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Listings Are Showing Aggressive First Prices And Within A Week Or Two, They’ve Dropped

A report from the Orange County Register in California. “Orange County’s supply of existing homes for is up 53 percent while builders have 35 percent more unsold new homes to peddle. ReportsOnHousing tracks homebuying patterns found in real estate broker networks. Supply: 7,218 listings, up 2,504 residences for sale in a year or 53 percent; and up 35 percent vs. 6-year average. Demand: 1,776 new escrows, down 538 sales contracts in 12 months or 23 percent; and down 27 percent vs. previous six years. Market time: 122 days vs. 61 a year earlier and an average 75 days in 2012-2017.”

“As for Orange County builders, data from MetroStudy: Unsold new homes: 1,074 as of Sept. 30, up 277 or 35 percent in a year. Average, 2004-2017: 402!”

“Elsewhere in Southern California, from ReportsOnHousing: Los Angeles County: 44 more days to sell in a year to 105 days; supply up 42 percent. Riverside County: 42 more days to 134 days; supply up 24 percent. San Bernardino County: 45 more days to 117 days; supply up 60 percent.”

From the Tennessean. “It’s been a tough year for home buyers. But there’s some relief this winter. The best opportunities for Nashville housing discounts are in December and early January. It’s also easier for buyers to get concessions such as hardwood floors, covered parking, new paint, or a refrigerator when homes aren’t selling quickly.”

“Greater Nashville Realtors President Sher Powers said the region’s housing market began cooling this fall. Inventory has also increased, offering buyers more choices. ‘Listings are showing aggressive first list prices and, within a week or two, they’ve dropped,’ Powers said. ‘That is indicative of a market that’s calming. I think there’s a tipping point where buyers start to step back.'”

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  1. ‘Orange County’s supply of existing homes for is up 53 percent while builders have 35 percent more unsold new homes to peddle…Los Angeles County: 44 more days to sell in a year to 105 days; supply up 42 percent. Riverside County: 42 more days to 134 days; supply up 24 percent. San Bernardino County: 45 more days to 117 days; supply up 60 percent’

    What happened to my shortage!!?

  2. ‘Listings are showing aggressive first list prices and, within a week or two, they’ve dropped’

    But Sher, what happened to the “six month equals balanced market”? Don’t tell me that old saw is a dead end!

    1. ‘On this week’s episode of National Real Estate Cafe, with Santa Clarita Real Estate experts Don Goettling and Gino Fronti, the two talk about how the housing supply has increased but sales have slowed down. “The media is going to tell you that we are headed into the next housing bubble,” said Don. “We aren’t!”

      ‘Don and Gino say that more homes are available, but because of that, buyers are more willing to wait for a home that is reasonably priced as opposed to being listed for an inflated price. Home’s have been going for unreasonable amounts of money because there was no inventory, so buyers were willing to pay more in order to secure a home, said Don and Gino, but now buyers know to wait for the home to be listed at it’s true value.’

      “If you put your home on the market right now with a reasonable price, it should sell within two weeks,” said Gino.’

      2. Don and Gino… ok I’ll admit they hit a few truths here but they still have that realtor mentality that it’s always going up. They should really consider going back to used car sales. Maybe even venture into used hubcap sales 🤔.

  5. That’s a lot of inventory for builder’s to hold. Orange county developments builders must have been pretty confident in selling spec homes.

    Most of the professional work I do here in SW Florida is in new home developments. Typically properties in these developments are contracted and built for a contracted buyer with closing occuring immediately after issuance of the C.O. or by construction perm loan. They are different. Either way, the house is built for a buyer. A few inventory homes may be built for the buyer ready to move in or because of default in financing of a custom built home. But seldom have I seen more than a handful in a large development. Probably less than 2 or 3 per cent. This is for SFR. Of course, attached and multifamily is a different story. I guess the dynamic is different in CA.

    This is where I have had a problem with news about builders not creating enough inventory. As a rule the build for specific buyers, they do not build for inventory. This would be very expensive. Those that do run a very high risk in a shifting market.

