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Some Sellers Can’t Get The Price They Want

A report from Bloomberg. “The U.S. housing market has already begun to lose its momentum as rising mortgage rates have cut demand in cities where prices ran too hot for too long, such as Denver, Los Angeles, San Francisco, and Seattle. If borrowing costs keep climbing next year, eventually real estate’s law of gravity will kick in—and sellers’ expectations will have to come down. ‘There are always winners and losers when prices move down,’ says National Association of Realtors Chief Economist Lawrence Yun.”

“In September, sales of new and existing homes plunged 18 percent in Southern California from a year earlier. They fell 19 percent in the San Francisco Bay Area, to the weakest pace since 2007. In San Francisco, 27 percent of listings meet the affordability threshold. In the Boston metro area, only 52 percent of listings are affordable to residents with the median local income.”

From Curbed Boston in Massachusetts. “Average condo prices declined annually during the third quarter in several Boston neighborhoods—including Charlestown, Beacon Hill, the South End, and Fenway, according to a wide-ranging market analysis from Berkshire Hathaway Home Services Warren Residential.”

“As for the year-over-year declines during the third quarter, they were only really significant in Fenway/Kenmore and Downtown Boston. The average sales price for a condo was down 14.27 percent, to $611,304, in the former; and 6.99 percent, to $1,378,764 in the latter.”

The Denver Post in Colorado. “Average rents on single-family homes in metro Denver barely budged during the third quarter and are moving lower in many parts of the state, according to Real Property Management Colorado and RentRange.”

“‘Rental rates across the Denver metro area continue to rise although the gains are more modest than we’ve seen in some time,’ said Greg Bacheller, co-owner of Real Property Management Colorado.”

“Bacheller notes that all the new apartment supply could be diverting some tenants who might have otherwise gone into existing homes. Declining home rents in Denver tend to line up with where the most new apartments are coming online.”

“A relative lack of affordability is making the region less attractive, and net migration to the state is slowing, meaning a smaller pool of new tenants. Metro Denver home rents are about a third more expensive than the nation as a whole, but incomes aren’t a third higher.”

“To that list, he adds a new restraint on rent increases. As the housing market cools, some sellers who can’t get the price they want are starting to rent their homes, he said. ‘That is also driving up supply,’ Bacheller said.”

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  1. ‘As for the year-over-year declines during the third quarter, they were only really significant in Fenway/Kenmore and Downtown Boston. The average sales price for a condo was down 14.27 percent, to $611,304, in the former; and 6.99 percent, to $1,378,764 in the latter’

    Only downtown, where all the really hot money laundering is going on. Why it’s only 6.99% (no rounding please) off of 1.4 million!

  2. ‘There are always winners and losers when prices move down’

    Down? Did you let everyone know there could even be a down, Larry?

      1. Not yet. People who matter have to be in immediate danger of losing significant money. Getting closer…

    3. ‘There are always winners and losers when prices move down,’ says National Association of Realtors Chief Economist Lawrence Yun.”

      Seriously. I think he is also implying that on the way up, there are only winners. Otherwise, his statement is pure stupidity, because it means that there are winners and losers all the time (which is of course the reality).

    4. “… and losers…”

      First time in all these years I have ever heard Lawrence Yun utter the word “losers”..

      According to Lawrence and the REIC spin machine, everyone who purchased real estate could *only* be a winner! (and a big one at that!)

      1. But you’re a loser if you stayed on the sidelines, ‘cuz now is ALWAYS the best time to buy. Even in Paradise, CA.

  4. ‘net migration to the state is slowing, meaning a smaller pool of new tenants’

    But Toyota is coming to Dallas, that’ll save ya!

    ‘Metro Denver home rents are about a third more expensive than the nation as a whole, but incomes aren’t a third higher’

    Oh!

    ‘As the housing market cools, some sellers who can’t get the price they want are starting to rent their homes’

    Accidental landlords anyone?

      1. That’s a good point. For sale, vacant. Enough in numbers to drag down rents. Sounds like a lot of speculators to me.

        And this is where rents (falling as they are) need to cover cash outflow.

        DONG! That never occurred to these flippers when they were getting ready to rake in that sweeeeet equity!

      2. Yeah, and come spring, a those landlords that have been eating $3k a month since fall are going to be desperate to stop the bleeding. I suspect a lot of six month leases are being offered right now.

