building in Portland’s South Waterfront at $410,000.”

“‘They feel they can take their time and they are nervous that we may be at the top of the market,’ said Smith. ‘People are afraid to buy high, especially first-time buyers.'”

The Denver Post in Colorado. “Home sellers in metro Denver appear to be trying to squeeze every last drop out of a historic run-up in prices. But in doing so, they risk getting squeezed themselves. In the past seven days, through Thursday, 1,433 new homes and condos came on metro Denver’s multiple-listing service. But in that same stretch, 1,539 listings underwent a price decrease, notes Anthony Carnesi, CEO at Keller Williams Realty DTC.”

“‘The number of price reductions in the six-county area is greater than the number of new listings,’ he said.”

“After botching the initial listing, sellers need to make a dramatic gesture to get buyers interested again. Offering token slivers of price reductions won’t do the trick, Carnesi said. There are other signs of a market shift. A year ago, one out of three homes that went under contract with a Redfin agent in metro Denver had received multiple offers. But in October, only 6.8% of metro Denver homes on the market received multiple offers. Nationally, the number of homes on the market receiving multiple offers dropped from 38.7% to 10.2%, which represented a 10-year low.”

The Midland Reporter Telegram in Texas. “Virtually all categories from September showed a better housing market in Midland County for the buyer, according to the Texas A&M Real Estate Center. The number of homes sold was 220 (down 50 month over month and down 30 year over year).”

“The average price for a home sold was $320,041 (down by nearly $27,000 month over month and down by more than $31,000 year over year). The median price for a home sold was $296,000 (down by $19,000 month over month and down by $4,000 year over year). Also, the median price was below $300,000 for the first time since February.”

“The total number of homes available at the end of the month was 632 (up 23 month over month and up 240 year over year). The total number of listings is the highest in any month since October 2016, according to the Real Estate Center.”

From Mingtandi on New York. “Singapore-based Alpha Investment Partners has agreed to buy out its partner’s stake in a luxury condo project in Manhattan’s Upper East Side just over three years after the joint venture began selling homes. The move comes as the average sales price for Manhattan apartments fell 22 percent in the third quarter of this year, compared to the same period in 2018, the steepest decline since the 2008 financial crisis, according to a report by real estate consultants Miller Samuel.”

From Miami Community Newspapers in Florida. “Attending a symposium in Broward last month, a successful realtor shared an anecdote about a client to whom she strongly suggested professional home staging prior to listing the property. The seller responded that she didn’t want to spend money on staging and was in ‘no hurry to sell her house.’ The realtor told the seller to call back when she was indeed ready to sell. While this may sound harsh, realtors are not interested in marketing the property of a completely unmotivated seller.”

The Los Angeles Times in California. “There’s a whole lot of price cutting going on in the multimillion-dollar home market. It’s typical for this time of year by sellers hoping to rap up a deal before year’s end. Among notable price choppers we recently spotted are a singing show creator and an NBA head coach. Those who don’t sell now will likely be taking their places off the market soon so they can start the New Year as a ‘fresh’ offering.”

“P is for price cut. The Montecito home of late author Sue Grafton is back on the market for $6.999 million. It’s the two-acre property’s second price cut after listing for $8.5 million at the beginning of the year.”

The Chico Enterprise-Record in California. “Residents throughout Butte County are still struggling to find housing answers for their situation. More than a year since the Camp Fire, planning for the future for some folks is still a day-by-day occurrence.”

“We’re seeing houses for sale staying longer on the market. They aren’t being scooped up as they once were, prompting sellers to reduce the prices that perhaps were overpriced originally. So what’s really needed and who can afford it?”

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  1. ‘Sale prices for new homes fell 12.1% year over year in the Seattle metro area in the third quarter…There was also a significant year over year increase in the number of residential building permits’

    These guys will drive you underwater and watch you go into foreclosure. Don’t say you weren’t warned.

    1. Great rewards lie in wait a few years down the road for patient buyers, while eagerly impatient stupid buyers presently step right up to catch themselves falling knives, and can look forward to stamping their liddle feet from an underwater position in a few years.

