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How Desperate Are Your Sellers And Can My Buyers Steal The House?

A report from ABC 10 in California. “There was a dip in the market, because of the unknown. But things are changing. The number of pending sales and listings in the Sacramento region is actually increasing, according to appraiser Ryan Lundquist. If you’re interested in selling, especially during pandemic, be prepared for price changes, said Tim Collom, of the Tim Collom Realtor Group. ‘We’ve seen anywhere from a 5 to 10% dip in values of what things are actually selling for compared to the comps three to four months ago,’ Collom said.”

From Realtor.com on California. “Formerly known as Opus, an ultra-luxe Beverly Hills estate has changed its tune. Now renamed 1175 Billionaires’ Row, the property, which was once on the market for as much as $100 million, is back on sale for just under $60 million. Last year, priced at $68 million and still known as Opus, it topped our weekly look at the priciest properties in the country. But earlier this year, the home changed ownership. It went from real estate developer Nile Niami to Joseph Englanoff, a lender on Niami’s portfolio, the Wall Street Journal reported. With the change in ownership came a new strategy to drive a successful sale.”

The Maryland Reporter. “Each week, John Peters does yard work for neighbors, shuttles friends to doctors’ appointments and works as a janito. The jobs bring in extra money used to keep the family afloat while he and his wife, Sheryl, scramble to find a lender willing to refinance their troubled mortgage. Both senior citizens in their 70s, the Peterses owe $72,000 on the small powder-blue bungalow that they have owned since 2002. But the house is worth just $48,000, meaning they are “underwater” and owe more on the home than it’s worth.”

“It’s a situation that has roiled the Peters family ever since John was laid off from his job as a store clerk in 2017 after 44 years of employment. Unable to sell the house or refinance the 10% mortgage rate to a more affordable level, the couple is stuck in a quagmire that shows few signs of being resolved anytime soon. While many homeowners across the country are likely to see their home values erode, those who are already underwater are especially vulnerable, said Frank Nothaft, CoreLogic’s chief economist. ‘Given that they have no equity,’ he said, ‘they may fall off the precipice’ and into foreclosure.”

“‘Families are stuck. They can’t refinance, they can’t take advantage of the current market rates which are so low, so they’re stuck paying a monthly payment based on an old probably inflated home value,’ said Leah Dyson, a former housing adviser at Salisbury Neighborhood Housing Services, a non-profit. ‘Our families that are underwater are ten times more likely to fall behind on their mortgage, so it’s just a problem that keeps on snowballing.'”

“The Peterses have owned their home since 2002, when Sheryl’s mother died and passed the home to her free of debt. A few years later, the house and garage needed a new roof and the couple took out a home equity loan for about $30,000 to pay for the repairs. At the time, the home was valued between $80,000 and $90,000. As their mortgage grew, home values in their community dropped. What was once a middle-class neighborhood turned ‘transient,’ with college students and others moving into the rentals. ‘The properties were not kept up like homeowners would keep up their own properties, so the values went down’ Sheryl said.”

The Oklahoman. “Homes sales didn’t hit the skids in April, just a patch of black ice, but everyone managed to keep it between the ditches. Sales were off 8.6% last month compared with April 2019, according to the Oklahoma City Metro Association of Realtors. Denise Schroder, an agent with Keller Williams Realty Elite had a caution for sellers: ‘Don’t entertain any lowball offers yet. We have gotten many calls from agents just feeling us out on how negotiable the sellers are. What they really mean is how desperate are your sellers and can my buyers steal the house?'”

“Trevor Sipes, broker/owner of ShowOKC Real Estate, had another caution for sellers: ‘Don’t be greedy. We still have to deal with appraisers.'”

From 6 Sq Ft on New York. “We now know more about the virus and the trajectory that New York’s reopening is on. So what will the summer, typically the height of the market, look like this year? 6sqft spoke to real estate experts across the board. Garrett Derderian, CEO of GS Data Services explains:’Since the mandated ‘stay-at-home’ order was enacted, there was a steep decline in new contracts, and fewer homes listed on the market. Many homes that were previously listed have also been taken offline, as the pool of buyers has shrunk considerably.'”

“To put this into concrete numbers, Garrett reports: ‘Since the start of Q2 through May 18, the number of contracts signed in Manhattan is down 82% year-over-year. The median contract price is down 13% to $990,000. In Brooklyn, the number of contracts signed is down 76%, while the median price is down 9% to $869,172.'”

