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A Sign That Buyers Won’t Accept The Phenomenal Asking Prices

A report from the Idaho Statesman. “Home buyers saw some relief in September. Existing-home prices fell 3.3 percent to $290,000 from $299,950. ‘We’ve been talking about the drop in existing inventory literally for years now, but what’s interesting about today’s market is that we’re seeing more and more new-construction sales,’ said Gary Salisbury, president of Boise Regional Realtors.”

“In neighboring Canyon County, the downward trend continued overall, IMLS reported. Overall median prices again fell, down 4.3 percent to $220,000, while the medians for both existing homes and new construction fell too. ‘I see Boise as having really health growth right now,’ said Mike Turner, owner of Front Street Brokers. ‘It’s not frenzied, and that’s good.'”

“There are signs that the housing market may be tempering. Turner thinks that may be in part due to federal interest rates rising. ‘Interest rates have kind of done their job,’ he said. ‘I don’t foresee, though, that it’s going to ultimately negatively impact our market. I think it will help moderate it.'”

From Mansion Global on California. “Feverish home price growth in Silicon Valley—where the average home has more than doubled in value since 2011—has finally shown signs of breaking. Santa Clara County saw a surge of more than 3,000 homes hit the market in September and October, according to data Compass culled from Realtor.com and the multiple listing service.”

“It’s an unusually high number of new listings for September-October and the most during that time frame in at least four years, according to the market report from Compass. The boost to inventory is ‘giving buyers more choices and lessening the competition,’ wrote Patrick Carlisle, chief market analyst.”

“Santa Clara had one of the highest rates of buyers paying over the asking price in the nation, with the average home selling for an 11% premium, according to Compass. In October, the average home got a very slight discount for the first time since early 2017. And more homes are failing to find a buyer and expiring off the market—a sign that buyers won’t accept the phenomenal asking prices seen in Silicon Valley.”

“‘We will see if there are substantial further increases in November and December of homes that sellers have not been able to sell at the prices they currently consider acceptable,’ Mr. Carlisle said. ‘One of the clearest indicators of a shifting market is a growing disconnect between buyer and seller expectations.'”

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This Post Has 43 Comments

  1. ‘In October, the average home got a very slight discount for the first time since early 2017. And more homes are failing to find a buyer’

    Lower prices, fewer sales? That’s not how a regular market works.

    ‘a sign that buyers won’t accept the phenomenal asking prices seen in Silicon Valley’

    They were accepting them just fine and offering to pay much more with a letter to the squirrels thrown in before. Wa happened?

    These would-be buyers no longer expect to make a whopping profit. It’s all just a speculative game now. Enjoy your crash California.

    2. These would-be buyers no longer expect to make a whopping profit. It’s all just a speculative game now.

      Yeah, that was my first thought in regard to the headline “A Sign That Buyers Won’t Accept The Phenomenal Asking Prices”. They would accept them if there was a high likelihood of profit.

      1. It’s all coming out now. What a big surprise!!! This has been a speculative bubble. Started with accelerated rise in rents, then combined with lowered cap rate expectations. Of course prices go up. When Interest rates go up cap rate expectations go up which lowers prices. If income i.e. rents, go down, then that process accelerates lowering prices. Then as values drop, physical maintenance goes down and depreciation further increases. It aint rocket science and we learned in 2006 through 2012

        Can anyone in the media get the point.

    1. It’s going to be like Sonoma but multiplied greatly. Paradise is a much lower priced area and many are the self sufficient, farmer typefolk up there. I’m not to optimistic that they will get the kind of resources / funding to rebuild. It’s really sad and my prayers go out to the people and families up there.

      1. What was so frightening was how FAST that fire was. Usually people have at least a couple days’ warning that a fire is on its way. These folks had mere minutes; many were killed in their cars. Or had to abandon their cars and run and were still overtaken. 🙁

        Prepper folks constantly lecture us about bug-out bags and car kits, but I’m not sure that even preppers would have been able to bug out in time.

        1. Prepper folks constantly lecture us about bug-out bags and car kits, but I’m not sure that even preppers would have been able to bug out in time.

          Maybe not, but keeping a bug-out bag ready to go is still a good idea. During the Waldo Canyon fire a friend of mine repeatedly asked his neighbor, a middle-age lady living alone, if she had packed all her important documents, pictures, valuables, etc. in case they had to evacuate, and she assured him she had. Then they got the order to evacuate, and it turned out the lady hadn’t lifted a finger to get ready. She got out but her house burned down, along with everything in in it.

