thehousingbubble@gmail.com
Blog

There Continues To Be An Increased Frequency Of Price Reductions

A report from the Seattle Times in Washington. “Home prices on the Eastside have now dropped on a year-over-year basis. In Seattle, the median house is nearly $100,000 cheaper than last spring. And across King County, the number of condos available for buyers has more than quadrupled in the past year. The cool-down in the local housing market continued in December.”

“Compared with the record highs reached last spring, prices are down $91,000 in Seattle, to a new median of $739,000, and they’ve fallen $69,000 on the Eastside, to $909,000. Most remarkably, in the last seven months prices have declined more than $170,000 in Queen Anne/Magnolia, the central Seattle area that includes Capitol Hill, and in East Bellevue.”

“‘Sellers are more willing to be flexible on pricing, even after a short time on the market,’ Redfin agent Jessie Culbert said. ‘It’s much more of a conversation at this point, versus a buyer just saying, ‘Have my soul and my unborn child, please get me this home.'”

“Three other areas have lost more than $110,000 since the spring: Ballard/Greenlake, Shoreline-Richmond Beach and Redmond-Carnation. And in the condo-only market of downtown Seattle, prices decreased about 10 percent in the past year.”

“Snohomish County is starting to follow King County’s lead. Inventory in Snohomish has also more than doubled in the past year while prices are up 4.5 percent, the smallest increase in two and a half years. The median house sold for $470,000, down from the record high of $511,000 in the spring.”

The Dallas Morning News in Texas. “After seven consecutive years of increasing sales, North Texas homebuilders saw a slowdown in the market in the second half of 2018 as consumers adjusted to higher mortgage costs and huge home price increases.”

“Homes started and new homes sold in D-FW: Starts – 8,973. Sales – 8,676. Finished vacant new homes: 5,950.”

“‘Dallas-Fort Worth, the nation’s top new home market, is slowing from a frenzied, overheated pace to a more stable, normalized market. Builders and developers are hard at work delivering product to meet the strong demand for affordable new homes.’ Paige Shipp, regional director, Metrostudy Inc.”

From The Signal in California. “This past year, we had a slowdown in the real estate market in the Santa Clarita Valley, especially in the higher home price range.”

“While early in the year we had solid home price appreciation at around a 6 percent gain from the year earlier, home prices leveled off towards the end of the year. There continues to be an increased frequency of price reductions from original list price, and homes are taking longer to sell. While some of these price adjustments downward and slowing activity are normal in the seasonal cycle of home sales, these changes are also indicating that we are in a period of market shift toward a more balanced market.”

From KTVZ in Oregon. “The Bend area’s median home sales price rose more than 9 percent in 2018, to $432,000, though that year-end figure was $17,000 below June’s peak price and fairly stable through the last quarter of the year, an analyst said Saturday.”

“The Redmond area’s median home price dropped a bit as well, down $5,000 to $300,000 in December. In smaller markets, the Sisters area median home price rose to a record $450,000, but dropped a bit in Sunriver, to $475,000.”

From Hawaii News Now. “Oahu’s housing market could be cooling off. That’s the takeaway from new home and condominium sales figures from the Honolulu Board of Realtors, which show the number of homes sold on Oahu in December is down 28 percent from the same month in 2017.”

“Darryl Macha, 2018 president of the Honolulu Board of Realtors, said that more inventory and slower sales are good news for those in the market for a home. ‘We began to see a shift in the market during the last quarter of the year and as 2019 begins, it appears that trends point toward a more balanced market for buyers and sellers,’ he said. ‘While current mortgage rates are still relatively low, they are anticipated to rise this year, so those ‘on the fence’ may want to consider purchasing sooner rather than later.'”

Related Posts
This Post Has 85 Comments

  1. ‘It’s much more of a conversation at this point, versus a buyer just saying, ‘Have my soul and my unborn child, please get me this home.’

    Ha ha, so funny Redfin Jessie. But you know, some people may pay too much in such a situation. To the point that they get their ass kicked and get foreclosed! Lose everything! I’ve seen it and seen it.

