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Everybody Had The Same Idea At The Same Time

A report from Hawaii News Now. “While December went out with a bang, the median sales price for a single-family home in 2019 ― $789,000 ― was down .1% from the year before. It was the first decline in the annual median sales price on Oahu since 2012.”

The Bothell-Kenmore Reporter in Washington. “Reflecting on the last two years, John L. Scott Redmond broker Emma Mueller said buyers locally have raised the bar, which she doesn’t see changing in 2020, even if inventory tightens. ‘Sellers will have to adjust their expectations in preparing to sell their home — to compete, sellers will have to tackle deferred maintenance or even take on some larger home updating projects,’ said Mueller. ‘Even then, it may still take more than 30 days for sellers to get under contract. Luckily, I predict the continued possibility of contingent offers in 2020, particularly for luxury homes, which weren’t really available in the frenzied 2016 and 2017 markets.'”

The Boston Globe in Massachusetts. “There are growing signs that Boston’s long-running housing boom may soon start to run out of steam. Building permits for new housing in Boston fell by nearly one-quarter in 2019, city data show. At the same time, rents, while already high, aren’t increasing as fast as they were a few years ago. Together, the numbers and trends raise questions about how much longer this wave of construction can be sustained, even though more housing is desperately needed in the Boston area.”

“‘With all these things playing out, you’re putting the brakes on new development,’ said David Begelfer, a consultant who long led the real estate trade group NAIOP Massachusetts. ‘We’re basically reaching a ceiling right now.'”

“It’s a trend that Travis D’Amato, managing director at Walker & Dunlop, a Boston real estate firm, expects to continue in 2020. ‘This year is going to be a peak,’ D’Amato said. ‘If you’re looking at larger luxury buildings, this is going to be the highest year we’ve ever seen for new deliveries” of housing stock.'”

From New York 1. “The city’s skyline is always reaching higher, and now it’s undergoing its biggest transformations yet with six buildings sprouting higher than the Empire State Building in the last six years, and more are on the way. When searching the Council on Tall Buildings and Urban Habitat, NY1 found that developers are planning another five buildings taller than 1,300 feet. Real Estate Statistician Jonathan Miller says the building boom began with the financial crises of 2008.”

“‘It was the perfect storm,’ Miller tells NY1. ‘It was Wall Street hungry for higher returns, hedge funds, sovereign wealth funds, private lenders. So, capital was readily available and very inexpensive [and] looking for a home. Everybody had the same idea at the same time.'”

“Because so many new expensive apartments are coming to the market at the same time, it’s created a high end housing bubble. ‘At the end of the day, you’ve got to sell and, of course, we’re in a market that’s oversupplied,’ says Extell CEO Gary Barnett. ‘It softened, so we had to price this building a little more restrained.'”

“Prices are down 15 to 40 percent from the high in 2014 says Miller. ‘We’re looking at a housing stock that’s about 40 percent unsold.’ And of those that are sold, Miller explains, more than half are going to out-of-towners buying a second, third or fourth home, amplifying the anger of New Yorkers left in the shadows.”

From The Real Deal on Florida. “The partnership behind the Apeiron at the Jockey Club project is in tatters, amid allegations of double-crosses, a loan-to-own scheme and the sabotage of a $20 million deal, according to a recently filed lawsuit in Miami-Dade Circuit Court. Apeiron Holdings Miami and Apeiron Miami, two shell corporations controlled by developers Muyad ‘Mo’ Abbas and Michael Bedner, are suing partners Asaf Horesh, Zeev Segal and their company Jockey Segal Upland. The complaint also names Doron Arad and his company Pledger Trust Series 28 LLC as defendants.”

“Jason Koslowe, the attorney representing the Apeiron entities, said his clients faithfully managed the project’s development for five years, but Horesh, Segal and Arad are attempting to force them out without compensation. The ultra-modern 120-unit project would be built on 13 acres of common grounds at The Jockey Club, which already has three existing condo towers.”

