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Some People Don’t Know It Yet, Those People Are The Sellers

A report from Bloomberg. “The luxury real estate market in 2018 wasn’t great for many people. Sellers in cities as far apart as London, Los Angeles, and New York found themselves facing daunting macro- and microeconomic headwinds, while buyers, on the other hand, had to contend with overpriced stock and rising interest rates—and taxes.”

“Possibly the greatest threat to sellers’ home prices is excessive supply. ‘We forecasted last year that in 2018 there would be about 3,000 new condominium units coming’ in New York City, says Jonathan Miller, the president of the appraiser Miller Samuel Inc. ‘Every year the cumulative inventory keeps rising,’ Miller says. He estimates that by the end of 2019, there will be almost 8,000 units on the market; only about 2,000 of those are expected to sell. And that’s just new apartments—resales add significantly to the total.”

“The inventory issue is widespread. ‘The national statistics pivoted about six months ago, where we started to go negative,’ Miller says. ‘Not a sharp correction or anything, but inventory is rising. And what happens? Prices slide or at least slow their rate of growth.'”

“All of this means that 2019 is shaping up to be a depressing, albeit probably not disastrous, year for home sellers. ‘Probably, 2019 will be more favorable to buyers,’ says Jon Woloshin, the head of real estate for UBS Global Wealth Management’s chief investment office . Miller agrees: ‘And some people don’t know it yet. Those people are the sellers.'”

From CNBC. “The U.S. housing market has become so cloudy that Lennar says it can’t give investors guidance for 2019. ‘Due to continued softness and uncertainty at this seasonally slower time of year, we are deferring guidance for fiscal year 2019 until the markets further define themselves,’ Lennar’s executive chairman Stuart Miller said in a press release.”

The Dallas Morning News in Texas. “North Texas homebuilders eased off construction in the fourth quarter as some buyers took a break from the housing market. ‘The builders said that the higher mortgage rates were making the affordability issue more pronounced,’ said Ted Wilson with Dallas housing analyst Residential Strategies. ‘Some builders said their sales were off 15 to 20 percent. And our finished home inventory numbers were up a bit.'”

“About 6,400 finished and vacant new houses were on the market in the D-FW area at the end of the year, almost 8 percent more inventory than in December 2017.”

The Colorado Springs Gazette. “Though the pace of price hikes and sales slowed in the second half, the local market should remain healthy heading into the new year and even begin to favor buyers a little more after years of sellers having the upper hand, some real estate agents say.”

“‘If things are overpriced, then they’re just not selling,’ said Donna Major, board chairwoman of the Pikes Peak Association of Realtors. ‘Buyers, I think, are wising up and not willing to overpay for a house. They’re willing to wait.'”

The Review Journal on Nevada. “Las Vegas’ housing market ended 2018 with a big drop in sales from a year earlier and a sharp rise in availability. A total of 2,142 single-family houses traded hands in December, down 6.5 percent from November and 18.2 percent from December 2017, according to the Greater Las Vegas Association of Realtors.”

“Also, 6,615 houses were listed without offers at year’s end, down 5.5 percent from November but up 72.9 percent from the end of 2017.”

From My Northwest on Washington. “As 2018 rolled to a close, the housing market in the Northwest saw a noted increase in eager sellers. That was rounded by a median closing price for houses of just $639,000 in King County, down from the 2018 high for the county of $726,275 back in May.”

“Meanwhile in King County, condo listings have quadrupled in the last 12 months, as buyers look for alternatives to pricier houses. ‘Buyers should act now, act deliberately, act decisively, and act in conjunction with an experienced real estate professional,’ advised Dick Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor.”

From Blabber Mouth on California. “According to Realtor, one of two properties METALLICA guitarist Kirk Hammett once called home in Sea Cliff, a neighborhood in northwestern San Francisco, California, had its asking price reduced from $13 million to $11.9 million. The home, located in an exclusive enclave by the beach, first came on the market last year.”

“Hammett first listed the home in 2017 for $16 million, then dropped the price a couple times before pulling it off the market.”