  2. ‘In the past seven days, through Thursday, 1,433 new homes and condos came on metro Denver’s multiple-listing service. But in that same stretch, 1,539 listings underwent a price decrease…’The number of price reductions in the six-county area is greater than the number of new listings’

    Where did all these shacks come from? It’s almost like they were there all along! Wa happened to my shortage Denver?

    There is a mention of “greedy” sellers. And the comments are lively, the trolls are angry.

    1. Ben Jones this is the tipping point. Enough people have realized that the cost of living here compared with the flyover wages just isn’t worth it.

      Add to that the quality of life issues: traffic, air pollution, homeless, crime, sanctuary city policies, and a mayor’s office and statehouse hellbent on turning this place into California.

      2009-2013 was the last livable time to be in Denver, since then it’s been nothing but the road to ruin. Stick a fork in this place, because it’s DONE.

      1. Those dates coincide with the decline in the standard of living in every city and town out west. It’s because housing bubbles do nothing but bring misery and poverty to the masses, benefiting precious few.

  3. “Sale prices for new homes fell 12.1% year over year in the Seattle metro area in the third quarter, according to a new report.

    And just like that, greed turns to fear.

  4. ‘Among notable price choppers’

    Yeah LAT this sawin’ and slashin’ is getting to be routine.

    ‘Those who don’t sell now will likely be taking their places off the market soon so they can start the New Year as a ‘fresh’ offering’

    Openly discussing REIC market manipulation again?

    1. ‘Those who don’t sell now will likely be taking their places off the market soon so they can start the New Year as a ‘fresh’ offering’

      This happened last year and the result was the greedy seller paid the carrying costs to watch their shack go down in value. Chase the market down greedbags! Stubbornness does not pay off when your attempting to get out of a depreciating asset

  5. “‘They feel they can take their time and they are nervous that we may be at the top of the market,’ said Smith. ‘People are afraid to buy high, especially first-time buyers.’”

    Gosh, that’s not conducive to Always Be Closing.

      1. That might be optimistic. Maybe they should start with #GetARealJob, perhaps a #WouldYouLikeFriesWithThat job.

        1. I started reading the Fed’s Beige Book awhile back. They had a interesting anecdote about table kiosks and self-service kiosks at chain and fast food joints. Apparently the order amount is significantly higher when customers don’t have to talk to a person. The presumption is that there is some shame/guilt when you admit you’d like to “supersize” your fries and get a large soda, or that you’d like 2 extra lava cakes for dessert. But a computer isn’t judgmental in the same way. So I am sure there will be far fewer retail cashiers asking, “Would you like fries with that?” as these establishments apply data to maximize their profits.

          1. The kind of restaurants that will go to automated ordering are the kind that I don’t eat at. They’re predominantly fast food, and calling it “food” is a stretch at this point. It’s chemical laden garbage.

            I hardly ever eat out anymore, and when I do it’s usually somewhere that has fresh food with a good reputation. Eating out is one of the most overpriced, unhealthy activities one can partake in these days.

          2. Eating out is one of the most overpriced, unhealthy activities one can partake in these days.

            Agreed. Most dishes at chain restaurants are calorie bombs.

          3. The same is likely true for self-checkout lines at grocery stores and Wal-Mart/Target. The computer doesn’t know what you’re buying (nor does the guy behind you).

  6. “The average price for a home sold was $320,041 (down by nearly $27,000 month over month and down by more than $31,000 year over year).

    Ya know, my rent is only $18,000 a year and I’m completely untroubled by falling shack prices. Nothing more expensive than regret, FBs.

  7. While this may sound harsh, realtors are not interested in marketing the property of a completely unmotivated seller.”

    Subsisting on Ramen noddles supplemented with food bank gleanings is making realtors surly. Get to sawin’ and slashin’, Greedheads. No sales = no commissions. Gotta keep the repo man away from the Beemer for at least another month, since image is everything.

    1. The good realtors are your best friend in terms of getting sellers to adjust their “expectations”. No transactions = no food.

