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They Don’t Feel That Sense Of Urgency To Lock Something Down

A report from the Park Record in Utah. “Home sales and prices in Summit County have paralleled each other in their steady growth in recent years, but now both statistics are starting to slow and level out. Todd Anderson, president of the Board of Realtors, said nationwide it seems home price tags are growing faster than wages, and something has to give. ‘At some point, people still have to be able to pay for (their home), so one or the other has to change,’ he said.”

“Cities across the nation, including Park City, have watched the ballooning costs of homes that have grown out of many people’s price range. Anderson said the tapering off of prices and sales in Summit County has become more apparent in the last six months, which could be a trend moving forward.”

“‘I don’t think we are going to see a big downturn, I think we are going to see things flatten out for a while,’ Anderson said. He said Canyons Village and Deer Mountain have potential for plenty of new construction, which will likely cause ‘large fluctuations’ to the market. If inventory is able to grow in the area, Anderson predicts that housing prices will remain steady or even drop slightly.”

The Appeal Democrat in California. “Local residential real estate experts say the market is experiencing a slow down across the state – and the Yuba-Sutter area is feeling it, too. It’s due to a variety of reasons, they say, and if it continues it could become an issue.”

“Tib Belza, broker and co-owner of Sunwest Real Estate, said a contributing factor is that some housing prices have outpaced the market. ”

“‘They raise their prices up and the consumer is pretty in-tune and has a lot of information at their disposal, so with more product and variety on the market, buyers are a bit more hesitant,’ Belza said. ‘It’s not unusual for our market. There are still people looking, there just aren’t as many, and they don’t feel that sense of urgency to lock something down, so they are taking their time to look around.'”

“With home prices and interest rates increasing, it’s making it harder for first-time buyers to find a home, which has a domino effect for the rest of the market.”

“‘I think part of the problem in California is that prices have risen so much that the entry buyer cannot find homes, so the person selling that home and looking to upgrade is also being impacted,’ Belza said. ‘The first domino isn’t clicking to knock the others.'”

“‘So far, I don’t have any real red flag antennas going up, but it kind of just depends on if it becomes a continuous trend,’ Belza said.”

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This Post Has 42 Comments

  1. Eeee-bola Parks-Yuba-Sutter!

    ‘nationwide it seems home price tags are growing faster than wages, and something has to give. ‘At some point, people still have to be able to pay for (their home), so one or the other has to change’

    Somebody call up the central bank! This is ground breaking stuff I tells ya!

    1. “If it continues, it could become and issue”

      Yes, indeed. It is continuing and the issue is coming like a freight train.

      “I see no red flags”

      More like flashing neon signs, but red nonetheless.

      Anyone want to place wagers on when the denial phase will turn to panic? RE tends to change slowly, but this trend seems to be evolving fairly fast. Just Google the term “housing market” and it’s pretty stunning. Was quite a bit different just a couple months ago.

      1. Way faster indeed! My morning start out with a “housing market” google search ;). Sometimes you have to go 4-5 pages in to find anything good but you are spot on regarding the difference between early summer searches vs now.

      2. Anyone want to place wagers on when the denial phase will turn to panic?
        ———————

        March/April 2019, when the FBers do their taxes. It’ll be the beginning of the “Spring market” and a flood of For Sale signs will pop up – Ebola-style!

    2. ‘nationwide it seems home price tags are growing faster than wages, and something has to give. ‘At some point, people still have to be able to pay for (their home), so one or the other has to change’

      All you have to do is raise the DTI loan limits and – !!!PRESTO!!! – people can afford them. It’s magic. What are we at now, 55%? Can I get a 60%? Anybody hear a 60%? Maybe we can get them all the way up to 95%!

      1. Maybe the US tax payers could subsidizes down payments?

        They can definitely raise the conventional loan limits, but this works better when the DTI gets a boost.

  2. OPEC, Russia Weigh Production Cuts to Prop Up Oil Prices
    New York Times-17 hours ago
    There are several reasons for the price drop. After restraining output since early 2017, the Saudis and Russians have significantly increased production in recent …

    Oil producers see oversupply, call for new strategies
    EconomyNext-13 hours ago
    AFP – Major oil producers said Sunday that crude supply next year would outstrip demand, calling for new strategies based on production adjustments.