“Asked by Atlanta, Georgia’s Rock 100.5 radio station if it ever gets old being a millionaire, Hammett responded: ‘You know, it just comes with a whole bunch of different problems, bro. And you know what? I’m not very good with saving money. [I spend it on] comic books and movie posters and horror stuff and guitars. I live my life. I just f***ing live my life. And I’m generous. The people who are around me experience what I’m experiencing while I’m experiencing it.'”

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This Post Has 55 Comments

  1. ‘6,615 houses were listed without offers at year’s end, down 5.5 percent from November but up 72.9 percent from the end of 2017’

    ‘About 6,400 finished and vacant new houses were on the market in the D-FW area at the end of the year’

    Hey Dallas Morning News, that’s over 400 more than you said yesterday. What happened to my shortage?

    ‘in King County, condo listings have quadrupled in the last 12 months’

    1. “Meanwhile in King County, condo listings have quadrupled in the last 12 months, as buyers look for alternatives to pricier houses.”

      Uhhhh… if demand for condos was increasing wouldn’t (all else equal) active condo listings be DECREASING????

      Oh, wait for it:

      “Buyers should act now, act deliberately, act decisively, and act in conjunction with an experienced real estate professional,’ advised Dick Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor.”

      Yeah makes sense now.

        1. Dick’s the kind of guy who cuts a young woman off in a drive-thru, so he can get his coffee first, name appropriate of course.

    1. Have not notice much of a slowdown here in Corvallis. A favorite pub of ours has been crazy busy and downtown at 6pm is packed (hard to find parking) Been talking with a real estate agent and he is keeping up how great everything is. I’m sure things are slowing down, just haven’t seen it yet.

      1. Here’s your rare opportunity to say “I saw it first on the Housing Bubble Blog”.

        It would look good on your t-shirt.

  3. ‘If things are overpriced, then they’re just not selling,’ said Donna Major, board chairwoman of the Pikes Peak Association of Realtors’

    As compared to six months ago when buyers just had to roll with it.

    1. “Buyers, I think, are wising up and not willing to overpay for a house. They’re willing to wait.”

      Translation: We no longer can fool them that buying now its in their best interests.

    2. “If it’s overpriced, it doesn’t sell”. Wow Donna, such fantastic advice! You must be a SENIOR Expert and Analyst!

      1. RE agents, you will do much better doing your own research and doing the opposite when their mouth moves?

  5. ‘And you know what? I’m not very good with saving money. [I spend it on] comic books and movie posters and horror stuff and guitars’

    Let me help you out Kirk. What do you call $4,000,000 off? A start!

  8. “We continue ro believe that the housing market is adjusting to a temporary disconnect between sales prices and buyer expectations…”

    Stuart can go eat a bag of something that I’m not going to type here. Producing product at a price the market will bear is his problem, not ours.

    1. There suddenly seems to be a lot more alcohol in the Fed’s punchbowl, thanks to the New Year’s respiking.

      1. It’s Everclear in the punchbowl, and now they’re not going to raise rates in 2019. Do you think we have a DOW 50,000 blowoff coming?

        1. There suddenly seems to be a lot more alcohol in the Fed’s punchbowl, thanks to the New Year’s respiking.

          That’s true. But everybody is keeping their eye out the window because they know the cops are on the way…

  13. Listened to an interview with Doug Duncan, Chief Economist for Fannie Mae yesterday.

    He summed up the 2018 market. Here are my notes:

    * Purchases of houses responded more negatively to higher interest rates than predicted
    * Forecasted 2.5% increase in home sales. Actual 2018 was 2.5% decrease in home sales.
    * Doesn’t see a collapse due to housing under supply.
    * Fannie surveys of buyers and sellers at the end of 2018 said it was a bad time to buy or sell.

    Interesting that most of the housing Econ people think there is no oversupply. I think he’s only talking about SFR without any idea that MFR also affects SFR.

    My big take away was this guy and his team were off by 5% in their sales predictions which means they don’t know what’s going on in the market.

    1. “Purchases of houses responded more negatively to higher interest rates than predicted”

      A tiny amount of arithmetic demonstrates a large percentage reduction in a given household’s purchase budget for the modest extent of rate normalization the Fed has achieved thus far.

      He who refuses to do arithmetic is doomed to talk nonsense.

