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The Denial…I See More Price Reductions Than New Listings

A report from the Santa Cruz Sentinel in California. “In September, the median price for a single-family home in Santa Cruz County was $920,000, the same as in August and just a tad off the record $935,100 in March, according to Gary Gangnes of Real Options Realty, who tracks the numbers. But in September, sellers at the high end and low end dropped their prices. Sales were the slowest in 10 years.”

“The ‘unsold inventory index’ was 4.2 months, the highest in four years. Another sign of slowdown: It takes longer to sell a home. MLSListings reported the average days on market swelled in September from 33 to 54 days.”

“Roger Berke, co-owner of Thunderbird Realty in Soquel, walked away from a seller who refused to see the shift in the market. ‘First time,’ said Berke, who has spent 30 years in real estate. ‘The denial … I see more price reductions than new listings. Buyers see the marketing softening.'”

“Robert Bailey, co-owner of Bailey Properties in Aptos, reported from a real estate conference on the East Coast that agents in Michigan, Texas and Massachusetts are seeing the same shift. ‘This is more a psychological shift than anything else,’ he said, noting Google and Apple buses are still driving employees to high-paying jobs over the hill.”

“‘People may well have been unrealistic,’ Bailey said, adding that ’54 days on the market would have been considered normal several years ago… It just became normal again.'”

This Post Has 25 Comments
  1. Eeee-bola Santa Cruz!

    ‘Robert Bailey…reported from a real estate conference on the East Coast that agents in Michigan, Texas and Massachusetts are seeing the same shift. ‘This is more a psychological shift than anything else’

    Yep, consistent with a mania collapsing, not some broad recession or credit crunch. Happening all over the place – at the exact same time – psychological indeed!

    1. ‘This is more a psychological shift than anything else,’ he said, noting Google and Apple buses are still driving employees to high-paying jobs over the hill.”

      Exactly what a neighbor realtor told me a few months back. SC RE will never go down because of the jobs over the hill…

      Santa Cruz is infected with a potent strain of the Ebola for sure. If our local measure M passes it will be multiplied even further / faster.

      1. I’ve been to SC many times as the kids love the beach. However, the commute there to Silicon Valley is pretty brutal. You got 2 lanes through the hills/mountains and it gets backup easier, even during the weekend in the winter.

  2. Ben is leaving bread crumbs behind to date the onset of bubble collapse. It will be fun to mock the MSM pundits who claim to have called it months down the road.

  3. But in September, sellers at the high end and low end dropped their prices. Sales were the slowest in 10 years.”

    Like most of us, I’m sitting here, beetle brow furrowed, trying to work out what this means and waiting for a real estate “expert” to show up to break it down real simple-like for us. I have a vague hunch there’s some sort of correlation between unaffordable shack prices and the lack of buyers, but need an REIC professional who gets paid the big bucks to explain the connection.

    1. unaffordable shack prices

      Call me crazy, but if you know you are going to lose money spent on a house, and you have to borrow for 20 or thirty years to pay for it, it just might be unaffordable.

    1. They need the Fed to both keep wages gains below inflation AND use funny money to keep asset prices high for financial sector and rich.

      It wouldn’t seem possible to do both — if it hadn’t happened for the past 30 years.

  4. Sold our family mini farm in Northern California over the summer. Since then I have seem many price reductions on similar properties. I am so glad we got it sold, that area is getting hit from many different angles ( the largest is low Marijuana price) I’m seeing reductions in the Corvallis/Albany area also. Met a real estate agent last week and he was all rosy about the above market, so good is the market that his wife is taking her agent test. This will be interesting sto watch, since I run into this couple every few months.

      1. Just lucky on the sale. It was a estate sale one sibling wanted to hold out for a higher price and the others were happy to make the sale. I kept telling them “we have to get it sold”

  5. After midterm election, focus on the ‘healthy’ 30%-plus correction headed for stocks
    Published: Nov 6, 2018 9:53 a.m. ET
    Critical information for the U.S. trading day
    AFP/Getty Images
    Bear crossing
    By Barbara Kollmeyer
    Markets reporter

    Election Day is finally here, and investors should be ready, given that barely a stone has been left unturned with regards to potential outcomes.

    While history shows midterms haven’t really carried much weight, at least in the immediate term, “given amount of controversy we have around this government, these elections for the first time could bring some dramatic movement in the financial markets,” says Naeem Aslam, chief market analyst at Think Markets U.K.

    The most likely outcome appears to be that Republicans will keep the Senate and Dems will win the house, causing gridlock. That won’t upset markets too much given they’ve had plenty of experience with political infighting. A less likely possibility would usher in a blue wave—Dems win Senate and House—causing lots of headaches for POTUS. Behind door number 3, another not so likely outcome, Republican sweep both houses.

    But those playbooks may not matter much, according to our call of the day from Joel Kruger, currency strategist at LMAX Exchange, who sees a hefty selloff coming no matter what the result.

    “Ultimately…i think we need to defer to the longer-term cycle and where things look at this stage in the game now that the economy is getting off central-bank proponomics and has to stand on its own two feet. This leads me to believe whatever the outcome…the market will find a reason to be selling risk (selling stocks) to allow for what has been a long overdue correction,” says Kruger, in emailed comments.

    1. 5 signs Californians are economically anxious: Election jitters or worse?
      OCRegister-14 hours ago
      Or considering weakness in housing and auto sales this summer, are do skittish … Orange County consumers are skittish, according to the Chapman-CMC …

      1. Being on the hook for hundreds of thousands of dollars on something you know deep down isn’t worth it is enough to give anyone agita.

      2. “Seven Sonoma County condos listed for less than the current median price of $366,500″

        “The median condominium sales price in Sonoma County dropped to $366,500 in September, the first decline in more than six years. The slump may be a sign of further reductions throughout the housing market, according to the monthly Press Democrat Housing Report prepared by Pacific Union International senior vice president Rick Laws.”

        “The dip in condo prices may be a result of a deeper decline in planned unit development (PUD) sales, as the number of condos sold in September fell to the lowest level in a decade, while the number of units available reached its highest mark in 11 years.”

        1. The headlines will write themselves, soon enough:

          “Developers Pull Their PUDs in Search of a Happy Ending in the Market”

  6. Repliess are suddenly showing up indented below the parent response. Thumbs up and thanks for the update; it’s now way easier to read.

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