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A Sign Of The Times Is a ‘For Sale’ Sign With ‘Reduced’ On It

A report from the Orlando Sentinel in Florida. “Home sales plunged in the Orlando area in December as 2018 finished with fewer sales than the year before, and real estate agents warned that 2019 could be slower as well. ‘The market has just sort of softened,’ said David Miller, president of the Miller Realty Group. ‘In the first half of the year, there was just so much urgency that you had to put down an offer sometimes without having time to think it over.'”

“In all, 2,412 homes sold in the Orlando metropolitan area in December, a 20 percent drop from December 2017 and 6.7 percent from November 2018, according to the Orlando Regional Realtor Association. Sales have been dropping since July. All four Central Florida counties saw a similar drop in sales during December, from 21.3 percent in Seminole to 23.8 in Osceola, the ORRA report said.”

From WCBS on New York. “A sign of the times lately is a ‘for sale’ sign with the word ‘reduced’ on it, at least when it comes to some New York City homes. According to a new survey from the brokerage firm Douglas Elliman and the appraiser Miller Samuel, prices in the fourth quarter in Manhattan declined about six percent and for the first time in three years, the median price of a Manhattan condo and coop fell below $1 million.”

“So what’s driving this? Greg David of Crain’s says for one thing, more people are trying to sell which means there’s a lot more inventory of the market. ‘In addition to that, you know, the condo and co-op market in the rental market works a little bit together. There are lots more rental units coming on line and those units are driving down rental prices a bit,’ David told WCBS.”

“This could also be an indication that suppy an demand is starting to even out following years of building. ‘We’ve had this really huge building boom in the city as everyone knows,’ David said. ‘New York has this great need for more housing but there is more housing coming on and there is going to be more supply for the next couple years probably than there is going to be demand and that’s going to put pressure on prices.'”

From People Magazine on California. “Real Housewives of Beverly Hills star Dorit Kemsley and her husband Paul ‘PK’ are attempting to sell off their Beverly Hills home, yet again. The pair appeared on Million Dollar Listing: L.A. on Thursday, where they attempted to close a deal on the property, known as ‘Dawnridge,’ which was first listed in August 2017 for $12.75 million.”

“During the episode, realtors James Harris and David Parnes take a second stab at selling the six-bedroom, seven-bathroom abode located near the Beverly Hills Hotel after it had failed to attract a buyer for months. ‘It was way overpriced and as a result, it’s been sitting on the market for almost six months with nothing—no interest,’ Parnes says.”

“However, after the agents throw a brokers’ open house and Parnes gets his first offer of $7.45 million with a counter offer at $7.7 million, things go south for the sale thanks to PK. ‘We will sell this house at $8.5 million,’ PK says. ‘That’s the price. Take it or leave it. I know what you’re doing. You’re trying to work me down and you’re wasting your time,’ he adds. ‘I want you to get me the price that you said you’d get me.'”

“He then decides to take matters into his own hands and calls the potential buyers’ broker to negotiate the deal himself, claiming that he’s saving them two weeks of time going back and forth attempting to counter when he could tell them his take-it-or-leave-it offer up front. When the buyers pull out, PK seems disappointed, as does Parnes, who thinks PK was responsible for killing the deal.”

“‘I’m not desperate to sell,’ PK says during the episode.”

“On Friday, The Blast reported that PK is at risk of having his wages, money and property seized without further warning unless he pays back over $1.2 million in unpaid loans. According to the lawsuit filed by man named Nicos Kirzis, the problem goes back to 2011, when Kirzis loaned PK the sum.”

“PK is also at the center of another legal battle. The Bellagio Hotel and Casino in Las Vegas is suing him for unpaid casino markers. PK argued that the bankruptcy filing had wiped the $3.6 million owed. He agreed to make payments until June 2018, but stopped paying — still owing over $2 million.”

“On Monday, the home was re-listed with another $1 million price drop to $7.995 million, according to Realtor.com.”

