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Price Points Have Had To Drop Quite A Bit Compared To What They’re Used To

A report from Montana Public Radio. “Today we’re taking a look at housing prices in Montana. There appears to be some downward pressure on prices for existing homes. ‘Well, so things are starting to change,’ says Brint Wahlberg, of the Missoula Organization of Realtors. Wahlberg says housing inventory in parts of Montana is generally rising, homes are sitting on the market longer and sellers are suddenly more willing to negotiate.”

“‘We’re seeing it quite significantly in kind of that $350,000 to $500,000 price range in Missoula. Those price points have had to price drop quite a bit compared to what they’re used to. Cause we’ve been riding a pretty easy wave since 2013,’ he said.”

“‘We’re starting to see more and more people though that are talking about – they should just cool it and see what the spring looks like and take it from there,’ Brint says. ‘It’s interesting, cause we’re returning to what we’d seen maybe 12 to 15 years ago with people wanting to take a little bit more of a measured approach to the market.'”

“Wahlberg believes prospective homebuyers are weighing all their options, keeping close tabs on interest rates while also watching how international tariff skirmishes play themselves out. ‘It doesn’t feel like to me like a bubble is building again. The good thing is it would seem like the backbone of the housing market is much, much stronger than it was in 2007, 2008. But this next stretch here you’re going to probably see continued slowdown in volume,’ he said.”

From Realtor.com. “It’s the season of sharing, caring—and scoring deeply discounted deals. If a home hasn’t found the right buyer by December, sellers often sweeten the deal with a price cut. To give your sleigh a push, we found nine examples of gorgeous homes on the market that have all had multiple price cuts.”

“513 Gwinhurst Rd, Knoxville, TN. Original price: $675,000. Today’s price: $600,000. Initially listed in March 2018 for $675,000, this home has had its price cut four times.”

“222 Goodale Rd, Baltimore, MD. Original price: $745,000. Today’s price: $600,000. Tudor time: Located in Baltimore’s Historic Homeland neighborhood, this three-level Tudor was built in 1929 and has been updated with care. The home has been listed for nearly a year, and its price has been dropped five times.”

“510 Walder Trl., San Antonio, TX. Original price: $700,000. Today’s price: $600,000. Discounted by a hundred grand since it was first listed in June, this rambler lives up to Texas’ oversized reputation. Built in 2000, the five bedroom has more than 6,000 square feet of space.”

“5408 Clinton Ave, Minneapolis, MN. Original price: $625,000. Today’s price: $550,000. For some reason, this Minnesota charmer has sat on the market since May, causing the sellers to mark down the price six times.”

“170 Railroad Ave, Ben Lomond, CA. Original price: $588,888. Today’s price: $549,000. This Santa Cruz County bungalow was first listed in September, and has had its price reduced twice since.”

From Erie News Now in Pennsylvania. “While retailers and big box stores are trying to draw you in this holiday season, those selling items with a higher price tag than your normal television are trying to do the same. But are people looking for buy those types of items, like homes and cars, this time of year? Shawne Fried, a realtor for Keller Williams in Erie, said yes.”

“‘Because it is the holidays season, people who are looking for homes are the serious buyers,’ said Fried. ‘It’s a buyers market if you’re looking for a home in $100,000 price range – families, millenials, families that are growing are looking for a home with a little more room.'”

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This Post Has 41 Comments

  2. ‘We’re seeing it quite significantly in kind of that $350,000 to $500,000 price range in Missoula. Those price points have had to price drop quite a bit compared to what they’re used to. Cause we’ve been riding a pretty easy wave since 2013’

    Easy wave, and he can’t see a bubble. Are people in Missoula really wealthy and can throw down half a million for a shack?

    ‘It’s interesting, cause we’re returning to what we’d seen maybe 12 to 15 years ago with people wanting to take a little bit more of a measured approach to the market’

    You mean a housing market without the frenzy, like it was for a hundred years?

