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Sellers Are Facing A Tougher Crowd And May Need To Adjust Their Own Expectations

A report from the Boston Globe in Massachusetts. “There are growing signs that Boston’s red-hot housing market may be cooling off, at least by a few degrees, a moderation that could be good news for would-be buyers. It’s a trend that has been in the making for several months. ‘We’ve seen a steady softening of sales since Labor Day,’ said Marie Presti, president of the Greater Boston Association of Realtors. ‘The good news for home buyers is there is less competition when making an offer, more time to shop for homes, and more opportunity to get into a property following a recent influx of new listings coming onto the market.'”

“Figures from the trade group show the median sale price of a single-family home in Greater Boston in October climbed 7.1 percent from the same month last year, to $605,000. But that figure has dipped over the last few months, an indication that the market may have peaked, Presti said.”

“Meanwhile, the number of sales was down 4.4 percent, and has fallen 2.7 percent through the first 10 months of the year. Crucially, though, the number of homes on the market is on the rise, and new listings in October jumped by 20 percent compared with this time last year.”

“‘If that number continues to climb, our market will be even more balanced,’ Presti said.”

The Hartford Courant in Connecticut. “In some years, the home sale market in Connecticut stages a bit of a burst in the fall — not as strong as the spring — that can end the year on an upbeat note.”

“A report Wednesday from The Warren Group showed that the market does not appear to be shaping up for a robust autumn. In October, sales of both single-family houses and condominiums statewide registered year-over-year declines and unlike previous months, prices did not register gains.”

“Single-family house sales declined for the third month in a row. Real estate agents say houses are selling, but only those that are priced right for a market still trying to recover from the last recession. Buyers generally are not willing to overpay and are looking for homes that have been updated or, if work is needed, priced so buyers can make renovations.”

“Which county lagged the most in October in sales? New London. Sales of single-family houses plunged more than 14 percent, and the median sale price dropped 4.2 percent, to $229,900 from $240,000 for October 2017.”

“Which county saw the steepest decline in median price in October? Windham. While sales of single-family houses fell a little under 2 percent, the median price fell 8 percent, to $182,000 from $197,900 for the same month a year ago.”

From Forbes on California. “Mixed housing market news for Bay Area home buyers and sellers comes directly from the latest economic number crunching by Selma Hepp, chief economist at the San Francisco-based luxury brokerage, Pacific Union International/Compass.”

“The main story, according to Hepp is about affordability. Despite a 19 percent year-over-year increase in affordable inventory, buyers aren’t falling over each other making multiple offers and snapping up properties. Buyers of homes priced below $1 million are restrained, with the fewest number of homes selling for more than asking price since January 2017.”

“‘I think the most striking insight is how much the affordable home buyers cooled off, even in light of more inventory across the region. Early-year price growth and interest rates have really taken a bite out of their budget,’ Hepp explains. ‘I was a little surprised to see such a decline given the continued strength in the local economy and job growth. I think we may still see some activity among these buyers as they notice more inventory and get used to the price shock.'”

“‘Sales in San Francisco are better than the East Bay, Marin or Santa Clara (counties) but we’ve seen a 10% drop on re-sales lately in higher priced homes. I just sold a home in the Marina for $7.2 million that the seller paid $ 8 million for a few years ago,’ confides Nina Hatvany, of Pacific International/Compass.”

“A red flag to the Bay Area’s market strength is that inventory grew by 21 percent year over year, with almost half of the increase, or more than 1,100 homes being priced below $1 million. Hepp also points to price cuts. ‘There were more price reductions across the region at all price ranges, with lower-priced homes posting the largest share of reductions in the past three years.'”

“Hepp’s bottom line advice to sellers: ‘They are facing a tougher crowd and may need to adjust their own expectations.'”

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This Post Has 57 Comments

  1. ‘I just sold a home in the Marina for $7.2 million that the seller paid $ 8 million for a few years ago’

    Oh dear…

      1. Found it myself on Zillow
        465 Marina Blvd
        San Francisco, CA 94123

        DATE EVENT PRICE AGENTS
        10/18/2018 Sold $7,200,000 -3.9% Michael King
        10/12/2018 Pending sale $7,495,000 —
        10/8/2018 Price change $7,495,000 -6.2%
        6/14/2018 Price change $7,988,000 -11.2%
        5/2/2018 Listed for sale $8,995,000 —
        12/31/2017 Listing removed $8,995,000 —
        8/17/2017 Listed for sale $8,995,000 +12.4%
        10/26/2015 Sold $8,001,000 +6.7% Jerry Jing Wang
        8/21/2015 Pending sale $7,499,000 —
        7/30/2015 Listed for sale $7,499,000 +22.9%
        3/6/2008 Listing removed $6,100,000 —
        8/15/2007 Price change $6,100,000 -6.2%
        8/5/2007 Listed for sale $6,500,000 —

          1. Fall in home values on track to be the worst since records began
            The Australian-28 minutes ago
            Sydney has recorded its biggest monthly fall in housing prices in 14 years and is on track to post the sharpest and longest housing price slide since 1980, when …

    2. I think we may still see some activity among these buyers as they notice more inventory and get used to the price shock.’”