“Lisa K. Lippman of Brown Harris Stevens expects to see ‘increased negotiability and properties trading at lower prices’ four to eight weeks after physical businesses begin reopening. ‘This will be primarily attributed to properties that were listed for some time prior to the pandemic and sellers who had been carrying two properties and can no longer afford to do so,’ she explains.”

The Greenwich Free Press in Connecticut. “As of this Monday, the price of 4 Doverton Drive will be reduced by $505,000, bringing the asking price down from $4,450,000 to $3,945,000. This significant price reduction is meant to motivate buyers with a competitive price in line with comparative active listings in town.”

The Cape Gazette in Delaware. “Time is running out as a federal lawsuit seeks an injunction before Memorial Day weekend against the state’s ban on short-term rentals. Patrick J. Murray, a Dewey Beach condo owner, filed the lawsuit May 15 in U.S. District Court District of Delaware asking the court to end the current ban on short-term rentals and commercial lodging, and to permanently prevent Gov. John Carney and future governors from restricting the use of private property for unspecified or indeterminate periods.”

“‘For owners of properties proximate to the Delaware beaches, this restriction is a death knell,’ the lawsuit states. ‘For many owners, rental income from Memorial Day through Labor Day is necessary to pay the mortgage on the property for the entire year.'”

From Medill Reports in Illinois. “Panic crept in as Airbnb host Samuel Szobody lost $48,000 worth of guest bookings in the two weeks that followed Illinois Gov. J.B. Pritzker announcing a statewide lockdown on March 20. ‘From April through June, all my calendars just went completely empty,’ he said.”

“Szobody manages nine Airbnb listings in the Chicago suburbs including Aurora, Schaumburg, St. Charles and Waukegan. Like many other Airbnb hosts, he rents houses from landlords, furnishes and sublets them on short-term rental platforms such as Airbnb, Vrbo and Booking.com. ‘We have a huge opportunity to host people for the long term,’ Szobody said. ‘I’m doing long-term booking only.'”

From Market Place. “All the travel we’re not doing because of COVID-19, for business or pleasure, has hit the market for short-term rentals pretty hard. Meanwhile, a new report suggests some owners of those properties may be pivoting to longer-term, seasonal rentals. In the 100 largest metro areas, furnished and seasonal rentals are up 21 percent since the end of February.”

“Kimberly Kent is an art broker, painter and former Airbnb host in Portland, Oregon. In March, she started renting her two studio apartments to traveling nurses for one- to three-month stays. ‘We were getting about $100 a night originally with Airbnb. And what we’re getting with these folks now is $1,200 a month,’ Kent said. That’s less than half what she made when fully booked on Airbnb. It wasn’t just the coronavirus; a saturated market also played a role.”

From Summit Daily in Colorado. “March sales tax numbers are in, and the mid-month shutdown took a big bite out of collections as expected. Four towns, Breckenridge, Frisco, Silverthorne and Dillon saw downturns in sales tax revenue in March. This varied from about a 24% decrease in Silverthorne to a 49% decrease in Breckenridge. The town of Frisco finished March with a 25% reduction in sales tax revenue compared with March 2019. ‘It is no surprise that Vacation Rentals and Hotels & Inns and Recreation were the hardest hit in terms of dollars,’ the town’s sales tax report read.”

From Short Term Rentalz. “The founder and CEO of Washington state-based apartment rental startup Stay Alfred, Jordan Allen, has confirmed the business is closing down permanently, a month after ShortTermRentalz revealed it had ceased trading and closed its social media accounts. Stay Alfred had raised around $60 million in funding, with its most recent round coming in at $47 million in October 2018. Allen said he and his leadership had been seeking new funding of up to $30 million as recently as March but the global lockdown caused by the coronavirus pandemic, coupled with investor interest failing to materialise into an offer, forced the startup’s hand.”

“Since news broke of Stay Alfred’s troubles, the startup initially came up with a strategy to retreat to one or two buildings they were leasing, even though its website indicated bookings were still on hold for the foreseeable future. ‘My heart’s broken in a lot of ways,’ Allen told the Spokane Journal. ‘We were trying to sell off assets, but there just aren’t a lot of buyers out there.'”

This Post Has 50 Comments
  1. ‘We’ve seen anywhere from a 5 to 10% dip in values of what things are actually selling for compared to the comps three to four months ago’

    Good thing everybody is putting 20% down.