This Post Has 78 Comments
  1. ‘We will sell this house at $8.5 million,’ PK says. ‘That’s the price. Take it or leave it. I know what you’re doing. You’re trying to work me down and you’re wasting your time,’ he adds. ‘I want you to get me the price that you said you’d get me.’

    Wow, a broke ass loser pretending to be rich in California. What a surprise…

      1. Hehe… so California, and Dorit Kemsley is probably looking for another pony to ride. “Everything is for sale.” —John Gage

    1. Ben, I hope you post updates on this greed head as he eventually ends up capitulating and chasing the market down.

    2. Greed… history on it shows a long run of it.

      Price / Tax History

      Price HistoryTax History
      DATE EVENT PRICE
      1/14/2019 Price change $7,995,000
      11/30/2018 Price change $8,250,000
      9/26/2018 Listed for sale $8,745,000
      8/23/2018 Listing removed $40,000
      8/20/2018 Listing removed $8,795,000
      7/2/2018 Listed for rent $40,000
      6/14/2018 Price change $8,795,000
      3/5/2018 Price change $8,995,000
      1/18/2018 Price change $9,750,000
      10/10/2017 Price change $10,950,000
      7/28/2017 Listed for sale $12,750,000
      9/15/2016 Sold $6,565,000
      5/2/2011 Listing removed $6,790,000
      11/29/2007 Sold $4,300,000
      12/3/2003 Sold $2,250,000

      1. “7/28/2017 Listed for sale $12,750,000”

        That’s the start of the slow motion Dutch auction. Rather than cutting bait by quickly reducing the price to a level where the house will sell, the owner seems bound and determined to chase down the deflating bubble. It should be interesting to see if the price ever goes low enough to attract a buyer.

        1. The worst thing you can do when selling a house, or anything for that matter, is grossly overprice it to start with. It insults the intelligence of buyers and turns all of them off, most importantly the ones who were most likely to buy.

      2. Translation: I can’t sell this house for less than $8.5M. I paid $6.5M for it and gambled away another $2M.

        1. Reminds me of a property I looked at a little over a year ago. The sellers, who inherited the house, wanted the buyer to pay off a $83K HERO loan ostensibly used to install solar and new windows for the 2,453 sq ft ranch house. The house NEEDED a complete gut remodel! It sold in less than two weeks for $750K cash, HERO loan paid off, and has been under construction since. I couldn’t stomach the thought of paying for someone else’s stupidity or fraud even though the $83K wouldn’t factor into the property taxes.

        2. Depends on whether he bought the place outright, or has a mortgage. If he has a mortgage he’s sunk. If he owns it outright, why not sell, use the money to pay off everybody and everything, and live very modest for a while. Isn’t that what Hulk Hogan did?

          But, then you don’t get the Beverly Hills lifestyle.

          1. “…use the money to pay off everybody and everything…”

            This is a California tragedy… nobody pays for anything. Everybody has filed bankruptcy and least once, usually twice or more. There’s more shady people there than in Florida.

            “But, then you don’t get the Beverly Hills lifestyle.”

            Whew, thought we lost you. 🙂

      3. lol they tried to rent it out for 40k per month….come on rich Chinese money launders! Please come and bail me out HAHAHA

      4. Great price history; it tells the whole story of bubble mania.

        It’s an especially good illustration of the difference between bubble peak 1 and bubble peak 2. Ie, if it was outrageously priced at the top of the admitted biggest housing bubble in human history (sold 2007, $4.3m), it is doubly bat-crap crazy now (they got 2 offers for over $7m).

        Same story in the middle too – if some crummy condo was insanely priced at $800k in ’07, it’s $1.6m today. Central bankers way overshot the mark in reflating housing prices. Wonder what that will mean for the crash.

        Also interesting the denial between 2007 and 2011. From $4.3m to asking $6.8m during the crash? Like many sellers today, someone didn’t get the memo.

  2. ‘The market has just sort of softened,’ said David Miller, president of the Miller Realty Group. ‘In the first half of the year, there was just so much urgency that you had to put down an offer sometimes without having time to think it over.’