    1. You mean a housing market without the frenzy, like it was for a hundred years?

      This time it’s different – realtor

    2. I’ve written before in this space about my 2016 visit to Missoula; while it’s a nice town (Moose Drool Brown Ale, thumbs up!), I got the sense that many locals were making a living by cobbling together several sources of income, like a regular 9-to-5 job, weekly gigs teaching yoga, and freelance writing. When you look at the local paper, the job openings are for jobs starting at $11 per hour. The housing market clearly is for equity-rich Californians and speculators, not for people who live and work in Montana.

      1. “The housing market clearly is for equity-rich Californians and speculators, not for people who live and work in Montana.”

        +1 There is no money to be made in Montana.

      2. Montana has some of the lowest wages in the entire country. At one point it was second only to Mississippi. That’s how bad the pay is. But they sure have their share of million dollar shacks!

    3. Assuming a DTI of 3.5x (generous, stretching) and 20% down payment, every single home listed in that article requires a buyer with an income over $100K / year.

      Surprisingly, that’s only a 71st percentile household income. (Source: https://dqydj.com/household-income-percentile-calculator/ )

      So 7 out of 10 households couldn’t buy a single home from the last despite the reduced prices and (unrealistic?) 20% down payment.

      Totally sustainable…

      Am I right?

    4. It doesn’t feel like to me like a bubble is building again.

      He means a “bust”. Realtors have no idea what a bubble is.

  3. “What we’re seeing is a bursting bubble, and only a fool would buy right now when the downside risk vastly outweighs any upside potential,” said no realtor anywhere, ever.

  5. “513 Gwinhurst Rd, Knoxville, TN. Original price: $675,000. Today’s price: $600,000. Initially listed in March 2018 for $675,000, this home has had its price cut four times.”

    Multiple price cuts don’t signify a good deal. They just mean the shack was way overpriced to begin with.

    Keep sawin’ and slashin’, greedheads. I’ve got all the time in the world, and plenty of foreclosure auctions to look forward to.

  6. “170 Railroad Ave, Ben Lomond, CA. Original price: $588,888. Today’s price: $549,000. This Santa Cruz County bungalow was first listed in September, and has had its price reduced twice since.”

    11/1/2018 Price change $549,000
    10/12/2018 Back on market $555,000
    10/3/2018 Pending sale $555,000
    9/26/2018 Price change $555,000
    9/13/2018 Listed for sale $588,888
    7/7/2006 Sold $260,000

    They have a long way down to go for this SC mountain cabin. Maybe just wait for the next fire and take the insurance money because you ain’t getting your dream price pal

  9. Did you buy the Thanksgiving dip?

    Jim Cramer says stocks are ‘opening up huge on nothing,’ sees signs of ‘classic bear market’
    By Mark DeCambre
    Published: Nov 26, 2018 10:48 a.m. ET
    Dow poised for best day in three weeks
    Getty Images/iStockphoto
    Looming bear market?

    Talk about classic bear-market behavior. We crater all week and then we open up huge on nothing, but because we are so oversold it is hard to let things go.
    Jim Cramer, CNBC

    …

  10. Let’s see.

    The realtor says it’s just like 12 to 15 years ago but goes on to says that it is not a bubble. Well what was the 2006 Era period called if not a bubble.

    The realtor babble has gone from denial, to jibberish code talk about pricing and activity, to today’s: “…… but not a bubble”

    This has evolved quite rapidly. What will next month’s “market qualifier cliche” be?

    Any guesses?

  11. There’s trouble in Motor City.

    BBC
    Business
    GM to slash jobs and close eight plants
    25 minutes ago

    General Motors plans to halt production at five factories in North America and cut thousands of jobs.

    The US carmaker has also announced it will close three plants outside North America by the end of 2019.

    The moves follow rising costs and slowing car sales and come as the US carmaker focuses on its line-up of trucks, electric and self-driving vehicles.

    The company said the plan would help it to save about $6bn (£4.7bn).

    The cutbacks include a 15% reduction the number of its employees, including 25% fewer executives.
    …

    1. “…carmaker focuses on its line-up of trucks…”

      Can they turn a profit on their $75,000 diesel Duramax pickups?

      1. Add a $75K 5th wheeler for full time living and you have a $150K mobile residence…or a lot of people’s retirement plan.