“Robert Stok, the lawyer for Horesh, Segal, Arad and their companies, accused Abbas, Bedner and the Apeiron entities of allowing a $10 million loan to go into default and of putting the project in ‘terrible shape.’ In October, Jockey Segal Upland sued the Apeiron entities, Abbas and Bedner to block the sale and foreclose on the $10 million debt, which Arad acquired from the original lender, Romspen Mortgage Limited Partnership from Ontario, Canada.”

From Curbed Chicago in Illinois. “An ultra-opulent mansion on Lincoln Park’s Burling Street hit the market in late 2016 for $50 million, shattering the record for Chicago’s most expensive listing in the process. After three years and a $5 million price cut, the superlative single-family residence is still available. Insurance magnate Richard Parrillo and wife Michaela completed the home in 2010 and claimed to have sunk $65 million into acquiring the land and constructing the 25,000-square-foot limestone structure, which occupies more than eight standard-sized city lots.”

“In total, there are six bedrooms and 11 bathrooms. There’s a massive outdoor terrace, a secluded walled garden, and a reflecting pool. The interior decked out in custom stone, wood, gold leaf, and plaster details befitting a European palace. Even the driveway gravel was imported from France. If all of that sounds like your cup of tea, the Burling Street behemoth can be yours for a cool $45 million.”

From Palo Alto Online in California. “The residential real estate market in Palo Alto had an unprecedented strong run in the past 10 years. The median home price of all sold homes increased 2.4 times from $1.25 million in 2010 to $2.94 million in 2019, which translates to an average compound annual growth rate of more than 10%. However, there have been signs of the end of the upcycle, once in 2016, and most recently, a market that has been slowing since the spring of 2018.”

“The median price of all sold homes in Palo Alto of 2019 was $2.94 million, a 3.8% decline from 2018. The weakness is particularly reflected in the total transaction amount, which fell by 10% compared to a year ago. Homes also stayed on market 10 days longer than a year ago. It now takes an average of 29.2 days for a listed home to find its buyer. As sellers are still adjusting expectations, 2019 saw a 26% increase in price reduction. In fact, more than 23% of new listings had to lower their asking prices after being listed on the Multiple Listing Service.”

“There’ll be a healthy supply starting from the beginning of the year. There were 35 active listings in Palo Alto on Dec. 24, 2019. A large number — 61 listings — went off-market in the last quarter of 2019 and will most likely come back in early spring. There will also be fresh new listings, evident in the ‘coming-soon’ signs that began to pop up during the holidays from those anxious sellers.”

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This Post Has 111 Comments

  1. ‘Prices are down 15 to 40 percent from the high in 2014 says Miller’

    Who’s going to quibble over 25%?

    ‘We’re looking at a housing stock that’s about 40 percent unsold’

    NYC is fooked.

    2. Is NYC fooked? Or about to get unfooked?

      “Miller explains, more than half are going to out-of-towners buying a second, third or fourth home, amplifying the anger of New Yorkers left in the shadows.”

      There is a price point at which they will come out of the shadows. How long are they going to extend and pretend this time?

  2. ‘It was the perfect storm,’ Miller tells NY1. ‘It was Wall Street hungry for higher returns, hedge funds, sovereign wealth funds, private lenders. So, capital was readily available and very inexpensive [and] looking for a home. Everybody had the same idea at the same time’

    ‘Because so many new expensive apartments are coming to the market at the same time, it’s created a high end housing bubble. ‘At the end of the day, you’ve got to sell and, of course, we’re in a market that’s oversupplied’

    QE is deflationary.

    1. Everybody had the same idea at the same time

      Geniuses have different ideas than everyone else. What should we call people who have the same idea at the same time as everyone else but think they are geniuses?

      4. What makes this mad rush into pre-construction condos even nuttier is – we had just had a huge crash in the exact same market just a few years prior.