  3. “‘I think part of the problem in California is that prices have risen so much that the entry buyer cannot find homes, so the person selling that home and looking to upgrade is also being impacted,’ Belza said. ‘The first domino isn’t clicking to knock the others.’”

    Belza that is “part” of the problem yes. The main part is the “dream” price the UHS is attempting to get. I see homes currently going on the market at ridiculously high asking prices. Almost as if everyone wants the million dollar profit regardless of what the home may be actually worth in this market. I’m seeing more greed than I saw before as the ones selling now have a disillusion that they can name the price. The only homes that have been moving are the ones priced accordingly and some of those are even closing below asking. It isn’t a matter of finding a buyer that can afford the payment on the over priced home as much is it is a matter of finding a buyer willing to overpay. A car dealership with vehicles for 30k will be selling many more cars than the dealership next door selling the same for 40k.

    1. https://www.redfin.com/CA/Santa-Cruz/1791-Willa-Way-95062/home/2430662

      So this is an example of that million dollar profit dream. It’s a track home in a highly low income surrounded neighborhood. Built in 2001 and doesn’t look like any improvements other than maybe some minor ones. 17 years of wear and tear and they believe it earned almost a mil in appreciation?? I think 2001 was also a peak in value so it’s not like they bought at a good time. I don’t get it and if it somehow fetches even a million I will be surprised

      1. This is my old house in SoCal (Belmont Heights). We lived in it for 6 years and watched it appreciate about $90K per year which we thought was crazy. The people who we sold it to put a bunch of work (and money) into it and lived there for 5 years before they sold it for $1,150,000.

        https://www.realtor.com/realestateandhomes-detail/332-Park-Ave_Long-Beach_CA_90814_M25291-24620

        The newest owner has lived there for the last 10 years. Zillow, and some of the other clown sites, had this thing valued at about $1.5K a couple of years ago. It’s for sale for $1.289K today. One can figure California property taxes were about $11,000 per year. Add a 6% realtor selling fee along with the fact that anyone interested in purchasing this is going to come back at $1.25K tops to start negotiations and the current owner is going to walk away with a net loss after ten years of ownership.

        The owner tried renting it out earlier this year for $5K a month but I guess that didn’t work out.

        1. It’s for sale for $1.289K today.

          $7,214/mo. $250,000 down. Should be no problem if you make over $300,000 a year and have nothing to do for the next 30 years but pay the bank. The house is nice enough, but rather ordinary. Ex bubble it would be more like $100,000. There will be a reckoning.

    2. California needs a new economic model
      OCRegister-Nov 10, 2018
      Already many Californians, cashing in on inflated housing, may be taking their own dollars to more affordable markets such as Boise and Reno…

      1. And they’ve run up the prices in those locales, so people in Boise are leaving for podunkville out in the sticks, so podunkville out in the sticks has gotten too expensive for the extremely low income people, and they’re facing homelessness because there’s nothing cheaper.

        1. ….. then demand collapses accelerating liquidations and defaults.

          As a wise man once said, “I can ask $50k for my 10 year old pickup truck but where is the buyer at that price?”

          So it is with all depreciating assets like houses.

          Alameda, CA Housing Prices Crater 5% YOY As Bay Area Housing Demand Collapses

          https://www.movoto.com/alameda-ca/market-trends/

  5. Election over, investors are back on inflation watch and feeling a little spooked
    By Jeffry Bartash
    Published: Nov 12, 2018 8:45 a.m. ET
    Consumer prices set to rise sharply, but relief might come soon
    Getty Images
    Wall Street hasn’t had to worry about rising inflation for a long time, but now investors are feeling anxious.

    The results of a superheated 2018 election didn’t bother Wall Street much, but oh, just a whiff of inflation sure did.

    U.S. stocks surged after voters divided power in Congress between Democrats and Republicans. But the Dow Jones Industrial Average (DJIA, -1.10%) and S&P 500 (SPX, -1.06%) tumbled toward the end of last week, especially after wholesale inflation showed the biggest gain in six years.