      — John McCarthy

  15. Can someone send these fella$ a some Vi$ual Realitie$ Goggle$!

    One of the large$t homebuilder$ said it can’t give a foreca$t because the market is so ‘uncertain’

    Lennar reported strong fourth-quarter earnings on Wednesday, but deferred guidance for 2019 “until the market$ further define them$elves.”
    “We continued to experience $lower sale$ due to higher home price$ and ri$ing mortgage rate$,” Lennar’s executive chairman said.
    The homebuilder also noted “buyer expectation$” were still too high.

    Yun Li | Published CNBC / 1/9/2019

  16. I’ll still going to say that housing prices will fall down to the price of a used car more or less.

  17. “Meanwhile in King County, condo listings have quadrupled in the last 12 months, as buyers look for alternatives to pricier houses. ‘Buyers should act now, act deliberately, act decisively, and act in conjunction with an experienced real estate professional,’ advised Dick Beeson, the principal managing broker at RE/MAX Northwest in Gig Harbor.”

    This clown sounds really desperate. When listings have QUADRUPLED, there’s absolutely no reason for urgency whatsoever. In fact, it’s time to sit back and do nothing, watching the train wreck unfold with absolute joy, as prices crash harder than ever before.

  18. I wonder how true this is ?

    By Ankit Ajmera

    (Reuters) – Lennar Corp said on Wednesday it was seeing an improvement in home sales in its new fiscal year as mortgage rates start to ease and posted earnings ahead of expectations, allaying concerns of a slowdown in the broader U.S. housing market.

    The company’s shares reversed course to trade up nearly 10 percent following the comments. They were earlier marginally down after the company reported lower-than-expected home sales and orders for the fourth quarter.

    U.S. 30-year mortgage rates have fallen over the past two months as the Federal Reserve officials have signaled that the central bank would likely slow its pace of rate hikes following signs of tightening financial conditions.

    Applications for home mortgages jumped by the most in more than three years in the week ended Jan. 4 as mortgage rates averaged 4.74 percent, their lowest since April. They hit a multi-year high of 5.17 percent in the week ended Nov. 9.

    The second-largest U.S. homebuilder said strong employment, wage growth and consumer confidence were encouraging buyers, and that the moderation in demand in the just-concluded quarter was temporary.

  22. ‘We forecasted last year that in 2018 there would be about 3,000 new condominium units coming’ in New York City, says Jonathan Miller, the president of the appraiser Miller Samuel Inc. ‘Every year the cumulative inventory keeps rising,’ Miller says. He estimates that by the end of 2019, there will be almost 8,000 units on the market.”

    New York City has something like 3.3 million housing units, with a zillion people around the country and around the world who want to live here. The 3,000 or 8,000 units are nothing. The issue is the price. They are all aiming at Jeff Bezos.

    1. “I think a lot of people think they’re never going to be debt-free, so they don’t even try to get out,” Garrido says.

      Wailing over student loans? Try getting married and plow some seed into that fertile valley, and you’ll see some real long-term expenses. Oh yeah, and buy a house in the suburbs too!

      1. I personally don’t think any man today should consider getting married with any seriousness until after age 35…

        The array of pressures and challenges associated with getting married- direct (whoops! babaah!) and indirect (white picket fence, etc) – have changed a lot since the 1950-60s, yet there not really acknowledged or taught enough.

        1. There are still some good women out there, but hooboy are there some bad ones. Still waiting on the courts to start treating men more fairly. I won’t hold my breath.

        2. 35.7 is the median age for marriage by men in Sweden. It is 33 for Swedish women. Do you think they know something we don’t?

        3. My wife and I were close to that age range when we married. I believe it helped with forging a long term commitment and starting out on a stable financial basis.

        4. Assuming you can find a good spouse, I strongly disagree — what I see around here is that getting married in your 30’s contributes to problems. Then again, I’m sure the toxic Silicon Valley culture doesn’t help (nor toxic Chinese SV culture).

          And having a wife in pre-menopause and a daughter in puberty at the same should be illegal (:

        5. “It is 33 for Swedish women.”

          At that age the odds of having kids with “challenges” increases, or she already has a couple… courtesy of Chad.

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