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We Were Spoiled Before

A report from the Orlando Business Journal in Florida. “After years of competitive bidding wars and rising prices, a new data analysis from Zillow shows it might finally be a good time to buy a home in many U.S. markets — especially in Orlando. Zillow researchers looked at three factors to determine which of the largest housing markets are becoming more buyer-friendly: an increase in the share of listings with a price cut; projected increase in rent appreciation over the next year; and affordability relative to the past.”

“‘The housing market always lets up a little in the fall, when kids are back in school and the home shopping season wraps up for the holidays,’ said Zillow Senior Economist Aaron Terrazas. ‘But this fall and winter are shaping up to be more favorable for those buyers who have struggled to get into the housing market for several years amid red-hot competition.'”

“Here in Orlando, there are 6.8 percent more listings with a price cut compared to last year.”

The Mountain View Voice in California. “The Midpeninsula remains one of the most expensive and least-accessible rental housing markets in the nation, but it has slowed down and cooled off a bit in 2018.”

“‘We did start to see changes in the market last year,’ said David Hunt, operations manager for WA Krauss & Co. Inc., a Sunnyvale-based residential property management company handling 450 properties in Santa Clara and San Mateo counties. His company’s portfolio includes single-family homes, condominiums and town homes. ‘We were spoiled before. Houses were renting within days at any price. Today, it’s taking a lot longer. Two or three months, in some cases. People are just not moving as much.'”

“Unless a property is already well under market rate, Hunt said his company has stopped increasing rents in its inventory of residential units. ‘In a few cases, we are even lowering rents if landlords really need to get a property rented,’ he said.”

“Kimm Terpening, real estate agent in the Menlo Park office of Coldwell Banker who handles both for-sale and rental properties in cities from Burlingame to Mountain View, agrees that residential rental inventory is plentiful this year.”

“When rent levels are determined by his company, Hunt said, owners’ expenses aren’t really considered. ‘It doesn’t matter what expenses a property owner may have, a tenant will be charged a rent the local market will bear,’ Hunt said. ‘Of course, we are trying to maximize income for a property owner, but if their expenses are high, that does not have an impact on the amount of rent charged.'”

“‘If you have a single-family home on the market, the demand is still strong,’ said Len Robinson, president of Menlo Park-based Robinson & Co. Realtors. ‘Rents have increased substantially in some places, but very little in others. Some rentals draw 10 applications, others can’t make the phone ring.'”

This Post Has 71 Comments
  1. ‘Here in Orlando, there are 6.8 percent more listings with a price cut compared to last year’

    Eeee-bola Orlandooo!

  2. Oh, Oxide…

    ‘It doesn’t matter what expenses a property owner may have, a tenant will be charged a rent the local market will bear…Of course, we are trying to maximize income for a property owner, but if their expenses are high, that does not have an impact on the amount of rent charged’

    Translation = some of these guys are losing money every month.

    DONG!

  3. ‘We were spoiled before. Houses were renting within days at any price’

    Sign of a bubble: ridiculous pricing statements.

    ‘Today, it’s taking a lot longer. Two or three months, in some cases’

    And these bozos charge 7% to have a shack empty for months? Price might be too high Dave.

  4. I just got another email:

    Broker’s Open | Price Reduced!

    Madison Park

    5 BED | 4 BATH | 4400 SF | $2,350,000

    2311 42nd Ave E | Seattle, WA 98112

    I looked it up:

    https://www.zillow.com/homedetails/2311-42nd-Ave-E-Seattle-WA-98112/48937091_zpid/

    $2,350,000
    Price cut: -$145,000 (10/26)
    Zestimate®: $2,544,684

    Date Event Price $/sqft
    10/26/2018 Price change $2,350,000 -5.8% $534
    8/14/2018 Price change $2,495,000 -5.8% $567
    5/30/2018 Listed for sale $2,650,000 +1380.4% $602
    12/15/1992 Sold $179,000 — $41

    Says built in 2003.