    The increase was driven by higher gas prices and rising costs for industrial supplies, perhaps a byproduct of Trump administration tariffs on steel and other foreign goods.
    …

    1. a whiff of inflation

      Really? With the commodities sucker rally over, the housing boom crumbling and credit tightening, we should be smelling something else altogether.

  6. “‘I don’t think we are going to see a big downturn, I think we are going to see things flatten out for a while,’ Anderson said. He said Canyons Village and Deer Mountain have potential for plenty of new construction, which will likely cause ‘large fluctuations’ to the market. If inventory is able to grow in the area, Anderson predicts that housing prices will remain steady or even drop slightly.”

    LOL this dude is smoking somthing or in denial!

  9. Veteran’s Day eee-bola has infected the stock market!

    – Decline of 5% makes Goldman Sachs the Dow’s bigger loser Monday

    Dow down nearly 350 points and Nasdaq off 175 as stock-market losses steepen
    – ‘Trap door under the market’ could slash S&P by two-thirds, warns fund manager
    – Death cross set to form in key gauge of small-cap stocks — and that’s bad news for broader stock market
    – What plunging oil prices may be telling us about the stock market and global economy
    – Election over, investors are back on inflation watch and feeling a little spooked
    – Are the financial markets affected by the Veterans Day holiday?
    …

      1. What are your best Alexandria Ocasio-Cortez jokes?

        Just booked my flight to Seattle, so excited to work in Washington!

        Nothing is built in America anymore. My new TV says “Built in Antenna.” Where the hell is that?

        If owning a gun was a right, it would be in the Constitution.

        I don’t like the Electoral College and I would never send my kids there.

        BREAKING: Alexandria Ocasio-Cortez says she will consider debating Ben Shapiro if he doubles his offer from $10,000 to $15,000.

        “If free speech was a right, it would be in the Constitution.”

        “I’m against studying civics in school unless we also study other cars.”

        “I promise I’ll fight for ALL illegal immigrants. Especially those who came here legally.”

        “If you are a teacher you should keep your security clearance.”

        https://www.quora.com/What-are-your-best-Alexandria-Ocasio-Cortez-jokes

    2. Take x5 week vacation$, return in $ept, work for 3 1/2 month$, go pa$t THANK$giving$, collect yer Bonu$!

      Wall $treet bonu$es will be even bigger thi$ year, but 2019 look$ less ro$y
      By Quentin Fottrell / Published: Nov 12, 2018

      Johnson said 2019 is looking less rosy. “Ongoing business challenges, including fee compressions, geopolitical influences and business efficiencies driven by technology, are likely to have an industry-wide, downward impact on compensation and head count,” he said. “While financial-sector businesses are still inherently healthy, the business challenges are expected to catch-up with them.”

  10. I’m in Utah. There was a kerfuffle in Park City recently about the new schools superintendent getting an $870k housing allowance. It’s probably the most expensive city in the state and gosh darn it they needed to cover her housing costs to get a qualified candidate to live in the district boundaries.

    http://www.kpcw.org/post/park-city-school-district-spend-1-million-superintendent-housing#stream/0

    According to Zillow, median list price in Park City was 1.3 million for Sept 2018. Jan 2018 list prices peaked at 1.55 mil … so roughly 13% drop 9 months and ~4% drop from 1.36 mil in Sept 2017.

    https://www.zillow.com/park-city-ut/home-values/

    Motovo says median Park City list price dropped 14% YOY, and inventory is up by 20%.

    https://www.movoto.com/park-city-ut/market-trends/

    1. Well, iffin’ $he’s that good, just think how much $chool $tate revenue$ will bee added, when all the home.$chooled kid$ coming ru$hing back because of her $pecial $kill$!

      1. Harrison, I saw that article too. I don’t know what to make of it. There is a problem with housing for educators. Lots of schools in the Bay Area and San Francisco are building housing on site because they can’t attract teachers on the wages they pay due to high housing costs. At some level I think direct intervention in the housing game by school districts is not a bad idea. My uncle lives up in Park City and sent all his kids to Park City High School. I’ll have to get his thoughts on this move.