  3. Now we got multi-million $ foreclosures in Miami. But hey, there’s no bubble!

    ‘claimed to have sunk $65 million into acquiring the land and constructing the 25,000-square-foot limestone structure…Even the driveway gravel was imported from France’

    Jeebus…

    ‘the Burling Street behemoth can be yours for a cool $45 million’

    Now that’s an a$$-pounding to start the new year!

    1. “…Even the driveway gravel was imported from France…”

      Meanwhile, millions of Americans are sleeping on the streets with no hope of ever finding shelter again. Heckuva job, Obama, heckuva job.

  5. For several days I’ve been overloaded with CRE crater, but I get up and there’s even more crater! So I need to just drop everything and get another post out, maybe later today. But first I gotta go scout foreclosures before the auction tomorrow.

  7. Sticking with Klipsch … (Eye though only China $teals American technology? How unAmerican!, $hame, $hame!)

    Apple selling $onos without Alexa or Assistant as speaker company says Google and Amazon $tole patent$

    Zac Hall – Jan. 7th 2020 | 9to5Mac (dotcom)

    (Yeah, knot $uing Google & Amazon @ the $ame time is a brilliant legal $trategy)

    Sonos has had a busy transition into the new year. The wireless speaker maker’s recycling program turned problematic, its premium products saw a price increase, and today it sued Google and accused Amazon of stealing its patents. Apple has a small role in the latest Sonos story too.

    The gi$t of the argument against Amazon in principal and Google in court, according to Sonos, is that the two competitors abu$ed early acce$$ to Sonos wireless speaker blueprint$.

    Sonos says Google and Amazon required this access to integrate their music services before each company started competing with their own wireless music speakers. Sonos is only suing Google, however, as it believes it can’t handle two major lawsuits due to its size.

    The litigation and accusation are especially awkward because Amazon and Google integrate with newer Sonos speakers to provide voice control. It’s easy to imagine either company pulling their integration in the future as a consequence.

    (Geez $ono$, gue$$ they see harm$ in “recycle$, reu$e, re.pupo$e,”)

    https://news.ycombinator.com/item?id=21895086

    $olutions abound!

    Be patriotic: Buy American made audio

    The Audiophiliac assembled this far from complete list of made in the US audio products

    Like most manufactured goods you buy today, the majority of electronics are made outside the United States. But when it comes to home audio equipment — headphones, speakers, amplifiers, turntables, phono cartridges, etc — a lot of the very best gear is produced here in the good old USA.

    https://www.cnet.com/news/be-patriotic-buy-american-made-audio/

  8. I’ve had some time to think about it, and that cultural roasting of Hollywood at the Golden Globes may have more significance than it first seemed.

    2. Maybe more people are open to hearing it now. I loved this fifth hosting but he’s whipped them pretty well in the past:

      RG on the Golden Globes:
      2010, 2011, 2012: youtube.com/watch?v=mXQShfw0EKg
      2016: youtube.com/watch?v=j71bDdVbjp4

      Many think that just because he’s contemptuous of HW stars he must be a Trump fan; he’s not.
      Ricky Gervais’ Hilarious Put-Down To Donald Trump – LBC • Mar 2, 2018 – youtube.com/watch?v=EVLdT_ySoDg

      I read more people have seen the yt videos of the monologue than actually watched the show. It’s true, I’ve never watched it and always waited to see recaps of his bits the next day.

      1. I don’t honestly even know what the “Golden Globes” are. I’ve heard of the Oscars, that’s it.

        1. “I don’t honestly even know what the “Golden Globes” are.”

          +1

          Until Ben’s post yesterday I didn’t know what it was either.

          2. I liked The Office (Gervais’ original version) much better than the American one. If anyone’s interested Afterlife, Derek and Extras are good, too.

        2. It’s an industry trade show for Hollywood. Personally I would rather watch the North American Copper Wire Manufacturers trade show.

    4. significance

      Truth bombs couched as humor. It’s why I posted Trump’s roast of HRC at the Al Smith dinner. Same thing.

    5. I’ve had some time to think about it, and that cultural roasting of Hollywood at the Golden Globes may have more significance than it first seemed.

