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Sellers Are Getting A Little Nervous That Their Time Has Come

A report from the Los Angeles Times in California. “Southern California home sales tumbled 7.5% in October from a year earlier, extending a broad slowdown in the housing market, according to CoreLogic. Last month was the third straight month of declines, and the 19,193 homes that sold were the lowest number for an October since 2011, before the housing market took off on its multi-year upswing.”

“As a result, homes are sitting longer and more sellers are scaling back ambitions. Seventeen percent of L.A. County listings on Zillow had at least one price cut in October, the greatest percentage in at least eight years. The number of listings was up 30.5%.”

“‘It’s really been kind of slow,’ said Suzie Titus, a real estate agent who specializes in Lakewood. ‘There is not a lot of activity.'”

“The slowdown doesn’t just apply to California. Buyers nationally are adjusting to mortgage rates that are nearly one percentage point higher than a year earlier as the Federal Reserve raises interest rates to head off inflation.”

“On Thursday, the National Assn. of Realtors said that, on a seasonally adjusted basis, buyers entered contracts to buy nearly 3% fewer homes in October than in September. Compared with a year earlier, contract signings fell 6.7% — the tenth straight decline.”

“In response to that report, Mike Fratantoni, chief economist for the Mortgage Bankers Assn., called the current slowdown a ‘healthy deceleration in the market.’ ‘Home prices had galloped ahead of wage growth for too long, particularly in the coastal markets,’ he said in a statement.”

The Union Tribune. “Home sales fell for the fifth month in a row in San Diego County in October and prices were also down, CoreLogic reported Thursday. The latest numbers show continued signs of a slowdown in the real estate market — across the nation, not just locally — but analysts cautioned it was not similar to conditions that caused the 2006 housing crash.”

“Still, there was evidence home prices would continue to decline or, at least, stay at current levels. In October, the median home price was $558,000, down by $25,000 from the all-time peak reached in August, but still up 5.4 percent for the year. Sales were down 12 percent compared to the same time last year and at their lowest level since 2011.”

“Nathan Moeder, principal with real estate analysts London Moeder Advisors, said the market is reacting to rising mortgage interest rates. Sellers are trying to get their homes on the market because they want to get the most they can before interest rates go up even more, and buyers are holding off to see what happens with home prices and interest rates.”

“‘Right now, the fact there is a lot of inventory compared to previous Octobers, that tells us people are testing the market if they can sell it because they know they are at the peak,’ he said. ‘But, I think there is some market resistance because there are only 3,162 sales.'”

“Real estate agent Michael Chandler, based in Kensington, said sellers are becoming more understanding with price cuts, and more willing to sell to investors in off-market deals.”

“‘Sellers are getting a little nervous that their time has come,’ he said. ‘At the same time, I advise everyone to look at the information. Even the California Association of Realtors are projecting an increase in price next year. It’s just the acceleration that is decreasing.'”

“San Diego County’s year-over-year drop in sales, 12 percent, was the most out of the six counties. It was followed San Bernardino County, down 8.9 percent; Los Angeles County, down 7.2 percent; Orange County, down 7 percent; Ventura County, down 6.2 percent; and Riverside County, down 3.2 percent.”

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This Post Has 30 Comments

  1. ‘Right now, the fact there is a lot of inventory compared to previous Octobers, that tells us people are testing the market if they can sell it because they know they are at the peak’

    Does this sound like people who decided to move, or speculators trying to time the market?

  2. From the last link:

    “I think the boom is over,” said financial analyst Rich Toscano, who predicted the housing crash in November 2005 on his housing blog Professor Piggington’s Econo-Almanac.’

    ‘He said price declines in the fall are typical and not that big of a deal, but the concern for the market is how rapidly the number of homes for sale went up while sales also dropped.’

    “Home prices got really high based on this perpetually low inventory, and now that’s gone,” Toscano said. “Can prices be supported at this level? I think you could make the argument with more inventory and less demand that prices will back off a bit.”

    Click!