    Eeee-bola Orlando! Which brings up something for those that have a memory of over 30 minutes. Remember a few months ago when this same newspaper reported three straight months of increased foreclosures in Orlando? As a matter of fact, it was all over the place: San Diego, Austin, Nashville just to name a few.

    Then those periodic Attom foreclosure reports just stopped. Or they stopped making them public or the media all decided at the same time not to publish it. Isn’t that interesting?

    1. “Foreclosure reports just stopped”

      Glad you mentioned this and Absolutely agree! I see foreclosures regularly pop up in the Bay Area. This was not the case before mid 2018. My thought is they don’t want to spook us and bring back memories similar to the 2008 era REO / foreclosure crisis.

    2. One good thing about government economic data reporting programs is that they are not as susceptible as private firm reporting to vested interests who might wish to suppress any information that doesn’t help boost sales.

    3. “Isn’t that interesting?”

      “Revealing”, I like the word “revealing”.

      It is interesting in that it is so revealing.

  3. ‘In the first half of the year, there was just so much urgency that you had to put down an offer sometimes without having time to think it over.’”

    Gee, and who whipped up this contrived “sense of urgency” for the Greater Fools? Oh, right, their realtors did. And now the marks who overpaid are going to have plenty of time on their hands to think over who led them down the primrose path to foreclosure and insolvency.

    1. This exactly.

      I watched my realtor game the buyer when I sold my house last year. All he did was add a “will review offers at the end of the week”, implying there would be multiple. We got one offer, over asking, and a nice “love letter” about how they loved the dated kitchen. Lol. That’s when I realized how much BS goes down in RE transactions. Soo scummy.

      1. “That’s when I realized how much BS goes down in RE transactions. Soo scummy.”

        Yeah? Well, surprise, surprise.

        As Charlie Munger says: “Never underestimate the power of incentives”.

        Reply

      2. And I’m sure the “buyer’s agent” was lying to the buyer, telling them there were multiple offers so they should “sweeten the deal” so to speak. A lot of companies/industries would be shut down for such fraud.

  4. So what’s driving this? Greg David of Crain’s says for one thing, more people are trying to sell which means there’s a lot more inventory of the market.

    I am filled with envy at Greg’s uncanny ability to earn the big bucks by making those connections between supply and demand that elude the rest of us.

  5. Does increased bearishness typically make investors wanna load up on risk assets? Seems rather like shooting one’s self in the foot.

    1. I keep harkening back to the horrible muppet slaughter in stocks over the Fall 2008 – Spring 2009 period. Doesn’t buying stocks today expose one to a similar fate?

      Investors haven’t been this bearish about global profits since the financial crisis, say BAML survey
      By Barbara Kollmeyer
      Published: Jan 15, 2019 9:41 a.m. ET
      Critical information for the U.S. trading day

      That brings us to our call of the day, from the Bank of Merrill Lynch Fund Managers’ Survey from January, which finds investors with the gloomiest outlook on corporate profits since 2008. A net 52% of investors expect global profits to deteriorate over the next year, a “major reversal” from just 12 months ago when a net 39% saw profits improving.

      The survey also saw the second-biggest two-month collapse on record in global inflation expectations, and the worst outlook on the global economy since July 2008, though just 14% of fund managers foresee a recession this year.

      “Investors remain bearish, with growth and profit expectations plummeting this month,” said Michael Hartnett, chief investment strategist. “Even so, their diagnosis is secular stagnation, not a recession, as fund managers are pricing in a dovish Fed and steeper yield curve.”

      And that is driving investors toward a “tentative risk addition” via tech stocks and emerging-market assets, as their chart below shows:

      1. Trump absolutely clowned the Fed, now they’re all talking rate pause, etc.

        https://www.marketwatch.com/story/feds-george-often-hawkish-says-it-might-be-good-time-for-interest-rate-pause-2019-01-15?mod=bnbh

        All this will serve to do is blow an even more gigantic, eye-popping, muppet-slaughtering stawk bubble. What they should really be doing is increasing the rate of unwind on the Fed’s balance sheet, and sticking to another 4 rate hikes this year. Instead, they lack any intestinal fortitude or true leadership.