      1. The “E” stands for “East”.

        Here’s a similar address: The “NE” stands for “West” (just kidding).

        4311 4TH AVE NE , BRADENTON, FL 34208-5407

        1. Shouldn’t the E be before the address and marked with punctuation to indicate it’s an abbreviation? Seems like a lot of mail will get lost.

          1. Mail doesn’t get lost if everybody in town has been using the same shorthand for a couple of centuries. We’ve got Main, N Main and S Main, Separated by North St and South St. We don’t need no punctuation.

          2. No. The address is correct. As the commenter above referenced, an address like 2424 24th street E. Means 2424 24th street East. This means it is 24 city blocks east of a central avenue. In these systems, there may also be a 2424 24th street west. This will be a property 24 blocks west of a central avenue. Those 2 properties will be 48 city blocks away from each other. He mentioned a Bradenton address. Manatee County’s older streets and avenues are numbered. I lived in Manatee County for 19 years and quite,like the numbered street system. When you go into a neighboring town the direction of streets and avenues are reversed. In Bradenton, streets run north and south, avenues run east and west. In neighboring Palmetto, these are reversed. Does make it easy to find destinations without maps or GPS. Some towns do put the directional before the street name.

            In Sarasota there is only 1 set of numbered streets, no directionals

            Hope this helps

      2. Sure thing, Ben. The position of the E (vs N, S, W, NW, SW, NE, SE, etc) actually helps differentiate mistaken St. vs Ave designations.

        In Seattle, which is based on a grid system, the directional designation normally follows the Ave, and precedes a St name.

        For example, I’ve lived on an XX Ave NE, and a NW XXX St.

        1. That was my thought. Although once you understand that Brigham Young brilliantly laid out every Deseret settlement plan as a Cartesian grid, it suddenly makes sense.

          1. Interesting. I live in Utah and I’ve always enjoyed how I don’t have to know the name of every street in a city to figure out which direction to go. Once you know state street (or main street) and center street you have your X and Y axis. Then it’s just north/south or east west. A nearby address is 300 South 1200 East, or 3 blocks from Tabernacle street and 12 blocks from Main Street. Easy peasy!

  5. it might finally be a good time to buy a home in many U.S. markets

    So we’re already to “yes, there was a bubble but now it’s popped and we’re near the bottom and you can’t time the market anyway”.

  6. I’ve been getting some interesting mail lately that I should probably put up to share on imgur.

    One was a super fancy brochure for a new high end condo tower downtown. Really? Sending to someone who just purchased something else? Spending more on fancy printing than on postage to blanket blast the area I assume… smells like desperation.

    The other was “Coldwell Banker Bain ‘Real Estate Guide’ for Mercer Island. Now, remember that is from a realtwhore(tm) – Inside the front cover are three large charts that fill the entire page, showing 2015 through 2018 activity… I wonder if anyone proofread because they clearly show: *

    1) Listings are at a new high
    2) Pending Listings are at a new low
    3) Sold Listings are at a new low

    * Seasonal/Monthly highs/lows, activity does dip in the middle of winter, but the trend lines are clear.

    Next page .. hmm.. a lot of fancy words to obscure the bad news.. oh but then they do say:

    “Buyers have taken a ‘wait and see’ approach to the market and are unwilling to pay over list price or EVEN MAKE AN OFFER on properties they and their brokers deem ‘overpriced'” (blah, blah, adjust your expectations seller)

    Wait.. what happened to “Sell now! Buyers will bid over list and write letters promising to feed the squirrels?”

    * Yes, I’m doing fine. I can still have fun enjoying the decline though.

    1. Yet another sign that it’s getting harder to make a sale for them realturds. The statements like the “wait and see” are all pedaled by there commander and chief mr Yun. The realtors don’t want to accept that we are in a shifting market and possibly one that could be a greater shift than any of us have experienced. I posted one of these mailers received recently that stated it’s a great time to buy and to sell… 🤔. I don’t think many realtors have much common sense or schooling.