    1. “Home prices got really high based on this perpetually low inventory, and now that’s gone,”

      Also gone:
      – Perpetually lowering interest rates
      – Flippers buying on the expectation of selling in a couple of years
      – All-cash foreign investors
      – Indefinite HODLers hanging on forever to capture perpetual appreciation

  3. “‘Sellers are getting a little nervous that their time has come,’ he said. ‘At the same time, I advise everyone to look at the information. Even the California Association of Realtors are projecting an increase in price next year. It’s just the acceleration that is decreasing.’”

    I bet in 2007 CAR also predicted the same thing. I dont think they are fooling anyone but themselves.

  5. Even the California Association of Realtors are projecting an increase in price next year. It’s just the acceleration that is decreasing…San Diego County’s year-over-year drop in sales, 12 percent

    Such a small space between contradictions.

  6. “Real estate agent Michael Chandler, based in Kensington, said sellers are becoming more understanding with price cuts, and more willing to sell to investors in off-market deals.

    “Sellers are getting a little nervous that their time has come,” he said. “At the same time, I advise everyone to look at the information. Even the California Association of Realtors are projecting an increase in price next year. It’s just the acceleration that is decreasing.”

    Attack of the idioms…
    Multiple choice: Best response: a) “Be still my beating heart”, or b) “Oh, bless his heart”, or c) “A man after my own heart” ? Answer: (b).
    “You can’t make this stuff up.” “What a load of (old) tripe.”

    1. price cuts, and more willing to sell to investors in off-market deals.

      Makes me think of the signs stapled to telephone poles at intersections “We Pay Cash for Houses”. Pretty much the pawn shop for irresponsible home owners.

    1. poor cnbc. Just last week the stock price of home builders rebounded a little. perhaps it will take them 3 years to build and sell – and the home prices will have rebounded

  9. Let’s see. A deceleration of acceleration at the maturation of capitualation.

    Kind of like a Lamborghini driven by a drunk crashing into a retaining wall.

    That would be decreasing acceleration. Get ready cause here I come….

    What jargo-babble will they be chortling next month? Just plain nonsense.

    Actually it will be slightly anti climactic when they start telling plain truth. After all, the lingo dance we have been hearing has been like some hipster English lit professor whose class, the students attend for entertainment value after smoking weed. It will be so dull when they just say that the market is down the toilet.

    1. It will be so dull when they just say that the market is down the toilet.

      Well it may not be as dull as you might think. Gonna be a lot of those sad “I lost everything” stories, Realtor’s huddling around trash can fires, great deals on used cars, and much more fun exciting ways we can enjoy the downturn!

      Like just now, I got a kick out of this listing that sold a month ago but reappeared back on the market with the headline “buyers quit”. I don’t see that remark as good marketing for this shack and any future FB. I saved this one as it will be providing me much more enjoyment as it continues to suffer the collapse

      https://www.redfin.com/CA/Aptos/524-Middlefield-Dr-95003/home/2292638

      1. “Buyers quit! You have another opportunity to own this.”

        $900,000 is a lot of money. The wood needs something.

      2. Taxable Value 2016

        Land $23,228
        Additions $147,059
        Total $170,287

        Now trying to sell for 900…what an epic joke.

    2. Yes we needed some rain! Wondering what’s in store for the areas that just experienced the fires. Seems to be the ingredient to add for some mid slides…

    1. London homes experience steepest discounts since 2009
      Financial Times-9 hours ago
      … Kensington and Westminster were reduced by £363,405 on average, while properties priced above £5m in those districts saw a typical price cut of £740,369 …

      1. New York’s Wealthiest Cut Losses as Manhattan Real Estate Falters
        Wall Street Journal-21 hours ago
        One factor is the dramatic oversupply of high-price, new construction condos. Some 1,775 new Manhattan condos are forecast to hit the market by the end of …

      2. I was reading this earlier.

        “The below-cost sales don’t show up in any official government housing data, which simply registers the original price agreed when the market was in boom mode. This is significant because researcher Acadata changed its forecasting model earlier this year to better capture sales of new-build properties, which typically sell for higher prices than existing homes. That helped turn a decline of 2.5 percent in home prices in the 12 months through April into an increase of 2.9 percent for the same period.”

        So they lied? Global malinformation in the RE market. They can’t prop this up for much longer. Even the dumbest of the dumbs will get that lightbulb moment and realize RE has hit its peak and must come down

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