      Hepp, you impress me as a cold predator.

  3. ‘new listings in October jumped by 20 percent compared with this time last year…‘If that number continues to climb, our market will be even more balanced’

    Or even more plateaued.

    pla·teau
    /plaˈtō/
    noun
    noun: plateau; plural noun: plateaux; plural noun: plateaus

    1.
    an area of relatively level high ground.
    synonyms: upland, tableland, plain, mesa, highland, coteau
    “a windswept plateau”
    modifier noun: plateau
    2.
    a state of little or no change following a period of activity or progress.
    “the peace process had reached a plateau”
    synonyms: quiescent period; More
    letup, respite, lull
    “prices reached a plateau”

    verb
    verb: plateau; 3rd person present: plateaus; past tense: plateaued; past participle: plateaued; gerund or present participle: plateauing

    1.
    reach a state of little or no change after a time of activity or progress.
    “the industry’s problems have plateaued out”
    Origin
    late 18th century: from French, from Old French platel, diminutive of plat ‘level.’
    Translate plateau to
    Use over time for: plateau

  6. Meanwhile in Japan…

    “Japan’s vacant homes are receiving more attention given the increasing number of affordable — and sometimes free — houses put up for sale online on websites called “akiya banks.”

    Many of such sites are set up by local governments and communities to better manage the supply and demand for the growing stock of empty houses in their respective towns…

    Across Japan, the number of vacant homes stood at 8.196 million in 2013, representing around 13.52 percent of the country’s total housing stock…”

    Maybe we need this tax here: “This is usually because the owners cannot take care of the property anymore or do not want to pay the property tax that applies in Japan for a home that they do not use…”

    https://www.cnbc.com/2018/11/22/japan-free-homes-empty-houses-given-away-and-sold-cheap.html?recirc=taboolainternal

  7. Saw a rental that would work well for us for the next couple of school years. Made contact with the owner. When he got back to us it turned out it was the same owner who was trying to sell it a couple of months ago who took it off the market when nobody was interested at his current price. In his attempt to rent it looks like he’s using some generic pictures from the same complex out of other people’s windows, which threw me off.

    For anyone interested it’s a small 3br apt in a very good location that he was trying to sell for 350k and is now trying to rent for 2200/mo. Nobody has snapped it up in either case, but we might take him up on renting after the 1st of the year.

    1. haven’t seen that phrase for awhile: “ snapped-up “

    2. Sounds like a good decision. Rent from him for a couple years then buy it up for 1/2 off ;). Also good for getting to know the HOA before commitment on a purchase. Lawn nazis and HOAs can be a nightmare

      1. That’s what we’re thinking too. Plus as soon as daughter finishes at this school in 2.5 years we’ll be trying to buy near a middle and high school we like better than the ones by this elementary. Wife would like to buy now and rent it out later but recognizes prices are falling and would prefer a floorplan that isn’t currently available for purchase anyway. Still trying to thread the needle and help her avoid throwing away some of the money she made selling Shanghai real estate after owning over a very fortunate period of time.

        1. In 2.5 years, there’s a good chance (if 2008-2012 was any indicator) that you could be paying a lot less for the floorplan you want.

  10. Hey Ben.

    Heard the podcast on Peak Propersity. Interesting to hear you were involved during the S&L bailout days. Was my indoctrination into the RE profession. Was in auction business for real estate and personal property.

    Surprised how many have forgotten how large that was. Could see the return of the RTC. About 1987 to1990. Made predicting 2006 easy as well as what is coming. Human behaviour really does repeat itself.

    Anyhow, interesting interview. Feel like we know you a little more now.

    Regards.

      1. Aww.. did he have to beat on Mercer Island so much? ;P

        Good natured poking aside, it was a very good podcast. I don’t know of anyone else out there who is connecting anywhere nearly as many global and historical dots as Ben did there.

        1. I noticed that too MGSpiffy. It was fun for me to hear Ben’s voice since I’ve only been here for the past 3 years or so.

  11. Mo$t “plateau$” eye’ve been on have been $surrounded by these $orta feature$:

    Ravine$:
    Ravines can be lonely and violent places averse to settlement as nothing can be built along their steep sides. The word ravine itself derives from the archaic rapin, which is a violent $eizure of property.
    Canyon/gorge$:
    Most canyons were formed by a process of long-time erosion from a plateau or table-land level. The cliffs form because harder rock strata that are resistant to erosion and weathering remain exposed on the valley walls.

