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A Wave Of New Listings Came On The Scene Throughout The Nation

A report from Forbes. “My first tip-off that winds of change were brewing came from an interview with a New York City real estate agent back in June. Over the phone he told me that home prices were down in his area 5-10% from six months ago. I had to listen back through the recording and make sure I’d understood it right. But he’d made no mistake.”

“Sure enough, in September, a wave of 465,000 new listings came on the scene throughout the nation’s 45 largest metros, an 8% increase that marked the largest annual inventory growth spurt since 2013. At the same time residential construction data shows builders are adding a bit more inventory to the mix, with housing starts up 3.7% year over year.”

“Rest easy, no one’s warning of a housing bust 2.0 danger zone.”

“Realtor Kelli Griggs, who services the tri-county area of Sacramento, El Dorado and Placer as well as the San Francisco Bay Area, describes a time at the height of the seller’s market when there were no opportunities for buyers to even make repair requests.”

“Griggs recalls when sellers would have a 65-page long list of things wrong with their home, or $23,000 worth of foundational issues, and then market it as an ‘as-is’ sale with no trouble.”

“That’s changing. ‘Buyers are pushing back, and they’re saying, ‘Enough,’ says Griggs. ‘They’re saying, ‘We’re done, we’re tired, we’re fatigued, we want to buy a home in good condition.'”

“Cities that experienced an extreme price run-up in a short span of time, like Seattle, San Jose and even Austin, Texas, will be more prone to a market correction. ‘Those markets that are seeing some downturn and correction—it’s because they have gone up so high in the last 6 years,’ says Jack McCabe, owner of McCabe Research & Consulting, a real estate and economic advisory and consulting firm.”

“Part of this is because affordability continues to be a challenge with home price growth outpacing wage increases. McCabe explains: ‘We’ve reached a level of unaffordability in certain markets and prices have shot up far above what household incomes have gained in the same time period.'”

This Post Has 45 Comments
  1. ‘My first tip-off that winds of change were brewing came from an interview with a New York City real estate agent back in June’

    This UHS was giving you two year old data.

    ‘in September, a wave of 465,000 new listings came on the scene throughout the nation’s 45 largest metros, an 8% increase that marked the largest annual inventory growth spurt since 2013’

    The REIC doesn’t like to hear this. And IIRC it was more than just one month. It blew their shortage myth out of the water. And where did these shacks show up? Why the most expensive supposedly “shack starved” markets. Suddenly shacks were flying onto the market where everybody wants to move!

    1. No profit, no flip, no future, no bank account, no equity.

      Theres nothing left…. nothing left but the cryin’.

      1. Apropos (as Alain would say 😉 to the current economic climate, despite the cheerleading – I just put an old tv up for $0 on craigslist, freecycle (actually hadn’t even finished listing on freecycle yet). Getting a bunch of responses. Of course, the price is right, but even free it’s a 2007 DLP, not used in years.

        How good can things be?

        I am anticipating getting news at the end of the month of our lease not being renewed (or a substantial rent increase, since I hear rents are still rising here in Las Vegas); spectuvestors are bolting as inventory is rising, but no one seems to be talking about it.

        Merry Christmas to us.

        1. 2007 DLP
          Wow, this evening has been an education re: responses. You would think that when you are giving something away for free (however low value), a person would still be polite. Apparently not. Wow.

        2. I live in Vegas (way down S. Jones). Just got the letter with my lease renewal options.

          For a 10, 11, or 13-month lease (the three options listed), my $1050/mo rent will go up to $1090/mo. Month to month would be $1345/mo.

          I was planning to bail, but I was thinking of staying one extra month through January. Nice to finally know what it will cost me.

          1. I already planned to move out, so it’s a moot point!

            I’m just hoping housing costs in general drop enough over the next 2-3-4 years so I can finally afford to buy a little place and lock in a payment. We’ll see what happens.

  2. Reader for 10 years, never posted but wanted to share this link.

    I know many “investors” who put money into coworking businesses thinking it was an innovative approach to real estate investing.

    I learned today that our major coworking space in downtown Boulder is shutting its doors. They published a note basically admitting they have never made money and never will. And also threw in a note about how the whole coworking industry is losing money. The only think keeping these things afloat is Yellen bucks.

    The post is here:
    https://docs.google.com/document/d/1a7vk6BPioce39r_uvhp5DyD9e-1JkBQKks0-2W0mNWc/edit

    1. “Despite great intentions and an incredible vision, our business model has never been sustainable.”

      Jeebus…

      1. That sure is some “incredible vision.”

        That’s the problem with these real estate bubbles – they breed all kinds of fake businesses, because the rents and purchase prices are so damn high that traditional businesses don’t pencil out. Real estate bubbles destroy businesses and household balance sheets.

        1. Truth. Now apply that nation (and world) wide when the Feds lower rates to a point where all manner of speculative ‘investments’ are worthy of experimentation with cheap borrowed money. Problem is the rates eventually go back up and all that borrowed money dries up and defaults, along with all those candle shops and dog grooming businesses.

      2. “Despite great intentions and an incredible vision, our business model has never been sustainable.”

        At some point in the future, Elon may want to borrow this line. 😉

    2. My takeaway: If they owned the building they occupy so that their rent didn’t keep going up, maybe they could have stayed open.

      1. My takeaway was that the intention from the beginning was to lose money but be really attractive to be acquired by the big boys. And then it didn’t happen.