      3. I have noticed a fairly large number of “empty “ houses when looking on the UHS website.
        Not sure if this is “normal “ or not but at first glance I would say it is not Normal.

  6. I wouldn’t get too worked up, Ben. This ain’t yer first rodeo so why not just sit back, relax, & tip back a cold one as once again the predictable kabuki carnage unfolds.

  7. Are you ready for “higher than expected” inflation?

    Consumer inflation posts biggest jump in nine months on higher cost of gas, rent, used cars, CPI shows
    By Jeffry Bartash
    Published: Nov 14, 2018 10:16 a.m. ET
    Increase in inflation in past 12 months rises to 2.5% from 2.3%
    Bloomberg News/Landov
    A person tries on cowboy boots at the Double H Boot booth. Consumer prices rose sharply in October, the CPI shows.

    The numbers: Americans paid more in October for gas, rent and used vehicles, triggering the biggest increase in consumer inflation in nine months.

    The consumer price index climbed 0.3% in October to mark the biggest advance since January, the government said Wednesday. It also matched the forecast of economists polled by MarketWatch.
    …

    1. Mr Market sure is a gloomster as of late!

      …
      The market

      The S&P (SPX, -0.21%) Dow (DJIA, -0.25%) and Nasdaq (COMP, -0.38%) are all moving higher as trade kicks off.
      …

      1. Agree, I think they’ll cut rates to zero, do QE, etc. again, and the next recovery might actually see inflation.

        1. “next recovery might actually see inflation.”

          How likely is it that wages will triple or quadruple to meet grossly inflated housing prices?

          Not very.

          Housing prices will continued falling to dramatically lower and more affordable levels, meeting wages.

          New York County, NY (Manhattan) Housing Prices 12% YOY As Global Housing Bust Expands Across US

          https://www.zillow.com/new-york-county-ny/home-values/

          *Select price from dropdown menu on first chart

          1. “…meeting wages.”

            Has there ever been another time in history besides the post-1997 period when home prices became so badly misaligned with incomes?

  8. Right now we are in the deep denial stage, with inventory mushrooming and sales drying up. A cursory glance at the mls reveals a mountain of “flips” that are “flops.” The owners are slowly realizing this as they make chintzy price cuts which do nothing to stimulate buyer demand. Another 6 months and the stories should really get interesting.

  9. Every once in a blue moon I pull up the sh!tcoin price. There is fierce “resistance” at $6,000. I think it’s 100% manipulation from insiders. I do not think there really is a “market” happening, so much as it’s an orchestrated, controlled scam.

    1. Haven’t looked for sometime but it was hovering above the 6k mark u til I looked after reading your post. Currently just above $5700. It really is a SH!TCOIN!

          1. Just because you have a crazy lunatic guy running around on stage promoting it doesn’t make Bitcoin a scam. It’s a real currency!

          2. Just because you have a crazy lunatic guy running around on stage promoting it doesn’t make Bitcoin a scam. It’s a real currency!

            Backed by…the sunk cost of electrical power that already became heat?

        2. I think alphonso was wiped out long ago, which is probably why he had his meltdown and started sending emails to Ben, complaining about other commenters, etc. Those are the actions of a desperate, angry speculator.

      3. I posted because I was wondering if it would actually hold that level and it finally collapsed. I am surprised it has taken this long, honestly. I thought it’d be close to zero by now.

    2. There’s a new business in town!

      Rockdale: The Tiny Texas Town That’s Turning To Bitmining
      By Paul Flahive • Oct 15, 2018
      The now-shuttered Alcoa power plant sits in front of the smelter Bitmain announced it would move into.
      Paul Flahive / Texas Public Radio

      Rockdale, Texas, was chosen as the site for what some describe as the biggest bitcoin mine in the country. A Chinese company plans on bringing 400 jobs, while investing $500 million in the mine, which is where rows of computer processors solve complex computations and are awarded digital currency. This comes after a series of booms and busts for this town of 5,600 people.

      http://www.tpr.org/post/rockdale-tiny-texas-town-thats-turning-bitmining

      1. Bitcoin Price Drops Below $6,000 for First Time in Months as $13bn Wiped off Markets

        “The cryptocurrency ecosystem is currently going through a red day as most top cryptocurrencies are currently taking a hit, with some dropping over 20% in the last 24-hour period. The cause behind the massive downswing is, at press time, unclear.”

