The Psychology Has Changed To, How Much Can I Get Off From The Price?
It’s Friday desk clearing time for this blogger. “Both nationally and in the Philadelphia region, the 2018 residential market offered some much-needed relief to home shoppers. In 2019, experts believe, a slowdown of the region’s hot market will continue. ‘There is currently an oversupply of rental housing, but it will be absorbed in a reasonable amount of time,’ said Kevin Gillen, a senior research fellow at Drexel University. ‘It’s just a normal cyclical fluctuation, not a bubble.'”
“‘We have had pent-up demand and low inventory, things that … would naturally increase prices,’ said Cheryl Young, a senior economist at Trulia Research. ‘It’s certainly not a bubble in the way that it was before, in that we could anticipate a large price drop and devaluation of homes.'”
“The number of homes sold in Charlotte has been on the decline for six consecutive months. Will Hadley and Cheryl Hadley have been trying to sell their home since February, and they are not alone. The Hadleys have been reluctant to reduce the asking price of their home in Dilworth.”
“‘If we need to, and we’re going to probably, lower the price just a little bit more,’ Will Hadley said. ‘Everywhere, everything has just really slowed down.'”
“A year ago, the three-bedroom craftsman home on 2873 Upas St. would have been one of the hottest on the market, receiving multiple offers and selling within days of its listing. But today, after sitting on the market for 44 days and four price reductions later, the remodeled 1943 home in the popular North Park-Morley Field neighborhood doesn’t have an offer.”
“That shift is most evident when you look at the number of times sellers have reduced prices. The share of home listings with a price cut grew to its highest level in at least eight years, says a recent analysis from Trulia. San Diego had the most reductions — 20.5 percent — of the 100 biggest metro areas in the United States so far this year. (It tied with Tampa, which also saw 20.5 percent of homes with a price cut.)”
“‘Three months ago, the feeling was, ‘I better make an offer on that house before somebody else does and how high do I need to go?’ said Gary Kent, a La Jolla-based real estate agent. ‘The psychology has really changed to, ‘You know what, how much can I get off from the price?'”
“As housing sales dropped to the lowest level in five years, new home starts continue to grow in the first quarter of the year in Metro Vancouver. Developers who scrambled to pre-sale condos prior to construction as little as three years ago now find many units sitting unsold as buyers watch the market to see if prices will drop lower. Buyer incentives, such as free trips or not paying mortgage for the first year are being offered in some cases as developers find themselves with empty inventory for the first time in many years.”
“‘The supply of homes for sale today is beginning to return to levels that we haven’t seen in our market in about four years,’ Phil Moore, REBGV president said. ‘For home buyers, this means you have more selection to choose from. For sellers, it means your home may face more competition, from other listings, in the marketplace.'”
“Discounts on London homes are creeping out further from the center as prices remain out of reach for many people and uncertainty surrounding Brexit starts to damp demand for homes in the capital’s cheaper neighborhoods.”
“‘Vendors in outer boroughs are catching up and becoming more realistic about pricing,’ said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors. ‘There’s been a shift of power from seller to buyer and it looks as if it will stay that way for some time.'”
“They say forewarned is forearmed, but are we getting to the stage where we are actually being spooked by the constant warnings from ‘experts’ over the outlook for house prices?”
“The worries over house prices are threefold. There is the natural correction to the massive spike that saw house prices soar to ridiculous levels, particularly in parts of Sydney and Melbourne, aided by tweaks to investor lending by the prudential watchdog.”
“Then there are concerns about a further tightening in bank lending standards resulting from the Royal Commission into the financial sector, making it even more difficult to buy a home. And finally there is the political hoo-ha over Federal Labor’s promised plan to change generous tax concessions on housing investments – a policy it also took to the 2016 election.”
“Aussie Home Loans founder John Symond launched a tirade against the plan this week, describing its as a ‘nuclear bomb’ that could tip the country into recession.”