      Why is that? It seems like we’ve had these sorts of moments before. Everybody laughs uncomfortably and makes a mental note to never hire that guy again and everyone moves on. What makes this different? The level of Epstein skepticism?

      2. Gervais publicly acknowledged Hollywood’s open secret: pedophilia. Audience of perverts. Friends of Epstein and flyers on Lolita Express. Scorsese at theme parks but too short for rides. DeCaprio’s aging movie date.

    6. Here’s his 2016 monologue, which he opens with, “Shut up, you disgusting, pill-popping, sexual deviant scum.” Note the cuts to Harvey Weinstein in the audience later.

      https://m.youtube.com/watch?v=MwuyvToXxbc

      So open contempt for Hollywood has been his schtick for a while. Rather like Family Guy pointing out the worst #MeToo offenders long before there was a movement against them.

    8. There is also some significance that the big movies coming out of Woke Hollywood have not been doing very well at the box office in the past 3-4 years. The execs commandeered some of the big franchises (Marvel, Star Wars, Terminator, Ghostbusters) and injected woke into them. Sure, the bigger movies made money off the goodwill of the established fanbases, but those franchises are pretty much over now. Hollywood has nowhere to go from here. They know that wokeness can’t make money on its own.

      2. I read that movie theater chains are VERY worried about 2020, as there are few blockbusters in the pipeline, and those movies are what earn them their bread and butter. Everything else plays to mostly empty theaters.

  9. Fascinating that Palo Alto saw about 10% annual appreciation while Salt Lake City also saw the exact same 10% annual appreciation in the previous decade. Almost like it was engineered purposely.

    But location, location, location…

    1. It’s the poster child of our era, a tiny car company that is the most valuable, despite long term results of losing $50K on every $50K vehicle it sells to the tune of $1 Billion per year.

    2. Claim yer coupon opportunitie$!

      (The $hort$ter$ have per$onally pocketed $8 Billion$ in lo$$ deduction$ thus far.)

      1. Powering up their Teslas with Peleton treadmills. Haven’t seen OAM lately… hope all is well with him and his fam

  11. “Prices are down 15 to 40 percent from the high in 2014 says Miller. ‘We’re looking at a housing stock that’s about 40 percent unsold.’ And of those that are sold, Miller explains, more than half are going to out-of-towners buying a second, third or fourth home, amplifying the anger of New Yorkers left in the shadows.”

    How could this be? People buying 20 – 40 millions vacation homes that they visit once or twice a year. Wouldn’t it be better to rent a hotel or Airbnb?

    1. It’s cheaper to buy your own vacation house and earn equity. Why pay for an AirBnB mortgage when you can build your own wealth instead!

      1. I’m assuming the house was passed from one family member to another, and a cost of the house of $1 was stated in the paperwork the purpose of transferring the title.

        It’s just bizarre to see it on Zillow, and especially in this zip code.

  13. New and interesting Poway property on the market today. Pictures are from the 2008 listing but I could use some input on the topography and pool. The stairs down from the street look really steep. The pool is spectacular conceptually but what about practically? Neither my husband nor I have ever had a pool. Is this too big and/or will it be a PITA to maintain?

    https://www.realtor.com/realestateandhomes-detail/13635-Antelope-Sta_Poway_CA_92064_M17619-64474?view=qv

    1. https://www.zillow.com/homedetails/13635-Antelope-Sta-Poway-CA-92064/16748566_zpid/

      Date Event Price
      1/6/2020 Listed for sale $1,525,000(+7%)
      12/7/2011 Listing removed $1,425,000
      8/5/2010 Listed for sale $1,425,000(+14%)
      12/5/2008 Sold $1,250,000(-25.6%)
      11/14/2007 Listing removed $1,679,000
      6/17/2007 Price change $1,679,000(-6.7%)
      4/15/2007 Listed for sale $1,799,000(+6.8%)
      4/12/2006 Sold $1,685,000(+56.7%)
      4/21/2003 Sold $1,075,000(+12.6%)
      5/16/2000 Sold $955,000(+46.9%)
      11/6/1998 Sold $650,000

        1. I’m hoping rms can opine from a civil engineer’s standpoint and at least Spiffy from a homeowner’s standpoint.

          1. My cursory observation:

            Your domestic water supply is up on the hill due east on the other side of Butterfield Trail, and it’s likely very expensive as electric power is used to pump that water uphill. There’s probably a special utility district for that area.