        1. https://www.richmond.com/business/pandemic-pushes-virginias-jobless-rate-to-10-6-in-april—highest-level-in/article_e325ce12-edc8-5327-b4c8-13252f1973c2.html

          Pandemic pushes Virginia’s jobless rate to 10.6% in April – highest level in at least four decades

          ‘Virginia’s unemployment rate surged into double digits in April as the coronavirus pandemic hit every industry in the state, forcing businesses and schools to close and putting hundreds of thousands of people out of work. Previously, the state’s highest modern jobless rate was 7.9%, at the end of a severe recession in 1982. During the Great Recession of the late 2000s, caused by a housing market downturn and financial crisis, the state’s rate hit a high of 7.5% in February 2010.’

          ‘About 450,000 Virginians were counted as unemployed in April, out of a total workforce of almost 4.3 million. The state suffered particularly heavy job losses in the leisure and hospitality sector, which includes businesses that have been forced to shut down or scale back operations because of coronavirus-related restrictions and a collapse in demand for tourism, restaurants, events, entertainment venues and hotels. That industry lost 161,400 jobs from March to April, but it still employed 240,800 in Virginia. Since April 2019, however, the industry has lost a little more than 41% of its jobs.

          ‘One of Virginia’s largest job sector — education and health services — lost 57,400 jobs from March to April, a 10.3% drop. Another vitally important job sector for Virginia — professional and business services, which historically has about 19% of the state’s overall employment — lost 43,700 jobs, or down 5.6%, month-over-month, and lost 33,200 jobs compared with a year ago in April.’

          ‘Government employment dropped by 31,500 jobs in April, with local governments shedding 19,000 jobs. State government lost 11,600 jobs, and federal employment slipped by 900 jobs.’

          Guberment jobs? Oh dear…

  2. ‘earlier this year, the home changed ownership. It went from real estate developer Nile Niami to Joseph Englanoff, a lender on Niami’s portfolio’

    Changed hands sounds better than foreclosure.

  3. ‘‘My heart’s broken in a lot of ways…We were trying to sell off assets, but there just aren’t a lot of buyers out there’

    via GIPHY

  4. ‘For owners of properties proximate to the Delaware beaches, this restriction is a death knell,’ the lawsuit states. ‘For many owners, rental income from Memorial Day through Labor Day is necessary to pay the mortgage on the property for the entire year’

    You are fooked Pat. Better get some boxes.

  5. ‘This will be primarily attributed to properties that were listed for some time prior to the pandemic and sellers who had been carrying two properties and can no longer afford to do so’

    Once again, how does one qualify for two loans at the same time? Sound lending!

    ‘so they’re stuck paying a monthly payment based on an old probably inflated home value’

    Inflated?

    ‘The Peterses have owned their home since 2002, when Sheryl’s mother died and passed the home to her free of debt. A few years later, the house and garage needed a new roof and the couple took out a home equity loan for about $30,000 to pay for the repairs. At the time, the home was valued between $80,000 and $90,000. As their mortgage grew, home values in their community dropped’

    The other day somebody mentioned subprime, etc. But prime was 95%+ of defaults last decade. What I remember from that time was how many were the result of cash out refinancing and HELOCs. A feature that’s just as prevalent today.

    1. BTW, I’m going to have an international post this evening you won’t want to miss.

      1. BTW, I’m going to have an international post this evening you won’t want to miss.

        CR8R porn! 🙂

        Thanks for all the great domestic and international crater news. The domestic news gives me hope I just *might* actually be able to buy a home within traditional affordability measures.

    1. Good lord what is that, a tweaker compound in foreclosure? You can’t even see the place because they’ve got it walled off, which is a dead giveaway for tweakers.

    2. Aww, only one pic? Geesh, can you imagine what the interior looks like!?

        1. Well, I didn’t have to. But in that business if you want the lucrative jobs you have to take the crappy ones too.

    3. The tax assessor think this prime desert property is worth $4K.

      There is a lot of desert and swampland in this country. Cheap is relative

    1. Gonna be interesting to see what happens here in Nevada when the moratoriums are lifted.

  6. “how desperate are your sellers and can my buyers steal the house?”

    The sense of entitlement here, LOLZ.

    1. “how desperate are your sellers and can my buyers steal the house?”

      It’s always the buyers who are the thieves.

  7. Rio Linda, CA Housing Prices Crater 24% YOY As Double Digit Prices Declines And Plunging Rental Rates Ravage Sacramento County

    https://www.movoto.com/rio-linda-ca/market-trends/

    As a noted economist said, “I can ask $50k for my run down 10 year old Chevy truck but where is the buyer at that price? So it is with all depreciating asset like houses and cars.”