    I know I’m old fashioned I guess, but people should never pledge unborn children for the chance to pay over asking for a shack. There should be no frenzy. No flipping, no multiple offers. If there are, somebody is going to get hurt.

    1. people should never pledge unborn children

      That’s what you’re doing if you take out a loan for 30 years that eats up all your disposable income.

      1. Holding a 30 year fixed is one thing. (At least you can pre-calculate what you are getting into), but I am constantly surprised that would be loan owners forget about holding costs (property taxes, insurance, HOA dues, maintenance, etc).

        None of these costs are small, and my own experience is that they only get larger over time and must be paid with cash money. (Never heard of a loan for property tax, HOA dues, insurance). I suppose some vendors might allow budget payments for putting on a new roof or a paint job. (None of which is cheap, BTW).

        1. I remember overhearing a remodel contractor over 10 years ago talking about how he never would have been able to make the money he did if he couldn’t offer financing options to his customers. Historically, remodels were paid in cash. He was naming lenders that he sent his customers to. I was shocked.

    2. And most of your equity should come from paying down your load, NOT real estate prices increasing to the sky

  2. ‘Homes started and new homes sold in D-FW: Starts – 8,973. Sales – 8,676. Finished vacant new homes: 5,950′

    They need to fly in some of those Florida loan originators right away!

    If you look at the graph they are already fooked. With almost 6,000 unsold new shacks, that’s almost twice Orange County’s’ 3,400!

    1. I’d bet they aren’t shacks; they’re air boxes. I guess the Chinese aren’t interested in airboxes more than a hundred miles from an ocean.

  3. ‘The Redmond area’s median home price dropped a bit as well, down $5,000 to $300,000 in December. In smaller markets, the Sisters area median home price rose to a record $450,000, but dropped a bit in Sunriver, to $475,000’

    I’m sure the robust incomes in these Oregon places almost no one has heard of will support the whopping price tags. Right?

    2. Bend, Sunriver, etc. are low wage hellholes. $11 per hour is a good job, $15 and you’ve hit the bigtime. $475k median? No comment…

    3. Retirement, second home destination. 330 days a year sunshine, lots of outdoorsy activities and good beer. So equity locusts.

  5. ‘Most remarkably, in the last seven months prices have declined more than $170,000 in Queen Anne/Magnolia’

    So I looked into why this is so remarkable:

    http://queenannerealestate.com/queen-anne-listings

    Those are some over priced shacks. But it fits with every other bubble city we’ve seen: single detached houses in the most expensive neighborhoods fall the most. Why, no on needs a $6,000,000 shack. It’s a speculative (a UHS would say discretionary) purchase.

    1. queen ann is considered a very trendy neighbourhood. When Amazon and Microsoft couples decide to have kids this is one of the places that they buy.

      Of course it makes no financial sense compared to other neighbourhoods, but you get to say you are in these cosy, trendy ‘walking’ areas.

        1. I know a puke that rented a two bedroom apartment in Beverly Hills (no, not zip 90210) just so he could establish bragging rights. He was in aspiring Hollywood producer (one of literally thousands), which figgers.

      2. I have friends who did exactly that. Paid way over asking for a 100-plus-year old house, then had everything break on them. They also found out previous owner had done some rather “unconventional” construction. Break out another 100K to fix it all….

  7. he said. ‘While current mortgage rates are still relatively low, they are anticipated to rise this year, so those ‘on the fence’ may want to consider purchasing sooner rather than later.’”

    Come on people. NOW IS THE BEST BEST BEST time to buy! No, not summer of 2018. We lied. Or 2007 (yes we lied again). BUT NOW is the best time to buy (we promised!!! No lie this time)

    1. I think we should trust them this time. They’ve done their research, after all. And each and every listing is special.

      You guys can do this….

  8. Now that the stock market bottom is firmly in place, and it’s off to the races, how is the Fed going to justify not raising rates next meeting in the face of a parabolic DOW?

    1. You may be a bit premature on calling a bottom. Trillions more Yellen Bux worth of fake valuations need to be wiped away before the bottom is in.

