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The Season For Records Is Most Likely Over

A report from the New York Post. “Keith Richards took a hit on this rock star apartment. The wrinkly rock royal and his wife, Patti Hansen, just sold their posh downtown digs for $9 million, according to city property records. That’s far less than the apartment’s $12.32 million original asking price — and a striking $1.5 million less than the couple paid for the pad in 2014.”

From Mansion Global on California. “Grammy-winning singer-songwriter Usher has sold his Spanish-style estate in Los Angeles for $3.3 million, listing records show. Usher seemingly sold the house at a loss as he purchased it in 2015 for $3.36 million via a limited liability corporation, Mansion Global has previously reported. The sale price represents a 16.7% discount from the original listing price.”

The Carroll County Times in Maryland. “The median sale price for homes in the Baltimore region dropped $10,100 from September to October and remained unchanged from a year ago. October’s median sales price of $259,900 marks the third month of dipping prices after a sustained rise that peaked in June at $285,000, according to data provided by MarketStats.”

“Median prices dropped in Anne Arundel County to $325,000 from $329,000; in Carroll County to $315,750 from $320,000; in Harford County to $240,000 from $245,000; and in Howard County, which remained the area’s most expensive jurisdiction, to $375,000 from $404,990.”

The Morning Call in Pennsylvania. “The Greater Lehigh Valley Realtors Group is projecting a period of ‘relative calm’ in the housing market for the remainder of 2018 — ‘relative’ being the operative word. Coming off an overheated summer and an unusually warm start to fall, the numbers point to a welcome balance in the housing market, the group’s latest report notes.”

“Nationally, a cool-off began earlier, with data from the National Association of Realtors showing a decline in existing home sales across the country in September after a stagnant August.”

“The takeaway: the season for records is most likely over. ‘Prices, though still rising, have widely reduced the march toward record highs,’ GLVR President Sean LaSalle noted.”

The Holland Sentinel in Michigan. “With inventory down and the number of buyers on the rise, the summer housing market was red hot. Now, according to local realtors, the market has shifted toward a balance moving into the holiday season.”

“According to Dave DeYoung, another realtor at Coldwell Banker Woodland Schmidt, it was not unusual for houses in the $150,000-$200,000 range to sell within a few days after receiving multiple offers above asking price.”

“‘It was a feeding frenzy,’ said DeYoung. ‘And part of what created it was a panic in June and July because interest rates started to steadily increase. But it’s balanced out from that. Now, as a buyer, you have a better opportunity to get a home at a fair price, as opposed to feeling like you just paid $5,000 too much. So, if you price your home competitively — rather than fluffing like sellers could this summer — your home will sell.'”

From Patch Renton on Washington. “Could this be fallout from HQ2? Are you in the market for a bargain? Well, the most expensive home in Renton is now $50,000 cheaper. This 3,700 square-foot home was just built this year.”

This Post Has 34 Comments
  1. ‘It was a feeding frenzy…And part of what created it was a panic in June and July because interest rates started to steadily increase. ..Now, as a buyer, you have a better opportunity to get a home at a fair price, as opposed to feeling like you just paid $5,000 too much. So, if you price your home competitively — rather than fluffing like sellers could this summer — your home will sell’

    This is where the REIC really screwed up. This mania isn’t just in Los Angeles or Manhattan. It’s in little towns and valleys all over the US.

  2. ‘Usher seemingly sold the house at a loss as he purchased it in 2015 for $3.36 million’

    Three bubble years -VOOM!

    1. 3 years of gains already wiped out on the high end. People have a hard time accepting, or even understanding, where the market is at right now.

      The median priced home of many west coast markets is losing $2,000 – $3,000 per month right now, some even more. That means sellers, assuming it’s priced correctly in the first place, need to trim $3k off the price every month just to stay with the trend.

      Most loan owners have no idea their “equity” is evaporating this quickly right now, but in a year’s time we will likely see prices have fallen much more than $36k in a lot of these markets, probably more than double that in the Bay Area.

      1. I think 2015 was probably the peak for high-end LA, just like it was for Miami, Manhattan and the Hamptons too. For medium and low-end the bubble kept expanding, but that was because what propped up the market were newly-minted borrowers with Rocket Mortgages and 50% LTV, and they weren’t buying $3 mil houses.

      2. “…losing $2,000 – $3,000 per month right now…”

        That’s on the order of losing a month’s worth of rent every month. At that rate of loss, coupled with all of the high costs of ownership, what’s going to keep the poor amateur investor-landlords in the game?

        I’m guessing ignorance will have to suffice.

          1. “…taking a $100 bill
            And then having to repay it to the bank….”

            With interest!

            “…feeling like you just paid $5,000 too much…”

            $5,000 too much? LOL, that’s a hoot. Somebody dropped some zeros. How about $500,000 too much?