  8. I saw a guy taking photos of his truck in the wilderness while I was out bicycle riding. He was trying to center the front-left tire atop a small boulder, so I stopped to offer help, i.e., hand signals. I asked if he was selling it, and said no; just wanted some photos. Another truck love affair, I suppose. Gotta give “Madison Avenue” credit; they know society’s suckers better than they know themselves.

  9. Just left my BIL’s place a bit north of SLC. He told me how he bought his place in a short sale for $240K in the aftermath of the 2007-2009 financial crisis. Said it’s “worth” over $500k now. I questioned whether that’s the case even with COVID-19, and he claims that anything going up for sale sells like hot cakes, mainly to Californians fleeing the state. Go figure!

    1. Utah housing prices expected to continue rise to record prices
      By Jasen Lee
      Jan 17, 2020, 4:46pm MST
      Homes in Salt Lake City are pictured on Friday, Jan. 17, 2020. Last year was an exceptional year for Salt Lake County’s housing market. It was the No. 4 best year in overall residential sales since the Great Recession ended in June 2009. It also was the second best year in the number of condominiums and town houses sold.
      Laura Seitz, Deseret News

      SALT LAKE CITY — The cost of homeownership in the Salt Lake City metro area is likely to rise to record levels in 2020, a new forecast predicts.

      James Wood, Ivory-Boyer senior fellow at the Kem C. Gardner Policy Institute, said the median sales price of a single-family home will rise 5% to register at $400,000 for the first time, while the median price for condominiums/town houses will climb 10% this year and could reach the $300,000 milestone next year.

      He noted that last year the median sales price of single-family homes in Salt Lake County was $380,000, which was a 91% increase from 2011 — the year prices ended their decline following the Great Recession. Utah housing prices have jumped significantly over the past seven years — up 67% statewide, he said.

      1. if you want to go long just buy AMH and invitation homes etc
        just click

        not for me ,but if you’re a believer

    2. Utah real estate experts anticipate summer surge in property listings after economy reopens
      Coronavirus Updates
      by: Rosie Nguyen
      Posted: Apr 29, 2020 / 05:33 PM MDT / Updated: Apr 29, 2020 / 05:33 PM MDT

      SALT LAKE CITY (ABC4 News) – Utah’s real estate market could be taking off again pretty soon, after the COVID-19 pandemic left the market in limbo for the last month and a half. Local experts are anticipating a surge in property listings come summer or fall.

      “Before the pandemic hit, the market was pretty normal. It was tracking somewhere close to the 2018 numbers. We were facing, at that point, a pretty high demand and our inventory levels were very low,” said Ron Snow, principal broker for RE/MAX Associates.

      He went on to say, “But once the pandemic hit, we immediately saw a 60 percent drop in our scheduled showings on homes. We are 1,000 active listings below where we were last year.”

      MaKaibree Reese and her husband were ready to expand their family and move into a bigger home, shortly before the virus outbreak hit the state. They listed their home in downtown Salt Lake City about a month ago.

      “It was a seller’s market. My neighbors’ homes were selling in like five days,” she said. “They’d put in on the market and they’d have offers same day, next day. It seemed like everyone was going into contract in five days or less.”

      Days turned into weeks for them with seven showings, but no written offers. Since then, Reese said they’ve dropped their selling price by $25,000.

      “It’s been an interesting experience. We’ve had to pause our plans to foster/adopt a child. It was not what I was expecting at all. We’re just doing our best to get it sold. We really want to move to a bigger home. We were at the point where we were ready to take in another child,” she said. “I do think this is a direct result of the pandemic because our house is fully remodeled and it’s in a busy area. Everyone’s pricing in my area is going down.”

      According to Snow, Reese is not the only seller experiencing this problem. Although the average sale price increased from $370,000 to $392,000 comparatively from April 2019 to April 2020, sales went down by nine percent compared to this time last year since the state began its shutdown.

    3. Ah, those mythical ex-Californians with bottomless pockets. They lift all boats, don’t they?

      1. California’s stay-at-home order could fuel another exodus of families seeking to send their kids to school this Fall. I spoke with a representative from our school district on Thursday. Compliance with fluid and various levels of guidance is their biggest concern.

      2. A casual mental appraisal of my BIL’s place, given the large yard, perfect view of the mountains, and large interior space, suggests it would sell for near $1 million if only it were situated in San Diego.

        Conversely, California homeowners relocating to Utah can get a very nice home for what is considered a starter home price in San Diego.

    4. He told me how he bought his place in a short sale for $240K in the aftermath of the 2007-2009 financial crisis. Said it’s “worth” over $500k now.