      1. Apparently you missed my Marketwatch link yesterday which emphatically declared “the bottom is in.” If Marketwatch says it, it must be true…

  9. “Home prices on the Eastside have now dropped on a year-over-year basis. In Seattle, the median house is nearly $100,000 cheaper than last spring. And across King County, the number of condos available for buyers has more than quadrupled in the past year. The cool-down in the local housing market continued in December.”

    Realogics sponsored article last Dec 2017

    https://www.seattlemag.com/news-and-features/condo-conundrum-10-reasons-why-theres-sale-shortage-seattle

    Crows, it’s what for dinner tonight!

  10. Ha, I was zillowing around and found a price reduction in Beaumont, TX. 2 bed- 1 bath shack on 7000 sq ft (comparatively big) lot. Lower-middle class liveable, could use a little work. Price reduced from $55K to $45K.
    It’s pretty funny when even the little Oil City-type houses don’t sell. I guess the literal “car up on blocks in the front yard” next door didn’t help much either.

    https://www.zillow.com/homedetails/1045-Fulton-St-Beaumont-TX-77701/50381957_zpid/?fullpage=true

  11. “Compared with the record highs reached last spring, prices are down $91,000 in Seattle, to a new median of $739,000, and they’ve fallen $69,000 on the Eastside, to $909,000. Most remarkably, in the last seven months prices have declined more than $170,000 in Queen Anne/Magnolia, the central Seattle area that includes Capitol Hill, and in East Bellevue.”

    Ouch! Heckuva job, Obama, Bernanke and Yellen. Outstanding!

    1. The Wealth Effects in reverse! Where is scdave from Bellevue? redmondjp? These housing bulls disappeared faster than the equity in their Seattle area houses!

      1. “Where is scdave from Bellevue?”

        I believe he is from Santa Clara, CA, and he likely paid-off his home more than twenty years ago and enjoys Prop13 tax rates.

  13. Will falling mortgage rates save the housing market from falling home prices?

    And given the “everything is awesome” economy we are enjoying, how come mortgage rates are falling?

    1. Markets
      Falling Mortgage Rates Raise Hopes for Battered Housing Market
      Mortgage rates have fallen to around their lowest levels in eight months, offering a potential boost to the housing market after a rough patch in recent months
      By Ben Eisen and Laura Kusisto
      Jan. 7, 2019 7:00 a.m. ET

      Mortgage rates have fallen to around their lowest levels in eight months, offering a potential boost to the housing market after a rough patch in recent months.

      The average rate for a 30-year fixed mortgage fell to 4.51%, matching the lowest level since last spring, according to data released Thursday by mortgage-finance giant Freddie Mac. That rate is still higher than its level of 3.95% from a year ago but has fallen from a more-than-seven-year high of nearly 5% last fall.
      …

        2. Fed rates are overnight interbank lending. Mortgages are 30 yr. No reason they should track in lockstep.

          1. Also, the yield curve is on the verge of inverting, where long-term rates dip below short-term.

          2. Seems an odd comment when all the hysteria has been over the Fed raising rates and how it has impacted mortgage rates.

          4. “Also, the yield curve is on the verge of inverting, where long-term rates dip below short-term.”

            That’s because Mnumbnuts is selling short-duration, higher yield treasury bonds.

    2. Treasury yields climb as haven demand fades amid stock-market rally
      Published: Jan 8, 2019 4:06 p.m. ET
      By Sunny Oh

      Treasury prices fell Tuesday, pushing yields higher, as the upbeat tone in stocks undercut the luster for haven assets.

      The 2-year note yield (TMUBMUSD02Y, +1.77%) advanced 6.1 basis points to 2.585%, contributing to a three-day yield climb of 20 basis points. That marks its largest such rise since June 2009.

      Long-dated maturities showed a more muted rise. The 10-year Treasury note yield (TMUBMUSD10Y, +1.18%) rose 3.2 basis points to 2.716%, while the 30-year bond yield (TMUBMUSD30Y, +0.61%) was up 1.5 basis points to 2.992%. Bond prices move in the opposite direction of yields.
      …

  15. Here’s a Fannie-Freddie fix proposal that greases the skids for Congress
    By Andrea Riquier
    Published: Jan 8, 2019 1:46 p.m. ET

    A group of academics and practitioners have tried to make it as easy as possible for legislators to reform housing finance
    Bloomberg

    As a new Congress settles into Washington, there’s some very old business lurking that’s not likely to grab its attention any time soon.