  8. ‘the average sales price for Manhattan apartments fell 22 percent in the third quarter of this year, compared to the same period in 2018, the steepest decline since the 2008 financial crisis’

    And the peak was 2016. Note that the MSM rarely reveals how far down it is from that. So we got NYC, Miami, LA, Seattle, Denver and Portland sinking like a turd in a well, and no mention of a bubble anywhere in these articles.

    1. Perhaps they think its not a bubble, rather more of a hot air ballon that can be kept floating peacefully in the air by adding more fuel, until they run out…

      1. Longtime HBB readers will recall all the mental gymnastics and verbal contortions that REIC shills used back in 2007-2008 to avoid calling a bursting bubble a bursting bubble. Any favorites come to mind? The NAR and it’s ilk are already starting to recycle the same lies and dissembling they used during Housing Bubble 1.0.

      2. The media drives by looking through the real view mirrors. It never occurred to them when they were looking at housing prices based on year to year comparisons that the fact that housing prices were rising less year to year each month actually meant that housing prices were falling real time. Just another thing they do not teach in the gender studies or the critical race theory classes. Thus, a lot of black women paid too much for their houses. Now, they are blaming it on racism and gender discrimination.

    2. no mention of a bubble anywhere

      Last time they didn’t call it a “bubble” until the crash was obvious to everyone. They were actually calling the crash the “bubble”. As illogical as it seems maybe not calling it a bubble yet means they know there is still a mile of dead air space under prices.

    1. There was a line of cars stretching for more than a mile for the Care and Share food bank giveaway in Colorado Springs, with most of the recipients driving late-model cars, trucks, and SUVs. I’m guessing the Caitlins of the greater Colorado Springs area were well represented in the throng. A similar food bank giveaway in Pueblo (50 miles away) got completely cleaned out. I’ve never seen anything like it here, and it belies all the Happy Talk of the Greatest Economy Ever.

      https://www.kktv.com/content/news/380000-pounds-of-food-being-given-out-in-Colorado-Springs-and-Pueblo-565019492.html

        1. After looking at about 10 more of those tapes from the food bank article posted it addresses what’s really going on. Add to this the outrageous increase in homeless.

          It’s testimony to how middle class jobs aren’t paying enough, yet industry has no problem raising prices it makes me remember how prices tracked with wages from housing to food and health care, in the good old days.
          It would seem to me that the first goal of any Society is to have jobs that keep up with inflation. The inflation is fake and it’s a byproduct of the greed that has seeped into the system by price sitting monopolies.

          Based on average wages the price of health care, as well as food and housing is to high.

          What is the end game here? Again, I will always say that the policies from say 1945 to about 1975 in the USA were the most balanced and sane. While big business made less and gave more to the workers, they still made a reasonable profit and the majority could afford the prices.

          What is the goal here, to price all needs above affordable? Turn the majority workers into slaves not able to get ahead ever?
          To only have health care workers and government workers have liveable wages?

          The thing I remember about the good old days was that all sectors of the economy were in sink with each other. Globalism really screwed this Country, and the balance of power we had under the old USA policies isn’t possible under the current system .

          1. +1
            The last two times I can recall that wealth inequality was this high were a) The Gilded Age (1870-1900) and b) The Roaring 20’s and the 1930’s. There will be a “readjustment phase” at some point.

            “History doesn’t repeat itself, but it does rhyme.” – Mark Twain

            “Those who cannot remember the past are condemned to repeat it,” – George Santayana

          2. Globalism really screwed this Country

            OK, but reversible.

            …prices tracked with wages from housing to food and health care,

            As to the housing, something other than price setting monopolies was in play. Tens of millions of people went up to their eyeballs in debt to buy bigger and bigger houses. The typical house is several times the size of when I was a kid.

          3. “It’s testimony to how middle class jobs aren’t paying enough, yet industry has no problem raising prices. It makes me remember how prices tracked with wages from housing to food and health care, in the good old days.” (edited run-on)

            Central bankers are accustomed to inflating away sovereign debt, and until the 21st century wages eventually caught-up. Globalism changed that equation, and the middle-class is now bifurcating with a larger percentage sinking as they take on debt forestalling the inevitable.

