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More Sellers Will Be Open To Negotiating Their Price

A report from the Naples Daily News in Florida. “While buyers struggle to find inventory in other highly desirable locations across the country, this is not the case in Naples. ‘We have almost 7.5 months of inventory,” said Bill Coffey, Broker Manager of Amerivest Realty Naples. ‘In fact, inventory for single-family homes under $300,000 grew by 79 percent to 483 homes in October.'”

“The October report also showed the overall median closed price increased 1 percent to $344,000 from $342,000 in October 2017; but went down 1 percent for homes priced over $300,000 to $475,000 from $480,000 in October 2017. Interestingly, the median closed price in the Naples Beach area decreased 13 percent in October to $595,000 in October 2018 from $682,000 in October 2017.”

The Los Angeles Daily News in California. “Looking for a home to buy in the San Fernando Valley? You might have some better chances these days, as the number of them on the market is creeping up, according to one analysis of the local real estate market. That number, 1,601 homes and condos by the end of October, was 28.5 percent higher than October 2017, according to the Southland Regional Association of Realtors.”

“‘The modest increase in listings gives buyers a wider selection, thus making it possible that more sellers will be open to negotiating their asking price,’ according to Tim Johnson, the association’s chief executive officer.”

“Three months of this year saw the San Fernando Valley’s median single-family home price at or higher than $700,000. But by October, the media price of a home stood at $678,000. It’s still not a bad chunk of change for sellers — up 4.6 percent from this time last year — but it’s a noticeable drop that illustrates a slight cooling from the summer months, when in May and August the record high median price of a home in the San Fernando Valley hit $708,000.”

“Realtors cautioned that the housing market is by no means — as of yet — a buyers market.”

‘But after years of dwindling supply and rising prices, ‘any increase (in inventory) will help buyers,’ said Gary Washburn, president of the Southland Regional Association of Realtors. Washburn said there appears to be a plateau in a market that was once on fire.”

“‘The days of double-digit monthly hikes in prices appear to be gone,’ he said.”

The Dallas Morning News in Texas. “After years of booming sales, the housing market in North Texas and across the country is shifting gears. In Dallas-Fort Worth, preowned home purchases have been lower than a year ago for three months in a row. That’s bad news if you’re trying to sell a house.”

“It’s also a worry for the real estate sales industry, which has seen an influx of thousands of residential agents and a growing roster of startup sales firms. Membership in the National Association of Realtors has grown about 30 percent since the worst of the Great Recession.”

“‘By the time this year is over, I think we will have gone past our prior record of 1.4 million Realtors,’ said Steve Murray, an industry analyst who heads Denver-based RealTrends. ‘People are still flooding in.'”

“Murray said that in previous cycles when housing sales declined, there was usually a shakeout of agents. ‘My view is there’s a down market, which we are in already,’ he said. ‘We are in a bear market, though it’s not falling hugely. In seven of the last eight months, existing home sales have been down from the year before. Unit sales next year could be off in the 8 to 12 percent range.'”

“If that happens, sales agents will be scrapping over a shrinking pie of business. The slowdown in home sales is occurring as a growing number of startup ‘disruptor’ residential companies are planting their flags in Dallas and markets across the country. Armed with billions in investor dollars, new technologies and marketing platforms, these firms are carving a share of business away from traditional real estate firms.”

“‘They look around for markets to disrupt,’ Murray said. ‘Everybody thinks they have the next Uber or Airbnb.'”

“Thousands of agents who entered the business during good times have never experienced a down market. In its latest membership profile, the National Association of Realtors noted that income and sales volumes for its members have dropped slightly during the past year.’

“The trade association reported this summer that almost 30 percent of its members have fewer than two years’ experience. The typical agent handled 11 transactions in 2017. The nationwide median gross income of Realtors last year was $39,800 — down from $42,500 in 2016. And 60 percent of Realtors who have worked two or fewer years made less than $10,000 in 2017.”

“Murray said a decline in the housing business at some point was inevitable. ‘Our prices got too high and then the mortgage rates went up and affordability cratered,’ he said. ‘We are going to do a cool-off.'”

This Post Has 51 Comments
  1. ‘Realtors cautioned that the housing market is by no means — as of yet — a buyers market’

    I’ll go along with that.

    ‘The days of double-digit monthly hikes in prices appear to be gone’

    Millions of people are going to wish this had never happened.

    Eeee-bola San Fernando Valley!

  2. “Washburn said there appears to be a plateau in a market that was once on fire.”