    Fannie Mae and Freddie Mac, the two giant mortgage guarantors, are still under government control, as they have been since the 2008 financial crisis. And despite passing all kinds of milestones since that time – the 10-year anniversary of the crisis, the first post-crisis taxpayer bailout – Congress has come no closer to finding a permanent fix for the nation’s housing finance system.
    ….

    1. Where did the idea that a government sponsored duopoly was the best way to provide housing finance originate, given that such a concentration of market power in two individual firms is normally illegal?

      2. Legal note: not all concentrations of market power are illegal. Anticompetitive conduct to establish or maintain a concentration of market power is illegal.

    2. “Congress has come no closer to finding a permanent fix for the nation’s housing finance system.”

      What’s wrong with the invisible hand?

      1. What’s wrong with the invisible hand?

        It has this tendency to slap People Who Matter at inopportune times.

    1. Looks like new construction sales are taking it in the shorts much more than existing stock. Serves them right…

      /Spiffy is not a fan of the builders that jumped into the teardown game.

      1. in the shorts

        There will be a pantsing for those who bought existing used houses at peak bubble prices too.

    1. So they are pooling there money together since they are capped at 50k each. They said the mortgage companies are finding ways to get them loans and not questioning how they are getting there money over since we all know the restrictions were put in place to prevent that. Perhaps why crypto is still hanging on by a thread as they can use it to funnel over corrupt money to the US.

      1. I have experience in this area. The people I’ve worked with in the USA so far require the money to “season” for 60 days in an American account. After that they don’t care where it came from.

        And on a side note, the ways to work around the 50k limit are getting more attractive even if you don’t need to transfer more than 50k. People who legally transfer 50k every year in the standard way are starting to attract unwelcome attention. Or there is at least fear that they are being noticed.

  19. Anyone else having issues with the Joshua Tree plugin (4.9.0)? clicking “Next” the count goes down then right back up milliseconds later…

    3. Also, after clicking “mark all as read” and it goes to 0… If I start to scroll back up the count goes back with each post revealed.

      1. Also, after clicking “mark all as read” and it goes to 0… If I start to scroll back up the count goes back with each post revealed.

        That’s actually a new feature I am playing with, which is likely the cause of the issue above. Feature is to keep the ‘read’ index in sync with the scroll position, if you happen to manually scroll vs hit ‘next’. Scrolling back up will then mark the ones you scrolled above as “unread”.

        Happy to hear feedback, and it’s easy for me to disable

        1. ok, just single clicking “Next” when the message is at the bottom of the window is probably why it undoes the click then

          1. ok, just single clicking “Next” when the message is at the bottom of the window is probably why it undoes the click then

            Well, the behavior you describe two posts above is “by design”, meaning if you mark all read then manually scroll back up, we’ll update the ‘read’ index based on your scroll position relative to the comments. The thinking here is that 1) my understanding of the use case is folks actually scroll through everything quickly just to scan what’s going on, but want to mark all read (manually scrolling will now do that), and 2) people like me sometimes fall back to manually scrolling without realizing it, and then hitting “next” actually takes you backwards.

            I’m not fully aware of what you mean by the quoted text above, but hopefully this gives some context to understanding whether the behavior is expected. if not, let me know (please email me with bug reports….I’m crazy busy here lately and not reading daily)

    6. Anyone else having issues with the Joshua Tree plugin (4.9.0)? clicking “Next” the count goes down then right back up milliseconds later…

      I’ve seen that a few times. Is this on mobile? (I’ve not seen it on desktop). If you can’t roll back to a previous version let me know and I can log in and delete v4.9.0 until I can fix it.

      Sorry about that!

    1. Naahh, all is well.

      Meanwhile, most sneak off to list their house. Just like my old neighborhood – everyone, after insisting they were in for the long haul, disappeared seemingly overnight without a word.

Comments are closed.