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The Culprit For Significant Price Declines Is Probably Increased Inventory

A report from Staten Island Live in New York. “After more than three years of a strong seller’s market, Staten Island’s residential real estate is now favoring home buyers, Realtors say. ‘Real estate always works in cycles. The seller’s market started to wind down around September from what I saw, and the buyer’s market is becoming more front and center,’ said Traci Cangiano, broker/owner of Cangiano Estates in Great Kills.”

“‘We are seeing more inventory, and as a result it’s almost eliminating the multiple-offer scenario. Prices are slowly dropping, and homes are sitting on the market longer. Buyers are finally able to be a little bit selective,’ she added.”

The Denver Business Journal in Colorado. “Housing inventory increased 46.76 percent in November year-over-year, but was down 11.82 percent from October, according to the latest Denver Metro Association of Realtors report. The number of homes sold in November was also down from October, by 17.27 percent.”

“The downward shift of the market that began around July, when average and median prices dropped and inventory hit a three-year high, and continued into November. It’s not yet a buyer’s market, as inventory is still low enough to keep prices high, but the market continues to shift. Meanwhile, the luxury market is officially a buyer’s market, said Libby Levinson, a Market Trends Committee member.”

“‘With interest rates on the rise, this may be the best time for buyers in the luxury market with low rates and the ability to negotiate,’ she said.”

“Back in August, the luxury market surpassed $2 billion in sales, which is the earliest it has ever hit that mark, according to DMAR data. Last month, the DMAR report showed that October home sales sharply decreased from the previous year.”

The World Property Journal on Nevada. “The Greater Las Vegas Association of Realtors are reporting this week that Southern Nevada home prices leveled off heading into the holidays, with more homes on the market and fewer properties changing hands.’

“‘The housing market has been softening nationwide,’ said 2018 GLVAR President Chris Bishop.”

“By the end of November, GLVAR reported 7,003 single-family homes listed for sale without any sort of offer. That’s up 54.3 percent from one year ago. For condos and townhomes, the 1,605 properties listed without offers in November represented a 118.4 percent jump from one year ago. Compared to one year ago, November sales were down 11.6 percent for homes and down 7.1 percent for condos and townhomes.”

From Boston Agent Magazine on Massachusetts. “A market analysis released last month by Berkshire Hathaway HomeServices Warren Residential found that condo prices in some of Boston’s most expensive markets fell during the third quarter of 2018.’

“Compared to the same period in 2017, condo sale prices in the Fenway/Kenmore area fell 14.27 percent to an average of $611,304. In Downtown Boston, condo prices fell almost 7 percent to an average of $1.38 million. Warren Residential also recorded less significant price drops for condos sold in the South End (4.6 percent) and the Waterfront district (2.5 percent).”

“The culprit for the more significant price declines is probably related to increased inventory, especially at the upper end of Boston’s condo market. In Fenway/Kenmore, Warren Residential reported the supply of condos for sale increased 231 percent year-over-year. In Downtown Boston, supply increased almost 73 percent annually. In both markets, closed sales were also down year-over-year.”

“Some trends, like listing supply, were mirrored in the latest GBAR report. New condo listings were up 20.3 percent in October compared to last year, while the total number of units sold was down 8.6 percent.”

“‘For now, it is still somewhat a seller’s market, but as these numbers reflect, supply is not as constrained as it was this past summer,’ according to GBAR president Marie Presti in a news release on October sales data.”

The Daily Mail on California. “Demi Lovato has taken her Los Angeles mansion off the market and is now trying to find renters for the home, which is the same location where she suffered a drug overdose in July. The singer recently listed the 5,500 square foot home for a hefty rental price tag of $39,000 per month.”

“The home was first listed for sale in September for $9,495,000 and the price was later slashed to $8,995,000 but still wasn’t scooped up.”

“TMZ reported that the singer’s renovations were putting off purchasers. Demi had turned the garages into a security base, and added a glam room and wardrobe room, leaving the property without a covered car space. In addition, a security fence around the property stands outside the lot’s border, taking in some city land. So much city land is enclosed, that it even includes a street light.”

“Back in 2016, Demi purchased the property for $8.3 million, according to Variety and, ‘after a series of storms in early 2017 sent the hillside behind the house tumbling into her driveway — the L.A. Department of Building and Safety has declared the hillside secured.”

This Post Has 34 Comments
  1. Eeee-bola Staten Island!

    Sure is a lot of inventory coming out of the wood-work.

    ‘The culprit for the more significant price declines is probably related to increased inventory’

    Weren’t we told they could sell even more if they had more inventory?

    1. The Culprit For Significant Price Declines Increased Inventory Is Probably Increased Inventory
      Significant Price Declines

      Fixed it!

  2. Off-topic… Look out below, market CR8R in progress! ATM, the Dow has lost 1500 points in the last two days. But it’s a long ways to the closing bell.

  3. TMZ reported that the singer’s renovations were putting off purchasers.

    Yeah, cuz buyers are just fine with living in a house that a washed-up celeb OD’d in. btw, ugly house. Like living in a Rubik’s cube.

    1. “Demi Lovato has taken her Los Angeles mansion off the market and is now trying to find renters for the home, which is the same location where she suffered a drug overdose in July. The singer recently listed the 5,500 square foot home for a hefty rental price tag of $39,000 per month.”