        “According to CryptoCompare data bitcoin, the flagship cryptocurrency, has dropped below the $6,000 as it’s currently trading at $5,900 after falling 7.52% in the last 24-hour period.”

        https://www.cryptoglobe.com/latest/2018/11/bitcoin-drops-below-6000-for-first-time-in-months-as-13bn-wiped-off-markets/

        It must have broken support. I remember when beanie babies did that.

        1. Who pulled the rug out from under cryptocurrency? Single-day losses are approaching 20% across a wide swath of ecoinage.

          1. The day didn’t turn out that badly, after all. None of the major cryptocurrencies even lost 20%. ‘Tis a mere flesh wound.

    3. ” … so much as it’s an orche$trated, controlled $cam.”

      ” x1 = from many, for the few” … “$unt enim victimae”

      Thus the motto “Novus ordo $eclorum” can be translated as “A new order of the age$.”
      It was proposed by Charles Thomson, the Latin expert who was involved in the design of the Great $eal of the United $tates, to signify “the beginning$ of the new American Era”

  11. “In September, sales of new and existing homes plunged 18 percent in Southern California from a year earlier. They fell 19 percent in the San Francisco Bay Area, to the weakest pace since 2007. ”

    What happened to US real estate in 2007?

  12. This flake comes up with an occasional good idea….

    When we talk about bringing jobs to the community, we need to dig deep:
    – Has the company promised to hire in the existing community?
    – What’s the quality of jobs + how many are promised? Are these jobs low-wage or high wage? Are there benefits? Can people collectively bargain?
    — Alexandria Ocasio-Cortez (@Ocasio2018) November 13, 2018

    https://1010wins.radio.com/articles/leaders-residents-protest-amazon-long-island-city-hq

      1. It’s easy to make fun of this crazy-eyed socialista, but I’ll give her credit for one thing: she bilged a ten-term corporate stooge and seems intent on standing up for her community against the financial interests who have made housing unaffordable for so many of the working poor.

    2. “– Has the company promi$ed to hire in the exi$ting community?”

      That’$ a very cheesy que$tion in Wi$CON$on / FoxCONn.

  14. “Some Sellers Can’t Get The Price They Want”

    Great title to this post and after just doing a recent search for new inventory, I spotted one of these soon to be sellers who won’t get what they want. According to the UHS’s title “If you snoozeyou will likely lose the opportunity to buy this amazing property!”. I will be snoozing on this one for sure. Not a good neighborhood, an ok home but looks like every other home that people have renovated in this town. Interesting that every week I have been seeing a dozen or more listings every week (just today there are 15 new listings) and these sellers don’t seem to be pricing in favor of the buyers.

    https://www.zillow.com/homedetails/1175-Lisa-Ln-Santa-Cruz-CA-95062/16127691_zpid/

    11/14/2018 Listed for sale $1,150,000
    9/4/2013 Sold $742,000
    11/14/2012 Sold $392,500
    8/31/2012 Sold $392,500
    8/11/2012 Listing removed $324,900
    8/3/2012 Listed for sale $324,900
    12/19/2011 Sold $544,000
    3/5/2003 Sold $560,000

    1. One more goofy one. They have been trying to sell this one for awhile now and the fluctuating +/- of millions makes me wonder if they are just joking or insane.

      https://www.zillow.com/homedetails/113-4th-Ave-Santa-Cruz-CA-95062/16112546_zpid/

      6/3/2018 Price change $4,210,990
      5/25/2018 Price change $2,900,000
      5/3/2018 Price change $3,850,000
      4/17/2018 Listed for sale $4,210,990
      1/25/2018 Listing removed $4,248,000
      1/25/2018 Price change $4,248,000
      12/8/2017 Listed for sale $2,450,000
      10/30/2017 Listing removed $2,400,000
      10/22/2017 Price change $2,400,000
      4/11/2017 Listed for sale $4,200,000
      5/4/1999 Sold $750,000

      1. I came across one in my hood last week that was changing every month by…$100, up and down. I assume the game is that it shows up on “price change” searches.

        1. Yeah those are funny too, but how can someone fluctuating prices by the millions up and down expect to find someone that would take them serious. I’m tempted to offer 1mil…

  15. “If borrowing costs keep climbing next year, eventually real estate’s law of gravity will kick in—and sellers’ expectations will have to come down.”

    Whoa, whoa, WHOA. All we’ve ever heard is that rising borrowing costs will make things more unaffordable for home buyers. What happened?

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