  3. “Keith Richards took a hit on this rock star apartment.”

    That’s better than turning blue in New York City.

  4. “Grammy-winning singer-songwriter Usher has sold his Spanish-style estate in Los Angeles for $3.3 million, listing records show. Usher seemingly sold the house at a loss as he purchased it in 2015 for $3.36 million via a limited liability corporation, Mansion Global has previously reported. The sale price represents a 16.7% discount from the original listing price.”

    These entertainers are getting good advice albeit a bit late.

    1. With what Usher makes these days that real estate “loss” is merely a rounding error.

      nice to be in that bracket.

      I still change my own oil. Mostly because I’m impatient and cheap. I mean frugal

  5. Will the Fed give in to pressure from a chorus of Wall Street commentators to stop taking away the punchbowl, in order to enable risk asset prices to resume their upward ascent?

      1. It seems like Greenspan and Bernanke implicitly added asset price support to the Fed’s mandate, which used to be limited to maintaining employment and price stability.

        Is creating positive wealth effects still part of the Fed’s game plan?

      2. These are not your daddy’s mortgage rates. In fact, they are far below historic norms.

        Mortgage rates hold steady as housing market stresses mount
        By Andrea Riquier
        Published: Nov 15, 2018 10:16 a.m. ET

        So far this year, the 30-year-fixed has averaged 4.53%, up from 3.99% in 2017
        Getty Images
        A home with American flag in Frankenmuth, Michigan.

        Rates for home loans took a breather after churning to the highest in nearly eight years, mortgage liquidity provider Freddie Mac said Thursday.

        The 30-year fixed-rate mortgage averaged 4.94% in the Nov.15 week, unchanged during the week. The 15-year fixed-rate mortgage averaged 4.36%, up three basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14%, also unchanged.

    1. Billionaire investor Dalio: Fed rate hikes are now ‘hurting asset prices’
      By William Watts
      Published: Nov 15, 2018 10:13 a.m. ET
      Fed now has to look at asset prices before economy, hedge fund manager says
      Bloomberg
      Ray Dalio

      Dalio, the founder of Bridgewater Associates, the world’s largest hedge fund, made those remarks in an interview with CNBC Thursday morning.

      “We’re in a situation right now that the Fed will have to look at asset prices before they look at economic activity,” he said. “It’s a difficult position.”

      Through Wednesday, the S&P 500 (SPX, -0.88%) was down 7.3% since the end of the third quarter, leaving it with a 1.1% year-to-date gain. The Dow Jones Industrial Average (DJIA, -0.95%) was off 5.2% in the quarter to date. A selloff in tech shares has left the Nasdaq Composite (COMP, -0.58%) off more than 11% in the third quarter. Stocks were adding to losses on Thursday.

      The Fed is widely expected to deliver its fourth rate increase of 2018 in December, lifting the fed-funds rate to a range of 2.25% to 2.5%, and to continue raising rates in 2019.

      1. “We’re in a situation right now that the Fed will have to look at asset prices before they look at economic activity,” he said. “It’s a difficult position.”

        Too bad the Millennials are already buried in student loan debt and have meager incomes. The falling labor participation rate will exert a drag on economic activity. The boomers are retiring, so they will eventually sell their assets at a loss.

  6. If the world economy is slowing, will the foreign investors driving up U.S. housing prices keep coming?

    1. Economy
      Global Economy Shows Strain as U.S. Steams Ahead
      China, Japan and Germany show signs of stress, posing a risk to the U.S. should the trends persist

      By William Boston in Berlin,
      Josh Zumbrun in Washington and Nina Adam in Frankfurt
      Updated Nov. 14, 2018 6:58 p.m. ET

      The global economy has hit a soft patch, putting the U.S.’s robust growth at risk should the slowdown persist.

      Economic output in Japan and Germany contracted in the third quarter, while in October consumer spending in China hit its slowest pace in five months and bank lending fell, according to data released Wednesday about the world’s biggest economies after the U.S.

    2. Global slowdown: 3 of the top 4 economies are suffering
      By Charles Riley, CNN Business
      Updated 12:19 PM ET, Wed November 14, 2018

      London (CNN Business)
      The global economic slowdown is happening and could spread to the United States next year.

      The economies of Germany and Japan shrank in the third quarter, according to data published Wednesday, providing a sharp contrast to another quarter of strong US growth. In China, there are signs of a deepening economic malaise.
      The reasons for the weak performance are varied, and economists believe that both Germany and Japan will dodge recessions by returning to growth soon. But the data underscore the major challenges faced by many of the world’s largest economies.

  7. “The takeaway: the season for records is most likely over. ‘Prices, though still rising, have widely reduced the march toward record highs,’ GLVR President Sean LaSalle noted.”

    Realtor speak for housing price has peak and has began to go down.

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