      1. You know in the end, realtors starve if there are no transactions. So on the way down once they figure it out, they will be your best ally in beating the seller into submission (or to accept the new reality).

    2. Of course you’re doing fine – right now. But how will you be doing in a year from now if your house is worth 15% less, or worse? Or how about in 2 years if it has declined 25% in value? How will you be doing in 3 years if it has fallen 40%? Would you have still chosen to purchase that house if those declines are in store and you knew it beforehand?

      1. if those declines are in store and you knew it beforehand?

        Of course no one really knows that, so we have to make our best guess based on the information in front of us.

        The fed may very well step in to try to put a floor under housing like they did last time around. If that happens, your “sure” 40% price drop very well may not materialize.

        1. “The fed may very well step in to try to put a floor under housing like they did last time around.”

          Democrats were firmly in control. Do you expect a Republican Fed to do the same kind of market intervention?

          1. Do you expect a Republican Fed to do the same kind of market intervention?

            Honestly, yes. I don’t read the Fed as political, so much as seeking to benefit the banksters. The preferred action then is independent of who holds congress or sits in the white house.

          2. Point taken. Runways must be foamed regardless of which direction the political winds are blowing.

        2. “…your “sure” 40% price drop…”

          Where did I say “sure?” I didn’t. However, regardless of the Fed’s efforts to “put a floor” under house prices last time, they did indeed drop 40%+ in many areas.

          1. See also “Decision Making Under Uncertainty: Theory and Application” MIT Press.

            One application: buying houses when they are 6-10x median income instead of 2x-3x is certain to lock you into debt. Better to wait and see. There are certain demographic trends happening, independent of the Fed, like the wave of baby boomers aging and the younger millenials having way fewer children (America’s birthrate at all time low). Any ideas what this will do to housing demand? Also, what about full-self driving taxis coming, or already here in Arizona. Why pay nosebleed prices to live in an urban crime area?

        3. A 40% correction is just a drop in the bucket this time around. Think about it…. Prices need to decline 65%-85% just to get back to long term historic trend.

      2. But how will you be doing in a year from now if your house is worth (blah) less

        I’ll be fine…

        I mean, it’s a really weird and unconventional concept we tried – buying a house to gasplive in for a long time…

        We’re staying put for a decade at minimum due to kids and exs (proximity clause in decree), and we’re dead center in one of the best areas job-wise in the country for our respective careers.

        Given that, what the market does over the next 2, 3, 5 or more years isn’t going to impact us directly in any meaningful way.

        I know, I know.. it’s soooo old fashioned to be be thinking long-term and not thinking of our home as “a fiscal investment vehicle”.

        1. buying a house

          …at the top of the biggest bubble in history. The amount of time you’ll be there isn’t relevant, except as a reminder.

  7. ‘We were spoiled before. Houses were renting within days at any price. Today, it’s taking a lot longer. Two or three months, in some cases. People are just not moving as much.’”

    Very reminiscent to the 2000 timeframe here in the Bay Area. I am watching huge housing development projects pop up and then seeing signs at current developments offering free first month or many months rent. I have a friend whom works for a developer that just completed one of these projects and I asked him if they are rented, he said they are only a handful of tenants with hundreds still empty over a month after opening. Doesn’t seem to me that the demand is really there. I have this “dotcom bubble” feeling when I am over in sillycon valley driving to meetings. Not sure how they are gonna fill all these new developments once completed…

  8. The Zillow guy commenting on Florida real estate is an idiot. Anyone who knows out state knows that summer is the slow season. Beginning about November 1, the yearly snowbird exodus arrives. Restaurants reopen, retail makes their nut, and real estate sales usually skyrocket. Populations of our better counties frequently double until about April when they all go home. Maybe Orlando has a slightly different dynamic. Do not study that area. Since summer sales are typically anemic, if sales drop in the next couple of months or even do not increase appreciably, then it’s game over. My guess is that there will be some increase but a year from now will be hiroshima. It is a slow progression.