            That property looks like a great place to host parties, but too high maintenance for family living. It would occupy several workers for a full day every two weeks just to manage the landscaping. I imagine the foliage quickly turns brown up there every summer; fire danger?

            The swimming pool would be an expensive chemical hog to keep the algae away, and a nightmare keeping unsupervised children away from it; think Bode and Morgan Miller. A membership at that local swim and racket club house might come with the hefty golf course HOA dues, and think of the eye candy?

            Even if you got the place as a gift it would clean-out your bank account in up-keep expenses, IMHO.

          2. I appreciate the observations. It appears to be pending despite not allowing showings until 1/13.

          1. You want to pay

            I’m not paying. I’m exchanging (1031-style). Everything is inflated.

          2. I’m working with existing assets in the best interests of my almost 10yo autistic son.

          3. I’m exchanging

            Just curious as I’ve never had such an inheritance, what percentage of the amount is being conserved by doing an exchange rather than a liquidation? Is it more than 50%?

          4. Oh, and pools are always a PITA. I’ve had several homes with a pool. The only time it was justified was when I had teenage daughters. The party was at my house and under my eyes.

          5. I’d be apprehensive of the pool’s liability impact to the insurance policy, and also not sure I’d want to have to deal with the maintenance (mainly because of where I live). But I’m certain you’ve researched all of this thoroughly already.

          6. A 1031 exchange requires equal liability and equity (minus transaction costs). Anything considered as “boot” is taxed at 27%.

          7. you’ve researched all of this thoroughly already

            I know nothing about pool maintenance! I’m delegating that research and responsibility to my husband. 😉

          8. Doesn’t a 1031 exchange only apply to investment property, not primary residence? None of these large, maintenance-intensive, high-tax basis single family homes look like a good rental property.

          9. investment property

            The property is in a generation-skip trust. Technically, we’re the renters.

      2. 4/12/2006 Sold $1,685,000

        Red, Its $160k lower than last peak price. I dont see that often up here. Kinda my main pain point of stubbornness of why im not buying now even though i have the means. You researched and know what your doing with the exchange. Seems like a good shelter if this is the place where you and your fam want to be for many years. PS The pool is rad! Oh, double PS, realtors are liars

      3. Looks like the 4/12/2006 buyer caught himself a falling knife. Still can’t sell for even less than they paid, 13 years later.

    2. This made me think of a Jay Leno monologue joke he made during a prior recession. He said things were to tough that his pool guy had to fire his pool guy.

      1. It’s admittedly a bit over the top but my almost 10yo autistic son benefits from the sensory input and exercise in a pool. He would LOVE that swim up bar! He’s also unlikely to be moving out any time soon. I don’t intend on moving again after this 1031 exchange.

        1. Poway. I lived there for a year too hot while the Ocean is so close. For that money I would go closer to the coast just my 2cents. What about the enormous bond Poway has due sometime in the future ?
          That bond comes due who do you think is going to pay for it ?

          1. I’m selling a property W of I-5 in Encinitas. This is what I get transferring equity inland, which is where we need to be for at least 10 more years.

            Professor Bear previously did some math regarding the bond. Other areas have their own warts.

    1. LOLZ when gas hits $4 again the consumer economy evaporates.

      But Pigmen gotta PIG.

      “This sucker could go down” — George W. Bush, 2008

      1. Good thing everybody went out and bought all those gas guzzling full size trucks and SUVs. LMFAO.

        2. And the knuckleheads who run the major auto companies have decided to axe their car lines to focus on trucks and SUVs at exactly the wrong time. I’m shocked, shocked I tell you.