    Wasn’t there a plateau in Bitcoin until about a week ago, after which prices violently plummeted by about 25%?

    But not to worry, because Bitcoin is not housing. No investment is safer than housing. It’s safe to assume the plateau in housing prices is permanently high.

      1. How can you extract a property tax on a nonexistent property? I guess they could levy a stupidity tax on people who pay good money for the opportunity to buy into a Ponzi scheme, and use the Bitcoin ledger to establish ownership. But this seems like cruel and inhumane punishment of the financially gullible.

    1. Mel has a menacing cloud of Me2 swirling around his head these days.

      September 27, 2018 – 01:40 PM EDT
      Mel Watt’s accuser describes sexual harassment claims in stunning testimony
      By Sylvan Lane

      A Federal Housing Finance Agency (FHFA) employee who has accused Director Mel Watt of sexual harassment described her allegations Thursday in gripping testimony before a House committee.

      Simone Grimes, a special adviser at FHFA, told lawmakers that Watt made dozens of sexual advances toward her, withheld a promised pay raise over her refusal of his advances and was protected by senior agency officials charged with investigating her accusations.

      Grimes told the House Financial Services Committee that the FHFA’s Office of Inspector General responded to her claims with “hostility, intimidation, bullying, laden with gossip and public shaming” and sought to protect Watt throughout the process.

      1. Unfortunately it appears that some ladies are capable of fabricating bombastic stories of sexual assault when the reality is that many other ladies causally apply their feminine wiles to get ahead in the world, and men have become accustomed to the practice. The news media should refrain with their public shaming until the relevant facts have been discovered and corroborated.

        1. Remember, you’re not allowed to even suggest that a woman would ever consider doing such a thing.

          I’m not allowed either. Even though I know a couple 20s women (in tech) who openly admit (away from work) that they know they’re hot and use it to their advantage.

          /Don’t get me started.

  3. Wonder when we are going to see the “Realtor by day, stripper by night” stories again…?

    ********

    “And 60 percent of Realtors who have worked two or fewer years made less than $10,000 in 2017.”

    1. “Realtor by day, stripper by night”

      This is probably a quiet reality in the larger west coast metro areas like Seattle, Portland, San Francisco Bay Area, Los Angeles, San Diego and inland in Phoenix. The San Fernando Valley also has a thriving porn business.

      1. I’ve talked to a few. The ones that have been doing this for decades will probably be ok, but it’s clear that some of the newcomers got into RE because other job opportunities were too overcrowded and competitive.

        Being a Realtor isn’t offering any shelter from that.

        I wonder if in part it’s a trend related to what some people have been writing about as “the end of work” – i.e. not enough necessary jobs to go around in a system that pretty much makes it necessary to work.

    2. I know four women in the past few years that have gotten a divorce, and all four got their Expert and Analyst License. For them it’s a nice way to pad their alimony and child support, even if it’s just $10,000 a year. My guess is they will still label themselves as “agents” during the downturn, and will now be a “Foreclosure Analyst”. It’s all about the title and a purpose to them. Do they care about building a client base and making a mark in their career? Nah, just gimme the commission check.

      1. For them it’s a nice way to pad their alimony and child support, even if it’s just $10,000 a year

        I wish my ex had bother to do that. I was paying almost $5K a month for a few years, and still got stuck with a ton of kid expenses as she was always broke. She went back and got a teaching degree in the meantime, but did she use it? Nope. Remarried 2 weeks after the last alimony check cleared.

          1. That’s an extremely vilified topic these days, with all sorts of less palatable things being piled in to make seem worse. But I think it will persist, especially the parts that explain the ‘whys’.

            I will be doing my part once my son turns 18 and is out of his mom’s house.

  4. “‘By the time this year is over, I think we will have gone past our prior record of 1.4 million Realtors,’ said Steve Murray, an industry analyst who heads Denver-based RealTrends. ‘People are still flooding in.’”

    Ya we really need more used home salesmen… how about some more bankruptcy professionals

  5. Housing is not the only asset crash that is becoming more affordable these days. In fact, it seems like a financial reckoning with a repricing of risk across the board is underway.

    1. Oops…I meant to write “asset class” but my fat finger slipped and I accidentally wrote “asset crash” instead.

    2. And another:

      Markets
      What Bond Gurus Are Saying About the Market Sell-Off
      By John Gittelsohn
      November 23, 2018, 10:33 AM PST
      – ‘It’s incredibly volatile now,’ Western Asset’s Buchanan says
      – Shorter duration, quality credit could emerge as a haven
      Mark Kiesel Photographer: Chris Goodney/Bloomberg

      Investors are turning conventional wisdom on its head. During stock market routs, they’re often expected to move into bonds for comfort. That hasn’t happened.