“Delivering a speech this week, Reserve Bank governor Philip Lowe agreed developments in the housing market needed to be watched closely. But he said this was taking place against the backdrop of a strong world economy, a positive Australian economy, low unemployment, low interest rates, strong population growth and only limited pockets of excess housing supply.”
“‘This is a reasonably favourable backdrop against which to be having an adjustment in the housing market,’ Dr Lowe said. So for now, let us all take a deep breath and not panic.”
‘Three months ago, the feeling was, ‘I better make an offer on that house before somebody else does and how high do I need to go?…The psychology has really changed to, ‘You know what, how much can I get off from the price?’
A perfect summation of mania thinking and how it unravels.
It’s never just one aspect that unravels too… And “fixing” a single factor (like dropping interest rates) is not going to stop it, not even slow it down much.
‘There is the natural correction to the massive spike that saw house prices soar to ridiculous levels, particularly in parts of Sydney and Melbourne’
It’s funny how people will say for years, “oh shacks cost too much, let’s build more and more so prices can be more affordable!”
And then prices drop a tiny amount and the sky is falling. So which is it?
It’s both! It’s a) “oh shacks cost too much”, (but I want my share of the easy money) as the bubble inflates, then it’s b) “prices drop” (hey, wait, what? how do I see this POS?) when it pops. Prices have not dropped much yet (U.S.), but the psychology of the bubble mania has turned. That’s all it takes to get the ball rolling. Same with stocks, HY (junk) and IG (almost junk) bonds. Kind of a feedback loop both ways due to herd mentality.
In my view, we’ll see some serious SHTF this time as “The Everything Bubble” pops; with most major asset classes experiencing mean reversion at roughly the same time. Great job Fed! We’ve got “pump and dump” on a global scale. Heluva way to run an economy. Got gold?
“How did you go bankrupt?” Two ways. Gradually, then suddenly.” – Ernest Hemingway, The Sun Also Rises
Oops! S/B: “how do I SELL this POS?”
The Dallas article in the past week on builders slashing 70-90k off new shacks was huge IMO. Now we have a San Diego UHS stating flat out the sudden collapse of bubble psychology. We’re running out of cities that the ebola hasn’t contaminated.
I almost forgot: Eeee-bola Philadelphia!
‘Will Hadley and Cheryl Hadley have been trying to sell their home since February, and they are not alone. The Hadleys have been reluctant to reduce the asking price of their home in Dilworth’
‘If we need to, and we’re going to probably, lower the price just a little bit more,’ Will Hadley said. ‘Everywhere, everything has just really slowed down.’
February? Keep chasing the market down Will and Cheryl.
9 months without a price cut and you think lowering it “just a little bit more” will help? Time to slash the price by a lot!
They will be slashing by 50% soon.
‘Will Hadley and Cheryl Hadley have been trying to sell their home since February, and they are not alone.
“Do or do not. There is no try.” — Yoda
Each fall/winter I like to buy a few quality clothing items. I was checking out the “Black Friday” deals today and I have to say I am not impressed one bit. The decent deals are on things where they have one size left – small – or similar. Lame.
Biggest scam ever
It was crazy out down in the Santa Barbara Paseo Nuevo Mall. Went there to eat and get some beverages and forgot about the whole Black Friday BS. I can get the clothes shopping part but not the other madness around a $200 50” tv that’s so speced down that they only make it to sell to the suckers and cheapskates… kinda reminds me of all the shacks they been selling the last years.
The best time to buy a TV has always been right before the Super Bowl when they are pushing last years models out the door, or when your daughter whips a ball at your son in the living room and misses, hitting your 46″ Samsung 😐
I learned a long time that with clothing there is a difference. You can get the ‘look’ by buying cheap (at target or Walmart) but they almost never last.
I have a couple dozen shirts in my closet that I purchased at Nordstroms (mostly during the annual mens sale) – most of which were bought in the previous decade and are still in good shape.
I’ve been looking to add & replace a few of them, and for the last year or two I’ve noticed the same about the stock available during sales.
What’s really disappointing is even the quality brands of yesteryear have morphed into cheap Chinese garbage. I still buy North Face and Patagonia products because the warranties are good (lifetime), but their quality and materials have suffered over the years on a lot of their stuff.