        1. Check out one of the comments:

          “No no. You let inflation in stocks and housing and living costs get way out of hand for way too long and now it’s coming back to bite you, again, only this time harder than ever. You know it, you see it coming on fast now, and you are scared. You lie about the economy just to keep panic away. You stole the lives of the poor and many middle with your inflation wealth transfer, and the punch party is over. Hangovers hurt and the only reward of greed is judgment.”

          Nice to see people out there who “get it.” Unfortunately, most people on that site are shills.

          1. That’s an especially good comment that sums up the rebubble in particular – so totally out of hand (costs overshot economic reality so far) that it actually stole life from its victims, not just money. It’s bad enough to lose a life’s savings to a bubble, but what the rebubble did was prevent most people from ever working towards anything in the first place except debt.

            Now there is no life’s savings to steal. And the insanity is evident to a lot more people who no longer see the point in striving for anything when a full-time job won’t even put a roof over their head. Because of this, I think that this time the Fed will face a credibility crisis that is insurmountable.

          2. Wow, that looks incredibly interesting, thank you for the recommendation. We hear a lot about people in their prime working years living in their cars, but this book seems to focus on senior citizens doing the RV lifestyle by necessity. I will definitely add it to my reading list.

            “a new, low-cost labor pool, made up largely of transient older Americans…. invisible casualties of the Great Recession”

            Great phrase. It’s amazing to think how many invisible casualties of the bubbles there are.

        2. What they should really be doing is

          They already did what they shouldn’t have done. Now what they don’t want to happen is inevitable.

    2. To figure out why the stock market is partying wildly in the face of bearish news, lookno farther than the Fed’s backpedaling on its punchbowl removal plans.

      1. Fed’s Kashkari says nothing in data justifies raising interest rates further
        By Greg Robb
        Published: Jan 15, 2019 12:22 p.m. ET

        No aspect of the job, wage, or inflation data are signaling the need for more interest-rate increases at the moment, said Minneapolis Fed President Neel Kashkari on Tuesday. “Right now, I’m not seeing evidence of pressures that would warrant raising interest rates further,” Kashkari said, in a discussion with an audience at the Chamber of Commerce in Rochester, Minnesota. Kashkari has been one of the most dovish regional Fed presidents since he joined the central bank in January 2016. He voted against all three rate increases in 2017, saying he saw no sign of an overheating economy. He will vote again in 2020. Kashkari said wage growth has ticked up but “hasn’t taken off.” He said the Fed can always raise rates if inflation picks up. “There is no need to snuff the economy before it really heats up,” he said.

        1. One minute I’m told the economy is booming and we’re all doing great! Next minute I’m told the Fed can’t possibly raise the rate any higher, even though it’s still far below historic norms.

          1. booming

            The secret is to be found in contemplation of Paul Kemsley mentioned above. With all the trappings of wealth, we have an economy of bankrupt gamblers drowning in debt.

          2. With all the trappings of wealth, we have an economy of bankrupt gamblers drowning in debt.

            Which is the inevitable result of bubble chasing in any era, isn’t it?

          3. At least Dorit got herself some “girls.” They’ll insure that she continues to live in the manner she’s become accustomed.

    3. So many stock market headwinds, so many up days when a liquidity-drunk Mr Market shrugs them off…

      Stock investors face historic headwinds if this record measure of policy uncertainty is any indication
      By Mark DeCambre
      Published: Jan 15, 2019 12:26 p.m. ET
      ‘The biggest problem for investors and central banks is that there seems to be no end in sight,’ Sløk says
      AFP/Getty Images
      A partial U.S. government shutdown is one issue stoking uncertainty in the world.

      Stock benchmarks are attempting to climb out of a hole dug back in 2018, but a cocktail of uncertainties, including swirling economic polices, is likely going to make matters more difficult for investors, according to a prominent Deutsche Bank economist.

    4. Yawn…

      PM’s Brexit deal rejected by 230 votes
      13 minutes ago

      Prime Minister Theresa May’s Brexit deal has been rejected by 230 votes – the largest defeat for a sitting government in history.