      As stock volatility rose in October, investors pulled a net $14.2 billion from taxable bond funds, the worst month since December 2015, Morningstar Inc. estimated. And, they withdrew another $7 billion in the first two weeks of November, according to the Investment Company Institute.

    3. Got junk debt focused on oil?

      Markets
      U.S. & Canada
      Market Extra
      There is no relief for junk bond ETFs as oil tanks by nearly 8%
      By Sunny Oh
      Published: Nov 23, 2018 2:32 p.m. ET
      Two biggest exchange-traded funds focusing on high-yield bonds are down more than 5% this year

      Exchange-traded funds focusing on high-yield corporate paper, or “junk” debt, extended a retreat on Friday, amid a persistent tumble in prices of crude oil.

      In the past few weeks, high-yield bonds—those deemed the riskiest debt and that offer commensurately higher coupons, as a result—have suffered amid concerns the investment vehicles are vulnerable to lower crude values. That is because energy bonds make up a sizable, 15%, of benchmark indices focusing on so-called junk debt.

    4. Cryptocurrency, anyone?

      You can tell this is a mass delusion by the photos of (nonexistent) physical coins that always accompany these articles. At least Beanie Babies physically existed, even if they were intrinsically worthless. Luckily for the cryptoHODLers, we haven’t run out of greater fools just yet.

      The great cryptocurrency crash of 2018 may not be over
      – Cryptocurrencies have become mired in a nearly $700 billion rout that shows few signs of abating
      Bloomberg
      UPDATED :
      Saturday, 24 Nov 2018, 5:48PM

      1. Crypto is doomed if many more people who know something about monetary systems start weighing in on the absurdity.

        Bank Underground
        The seven deadly paradoxes of cryptocurrency
        John Lewis

        Will people in 2030 buy goods, get mortgages or hold their pension pots in bitcoin, ethereum or ripple rather than central bank issued currencies? I doubt it. Existing private cryptocurrencies do not seriously threaten traditional monies because they are afflicted by multiple internal contradictions. They are hard to scale, are expensive to store, cumbersome to maintain, tricky for holders to liquidate, almost worthless in theory, and boxed in by their anonymity. And if newer cryptocurrencies ever emerge to solve these problems, that’s additional downside news for the value of existing ones.

        https://bankunderground.co.uk/2018/11/13/the-seven-deadly-paradoxes-of-cryptocurrency/

        1. “…for cryptocurrencies with no yield the maths is easy: Zero income means zero value.”

          That seems hard to refute.

          ‘Some argue that the breakeven energy cost of mining provides a floor for cryptocurrency prices. But, in Jon Danielsson’s words: “the costs of mining are sunk costs, not a promise of future income”. If I waste £150 on employing labourers to find and exhume the buried remains of my childhood pet tortoise from my parents garden’, those costs don’t make the skeleton worth £150 to an investor.’

          LMFAO! Who knew that cryptofinance was so hilarious?

  6. ‘In fact, inventory for single-family homes under $300,000 grew by 79 percent to 483 homes in October’

    But – shortage?

    ‘the median closed price in the Naples Beach area decreased 13 percent in October to $595,000 in October 2018 from $682,000 in October 2017’

    Good thing everyone is putting 20% down.

    1. Gosh, inventory seems to be sprouting out of the ground like mushrooms these days. Makes me wonder if it wasn’t there all along, despite NAR claims to the contrary.

      1. Speculators / investors just testing the water. Sooooo many shacks coming online in the last few months but all priced at 2017 levels. Majority sit or get pulled off so they can be presented as “new” listings. Cat and mouse game going on here but soon these cats will become starving and settle for whatever is offered. I like being a mouse right now 😉

  7. ‘We have almost 7.5 months of inventory,”

    No mention of it being a buyers market here other than “it’s a good time to buy and sell”…

  8. Won’t be long until we see the return of Realtors with the tagline of “Short Sale Specialist”

    They all made this claim back during the last downturn.

    1. They also re-branded themselves as “buyer’s agents,” then colluded with sellers’ agents to ensure their “clients” overpaid so they could reap a fatter commission.

    1. It’s a sad day when the specuvestors who got in at a bubble top realize the ever shrinking pool of greater fools just dried up.

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