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Sellers Are Still Struggling To Get Their Homes Noticed

A report from New York Daily News. “Real estate agents have historically lured people to outer borough nabes like Long Island City in Queens, Williamsburg in Brooklyn and St. George in Staten Island by touting their proximity to Manhattan. But now, the opposite is happening too in a telling role reversal. Listings for pricey Manhattan pads are now bragging about how close they are to Queens and Brooklyn.”

“‘The market is very slow so we try to advertise our listings in a way which will catch the attention of most buyers,’ said Alisher Mukhamedov, the Laffey Real Estate listing agent for the Turtle Bay condo that lauds its 10-minute distance to Long Island City. ‘For investors, there’s a chance right now to get a very good bargain.'”

From Metro USA. “Power in the New York real estate market is starting to lean more toward buyers, with prices of houses in Manhattan falling to their lowest point since October of 2015. According to StreetEasy’s latest market report, a significant bump in the number of houses for sale is forcing sellers to accept lower offers.”

“‘The combination of a ton of new homes on the market and potential buyers holding out for better deals has shifted the market dynamic in Manhattan further in favor of buyers,’ said Grant Long, a senior economist for StreetEasy.”

“Home sellers are finding it harder to stand out in a deepening pool of available houses, StreetEasy found. Inventory in Manhattan saw the smallest jump of the three boroughs measured, with only an 18 percent increase, totaling 1,400 homes going up for sale. By comparison, the number of homes for sale in Queens increased by 35 percent.”

“Despite rising real estate prices in Queens, home sales increased by more than ten percent over November last year. ‘[These increases] should come as encouraging news to those looking to sell their homes, but it’s too early to tell whether this will be an enduring trend,’ Long cautioned. ‘The majority of sellers are still struggling to get their homes noticed.'”

From the West Side Rag. “The Upper West Side has gone from unaffordable to borderline ridiculous in the past five years, as sellers have benefited from high demand and low inventory, inspiring bidding wars for apartments. But the latest market report from Streeteasy indicates that that dynamic could be changing.”

“The November market report showed that prices throughout Manhattan fell 3.3% year over year during the month. On the Upper West Side, prices were down 1.3%, but by other metrics the market looks like it’s softening.”

“In November, the number of recorded sales was down 4%, and homes stayed on the market for an average of 82 days, up 22 days from  the same period last year. In the month, 15.7% of for-sale homes had price cuts, more than other neighborhoods like the Upper East Side or Upper Manhattan. And sale inventory was up 21.6%, more than anywhere else in Manhattan.”

This Post Has 40 Comments
      1. This explained alot. There are a ton of new luxury apartment just built where Im at in Milpitas, CA. Around the Great Mall area. Like time I check, they were offering 3 months free or dont pay until Feb 1, 2019. However, I check the inventory and about 90% are listed as “Available Now”. I wonder why don’t they just cut the prices. Keep in mind that 2 BR 1.1K sqft apartment go for around 3,400-3,500 per month.

        1. “There are a ton of new luxury apartment just built where Im at in Milpitas, CA. Around the Great Mall area. Like time I check, they were offering 3 months free or dont pay until Feb 1, 2019.“

          Last round during bubble 1 I recall these incentives going up to as much as 6 months but it took awhile. Up north in Fremont they are building like crazy right near the Tesla office (warm springs?). If learning from previous indicators has any credibility, we are headed off a steeper cliff than last time

          1. Care to share what apartments? My wife has been nagging me to buy a place and I keep telling her to wait! She wanted to buy in the Spring which I prevented as that would have been peak!!! Though renting in Fremont, my commute will be very BAD as I work in Santa Clara!

          2. The massive building in Fremont is by the Warm Springs BART station,which is across the railroad tracks from Tesla. Some of the building is on former NUMMI land, is all pretty high (looks like 5-6 stories), and is a mix of apartments and condos. I believe the total number under construction is >4000, so that should help accelerate the decline!

        2. “I wonder why don’t they just cut the prices.”

          Because the investor’s prospectus needs those inflated values whereas the customer incentives appear as expenses only after they have occurred.

          1. Everything is based upon fraud and accounting shenanigans. The fact of the matter is, any prospective buyer or lender could easily see through this pathetic smokescreen.

  1. “Sellers Are Still Struggling To Get Their Homes Noticed”

    It’s easy. Just drop the price by 5%. If still not noticed, repeat.

    After a few more rounds of reductions, the home will be noticed and sold.

    1. What these guys really mean is that they are in denial about the real estate price decline. Buyers willing to pay last year’s price are not in the market. Sellers in denial about the lower market value may keep their homes on the market forever, or may even pull the listing, before yielding to the market’s requirement for a lower price.

      1. “Power in the New York real estate market is starting to lean more toward buyers, with prices of houses in Manhattan falling to their lowest point since October of 2015.”

        You mean we ran out of greater fools willing to pay prices from 3-4 years ago? Start with November 2015 prices, cut 5% off, and continue every month until it sold. Fix!

        1. prices of houses in Manhattan falling to their lowest point since October of 2015

          Does this mean they’ve been lying about the YoY declines?

          1. I think Manhattan peak in 2016. It was the first to GO UP as foreign investors (i.e., speculators) pour hot money (i.e., dirty money) into it from 2013-2015. In 2016 sales begin to slow and inventory went up. Prices start to decelerate…HMMMM similar to what is happening now on the West Coast and then the rest of the nation.