        Our normal cynicism aside, those Duramax Diesel engines put out over 900 lb/ft of torque – amazing power compared to what you used to be able to get not long ago, 10 years ago I think it was 600 lb ft.

        Anyway, nobody should be getting that unless you have something very big to tow or a specific work/job to do that needs it.

      2. If you can’t earn a profit on a pickup at $75k or on a house at $120k, you’re in the wrong business.

  12. The U.S. Housing Boom Is Coming to an End, Starting in Dallas
    Home prices zoomed higher in recent years, and mortgage rates are climbing. Buyers are queasy.
    By Laura Kusisto
    Nov. 26, 2018 11:01 a.m. ET
    Empty lots and newly built homes in the Edgestone At Legacy development in Frisco, Texas, last week. Laura Buckman for The Wall Street Journal

    PLANO, Texas—A half-hour drive straight north from downtown Dallas sits one of the fastest-growing counties in the country. Cotton fields have been replaced with Toyota’s new North American headquarters, a Dallas Cowboys training facility and a sand-colored shopping strip with a Tesla dealership and a three-story food hall.

    Yet even with the booming growth, Dallas’s once vibrant housing market is sputtering. In the high-end subdivisions in the suburb of Frisco, builders are cutting prices on new homes by up to $150,000.
    …
    To Read the Full Story
    Subscribe

  13. This won’t last for long.

    Surge in Cash-Out Refis Doesn’t Concern UI Researchers
    Nov 6 2018, 4:29AM
    by: Jann Swanson

    Cash-out refinancing is currently a larger share of the refinance market than at any time since the financial crisis. However, the Urban Institute (UI) says even though those refinances were one of the main contributors to the crash, the present trend doesn’t worry them.

    Cash out loans, defined as those where the new loan is at least 5 percent larger than the loan it replaces, made up 77 percent of total refinances in the second quarter of 2018. According to Freddie Mac, which tracks its loans that are refinanced into another Freddie Mac product, this is the largest share since 2008.

    Despite the high percentage of loans, the dollar volume of equity that is being withdrawn is still well below the crisis peaks. Homeowners cashed out $15.8 billion in equity during the second quarter of this year, far below the $75 to $85 billion in the pre-crisis years.
    …

  14. Cripes, looking at these listings is like shopping at Kohl’s or JC Penney. These price drops aren’t “deeply discounted deals.” They’re just starting high for the coming negotiation, like haggling at a street market in a second-world country. “Ah what a beauty you are…$100K price drop, just for you my lady …” barf.

    The Knoxville house is an abomination. $600K standard-issue McMansion 15+ miles from the city center? Gimme a break, that’s suburban MD pricing. How many six-figure Fed and contractor jobs are there in Knoxville?

    1. Yeah, a lot of the listing prices are of the delusional “wishing price” variety we saw back in 2005/2006. That being said, it does not negate the fact that the price slashing is a symptom of crashing prices.

    1. Mortgage Watch. Almost all of your posts feature cities where the price per square foot is up 1 to 3% year over year, but where the median square foot has decreased by 10 to 15% year over year. This makes it appear that price has fallen when it is only that median house for sale has decreased. Is there a reason why you are posting only this type of data, and while other posters have said that square foot must be consider in the context of other house data (lot size, neighborhood) isn’t the data presented for an entire city so the other house data can be ignored since it is randomly distributed across the entire city?

      2. appear that price has fallen

        Because the price has fallen. Nobody wants a house the size of warehouse when it’s a money losing proposition. You’ll get it months from now.

        1. Slow down in real estate is causing smaller houses to sell in greater number than larger houses. Makes sense.

  17. Despite crashing oil, I have yet to see the price at the pump drop. Weird, huh? On second thought, not so strange…

    1. I was thinking the same thing over the weekend. I did see $3.01 gallon gas on the 46/ i5 interchange on my way down to SoCal but everywhere else was around $4 gallon from NorCal down to San Diego. Pretty sure all these greedy bastards ride out the high prices as long as they can especially when they know we are traveling for holidays.

      1. $3.199/gal tonight at Costco…lowest gasoline price in months. I’m asking Santa for under $3 by Christmas.

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