      LOL. This idiot is gonna chase the market down!

        1. Well, having seen refrigerator boxes (humans homes, knot Joseph & Mary’s) adorned with Xmas lights in a dump on the “old hwy” whilst traveling to surfing locals in baja mexico, 5,500 sqft, actually might qualify as a “Man$ion”

  4. 231% for sale inventory increase YOY for Boston Condos! I wonder what that number would look like if you include all of the pocket listings. If you don’t know what pocket listings are, they are a trick that realtors use to hide inventory from the market; because once you list, it’s first place to the bottom in a buyer’s market.

    1. Wiki: “A pocket listing or hip pocket listing is a real estate industry term used in United States which denotes a property where a broker holds a signed listing agreement (or contract) with the seller, whether that be an “Exclusive Right to Sell” or “Exclusive Agency” agreement or contract, but where it is never advertised nor entered into a multiple listing system (MLS), or where advertising is limited for an agreed-upon period of time.”

      I can definitely see this happening in the wealthier circles, where the broker can steer the $1.5M buyer to an exclusive listing, because you know, the buyer is special. (Middle-class SFH, not so much)

  5. “‘With interest rates on the rise, this may be the best time for buyers in the luxury market with low rates and the ability to negotiate,’ she said.”

    Thats probably what she said 6 months ago. Now is the best time to buy!

    1. Yeh. That one caught my eye too. Got to be the best time to,buy when pressures reveal that prices will likely be dropping. Of course a comission now doesn’t have anything to do with that advice.

      Reminds me stunningly of 2006. Seen it all before.

      1. Yes…Indeed. The sucker cycle has a limit too…counting on younger and younger people who may have not been paying attention to the last downturn if they were still being supported by parents, or deep inside the university snowflake system. Now they’ve been conveyed into the next system of full time life distraction in the corporate world and bought at the peak b’cause that is what their peer group did, and the Realestate agents are quick to spot those suckers and ram rod them through the system so fast that by the time they blink….it’s too late.

  6. From the las vegas association they quote listings without an offer. Pretty sure that offers are not data that is recorded. My parents had a property in Las Vegas that got listed and had several offers. I never saw any data revealing these offers. Not sure where they got that one from. Once a property is pending, then you know they had an accepted offer, although I have seen suspicious pending listing that sit for a couple of months only to wind up being active again. Something fishy

    1. Offers are “pending” while the buyer obtains the mortgage approval. I’ve seen several Zillow listings which were off market and then back on, proclaiming “back on market, financing fell through.” A couple of months from offer to closing is not unusual. When I bought in early 2012, my realtor told me that my 6-week settlement was “quick.”

      What is really fishy is if you see several pending offers fall through, one after the other. That’s a sign of a deadbeat FB trying to avoid foreclosure. An unscrupulous realtor will put in a fake offer just to stave off a bank foreclosure. Of course the financing falls through, but it buys 2-3 months for the occupant. Rinse and repeat.

      One house I visited on a Saturday at midday was going through this process. The residents were there: lazy, unkempt, in their jammies, watching cartoons, and shooting laser beams out of their eyes at me. They knew that I was a potential serious offer and not another fake push-off. And how dare I have enough money to kick them out of “their home.” (That place was trashed. Think of a set from Mad Men being used for 40 years without being repaired or even cleaned. I chose a different house. )

        1. Sometimes that’s not enough. I’ve told this story a few times and I’ll just use round numbers for simplicity.

          I was talking with a UHS about a bank foreclosure years ago. She complained that the bank had priced it at $350k, basically what it was owed on it. They had an offer at $250k and rejected it. Then some period of time goes by (6 months or a year, I don’t remember), it transitions to Fannie Mae who markets it at $250k and sell it for $200k.

          What was going on was the bank was waiting for the Fannie guarantee of the loan to kick in. IMO you should expect a screaming deal on a foreclosure to make up for uncertainties and negative surprises. If it ain’t a screaming deal, don’t bother.

          1. ” IMO you should expect a screaming deal on a foreclosure to make up for uncertainties and negative surprises. If it ain’t a screaming deal, don’t bother.”

            It’s that straightforward. No different than bidding on work with unknown and unforeseen conditions. There’s a dollar number associated with it and only fools understate it or ignore it entirely. Entire firms have gone under because of it. And millions of borrowers are underwater because they ignored the obvious.

          2. “What was going on was the bank was waiting for the Fannie guarantee of the loan to kick in.”

            Is there really a delay associated with that guarantee? I thought the banks were more inclined to keep the foreclosures because the servicing fees were higher on the defaulted properties.

  7. “The singer recently listed the 5,500 square foot home for a hefty rental price tag of $39,000 per month.”

    “Back in 2016, Demi purchased the property for $8.3 million, according to Variety …”

    First of all, aren’t most people who could afford to pay $39,000 a month in rent comfortably housed in a home they own?

    Secondly, 12*$39,000/$8.3 million = 5.6%…a pretty good return on the purchase price if they can find anyone willing to pay that much rent.

  8. “First of all, aren’t most people who could afford to pay $39,000 a month in rent comfortably hou$ed in a home they own?

    $illy Professor Bear, you reckon$ “$ome folk$” only choo$e to re$ide in x1 $helter? … There might bee counter point$ to this world view.

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