    G-night

  9. Ebola has infected Wall Street, with the worst yet to come! Sell now, or get priced in forever.

    Monday’s nasty stock-market reversal is evidence that the worst is far from over for Wall Street
    By Mark DeCambre
    Published: Oct 29, 2018 4:49 p.m. ET
    Dow industrials turn 352-point gain to a more than 300-point loss intraday Monday

    Major drivers of market sentiment like the popular technology and internet-related constituents of FANG, including Facebook Inc. (FB, -2.26%), Amazon.com Inc. (AMZN, -6.33%), Neflix Inc. (NFLX, -5.00%), and Google-parent Alphabet Inc. (GOOGL, -4.52%) were still under pressure.

    Shares of Amazon.com were on pace to enter bear-market territory, down by at least 20% from a recent peak, underscoring the notion that the uptrend has come to a screeching halt, especially if shares of the most influential companies over the past 18 months are turning decidedly lower.

    On top of that, the average stock in the S&P 500 has fallen by at least 20%.

    Those factors, and many others, have given investors cause to believe that the worst is far from over for equities, even if Monday has demonstrated some signs of buoyancy.

    “As for the very near term, it’s hard to see a sustained rally for the next few weeks,” wrote Stephen Auth, chief investment officer at Federated, in an Oct. 25 research note.

    1. Business News
      October 29, 2018 / 6:35 PM / Updated an hour ago
      Asian stocks fragile as U.S.-China trade tensions escalate
      Tomo Uetake

      TOKYO (Reuters) – Asian shares came under pressure on Tuesday with Chinese markets and the yuan falling, hurt by fresh worries about the intensifying Sino-U.S. trade war and tracking losses in Wall Street indexes.

      MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.3 percent. The index has declined more than 12 percent this month and is on track for its biggest October decline since 2008, the year of the global financial crisis.

      Shanghai shares fell 0.6 percent in early trade while Japan’s Nikkei average rose 0.7 percent, clawing back earlier losses in a volatile session.

      Major U.S. indices fell steeply after a Bloomberg report that the United States is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between presidents Donald Trump and Xi Jinping falter.

      The CBOE Global Markets volatility index, known as Wall Street’s “fear gauge”, jumped to as much as 27.86 points, its highest since Oct. 11 and the second highest since the volatility shock of early February.

      “The probability of global stocks turning to a bear market is increasing,” said Masanari Takada, cross-assets strategist at Nomura Securities.

      “While some investors who look at fundamentals buy stocks on dips, there are other players who keep selling automatically in response to heightened volatility. Buyers will be overwhelmed if we have negative headlines on tariffs at time like this.”

      1. In this November 9, 2017, file photo, US President Donald Trump, right, chats with Chinese President Xi Jinping during a welcome ceremony at the Great Hall of the People in Beijing. Photo: AP
        Politics
        US poised to extend tariffs to all Chinese imports if Trump-Xi meeting fails, hitting another US$260 billion in products
        – The tariffs would be announced in December and go into effect around the Lunar New Year in February, sources say
        – Donald Trump and Xi Jinping are set to meet on the sidelines of a Group of 20 summit in Buenos Aires…
        Bloomberg Bloomberg UPDATED : Tuesday, 30 Oct 2018, 8:53AM

    1. I just remembered something.

      Before the 2016 election, someone here on HBB posted an interesting theory. Basically, TPTB were planning to pop the bubble(s) during the Trump administration, so he could be the fall guy.

    2. “Is today’s market volatility setting up an election year rally in 2020?”
      If President Trump can continue to shore up our economy with actual fundamental building blocks it may take some of the sting out of the global QE meltdown. So maybe. Though PE ratios are still at free money mania levels. Interested to see what happens after midterms.

    3. Is today’s market volatility setting up an election year rally in 2020?

      If we could take a big step down now and then bottom in early 2020 I would definitely expect to see “Morning In America” commercials by November of 2020. But I don’t expect it to work nearly that cleanly. But now that I think about it, for the flyover people that Trump has managed to help a little, it’s an easy sale already. And they won’t care who loses money in the stock market.