Even Filson, which was exclusively Made in the USA for the longest time, has gone the Chinese route with much of their product. Danner boots – same. They still have some Made in USA, but none of the new lines for any of the brands is as good as the old school stuff.
I can only nod in agreement. The race to the bottom and to squeeze out every fraction of a cent in costs comes at the expense of long term quality.
“‘We have had pent-up demand and low inventory, things that … would naturally increase prices,’ said Cheryl Young, a senior economist at Trulia Research.
Here we go again with the mythical “pent-up demand” and “low inventory” song and dance from an REIC shill in a contrived yet failed attempt to drum up a nonexistent sense of urgency. How’s “always be closing” working out for you these days, Cheryl?
But she’s a SENIOR Economist at a small failing app that lists houses! She’s getting the Cadillac, not the steak knives!
First Videos Of #BlackFriday Mayhem And Carnage Hit Social Media
23 Nov 2018 by Jasmine Stone in Lifestyle, South Africa, Video
Read more: http://www.2oceansvibe.com/2018/11/23/first-videos-of-blackfriday-mayhem-and-carnage-hit-social-media/#ixzz5XiD9s6mR
Australia’s robotic bricklayer has just finished its first house – in under three days
The costs to build houses in the United States are artificially inflated by the layers of government bureaucracy and all the associated fees and added costs which go along with it.
There are innumerable much less expensive, perfectly safe and effective ways to build houses, but try getting those approved – ain’t gonna happen because it’s not lining the pockets of those who have a stranglehold on power.
You can’t even buy a wooded lot and mill the lumber and build your own house anymore, because the lumber is not stamped and approved. That doesn’t even scratch the surface of the asinine requirements.
It’s not just houses… consumers must obey.
— College, told what to think, not how to think.
— Ring that glitters, three months gross salary.
— 3/2 spec ranch, a payment that fits.
— A “safe” minvan for the bird-n-sprogs.
— Cubicle job w/diversity, inclusion, etc., training.
— Work ’til 67, none of this 62 chit.
It’s the modern version of slavery.
“That tie you wear, it’s the lea$h yer ma$ter cut off of you, on account$ you ain’t goin’ no where.”
Burke, VA Housing Prices Crater 11% YOY As Double Digit Prices Declines Envelop Fairfax And Arlington Counties
inventory is steady -no price chopping yet
Cortez adding multiple fed agencies
Haven’t seen any places in my neighborhood up for sale recently. All the immigrants are renting out the ground floors/basements though, to offset them overpaying on their houses and townhouses. Very annoying, all guest parking is pretty much gone.
Economist #1: “………..but not a bubble”
Economist #2″………….but not a bubble”
Wonder what the next stage in economist/realtor quotes will look like.
Happy holidays to all.
“Just as I suspected. We were in a bubble, but NOW is a great time to buy” says the Expert and Analyst, as she, Amy Moak and Ben walk into a bar…….
“………..but not eee-bola”
Manassas VA Housing Prices Crater 7% YOY As Fairfax County Chokes On Record High Housing Inventory
Those are fairly large homes… funny to see ’em built so close together like 3/2 spec 1,300-sqft ranch neighborhoods.
Black Friday Shopping CHAOS 2018 – When People Lose Control:
I laughed hysterically at a few of those. What’s with the full page video links covering the screen at the end, though? Lame…
What are people buying when they purchase cryptocurrency? Seems like there’s no “there” there.
Sorry sellers, price right from the get go or next 90 days 20% to 40% reduction is the new norm. Also, your home better be in very good shape in and out and if sits over 90 days you have a: “Houston we have a problem” syndrome, the RE agents love the list high to get listing and watch the wolves come out and eat sellers alive?
China and HK housing developers forced to offload at a discount
Financial Times-Nov 23, 2018
Cracks are forming in the hotspot housing markets of China and Hong Kong, … debt in 2019, raising concerns over defaults at a time of economic slowdown and …
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