          4. as they take on debt

            Consider that this might be a big part of what makes them poor and the top feeders wealthy.

          6. The last two times I can recall that wealth inequality was this high were a) The Gilded Age (1870-1900) and b) The Roaring 20’s and the 1930’s.

            Wow! What year were you born?

          10. “prices tracked with wages from housing to food and health care, in the good old days.”

            It’s worse than we think. Prices tracked with wages on ONE income while the other spouse stayed home. Then in the mid-70s the wife had to work at the grocery or gas station for extra cash. Now, even two degreed incomes may not be enough.

          11. Then in the mid-70s the wife had to work at the grocery or gas station for extra cash

            Had to or chose to? It’s not clear which is the independent variable here.

            Did women entering the workforce cause price inflation (more dollars chasing same goods), or were prices already going up, and the extra income was _needed_ to afford it?

          12. I would say that in the 1970s women didn’t HAVE to work, mostly they just wanted a little cash for luxuries like more expensive food, or eating out, or movies, or a road trip to the beach with the kids. Of course, wifey worked for a few weeks when hubby was laid off from the GM plant.

            I don’t think prices started rising as a response to women working until women started working professional degreed jobs, and started making real money. (in 2019 dollars, for ex., making $50-60K instead of $15K cash).

          13. The 1971 collapse of the Bretton Woods System and the 1973 Yom Kippur war and resulting OPEC oil embargo set the stage for a huge decline in the standard of living for the American family.

          14. Had to or chose to?

            Many women were mistakenly lead to believe by the feminist movement that they could “have it all.”

          15. Turn the majority workers into slaves not able to get ahead ever?

            That would be it. Scare them into maximum productivity and then extract/skim every bit that you can for as long as possible.

      2. with most of the recipients driving late-model cars, trucks, and SUVs

        It’s always been like that. I remember driving past one of those giveaways in the late 1980’s in Oceanside, CA and it was the same story: most of the people lined up for free food had a better car than I did.

  10. Caitlin got rolled. Get drunk with greed and you get rolled. She should have remembered that time on Spring break, she woke up in Uncle Sam’s bed with a tattoo.

    1. It was a stunt to keep him relevant and in the public’s mind. He knows no team will ever sign him, but he makes even more money hawking absurdly expensive sneakers for Nike, but he can’t do that if he’s forgotten.

        1. I remember when Kaep came to LaVell Edward’s stadium and beat up on my Alma Matter (BYU) in 2010. I didn’t know he was black, but he seemed to manhandle my team.

  12. 1) Great post today (as per usual), with a sampling of RRE updates from across the nation. Anyone not taking note of the obvious trends of a) increasing inventory and b) falling prices isn’t paying attention. The slow-motion train wreck of housing bubble 2.0 grinds on. Prices still “sticky” at this point on the downside, as sellers can’t/won’t believe that the market has turned. “Denial is a river in Egypt.”

    2) Some perspective on The Oregonian article, but broadly applicable to most any MSA/market.

    “The Oregonian. “With a slower market, buyers feel they have more power than in the past to negotiate on price, repairs or closing costs, especially in the condo market.”

    “‘They feel they can take their time and they are nervous that we may be at the top of the market,’ said Smith. ‘People are afraid to buy high, especially first-time buyers.’”

    https://www.oftwominds.com/blogmay19/21st-economy5-19.html
    The Economy Has Fundamentally Changed in the 21st Century–and Not for the Better
    Charles Hugh Smith
    May 15, 2019

    “The net result is we have an economy that’s supposedly expanding smartly while our well-being and financial security are collapsing.

    Gross Domestic Product (GDP) and other metrics of economic activity don’t measure either broad-based prosperity or well-being. Elites skimming financialization profits by expanding corporate debt and issuing more loans to commoners while spending more on their lifestyles boosts GDP quite nicely while the security and well-being of the bottom 90% plummets.”

