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Seeking To Sell Before Values Start Dropping

A report from Kenneth R. Harney. “For years since the end of the financial crisis, prices in most markets have increased steadily — by single digits annually in most places, double digits in cities like Seattle, San Francisco, Denver and others that have vibrant employment growth plus persistent and deep shortages of homes for sale. Sellers were in the saddle. That was then. This is now.”

“Sales of existing and new homes have been sagging for half a year. That’s despite growing inventories of homes available for sale in some areas, reversing the boom-time pattern of bidding wars that pushed prices to record levels and drove buyers batty.”

“Sellers are cutting their list prices. According to research by realty brokerage Redfin, 28.7 percent of prices of homes listed for sale in major markets during the month ending October 14 saw reductions. That’s the highest share of homes with price drops recorded since Redfin began tracking this metric in 2010. One of the key reasons for the cuts: Demand by shoppers is down by more than 10 percent compared with a year earlier.”

“Consumer psychology is shifting as well: A national survey by Fannie Mae released last week found that the net share of Americans who believe it’s a good time to buy has fallen to just 21 percent, while the net share who say it’s a good time to sell is 35 percent.”

“There are other signs of cooling underway that could be cited, but you get the point. If you’re a seller, the key to your transaction will be getting your list pricing right. If you’re a buyer, take your time but keep in mind: If you shop diligently, this fall could be a smart time to catch a deal — a marked-down price on the house you really want.”

From the Maryland Daily Record. “The median sale price for homes in the Baltimore area remained essentially flat in October year over year, while sales volume noticeably declined from 2017. Only Baltimore and Baltimore County median home prices increased year over year.”

“Howard County experienced the steepest decline of the eight Maryland jurisdictions tallied in the report. The suburban jurisdiction’s median home price fell 7.4 percent from $404,990 last year to $375,000 in October. Anne Arundel, Carroll and Harford counties also experienced year-over-year decreases. The drops in median price ranged from 1.2 percent to 2 percent.”

“In Prince George’s County the median home price dropped from $285,000 last year to $280,000 last month, a nearly 2 percent decrease. The number of homes sold last month in Prince George’s County increased by .5 percent from the same month a year ago. While sales volume dropped by 11.4 percent in Montgomery County.”

“New listings in both counties were up by sizable margins. There were 1,407 new listings in Montgomery County, a 9.3 percent bump from October of last year. In Prince George’s County new listings were up 7.3 percent, with 1,328 properties coming on the market.”

From Seattle PI in Washington. “October was an interesting month for Seattle’s condominium market. Sale prices continued to rise while inventory skyrocketed and sales activity slowed. Counter to our historically seasonal downturn, Seattle’s inventory of available condos for sale that are listed in the Northwest MLS rose 258.2% to 677 units. This does not include unlisted new construction properties so the actual inventory is a little bit higher.”

“The burgeoning condo supply and slowing sales activity resulted in a significant change to the inventory supply rate, which rose to 3.5-months of supply based on pending sales transactions. That moves us from a seller’s market towards the normal market territory. The last time we had this level of supply was just before the market bottomed in early 2012.”

“Sales activity was tempered with 195 units going under contract into pending sales status in October. That reflected a 31.3% year-over-year and a 12.6% one-month decline, respectively. Though we historically experience declining sales volume towards the end of the year.”

“There were 195 closed sales last month as well, exhibiting a one-year decline of 32.1% but an improvement over the prior month by 14.7%. Since closings typically follow pending transactions by around 30 days, we can expect the lower number of sales in October will result in fewer closings for November.”

“The Seattle condo market is shifting and being impacted by more than the normal fluctuations we usually experience during the fall season. Approximately 90% of the condos for sale are resales; a significant number of owners are exiting the market.”

“There could be a number of reasons for that – economic outlook, moving up to single family homes as they are becoming more affordable, relocation or those seeking to sell before values start dropping.”

“The increased inventory may hamper the sales velocity that we’ve been used to over the past several years. That’s not good news for seller, but it is great for buyers who will have more choices and potentially better value.”

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This Post Has 29 Comments

  1. ‘Howard County experienced the steepest decline of the eight Maryland jurisdictions’

    Eee-bola Maryland!

    1. Those counties in MD are ALL outer burb bedroom-community counties. I remember when we said that the outer burb McMansions will be the biggest drops, and here they are, dropping.

      1. good to see Oxide
        seems the new format scared some away.
        Things still firm in 22151
        inventory at 30=bull
        40= flat
        50 =bear

  2. ‘Approximately 90% of the condos for sale are resales; a significant number of owners are exiting the market’

    And to think they all decided to move, at exactly the same time!

    2. It’s going to be difficult for everyone to race out of the burning theater at the same time, thanks to the crowd at the exit door.

    3. It’s not just that all those speculvestors are running towards the big flashing red “EXIT” Sign here in Seattle.

      All those new condos coming online – many originally built to be “luxury apartments” and not condos until the developers saw the handwriting on the wall – they are all priced too damn high to compete with older, pre-existing condos that offer the same or better space and amenities, but come with a cheaper price tag.


      Three more Seattle apartment projects go condo
      That’s five pivots in the past two months

      Can’t sell ’em to a greater investor-fool as apartments, and can’t sell ’em off as condos…. What’s “Plan C” again?

  3. If you’re a buyer, take your time but keep in mind: If you shop diligently, this fall could be a smart time to catch a deal — a marked-down price on the house you really want.”

    Nice try, REIC shills. The “smart time” to catch a deal is when the bottom is in. We’ve got a long, long way to go before the implosion of Housing Bubble 2.0 plays out in all its terrible glory. But we renters are a patient lot when we see prices cratering by thousands of dollars a month while the FBs who overpaid become more and more desperate to offload their shack, or walk away.

    1. ” this fall could be a smart time to catch a deal”

      But the house sales lady said last summer was the best time, and then they said last spring was the best time………and before that the winter was the best time!

  4. “There could be a number of reasons for that – economic outlook, moving up to single family homes as they are becoming more affordable, relocation or those seeking to sell before values start dropping.”

    Or it could be the most obvious reason of all: a bursting housing bubble.

  6. “That was then. This is now.”

    Seem’s like we’ve passed a bubble top in risk assets, including stocks, long-term bonds, and housing, and now we are on the steep downhill slope.

    It’s a red flag warning day for risk assets. Try not to get burned.

    1. Forgot to mention oil…

      3:07p
      Breaking Brent oil enters bear market, with Jan. contract down 6.6% to settle at $65.47/bbl

        1. You can’t help but suspect that the same dessication of Chinese cash from risk asset demand which has caused oil prices to plunge for a record period of consecutive days is similarly affecting housing demand in locations where Chinese speculators were a driving force behind bubble price appreciation.

          But since housing is not traded on a centralized exchange with regularly updates, internationally posted, market clearing prices, the attendant effect on housing is silent and somewhat invisible. However, reports of rising inventories, price reductions, and collapsed sales agreements all provide hints about what is underway.

        2. What is most interesting about the current oil price crash is that the rate of price decline has actually gotten steeper since the onset of the selloff, with the first derivative increasingly tending towards negative infinity.

          CR8R

      2. Wow! I just paid 5% less at the pump than for my last gasoline purchase five days ago, and put more gas in the tank. I don’t know whether to thank the Chinese, the Saudis, or DJT, but someone is owed a debt of gratitude.

    1. I can’t speak to the data, but I’ve been driving around MD a lot, and For Sale signs are sprouting up all over the place.

      1. “For Sale signs are sprouting up all over the place.”

        Ebola in all 50 states. Let it crater, then buy later for 75% less.

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