          For those inclined to build a bug-out bag, here is a good example. This stuff would be priceless in a true bug-out emergency.

          https://graywolfsurvival.com/66545/how-to-build-ultimate-25-pound-bug-bag/

      2. “Paradise is a much lower priced area and many are the self sufficient, farmer typefolk up there.”
        Lots of working-age scamming disability, welfare-mom girlfriends, etc. More pride around Chico, IMHO.

      3. Don’t people have insurance to protect them from things like fire? Or is buying Insurance old-fashioned, and now you just expect a government (i.e. taxpayer) bailout?

  3. “Santa Clara had one of the highest rates of buyers paying over the asking price in the nation, with the average home selling for an 11% premium, according to Compass.

    The Society for the Seriously Schlonged, Santa Clara chapter, will be convening its inaugural meeting tonight to pass out maps depicting area food banks and offices of bankruptcy lawyers.

  4. These headlines are garbage.

    “Is Silicon Valley’s Feverish Housing Market Finally Slowing Down?”

    Yes they are, MSM you have been “confirming” this for months now but yet you come back and report / ask it as if it is new. Remember this one

    “It’s official: California’s housing market experiencing shift”

    And this one

    “The housing market is cooling off — and uncertainty isn’t helping”

    I guess we just have to be patient for the MSM to start publishing articles headlines that reflect the current market instead of what we already know from months back

      1. Well that would explain a lot… basically we have to parse and decrypt the headlines. RE is floating in a pink cloud because of the ambiguousness of (mis)information. To the common joe who doesn’t keep up on it daily, I am sure they think it’s all rosey and when it finally ranks they will be in such shock

        1. Six corporations own every media outlet in this country, and those corporations in turn are owned by globalist oligarchs out to influence rather than inform. So yes, if you want real news and real truth, look to the alternative media and citizen journalists. The sheeple who rely on the MSM for their news and information are in for a rude shock when they belatedly discover the difference between corporatist propaganda and objective reality.

  5. “Democrat Kyrsten Sinema wins Arizona Senate race”

    Looks like Phoenix and Tucson have reached the tipping point of Californians infestation. More public services and increased retirement benefits for those who administer them, coming up!

    1. Tucson has been a liberal stronghold for as long as I’ve been alive. I wouldn’t say it’s due to immigration. It’s a mostly homegrown population. There’s a lot of resentment towards Phoenix and state politics. I would know, I’m from there and my family lives there now.

      It’s strong enough that “Baja Arizona” is a thing. Nothing has come of it, though.
      https://tucson.com/news/local/govt-and-politics/could-baja-arizona-be-st-state-in-us/article_c2787d7e-fbcb-501f-af4b-c85d4da7ac62.html

      1. “It’s strong enough that “Baja Arizona” is a thing.”
        Thanks for the link. Pima County gets its water from up north, IIRC.

        1. No problem. One could say that all of lower Arizona, including Phoenix, “gets its water from up North” via the CAP canals and therefore the Colorado River. I think Phoenix is like 40% dependent, can’t remember the stat exactly. Tucson imports a lot as well. Both are furiously storing water underground to get ahead of the looming shortage.

          Lots of buzz about water right now. Including 2 years of 6% water rate increases in Phoenix. I’m a multi-generational Arizonan and have no clue how it’s going to keep growing the way it has.

          1. Imported northern water is the glue that keeps California together. I agree about the growth issues, but caution doesn’t stand a chance against profits and tax revenues.

  6. The DC area is a-hopping and a-buzz this morning with the rumor/announcement that Amazon is locating 1/2 of its HQ2 in Crystal City, in Northern Virginia. I haven’t been to that area in a long time, so I can’t speak to the area. But it is chock full of half-empty office buildings left behind by some defense contractors. Great place for offices. For housing and transport, not so much.

    1. I should also add that while I haven’t been to Crystal City, I used to shop at the Pentagon City mall (1/2 mile away) a lot. Almost everything is within walking distance. However, it’s unwalkable because the area is cris-crossed with multilane highways and railroad tracks. You can practically spit on National Airport but you can’t get there.

      My advice to Bezos and Co. is to build a lot of pedestrian-type bridges and run golf-cart shuttles for employees to shops and the airport. That would help the traffic situation greatly.

    2. They’re heavily pimping the “$150,000 average salary” but fail to announce the median – which is probably less than $30k, while some fat cat executives get tens of millions. Same old chit, different day.

      I wish Amazon would go BK. It’s everything that’s wrong with the system in this country, all the way down to the massive gives from the local governments to get them there.