    (Lotto folk$ gonna find their$elf’s in what some would call a “box canyon”)

  12. So which markets are falling fastest
    I would think chighetto as the city and state are bk w one source of $

    Re taxes

    1. Per Case Shiller Chicago is 7% below the peak
      SF is 1% below its peak
      LA and NY are at their peaks (highest value ever) so may rollover next report or may go higher.

      I got that info from a socketsite (website specializing in SF RE) reprint.

  14. The Fed statement really lit a fire under crypto. Who knew the value of imaginary currency was so interest rate sensitive?

    1. rate sensitive

      Oddly, the rate did not change. It was just words. Sensitive to words, not sensitive to interest rates.

    1. Heh heh…seems like the Fed is trying to walk back its punchbowl removal process. Too late for housing. Once started, avalanches can’t be stopped.

      1. “Once started, avalanches can’t be stopped.”

        Indeed. Maybe Trump will send checks to everyone like Dubya did when the schitt hit the proverbial fan. Upping mortgage limits might have worked six months ago.

      2. Just what is the Fed doing, anyway? Powell is starting to look like a buffoon. He was steadfast until today when he apparently completely reversed course. Seems like he couldn’t handle the President’s criticism, and wilted like a lettuce leaf in Death Valley.

        Speaking of the Pres, why is it that he spoke of a “big, fat, ugly bubble” on the campaign trail, talked of what a poor job Yellen was doing, but now apparently wants his new Fed head to continue with the same, irresponsible low rate policies? I don’t get it. I voted for him because I thought he understood the disaster we are in. Clearly he wants to perpetuate it.

        2. “I thought he understood the disaster we are in.”

          You’re joking, right? How many times did he go bankrupt?

      3. “…Once $tarted, avalanche$ can’t be stopped.”

        @ what point is it advantageou$ to $urvive rather than to avoid$ a de$cending avalanche$ upon one person$?

        (Hwy consult$ Amish old order direction$ on: “impending doom”)

  16. The one bit of buffering b.s. the REIC (finally learned what that stood for. Good abbreviation) is this nonsense of quoting YOY figures which, by and large, are still positive. It is Case Shiller convention. It is utilized to buffer seasonally sensitive locations such as here in SW Florida. However, it is being used in media for the purposes of showing a positive movement in price appreciation.

    Of course this is largely b.s. since we know what is happening and if month over month data were being reported, the optic might be less attractive. A few more months, and even the YOY will be negative and there will be no more b.s. wiggle room. Truth will prevail and people will get a less convoluted picture.

    Of course, the media and REIC may change over to the increasingly common “soft landing” spiel. Starting to see that one crop up a bit lately.

    Anyhow, things changing pretty rapidly. Interesting to follow.

    Regards.

    1. Of course the REIC is always going to use rosy talk. How else can they lure suckers in to buy rapidly depreciating houses?

    2. In the face of definite seasonality what makes sense? I think the year over year comparison is valid. If there is more or less always a decline between November and December what are you supposed to make of a decline this year?

      Not even the RW media is reporting that the fact that December is colder than November means global warming is a hoax (and you know they want to (or didn’t think of it)).

  17. “…Once $tarted, avalanche$ can’t be stopped.”

    @ what point is it advantageou$ to $urvive rather than to avoid$ a de$cending avalanche$ upon one person$?

    (Hwy consult$ Amish old order direction$ on: “impending doom”)

  18. Seems like he couldn’t handle the Pre$ident’s criticism, and wilted like a lettuce leaf in Death Valley.

    Powell, ohnancyPelo$hi, a$$clown & (a donkey), walk into a whole food$ in $tove Pipe Well$, CA …

    1. Oh God, that comments section of that article is funny and sad at the same time.

      “My rate was 18 percent in the 80’s, now kids today complain about 5 percent!”

      Definitely worth a read thru to get a pulse on the American consumer.

      1. My rate was 18 percent in the 80’s

        My experience as well, but the house was only $27K.

        Amazing what 40 years of credit expansion and housing mania have done.

    2. Read a yahoo article awhile back confirming Bigfoot is real and one proving the earth is actually flat. MSM thinks the sheeple will buy anything they tell them.

        1. “Iowa Farmer Claims Bill Clinton had Sex with Cow during ‘Cocaine Party.’ ”

          That’s nasty Mr Clinton 😂

        2. I listened to this one during my run last week and promptly sent it to my mom to forward to my grandmother who routinely forwards and clicks on this type of stuff. Apparently doing this was futile, but it feels like one should still do something.

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