      A real braggart, huh? If it cratered down to $150k, do you think he’d be offended if you reminded him it was worth less than what he paid? Oh, that’s right, the house value is only to be talked about when the loanowner’s gamble is appreciating. When the alternative happens, it’s suddenly taboo.

    5. “He told me how he bought his place in a short sale for $240K in the aftermath of the 2007-2009 financial crisis. Said it’s “worth” over $500k now.”

      …. and not a buyer in sight at a fraction of the amount he’s got in it.

    6. Congratulations to your BIL,

      He purchased at a good time. Back when we purchased a house in Colorado, there was a common term “House Poor”. Anything over 200K would make you “House Poor”. Since then, wages have gone up and a 200K mortgage is a 75% off steal. Now the same house is 700K.
      For some, 200K would still make them “House Poor” today.

      If you want to look at a house as an investment, rather than a place to live and enjoy life, there are 2 train of opinions that I have seen:

      The Flyover housing market will tank:
      1) CA resale values are falling. Nobody wants to sell their current house at a loss.
      2) The stock market has fallen 20% so nobody want to take a loss and sell at a relative low for a downpayment.
      3) Major corporations have stopped paying their 5-8% dividends/ Income has dropped.
      4) This is only temporary like the 1918 Flu Pandemic. Everything will be a distant memory in 2-3 years.

      The Flyover market will boom:

      1) Someone stuck in a small city center condo has lost all of their benefits of city living. No restaurants, shops, cafe’s, theater, movies, etc…. Why are they there???
      2) City dwellers are surrounded by Covid 19. The steps/elevators to their condos are shared by potentially dozens of disease-ridden dwellers. Time to run for their lives to semi-rural SLC.
      3) They enjoy the outdoors and skiing. Only 20-30 minutes from SLC.
      4) They can work from home anywhere.

      Personally, I think there will be a boom for the rural areas in the short-term. As Covid goes away, the stock market will rise and housing in places like SLC and Denver will level off to the typical second home owners.

      1. Everything will be a distant memory in 2-3 years

        Not “everything”. A big fat mortgage is a Faustian Bargain. When the Devil gets his due, you don’t forget. Alot of accounts are about to get settled.

  10. I believe there was an undocumented hit-and-run discussion on this blog a short time ago.

    Hit-and-run crash victim dies, suspect arrested

    by Lizandra Portal
    Saturday, May 23rd 2020

    WEST PALM BEACH, Fla. (CBS12) — Police say the victim of a hit-and-run crash in West Palm Beach died Saturday and one person is in custody.

    The pedestrian in the crash was identified by police as David Dering, 35.

    The crash happened Friday night and West Palm Beach Police were still actively looking for the suspect vehicle Saturday morning.

    Shortly after 11:30 a.m., police announced they’d located the driver of the vehicle, 23-year-old Juan Castanon Perez, who is in police custody.

    http://cbs12.com/news/local

  11. I’ve always been amazed at people’s propensity for living on the financial edge. Lots of debt, marginal jobs and not a care in the world as to how they’ll pay for everything except when the shite hits the fan then they become solid citizens who just need a little help.
    I grew up poor and I was an enlisted man in the Navy for 16 years and I have absolutely no mercy for these types of folk. I hope that all of the AirBNB hosts, real estate speculators, realtors, private equity investors and house flippers are on their way to bankruptcy court. The pendulum swings both ways my friends and if you didn’t save for a rainy day, it’s not something that I should have to pay for.

    1. “The pendulum swings both ways my friends…”

      It looks like Hertz Car Rental is acknowledging its destiny.

      1. I don’t see how car rental agencies can survive. No amount of reorganization can make them viable.

        Most likely there will be a “last man standing” agency, which will pick up the little business the others had when they liquidate, and even that lone survivor will be very shaky.

        Also, I recall that Boeing’s CEO predicted that one of the big 4 US airlines will liquidate, despite the bailouts.

        I see a lot of people out and about in my neck of the woods, business as usual. I wonder how many of them are getting $1000/wk in unemployment.

        1. the rental car cos that sell cars are trying to get pre covid prices while inventory skyrockets

          1. I took a look at the Hertz website. Their cars are high mileage and expensive. Which is absurd as dealers are refusing to accept end of lease cars as a used car glut is ballooning.

          2. “…as a used car glut is ballooning.”

            You’re correct. There’s pain all ’round in the retail automobile business, both new and used. I’m comfortably and patiently waiting for “Blood in the Streets” before I buy anything that’s been inflated with easy credit.

      2. No amount of reorganization can make them viable.

        They were hollowed out. Hard to reorganize that.

        Like the President explained, there will be rental car companies, they just may have different owners.

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