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A Real Problem Where Sellers Are Anchored To A Prior Market

A report from Mansion Global on Colorado. “The luxury real estate market in Aspen, Colorado, is coming off a poor third quarter. While prices dipped annually, they plummeted almost 20% on a quarterly basis, according to Douglas Elliman. In the luxury housing markets across the U.S., ‘the sense of urgency isn’t there,’ said Jonathan Miller, author of the report. ‘It’s a real problem where sellers are anchored to a prior market, there’s a lot of aspiration pricing that’s proving to be a drag on performance.’ And Aspen is no exception, he said.”

From The Leader News in Texas. “Price drops littered the figures in the most recent report from the Houston Assocation of Realtors (HAR). Home buyers in Garden Oaks, Oak Forest, Shepherd Park Plaza, and Candlelight Plaza were among the more aggressive September buyers according to HAR’s more recent report, showing a 28.6 percent uptick – from 42 to 54 – last month compared to September 2017.”

“Accompanying the rise in sales, however, was a price drop across the board. YOY average home price dipped 9 percent (down to $414,413), while median home prices were down to $370,000 in the area – about a 6.3 percent drop.”

From Mansion Global on California. “Los Angeles’s overall housing market has eased from the white hot sales and price growth recorded over the past two years. The cooling reflects a broad trend in the U.S. housing market, where home sales are still strong but declining, and inventory is rising, noted Jonathan Miller, chief executive of appraisal firm Miller Samuel.”

“‘The market is still moving very briskly, but you are seeing a noticeable slowdown in the pace of activity,’ Mr. Miller said.”

“That easing has been more pronounced among single-family homes. The median price of a luxury home in Los Angeles, defined as the top 10% of sales, fell 7.5% to $8.6 million in the third quarter compared to a year ago, while sales of such homes have slipped 16% over the past year.”

From Curbed Los Angeles in California. “The lime-stone clad mansion in Bel Air owned by the late TV executive Jerry Perenchio just got a price cut. But at $245 million, the commanding French neoclassical residence, which measures 25,000 square feet, is still the most expensive listing on the open market in the U.S.”

“The property, which came up for sale last year for a staggering $350 million, has long been the cream of the crop among high-end estates.”

This Post Has 36 Comments
  1. ‘It’s a real problem where sellers are anchored to a prior market, there’s a lot of aspiration pricing that’s proving to be a drag on performance.’

    I fail to see the problem. Simply refuse to deal with greedhead sellers and let gravity do its thing.

  2. ‘Price drops littered the figures in the most recent report from the Houston Assocation of Realtors’

    Wa? But all time highs? Shortages?

    1. Interesting but seems like another fly by night company that will suffer from ending up with a portfolio of homes that will crater along with the rest of the RE market and bankrupt them. A few years late IMO.

  3. “Los Angeles’s overall housing market has eased from the white hot sales and price growth recorded over the past two years. The cooling reflects a broad trend in the U.S. housing market, where home sales are still strong but declining, and inventory is rising, noted Jonathan Miller, chief executive of appraisal firm Miller Samuel.”

    “‘The market is still moving very briskly, but you are seeing a noticeable slowdown in the pace of activity,’ Mr. Miller said.”

    “That easing has been more pronounced among single-family homes. The median price of a luxury home in Los Angeles, defined as the top 10% of sales, fell 7.5% to $8.6 million in the third quarter compared to a year ago, while sales of such homes have slipped 16% over the past year.”

    Hey Miller-boy, stop makin these stupid contradictory statements. How can home sales be strong and declining at the same time. Very fast but slow? I guess that’s why you get paid the big bucks LOL. Oh, it seems like “easing” or price improvement has hit the high-end in LA. Can’t wait to see more easing in Q4. HAHAHHAHAHAHHA

  4. “But at $245 million, the commanding French neoclassical residence, which measures 25,000 square feet, is still the most expensive listing on the open market in the U.S.”

    “The property, which came up for sale last year for a staggering $350 million…”

    ((245/350) – 1)*100% = -30%. Nice haircut!

    1. See, that -30% is meaningless. At that level there are no comps. They could have listed it for $150 million and if it sold for $200 mil would you say it got a +33% bump?

        1. What docs are being subpoenaed and why? There has been discussions lately surrounding fake income statements coming from phony employers. Saw an enlightening article on Housing Wire on how Fannie is investigating and warning lenders. This could get pretty big and put lenders in the line of Fannie arbitrations. Check out for yourselves.

      1. Your point is taken, except that they must have believed that they would be able to find a buyer at the $350 million price. If not, why would they have bothered to list it so high?

          1. The super expensive house thing was right about the same time as the safe deposit box in the sky which grew into $100 million NYC condos bought by flippers. It fizzled. Here is an extreme example:

            “This Insane $500 Million Mansion is About to Be America’s Most Expensive Home for Sale”

            December 28, 2017

            “A massive mansion, known as “The One” and located in the same exclusive Los Angeles neighborhood, is expected to be listed with real estate firm Hilton & Hyland in mid-2018 for a jaw-dropping $500 million, according to the New York Times.”