    “The family home remains the mainstay of middle-class wealth, but its value is now determined by credit bubbles and busts and the relative burdens of property taxes. In the pre-financialization / pre-neoliberal era, house prices tended to rise by a modest percentage over time, more or less the equivalent of a savings account drawing interest as the homeowner paid down the principal and accrued equity.

    Now every homeowner has been transformed into a gambler who must time the market swings when buying or selling. One mistake can wipe out decades of paper gains. How do we quantify this erosion of the reliability and safety of homes’ market valuations?”

    “Everyone with their retirement savings in a 401K or IRA is also now a gambler whether they accept that reality or not. In a global economy of historically low yields on safe investments such as government bonds, households playing it safe are punished with near-zero or negative returns, while households that put all their money oin the stock market roulette game have been richly rewarded to date.”

    “But the security of stock market gains is illusory: rather than reflect the fundamentals of the corporations, stock valuations reflect the Federal Reserve’s decision to make the stock market the signifier of economic growth: if the market is rising, the economy is doing well.”

    “Why did they do this? Manipulating stocks higher is easy: just push low-cost liquidity into the financial system and much of it will end up in stocks or corporate buybacks which boost shares valuations by reducing the number of shares outstanding.”

    “The other factor is the concentration of stock ownership in the politically powerful hands of elites. Should the market threaten to crash, wealthy donors and their lobbyists will let the regulators and politicos know they’re not happy that their enormous wealth is at risk of dwindling.”

    “Fed goosing and corporate buybacks are not solid foundations. All such manipulations eventually founder on the shoals of reality, and everyone who thought their retirement funds in stocks was as safe as a savings account will discover that risk can be masked but it can’t be made to disappear.”

    “The Neoliberal Project of making everything into a tradable market has dominated the 21st century economy. The concept is appealing: by making everything into a competitive market, prices will drop as efficiencies and innovations take hold, and financial markets will benefit as everything that’s being commoditized can be packaged, marketed and sold globally.”

    1. Key remarks:

      “This happy story of the wunnerful benefits of turning everything into a tradable market is not what actually happened. What actually happened is that the new markets were quickly dominated by monopolies and cartels, and previously safe assets were financialized and securitized, in effect stripmining the unwary of their income and assets.”

      “Neoliberal financialization and Fed goosing of risk assets are why the nation’s wealth has become increasingly concentrated in the hands of financial elites. As you can see in the charts below, the gains reaped by the top 10% were concentrated in the top 1%, and the gains of the top 1% have been concentrated in the top .01%.”

  13. Linked from CNBC — More young people are dipping into their 401(k), a trend experts call ‘troubling’

    “More Americans are tapping into retirement savings to cover short-term and emergency expenses than had to a decade ago, with young people especially finding themselves in this bind. Over a quarter of millennials have taken a hardship withdrawal from a 401(k) or other retirement account in the past decade, and over a quarter have taken a loan.”

    https://grow.acorns.com/how-to-avoid-dipping-into-your-401k/

    No “pent-up demand” for $500,000 starter homes happening here.

  14. Well, if the younger people are rejecting the Insanity of our current economic systems, it seems to me they have valid reason.
    Going into debt or being a casino player seems to be what’s offered when it use to be viable jobs. It’s just not a stable sane way of living.
    If the young people are feeling like their options are limited it’s because they are.

    1. I think people start acting a little nuts when their options become more and more limited. It’s almost like wartime behavior or survival mode. The normal BS from the talking heads starts to fall on deft ears when reality doesn’t jive with the narrative.

    1. My generation was taught that debt was bad and hard work would get you somewhere. But we had jobs and upward mobility

      I’m not sure when this to much credit started being pushed, but the loss of jobs that didn’t keep up with inflation anyways ,mostly in the private sector , was a game changer.

      I’m just saying that if the young people had the kind of options that older Americans had they would have better choices.