  3. ‘Griggs recalls when sellers would have a 65-page long list of things wrong with their home, or $23,000 worth of foundational issues, and then market it as an ‘as-is’ sale with no trouble’

    How does one get a loan in this situation? And imagine trying to unload these dumps now that the shoe is on the other foot? I’m sure this is contributing to some strategic defaults discussions right now that they’re underwater.

    I’d bet 5 bucks that Kelli was telling these suckers they gotta roll with it, and to write a letter including little Jimmie’s crayon drawing of the dog skipping among the back-yard rock features.

  4. “Rest easy, no one’s warning of a housing bust 2.0 danger zone.”

    Um…We the motley crew at the HBB have been sounding the klaxon horn on housing bust 2.0 for all who care to listen.

    1. I’m hoping for bust 2.0, so I can at least consider the possibility of buying and locking in an affordable payment!

  5. “Yet despite what seems like swift upward movement, mortgage rates remain historically low (remember the 10% averages of the early 1990s?). The difference between a 4.875% rate and the imminent 5% mark is only $20 per month on the average mortgage.”

    Well that excuse of interest rates being raised is out the door… ok back to the buyers are on vacation again. —realtor

  6. Business
    Three New Signs China’s Housing Market Slowdown Is Taking Hold
    Bloomberg News
    November 5, 2018, 10:57 PM PST

    More signs have emerged that China’s housing market is cooling, with sales in the secondary market, land purchases by developers and contracted sales at the biggest builders all falling last month, as these three charts show.

    Sales of existing homes, which are quarantined from the government curbs on the new home market, last month plunged to a four-year low in 10 major cities tracked by China Real Estate Information Corp. Lackluster sales will likely weigh on existing-home prices in coming months, Shanghai-based analyst Wang Zhaojin said. In September, new-home price growth slowed for the first time in seven months.

    Cash-strapped developers are also pulling back. Land sales in 40 cities tracked by CRIC fell 0.5 percent in the first 10 months from the same period a year ago, a sharp contrast to the previous two years when land sales surged about 40 percent. With builders facing a record $18 billion of bond maturities in the first quarter of 2019, the cooling in the land market is set to intensify.

  7. CR8R

    The Ledger
    Bitcoin
    The Entire Cryptocurrency Scene—Including Bitcoin—Is Plummeting Again. These Might Be the Reasons Why
    By David Meyer
    November 15, 2018

    For months, the price of Bitcoin has been hovering around the mid-$6,000s mark. No longer. The most popular cryptocurrency has plummeted by 12% over the last day, hitting a value of little more than $5,500.

    The total market capitalization for Bitcoin now stands at $96 billion—the first time the market cap has fallen below $100 billion since October last year. The total market cap for the entire cryptocurrency scene now stands at $181 billion.

    Bitcoin is far from the only casualty, with cryptocurrency price charts all firmly in the red right now. XRP (Ripple), the second-biggest virtual coin, is down 9.2%, Ethereum’s Ether is down almost 13%, and Bitcoin Cash is down 8.7%.

    So, volatility is back, but—as is so often the case—it’s not entirely clear why that is.

      1. I’m not entirely clear why Bitcoin has ANY value. At least when I buy fake currency at Chuck E Cheese my kids can still play games with it.

        1. Anything that can be used to anonymously transfer nearly any amount of money anywhere without much loss is going to have some usefulness. The “without much loss” part is the trick.

  8. McCabe explains: … prices have shot up far above what household incomes have gained

    Sorry Jack, it was all gambling. Gambling limits have nothing to do with family income or logical budgets. They are based on what the degenerate can get away with.

  9. Interesting article about supply. This Is Because I closely watch a zipcode here and there have been 20 new listings in the past 10 days. 2 were three days ago, 3 yesterday, and 4 today. This area had about 120 consistently over the last 5 months or so with little change. This is sudden and happening now. Same in your areas? Can’t wait to see what happens in the next week or 2.

    1. I’m seeing houses go on the market then pulled two weeks later with no sale or price reductions. It’s happened with about 5 houses in my zip code. Me thinks they were expecting a “flood of offers” and never got a single one.

      1. Me thinks I agree. These greedbags are holding onto the dream prices there neighbors got months ago and when the reality that there are no more knife catchers left finally sets in, they will be the ones foreclosing or taking a hit and selling at a loss.

        “High expectations are the key to everything.” -Sam Walton

  10. You can bet this kerfuffle across the pond will spark some economic turmoil.

    Brexit: What just happened?

    After a day of Cabinet resignations, and mounting speculation that the prime minister could be forced out, no one really knows what might happen next.

    But Theresa May has said she is “determined” to see her draft Brexit agreement through, and has vowed to stay on in Downing Street.

    Our political correspondent Leila Nathoo looks at what we know now, and what could still happen.
    6h ago

  11. Is a crypto hangover putting a damper on your holiday season?

    Opinion: ‘Crypto hangover’ has Nvidia staggering into holidays with a big headache
    By Jeremy C. Owens
    Published: Nov 16, 2018 6:56 a.m. ET

    Nvidia must clear backlog of older gaming cards while miners sell similar gear on secondary market and new Turing-based cards attract high-end buyers

    https://www.marketwatch.com/story/crypto-hangover-has-nvidia-staggering-into-holidays-with-a-big-headache-2018-11-15

    1. They also stated that there surge in revenue over the past year was a mere 10% of sales (lies). They will tank along with crypto

      “Although Nvidia’s report said the company was expecting a decline in GPU sales and “cryptocurrency-specific products” from a peak of $289 million last quarter to about $100 million this quarter, the actual revenue for its crypto-specific products ended up being a mere $18 million. That’s a 93 percent decrease in just three months.” Aug 2018

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