      2. After a wild ride oil prices are down a $1 a barrel. Oil traders seem to be betting on the shortest war ever. If Trump does not retaliate and it stops look for expert after expert on MSNBC to say it was a mistake. Right now, we have killed Iran’s second most powerful man and premier military strategist and terrorist handler. They have blown up some desert. I am good with ending the war here.

    2. Like the oil market, I am still trying to figure out whether it is Iranian ineptitude or they are looking for an offramp. So far pictures are showing they hit the desert around the bases and not the actual bases. Also wonder if Iranian defenses got trigger Happy and shot down the Ukrainian plane.

      1. Heard a military officer on NPR and he reminded me of Iran’s missile attack on the Kurds whick was done with precision. I am leaning to deliberate desert targeting unless we intercepted all the accurate missiles. If not, let Iran use the offramp. We stopped the escalating Iranian attacks for now. It was shoot down our drone, attack Saudi Arabia and then attack our embassy. It was not difficult to see that kill Americans was next. Trump did something Iran never expected and for now the Iranians seem to want to deescalate. Let them.

  16. Aren’t you glad you worked hard all your life?

    Here’s a Look Inside LA’s New $600,000 to $700,000 Condos for the Homeless – By Victoria Taft January 7, 2020

    Sure, most of us can’t afford a $600,000 condo in a trendy neighborhood, in one of the most expensive places to live in the country. But if you’re homeless in Los Angeles, a condo can be yours!

    The new condo development is the first of 118 projects to be built over the next six years to house the homeless and other needy people in Los Angeles, California, according to the mayor’s office.

    pjmedia.com/trending/heres-a-look-inside-las-new-600000-to-700000-condos-for-the-homeless/

    2. Meanwhile, more bums will head out to Clownifornia, and leaders there will be perplexed as to why that is happening.

    2. The only student loan forgiveness I support is some kind of conversion to very low interest. Yes, students should pay their principle. But with the interest rates, some student balances are increasing instead of decreasing even after paying hundreds a dollars each month. Maybe that’s a compromise. If you declare BK you can discharge the interest on the loans. But principle lives with you for life. How’s that sound?

      1. Sounds very reasonable to me. The big banks were allowed to borrow at .25 percent for around a decade. Interest rates at say the ten year US bond do not sound unfair.

      3. Nobody put a gun to these students’ heads forcing them to sign for these loans.

        Wage garnishment, and possibly debtors’ prisons, are a better idea.

        None of the “real journalists” report where the real bloat in higher education is: administration.

        I was a GRA for four semesters during grad school so I have witnessed this firsthand.

        1. and possibly debtors’ prisons, are a better idea.

          Doesn’t it cost $60K a year to house an inmate?

      4. How’s that sound?

        Honestly it sounds like masking the symptoms of a problem rather than addressing the problem itself.

        1. The problem is both economic and political. While I can certainly see the argument that government should have no role, they should just pay that money back politically the absolute position will not fly and economically it will delay having children, starting businesses etc which hurts economic growth. That is why we have had bankruptcy laws and not debtor’s prisons in this country. Too harsh of a punishment for stupid economic decisions can hurt everyone. Thus a balance must be struck between avoiding moral hazard and draconian punishments which hurts everyone. Oxide’s proposal does achieve a balance. I do think that the government must undue the changes done by Obama and make student loans more difficult to obtain as any fix but Oxide’s proposal is sound.

    1. From the story’s cover photo: “Houses with property tax over $10,000 getting harder to sell: Tax consultant”

      In other words, you don’t retire in your family home after busting ‘yer ballz paying off the mortgage in full. Indentured servitude?

      1. “Houses with property tax over $10,000 getting harder to sell: Tax consultant”

        Duh! Don’t need a tax consultant to know that.

    1. construction is even more shoddy

      Building collapse? Down in the article it says:

      “The company, which hopes to become an electric-car powerhouse and take on the likes of Tesla in China, said the accident resulted from the collapse of scaffolding at the construction site.”

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