  10. Where are you hiding your liquid assets (stocks, bonds, cryptocurrency, etc.) that you dumped during this risk-off correction?

    Sadly, homeowners are stuck riding the storm out and eating their losses, as houses are lumpy, overleveraged, and illiquid.

      1. Tsk, tsk…

        “What bothers me most is that some of the previous biggest gainers are trailing badly, while economically sensitive sectors have sold off dramatically, and bellwether home builders’ stocks are already deep in a bear market.

    1. If self-driving can’t lead to lower priced home building because of more feasible construction on lower priced lands, then RVs are the next best option for affordable homes. Not ideal, but maybe realistic in stupid house price era.

    2. That’s a pretty cool vintage camper and looks like a hell of a restoration job.

      On a mainstream note, I am of a similar mind with OneAgainstMany regarding RV’s as an increasingly popular option for people.

      What I’ve found is that since about ~2000, the invention and widespread adoption of slide-outs has changed the game big time and made many RVs/5th wheels/etc much more viable for full-timing.

      I’ve toyed with the idea of getting one myself and living+working for a few months at a time out of it in various remote locales, and have metaphorically kicked the tires at a few local RV/5th wheel dealers. When I was a kid, my uncle had an RV and we had some cool trips in it, but what he had doesn’t hold a candle to what you can get today.

      1. RVs are the next best option for affordable homes

        I don’t consider an RV to be an acceptable substitute for a real house. BUT, if things were to get messy enough that I could afford a house but not the taxes then it becomes the obvious solution to ride that particular storm out.

        1. I agree that an RV isn’t an ideal situation. It is a substitute housing good. Every month one of the tenants where I work who is a skilled carpenter struggles to make his monthly payment. He incurs late fees and he’s single. He does piece work on high end cabinetry in Park City, UT, where the mega rich play and film festival patrons reside. He is enriching someone, but not himself. This guy is an expert craftsman from what I can see, but he doesn’t get ahead financially because of housing.

          Book on my reading list: Nomadland: Surviving America in the 21st Century. It’s all about RV living not as vacationing, but a conscious choice due to high housing costs.

          1. RV life notably does not work for families with small children. Could work for singles, couples, and the elderly.

          2. OK, but my point about taxes is separate from what is livable and what it not. It’s the only way to dodge taxes if there is no choice.

          3. RV life notably does not work for families with small children

            I think that might be only an armchair conclusion.

            I know more about Boaters which is arguably less convenient than RVing maybe. I’ve known or read the stories of folks who raised ankle biters on 30 footers. No slide-outs on those things. Not everyone has the same idea of what’s a necessity.

          1. I’ve vacationed in an RV and owned a mobile home in the past. I have not tried to live in an RV full time. I could definitely do it, but still don’t consider it an acceptable substitute. If you’re going to live in one it should be because you want to. Not because you have to.

      1. The article fails to bring this up, but the monthly changes are flatlined or negative compared to sizable year-on-year gains, suggesting that price appreciation has lurched to a standstill:

        Metro area Monthly change 12-month change
        Atlanta 0.3% 5.8%
        Boston 0.1% 5.5%
        Charlotte 0.2% 5.2%
        Chicago 0.2% 2.9%
        Cleveland 0.5% 5.6%
        Dallas 0.0% 4.7%
        Denver 0.0% 7.7%
        Detroit 0.5% 6.0%
        Las Vegas 1.2% 13.9%
        Los Angeles 0.1% 6.2%
        Miami 0.1% 5.0%
        Minneapolis 0.3% 6.0%
        New York 0.0% 2.8%
        Phoenix 0.4% 7.0%
        Portland -0.1% 5.4%
        San Diego -0.5% 4.8%
        San Francisco -0.3% 10.6%
        Seattle -1.6% 9.6%
        Tampa 0.5% 7.0%
        Washington 0.0% 2.8%

  11. “Where are you hiding your liquid assets (stocks, bonds, cryptocurrency, etc.) that you dumped during this risk-off correction?”

    Cash. Short term CD, Money market.

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