            “When complete, the 100,000-square-foot estate will feature 20 bedrooms (including a 5,500-square-foot master suite), five elevators and seven pools, all perched on a hilltop with expansive views across the city. When the five-year construction wraps up this spring, the house will officially be one of the largest private homes in the country.”

            https://people.com/home/this-insane-500-million-mansion-is-about-to-be-americas-most-expensive-home/

          2. I can be as greedy as I choose when listing a shack, but if there are no willing buyers at my wishing price, it will be a complete waste of time for all concerned.

        1. Well you can cut it to 250M and the buyer will think he got a “bargain”. If I had 250M to spend on a house I sure wouldn’t live there.

          1. Nobody needs or wants a shack like that. The only reason it was conceived was for people who thought they would sell it for a huge profit.

            white el·e·phant
            /ˌ(h)wīd ˈeləfənt/
            noun
            noun: white elephant; plural noun: white elephants
            -a possession that is useless or troublesome, especially one that is expensive to maintain or difficult to dispose of.

    1. China stocks fall as weaker yuan hits sentiment; HK down

      SHANGHAI, Oct 26 (Reuters) – China shares fell on Friday morning in choppy trade as investor excitement over government support measures faded amid renewed weakness in the yuan.

      ** The CSI300 index ended the morning session down 1.04 percent at 3,161.20, while the Shanghai Composite Index lost 0.58 percent to 2,588.66.

      ** Hong Kong’s benchmark Hang Seng index dropped 1.41 percent.

      ** The Chinese stock markets jumped over 4 percent on Monday in response to a chorus of support from top government officials over the weekend, but have given up most of the gains. The CSI300 is currently up 0.84 percent for the week.

      ** “There’s still a lack of confidence, and the bearish mindset remains in place,” said Yang Hongxun, Shanghai-based analyst at investment consultancy Shandong Shenguang. He pointed to headwinds including a weaker yuan, volatile global markets, lingering concerns over pledged shares and domestic economic growth.

      ** The Chinese yuan continued its slide against the U.S. dollar on Friday, falling below the psychologically key level of 6.96 on the onshore spot market.

      ** The weaker yuan hit shares of airliners, as a strong greenback would increase value of liability of a sector burdened with heavy dollar borrowings. An index tracking the aviation sector fell 1.27 percent.

      ** The financial sector fell 1.52 percent on profit-taking after a strong rally in previous days, and as insurance giant China Life posted disappointing third-quarter results.

      ** China Life Insurance Co Ltd,, the country’s second-biggest insurer by market value, reported on Thursday a 76 percent plunge in quarterly net profit due to lower equity income in a volatile domestic stock market.

  5. Naz is going to take a dump tomorrow. This should only add to the pain in Seattle, Bay Area and Venice beach

    1. Eee-bola…

      Markets
      U.S. & Canada
      Market Snapshot
      U.S. stock futures under pressure after Amazon, Google disappoint
      By Barbara Kollmeyer
      Published: Oct 26, 2018 4:52 a.m. ET

      U.S. stocks were poised to come under pressure on Friday, threatening to give back some of the previous session’s rally in a week marked by sharp volatility that has pushed the major indexes in and out of negative territory for the year.

      How are major benchmarks faring?

      Dow Jones Industrial Average futures (YMZ8, -0.95%) were down 185 points, or 0.8%, to 24,690, while those for the S&P 500 index (ESZ8, -1.09%) fell 23.7 points, or 0.9%, to 2,664, and Nasdaq-100 futures NQZ8, (-1.61%) slid 94.25 points, or 1.4%, to 6,832.25.

    2. When the long-deferred financial reckoning day arrives and lays waste to the mark-to-fantasy valuations of the Tech Bubble 2.0 stocks, trillions of fake wealth is going to be wiped away from the portfolios of all those San Francisco and Silicon Valley tech workers, at the same time that Housing Bubble 2.0 is cratering. And yet their mortgage payments and debt will remain the same. Huh. That could get downright painful.

  6. I’m seeing a new trend pop up in Orange County listings. Low ball priced listings that agents are offering for auction to induce multiple offers or bids. How times have changed!

  7. Another day, another triple digit loss on the DOW. Luckily October is almost over, or this could be worrisome.

  8. Aspen, CO – “While prices dipped annually, they plummeted almost 20% on a quarterly basis, according to Douglas Elliman.”

    Maybe a small number of transactions distorted the data, because if true that would be huge news!!!!!!!!!!!! That would mean an appropriately 59% drop in prices if it continued for a year. (100*.8*.8*.8*.8)

    1. For that matter, 36 trading days of 2% drops on the NASDAQ such as those we have recently witnessed would halve its level (0.98^36 = 0.483213128).

  9. It almost seems like the stock market is not always going up anymore.

    uncertainty about the economy has rattled the stock market. The Dow Jones Industrial Average (DJIA, -0.96%), S&P 500 (SPX, -1.42%), and Nasdaq Composite Index (COMP, -1.93%) have had a rollercoaster few days as analysts and investors wonder whether the 9-year bull market, the longest since World War II, is finally coming to an end.

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