  11. Another foreclosure in the email this morning:

    https://www.zillow.com/homedetails/5030-S-Downey-Rd-Fort-Mohave-AZ-86426/63494801_zpid/

    5030 S Downey Rd
    Fort Mohave, AZ 86426
    4 beds 3 baths 2,334 sqft
    Foreclosure
    $142,000

    Date Event Price $/sqft
    11/9/2018 Price change $142,000 -9.9% $61
    10/26/2018 Price change $157,600 -5.6% $68
    10/11/2018 Price change $167,000 -7.9% $72
    9/26/2018 Price change $181,300 -6.8% $78
    9/8/2018 Price change $194,600 -5% $83
    8/24/2018 Pending sale $204,800 — $88
    8/10/2018 Price change $204,800 -4.7%
    7/23/2018 Listed for sale $215,000 +9.9%
    6/14/2018 Listing removed $195,600 — $84
    6/11/2018 Price change $195,600 -5.1% $84
    5/5/2018 Listed for sale $206,100 +19.2%
    11/13/2017 Sold $172,943 -34.7% $74 Public Record
    1/25/2017 Price change $265,000 -11.4% $114
    12/16/2016 Price change $299,000 -8% $128
    9/9/2016 Price change $325,000 -7.1% $139
    3/15/2016 Listed for sale $350,000 +250% $150
    8/25/2010 Sold $100,000 -51.2% $43 Public Record
    9/3/2003 Sold $205,000 — $88 Public Record

    2. “3/15/2016 Listed for sale $350,000 +250% $150
      8/25/2010 Sold $100,000 -51.2% $43 Public Record
      9/3/2003 Sold $205,000 — $88 Public Record”

      Those first three transaction prices are most interesting!

  13. UhOH from the Wall Street Journal:

    A team of New York City law-enforcement officers swarmed a Manhattan condominium last month, issuing 27 notices of violations for illegal hotel use in one of the largest crackdowns on short-term rentals such as those listed on Airbnb.

    The raid at the Atelier, a 46-story Midtown luxury tower, may be a sign of what’s to come. New York and other cities are seeking to limit short-term rentals that can run afoul of local laws designed to limit hotel-style stays in residential buildings.

    The violations went to 20 different apartment owners who allegedly rented to guests from at least 15 countries including Argentina and Spain. Some guests paid $400 a night, and one group of six from Switzerland paid a total bill of $3,823 for a short-term stay, according to city records.

    Two members of the Atelier condo board were among those cited for making illegal short-term rentals. They also were accused of putting up illegal partitions in their units to create extra rooms.

    http://queenscrap.blogspot.com/2018/11/condos-raided-over-airbnb-rentals.html

    1. I think we are going to see a whole lot more of this kind of enforcement. Nothing local governments hate more than being bypassed in both the regulation and revenue departments.

      Combine that with falling prices for housing, rentals and maybe a recession, and we will see who gets caught with no swimsuit on when the tide goes out.

      I’ve mentioned several times before personally encountering people who rent multiple apartments under pretense and then turn around and STR those units. I can’t want to see those people put out of business. Reminds me of this thing I read the other week:

      https://www.reddit.com/r/legaladvice/comments/9prn30/tenant_is_renting_out_my_apartment_on_airbnb/

      1. Yeah, we’ve been discussing this MGSpiffy. I do this on behalf of the owner in a luxury condo building. We are 75% occupied, 80% leased up. We are about 6 months into our lease-up phase. The raids are interesting in that they make the news, but what will really sent shock waves through the STR market is going after the platforms directly and holding them liable for fees, penalties, and infractions for those that list a STR that violates local ordinances. The only way this stops is if they platforms are forced to be a gatekeeper and take addresses and make sure the individual listing is able to list the unit for STR according to local zoning ordinances. Of course this will greatly crimp the revenue of Airbnb/VRBO/Home Away, so they will fight it tooth and nail while trying to say that they are not the problem when it comes to affordable housing.

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