      1. “I wish Amazon would go BK.”

        That happened years ago, they just forgot to file. They’re a profitless company.

        1. Yep, the Web Services division is what keeps them afloat.

          Personally, I’m now more likely to order something from walmart.com. I can just pick it up at the store when I go over for my regular shopping trips.

      2. “…the massive gives from the local governments to get them there.”

        Agreed. It happened with Boeing too. Remember to bend the knee when you see Bezos’ chariot.

        1. This is a corporate HQ, not a distribution center. ALL of those employees are going to be pulling six figures, except a few janitors.

          But yes, NoVa will be bending the knee (or, as the joke goes, both knees).

          1. Corporate hdqs don’t pay their rank and file 6 figures. Not remotely close. Besides, Crystal city is a backup to the main hdgs in Long Island. Both locations amount to raindrops in the desert given the record high unemployment rate.

          3. I am not understanding the supposed benefit to them to have distributed HQs.

            For the same reason that parts for an F35 need to be made in every Congressional district?

      1. It’s notable that Alexandria Ocasio-Cortez, a political novice, unseated a ten-term Democrat congressman from the corporatist wing of the party (which is to say, the mainstream Democrats). One particular local grievance she rode to victory was community anger over unaffordable housing. Now it looks like other NYC politicians who up to now have been bought and paid for by real estate developers are seeing the light, and distancing themselves from their former pimps.

        Queens City Councilman @JimmyVanBramer and State Senator @SenGianaris have come out against HQ2 deal:

        “The burden should be… on Amazon to prove it would be a responsible corporate neighbor.”

        Both announced they will stop accepting real estate developer money last month. https://t.co/XOld5WUDMX

        — Alexandria Ocasio-Cortez (@Ocasio2018) November 13, 2018

      2. My default setting is not to harbor any animus towards Amazon. They rode the no sales tax wave by selling online for quite some time, which I thought was completely unfair. But that is largely rectified, although they need to go after 3rd party sellers. Amazon is customer-centric, but has a reputation for running their employees into the ground.

        Having said that, I have to give them praise for raising their hourly minimum to $15/hour. That is a good thing in my opinion.

  10. Oil futures just did something never done before, as Trump calls for lower crude prices
    By Mark DeCambre
    Published: Nov 12, 2018 4:17 p.m. ET
    Oil notches 11th consecutive loss on Monday—the longest skid on record, according to FactSet data

    Oil is set for 10 straight losing days.

    A jolt lower for oil since peaking in October has helped crude futures to carve out a bearish record. That is even after U.S. benchmark oil on Thursday fell into bear-market territory, defined as a drop of at least 20% from a recent peak.

    West Texas Intermediate crude for December delivery on the New York Mercantile Exchange (CLZ8, -4.22%) settled lower on Monday, marking its 11th consecutive decline, surpassing a 10-day skid for the contract from July 18-July 31 1984, according to Dow Jones Market Data. It’s 11th straight decline is now the longest series of losses for oil since WTI started trading in 1983, according to Dow Jones Market Data.

    What’s behind the downturn?
    …

    1. U.S. oil prices continue record skid, headed for the lowest finish of the year
      By Myra P. Saefong and Barbara Kollmeyer
      Published: Nov 13, 2018 10:37 a.m. ET
      Natural-gas futures on track for highest settlement since 2014

      Oil prices fell anew on Tuesday, continuing a slide that has West Texas Intermediate crude in the grips of the biggest losing streak on record and headed for its lowest finish year to date.

      Natural-gas futures, meanwhile, jumped by more than 6%, poised to settle at their highest level in nearly four years as the heating fuel continued to soar on the back of expectations for strong winter demand. The move comes a day after futures prices settled at an almost two-year high.

      Picking up on losses that heated up in Monday’s extended session, crude for December (CLZ8, -3.99%) fell $1.99, or 3.3% to $57.94 a barrel on the New York Mercantile Exchange. It’s poised to settle at its lowest since December 2017.

      Another down day for oil will mark the 12th consecutive decline, the longest series of losses for the commodity since WTI started trading in 1983, according to Dow Jones Market Data. Monday marked an 11th straight loss for the contract.
      …

    2. China perhaps? We tend to think of ourselves as the driver of oil prices but China probably is moreso now. Total vehicle sales are reported to have declined YoY though the auto industry can have a strong 4th quarter.

    3. the downturn?

      10 days is a pretty short time frame with a back drop of a multiple decade speculative building boom. Oil is a big component of construction. Oil is following copper and other building materials down the backside of the twin peak boom. It is still a long way down.

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