  17. The same captured economists and “experts” who denied the existence of Tech Bubble 1.0 and Housing Bubble 1.0 are now weighing in on the “shift” in the San Francisco housing market, and its implications. Far be it for the globalist mouthpieces at Salon to mention an obscure little blog that trounced “the experts” when it came to accurately pointing out the existence of an unsustainable housing bubble in 2006-2007, and is repeating history in 2019.

    https://www.salon.com/2019/11/15/housing-price-slump-in-the-expensive-bay-area-could-signify-economic-shift-ahead/

    1. If homelessness is this bad now in a “good” economy, imagine how bad it will be in the next recession.

      I visited San Francisco for the first time ever in May of this year, the conditions on the streets in the Tenderloin, Mid-Market, Civic Center neighborhoods are dirtier than anywhere I’ve ever seen in the U.S.

      1. I can’t even imagine how dismal things would get if we went into a recession or depression. We need to bring even more jobs and manufacturing back to USA by any means possible.

        1. “I can’t even imagine how dismal things would get if we went into a recession or depression.”

          At this point I believe drug addiction and mental illness have a lot more to do with homelessness than a good or bad economy.

          1. drug addiction and mental illness

            A recession or depression for most of us is having the value of our 401K or house go down a tad, or taking a pay cut. Depression for them is losing Everything.

      2. I was recently in LA and went to get a sandwich at a Subway in Torrance area. There was a guy sitting on the curb by the busy street shooting up. I had heard about this sort of thing but it’s still a shock when you see it with your own eyes.

        1. I was down there recently and it’s hideous. The house prices are laughable given how horrific the neighborhoods are. Bars on the windows for $750k and high taxes. Those houses should be $100k.

    2. REALTORs are debt pimps selling an illusion.

      But sadly, the kind of people who listen to REALTOR and watch HGTV will never learn, even as they’re digging through my building dumpster for uneaten scraps of ramen (yesterday morning, sketchy tweakers are all over Dumver looking for sh*t to steal)

  19. What is believed to be the last Japanese holdout from WII emerged from the jungle on the island of Saipan after Japanese authorities blanketed his suspected hideout with leaflets urging him to surrender. His first words upon being reunited with with relatives in Japan were “Realtors are liars.”

  21. R u worried that the bull party on Wall Street may soon end? Or is it safe to assume the Fed can keep it up forever with their special brand of monetary viagra?

  23. “Bumble Bee Foods is preparing to file for bankruptcy within days over mounting legal expenses stemming from its involvement in a conspiracy to fix prices on canned tuna, according to people familiar with the matter.” —wsj

  24. I think that a lot of powerful forces converged in the 1990”s to change the USA. Some of the power brokers to change America were as follows,

    1, Wall Street, who was limited in how much profit they could make by the Glass Steagal Act.
    2 Corporations/Globalist, entities that wanted to make more money by gutting the American work force.
    3 Agenda 21 a Global plan of sustainable earth that wasn’t voted on by the people.
    4. One World Order. A plan not voted on with ideas that wouldn’t work considering the different nature of Countries.

    5, Communist plot to change USA to Communist Country by using the other power brokers to rig the system by the betrayal of American workers and systems that showed that regulated capitalism worked.

    None of the objectives of the power brokers were in the best interest of the actual citizens of the United States, especially the majority working class.

    Now you have a actual Political Party that wants to change this Country into a Communist Country because of the mess the other power brokers made.

    So, I don’t think working class America would of knowingly voted against their own interest but their self interest was being usurped by the power brokers that converged in the 1990”s. In the final analysis the Communist would over take the billionaires that they just used to weaken America by unfair wealth distribution, and the gutting of jobs.

      1. Well I was risking even making the post. But, if my theory is correct, than it becomes clear that the USA does need to be made Great again, but one has to understand how it got torn down .

        1. Also, anther Hallmark of the Communist was to take over the education system. This was done in a very gradual manner. The whole idea was to discredit capitalism and any attachment to Western c culture. It was to use race and idenity politics to manufacture a divide in the USA. Changing speech and the ability to speak, and now a major attempt to ban free speech is part of it. Taking the guns are also necessary to take any power away so the Communist can enter the last phases of forced takeover.
          I’m just saying that I would of not believed it was possible, but the evidence is getting a little overwhelming that this is the underlying agenda.

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