      MPs voted by 432 votes to 202 to reject the deal, which sets out the terms of Britain’s exit from the EU on 29 March.

      Labour leader Jeremy Corbyn has now tabled a vote of no confidence in the government, which could trigger a general election.

      1. That one might not be a yawn, if the UK ends up “crashing out” of the EU as it appears will happen.

        1. Just like Greece and their issues, the EU PTB are making leaving as confusing and painful as possible in hopes of securing the chains a little tighter. If anything they are even worse than our elites if you believe what Yanis Varoufakis wrote.

        2. I don’t even understand what’s taking so long with Brexit, and why there needs to be more votes, and why now it appears that NO Brexit may be a possibility? What’s really going on? I thought once they voted for it, it was a done deal.

          1. Californians voted for no free public education and no free healthcare beyond emergencies for illegal immigrants, but a judge over-turned it. There’s the little people and there’s the deep state.

          2. Basically the terms of the Brexit have to be finalized with regards to tariffs, customs, and the single market. The UK wants to leave and get rid of “free movement of people” and some of the regs coming out of Brussels, but they still want to have access to the continent for exporting their products. EU members are not keen on giving the UK a “have your cake and eat it too” deal whereby they get the benefits of being part of the common Euro area without the costs. So if the UK crashes out without a deal, it may severely crimp UK companies, not to mention foreign businesses located in the UK, which may close up shop and relocate in an EU country.

  6. The U.S. map that accompanies this article strategically uses blue to designate where renting is more affordable and red where buying is more affordable. There aren’t many red zones on the coasts, nor anywhere west of the Mississippi River.

    Renting a Home More Affordable Than Buying in 59
    Percent of U.S. Housing Markets

    Christine Stricker
    January 8th, 2019

    1. What is ATTOM hinting at with the red and blue, Bear? That all the cool kids (hipster coastal/Denver Dems) are renters and buying a home is for old fogie Establishment conservatives who brunch at Cracker Barrel?

      Well, ok. Problem is that when people retire, they need to have a paid off dwelling. They can’t afford to rent on their retirement income. And when rent costs as much as PITI, they aren’t saving the difference.

      1. They can’t afford to rent on their retirement income.

        Not so long ago they certainly could. A modest amount of retirement savings at normal interest rates would pay the rent on a small place in flyover in perpetuity. Normal hasn’t applied for most in recent years.

        1. We are far away from retirement and our interest in savings pays for our rent. Granted, we have a sweat-heart deal on rent and pay about $300 below market rate, but still I think it can be done. Part of the calculus is being willing to relocate to a lower cost of living area once you’ve made some money.

  7. Zillow predicts Vista East home values will rise 9.9% next year, compared to a 9.3% increase for Orlando as a whole.

    9.3% – you guys are wrong, Orlando is booming

  8. The ECB president made his first public appearances of the year on Tuesday, shortly after a report showed that Germany only narrowly dodged a recession in late 2018, and posted the weakest annual growth in five years. Earlier in the day, Draghi marked the 20th anniversary of the euro with a call for more reforms. He will speak again later this evening.

    A spate of weak data from across the 19-nation euro area in recent weeks has led investors to question whether the central bank will be able to start raising interest rates this year after it halted its bond-buying program at the end of December. The Governing Council holds its next policy meeting on Jan. 24.

    1. Isn’t it interesting to see a Democratic governor espouse traditional Republican values, while Republicans W and Hank Paulson completely caved on pressure for bailouts in 2008.

    1. Fantastic, the ebola has spread to my home of Carlsbad. We were getting ready to buy but I told the wife, lets wait another year. Went out and bought a boat for the year so we’ll enjoy the coast then sell it for what we paid (desperate seller) and use that money for a home next year.

      Waited and bought our first place in 2011, its small but will make a great rental when we move up to a nicely discounted Carlsbad home in 2020!

      1. bought a boat

        Safety deposit box on the water.

        Didn’t work out so well for many of my friends in the last little economic downturn.

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