      1. To their credit, it’s a lot more entertaining than the “Suzanne Researched It” commercial of yesteryear.

        1. I kind of liked it. I give them points for creativity and the music choice was good. It seems kind of crazy that probably lots of money went into producing something like this, but what is crazier is the amount of money that seller is trying to get for this property. Welcome to the warped economy we live in!

  2. Whatever price you are asking, the increase in mortgage rates has shrunk your available pool of buyers. It isn’t the same market at 1 year ago.

    1. That’s what I keep saying, though I put it a little differently. The interest rate increase since last year reduces how much a prospective homeowner can borrow by about 17%, assuming the same monthly payment. Given that the vast majority of people in the market to buy a home have to finance the purchase with a mortgage, this is a huge drop in demand, which freshman economics textbooks suggest will translate into a sizable reduction in market values.

      1. That’s what I keep saying, though I put it a little differently.

        OK. Then you’re saying there is no mania, only the cold hard How-much-a-month & scdave’s Can you qualify.

        1. Not at all.

          The drop in individual (and collective) prospective buyer demand due to the effect of higher rates on the lending budget constraint is merely one of many reasons the mania is rapidly coming to an end. Think of this factor as playing a similar role to a pin in popping a balloon, and you will have the right idea.

  3. Drop house price folks, all homes eventually sell, buyers want to realize at least they can break even or a small profit on their investment.
    Pay over market, time has come and gone sellers, either lower price to it sells or take it off the market, DOD will kill you in the end?

    1. “Pay over market, time has come and gone sellers, either lower price to it sells or take it off the market, DOD will kill you in the end?”

      The bubble has burst folks. He who panic first, panic best! Inventory will continue to explode as new constructions can’t sit empty forever.

    2. Another day, another swing of the $harp edged axe @ “flip.the.flop” timmmmmberrrrrr! de$truction.

      Chop, chop, chop! … closer & closer to the demarcation of “the patience of capitulation”.

  4. So the Fed just hike rates a quarter percent. Big whoop. Meanwhile, they’re now cutting down their projected 2020 hikes from 3 to 2. So much for ever getting back to “normal.” It’s low rates forever – or at least until the end of many of our lives.

    1. The 1/4 point rate hike was supposedly priced in. But judging from the stock market selloff that ensued after the announcement, it almost seems like the markets expected the Fed to pause this meeting!

      1. Judging from the magnitude of the post-meeting selloff, I guess those algos were completely blindsided by the Fed decision to do exactly what it said it was going to do. Did they miss the memo that Yellen is no longer Fed chair?

    2. I think you’re right about the low rates. It’s like we’re following the same dismal path of Japan. Baby Boomers hoping to move money from high risk assets to low risk CDs are not going to be happy with historic low returns. So I guess they’ll be forced into reverse mortgages in order to supplement their lifestyle.

  5. I can’t find the text yet, but judging by what the stock market algos are doing it looks like the fed went hawkish?

    Does that bring the cliff tangibly closer?

    1. Pray tell how reducing the number of future rate hikes is “hawkish” when considering how low rates currently are?

  6. “Sellers Are Still Struggling To Get Their Homes Noticed”

    No they’re not. Everybody notices them, probably even moreso due to the outrageously inflated asking prices that have no basis in economic reality.

    “Sellers Are Still Struggling To Find Suckers To Fund Their Retirement Windfall”

    There, fixed it.

    1. I mean I guess all of those overpriced, thin walled, ecru colored developments supplied with overpriced, poor quality but bright shiny appliances could paint their doors a different color once the HOA approves…that’ll do it I’m sure.

  7. Here is a hopeful sign of improved future rental affordability!

    Rent prices are doing something unexpected in some of the country’s most expensive cities
    Published: Dec 19, 2018 2:14 p.m. ET
    Seattle, Atlanta and Miami are all seeing this trend
    Bloomberg News/Landov
    Single-family homes have become more expensive to rent across the country over the past year, but in the nation’s largest cities rent-price growth has slowed.
    By Jacob Passy

    In cities like Seattle, the rent has indeed gotten too damn high — so high, in fact, that prices have flattened.

    Rent prices in Seattle, the original home of Amazon (AMZN, -0.68%) increased by just 0.3% in October — down from nearly 4% a year ago, according to a new report released by global real-estate data firm CoreLogic (CLGX, -0.56%) That represents the slowest pace of rent growth for Seattle since May 2010.

    1. At the risk of coming off as “captain obvious”, rental markets compete with home sellers. Case in point: right now along the Wasatch Front in Utah, the value that I can get as a renter is much higher than I can get as a buyer of a similar property. This is because so much class A has been built and incentives and burgeoning supply is constraining rent increases.

      I walked the club rooms of the luxury property I manage yesterday and I saw a family that was enjoying the theater room, Xbox one/PS4 room, and the arcade room. They pay probably $1475/month for a 2-bedroom, not including utilities, internet, cable, etc. Probably a lot for their budget, but there is no where they are going to be able have the same experience for their lifestyle and children in a run-down old house for the equivalent monthly payment. Right now, renting is truly a better option across the board. This only will force more price cuts from sellers as buyers can afford to wait it out in a sea of pretty decent rental stock.

      1. But your luxury property isn’t going to make them rich like a run down old house is guaranteed to. They should think of the kids’ future. Cough.

  8. Might be worth a chuckle to see how many open houses are held this weekend. Normally, it would zero given it’s 48 to 72 hours before Christmas, but after what I saw last week (per my comment in an earlier post)… *laughs*

    1. We have yard signs and open house signs in plain view in North County San Diego, following a period of years where such items were generally absent from view.

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