  6. “Unsold new homes: 1,074 as of Sept. 30, up 277 or 35 percent in a year. Average, 2004-2017: 402!”

    Increase off 2004-2017 average:

    1,074 -402 = 672 = 167% of 2004-2017 average.

    That obviously is a lot more than 35 percent, so inventory has been rising for over a year already!

  8. Sorry if this story has already been posted since it is a couple of days old.
    Nissan’s Carlos Ghosn Arrested by Japanese authorities for under reporting pay. Apparently he hid up to 50 million over 4 to 5 years in pay in various schemes one of which, you guessed it, buying real estate in Netherlands, Lebanon and his birth country Brasil.
    Rhetorical question: Why do these so called elites want to hide money? When is it enough?
    The Japanese, not known for showing emotion, are apparently fuming that Carlos Ghosn laid off thousands of employees in cost cutting measures.

  9. Pessimism will set in soon. Then the markdowns will predominate followed by the delinquencies and finally short sales.
    Realtor language is interesting when short sales show up. Then they start to exclaim further reduction predictions so that lenders will accept short sale offers rather than foreclose. This, of corse, is in order to generate comissions. Saw this many times back in the short sale days.

  10. Is it safe to assume that the Fed will find itself politically unable to continue its rate hike schedule as aggressively as announced?

    1. Market research guru Jim Grant predicts the Fed ‘will definitely blink’ on interest rates
      – The Fed won’t end up raising interest rates as aggressively as projected, says the editor of the Grant’s Interest Rate Observer newsletter.
      – “I don’t know when it will reverse course; I suspect sooner rather than later,” says Jim Grant.
      – Some of the recent central bank chatter seems to indicate that a slower path higher for rates may be under consideration.
      Matthew J. Belvedere
      Published 1:36 PM ET Tue, 20 Nov 2018
      …

    2. Look for the mother of all stock market rallies, back to permanently overvalued status, once the Fed confirms expectations for it to not follow through on announced plans.

  11. Bitcoin has further room to fall.

    How do I know this? There is way too much bullish sentiment remaining, even after the price cratered by 1/3 in under a month, for true capitulation to have yet taken hold. We’ll know when a true bottom is reached once present denial ultimately gives way to abject, irreversible, everlasting despair amongst the HODLers.

    1. Gee whiz, if a noted real life cryptocurrency analyst says so, then it must be true. Moronic financial journalism certainly is highly fashionable these days.

      Bitcoin price just hit new 2018 low but cryptocurrency analysts predict dramatic market reversal
      ‘Personally I consider $250k-$500k/BTC plausible in the years ahead,’ one noted analyst says
      Anthony Cuthbertson
      17 hours ago
      The Independent Tech

      Bitcoin has fallen to its lowest price since October 2017, marking the latest losses in a year that has seen its value drop to just a quarter of what it was worth just one year ago.

      Despite these losses, some cryptocurrency analysts are making the bold prediction that bitcoin could return close to record highs before 2019.
      …

  13. Buying into a bubble that’s about to pop is bad enough, but how about paying a 100% premium for the privilege of HODLing!?

    Bitcoin traders who could be nursing losses of over 87%
    Thu, Nov 22, 2018 – 5:50 AM
    Hong Kong

    LOSING money as everything from stocks to oil and corporate bonds tumble? It could be worse.

    To see what may be one of the most poorly timed trades of the past year, take a look at the US$1 billion Grayscale Bitcoin Investment Trust.

    On Dec 18, 2017, the day before bitcoin’s epic crash began, buyers propelled the trust’s premium over net asset value to more than 100 per cent. In rough terms, it was like shelling out US$40,000 for a bitcoin that was trading near US$20,000 on spot markets.

    The markup was largely a result of scarcity value. Buying the trust was one of the few ways for regulated US institutional investors to gain exposure to cryptocurrencies, and some were willing to pay for the privilege on expectations that crypto-mania was just getting started.

    https://www.businesstimes.com.sg/banking-finance/bitcoin-traders-who-could-be-nursing-losses-of-over-87

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