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Price Reductions Are Making Their Way Into The Market Again

A report from the Davis Enterprise in California. “As autumn begins, the supply of existing Davis homes for sale remains limited — but with a few more homes coming onto the market as the peak summer season fades into the past. Prices for existing homes remain high, and homes priced below $800,000 continue to sell pretty quickly, but in some cases homes are beginning to sell for a bit below the asking price, and competitive bidding involving multiple offers on the same property is becoming less common.”

“Longtime real estate professional Claire Black Slotton said ‘The market appears to be doing it’s normal fall thing. Inventory is up a bit and some sellers are beginning to make price reductions in order to attract the next buyer. The number of multiple offers has slowed.'”

“Cory Gold, a longtime broker said ‘I believe we are seeing a slight shift in the market where buyers are going to have more options, meaning more inventory. The typical August slowdown actually started in July this year. We are not seeing a buyers market, as inventory is still very low compared to what we would consider a ‘balanced’ market.'”

“‘Over the last few months, I have seen fewer multiple offers and we are now seeing a significant number of homes selling below the asking price. Price reductions are making their way into the market again. Fall is going to be a great time for buyers to get into the market, sellers will have to be more realistic when pricing their homes.'”

“Here’s an update on current new home projects: The Cannery is getting closer and closer to build-out. Of the 457 for-sale homes, fewer than 150 are still available at this point. A goodly portion of the remaining units are single-story flats in the four-story Gala section (starting in the $400s); some large homes, including several in the $1m range, in the Sage section; and some mid-range sized homes in the Tilton section (starting in the $800s).”

“Of the 35 residences in the Willow Creek Townhomes project, five are still for sale (in the upper $600s), and a ‘builder’s closeout’ promotion is underway. At Grande Village, of the 41 lots, 13 are still available, and a number of homes have been completed. At the Villas at El Macero, five of the 16 luxury condominium homes (starting in the mid $800s) have been sold.”

From the Valley Road Runner. “The median sales price for a detached single-family home in North San Diego County reached $755,000 in August 2018, which was 9.4% higher than the $690,000 price in August 2017, according to the North San Diego County Association of Realtors.”

“For attached homes, NSDCAR said the median home price in the North County was $445,500 in August 2018, which was a 2.3% increase compared to the $435,000 price the same month a year ago. The August 2018 figure for attached homes is lower than the year-to-date median sales price of $459,100.”

“‘The economy is under scrutiny, but certainly not deteriorating,’ said Carol Farrar, 2018 NSDCAR president. ‘While some housing experts are starting to look for recessionary signs like fewer sales, dropping prices and even foreclosures, others are taking a more cautious and research-based approach to their predictions. Housing starts are performing admirably, prices are still inching upward, supply remains low and consumers are optimistic.'”

“Closed sales totaled 920 detached units in August 2018, which was a 15.3% year-over-year drop compared to the 1,086 units sold in August 2017. For attached home, closed sales totaled 348 in August 2018, a 15.3% decline from August 2017’s total of 411.”

“The number of detached property listings on the market in August reached 1,445, a 10.4% increase from the 1,309 properties listed in August 2017. For detached properties, 568 were listed in August, a 16.4% increase from the 488 properties listed in August 2017.”

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This Post Has 24 Comments

  1. Eeee-bola for North County and Davis!

    ‘While some housing experts are starting to look for recessionary signs like fewer sales, dropping prices and even foreclosures’

    You know Carol ever since the big spike in California foreclosures, especially San Diego and Los Angeles, you are the first person who has said boo about it in the media. And I check several times a day.

    1. I think it’s so funny the way realtoRs associate “housing starts” with “a reason to believe that prices will go up”. A housing start is, well, you know, an another extra house to add to the pile. With sales down by 15.3%, and more new houses being added every day, there is no reason to think it’s possible for house prices to continue being more than 10x the median income. Maybe it’s wishful thinking, but prices in San Diego need to drop by 75% before professionals with relatively high incomes can afford them.

          1. The sound, not the price reductions. I’m getting 10-12 a day in my email, some really large (Las Vegas), but all is well!

  2. Davis
    City in California
    Davis is a city west of Sacramento, in California. It’s home to the United States Bicycling Hall of Fame, which has a collection of antique bikes and trophies. To the southwest, the UC Davis Arboretum features acres of gardens, with trails and a lake. Locally grown produce is sold at the Davis Farmers Market. The Hattie Weber Museum has exhibits on the area’s history, including dresses from the 1920s and ‘30s
    ZIP codes: 95616–95618
    Population: 68,111 (2016)

    Sounds like a super place for $800,000 condos! Oh, the culture, and that Bicycling Hall of Fame! Glory be sign me up.

    1. My Wife’s Cousin lives in Davis. Lots of far-left progressives that embrace all the usual “causes”, to their own detriment. The downtown is quaint, and now overrun with homeless (which is happening ALL over California – even small and mid cities, not just LA, SF, SD, etc.). Also, lots of NIMBY-types. They do have an amazing co-op store downtown.

      At one time it was a really nice place to raise a family, but now it is a place where you get $800k condos and all the riffraff.

  3. “Locally grown produce is sold at the Davis Farmers Market. The Hattie Weber Museum has exhibits on the area’s history, including dresses from the 1920s and ‘30s”

    A day of biking to eat fresh carrots and viewing vintage dresses. Could not get any better! Worth every penny.

  5. ““Longtime real estate professional Claire Black Slotton said ‘The market appears to be doing it’s normal fall thing.”

    Sure, Claire, bursting housing bubbles are a normal fall thing just like Halloween.

  6. ““Cory Gold, a longtime broker said ‘I believe we are seeing a slight shift in the market where buyers are going to have more options, meaning more inventory.”

    So “slight shift” is REIC-speak for cratering. So noted.

    1. Its truly amazing the amount of down plays I hear from some these RE articles. “Slight shift, cooling down a little, market is softening due to (fill in the blank excuse here).” MSM marketing paid for by RE vested companies, NAR ran by that puppet mr Yun that’s probably making a pretty penny on the side dishing us falsified and or manipulated market stats.

      On a side note, how do I get me one of them perty avatars next to my screen name? Thinking of this one: 🎢

  7. Subscriber paywall preview — Denver home price reductions point to normalizing market, local realtors say:

    “Some sellers are surprised to find that their properties are spending more days on the market than expected, and sometimes not even selling for their listing price.”

    https://www.bizjournals.com/denver/news/2018/09/19/denver-home-price-reductions-point-to-normalizing.html

    Also linked from DBJ site reporting Wells Fargo to layoff 10% of workforce.

    Because Suzanne researched it, right?

  8. Realtor math = FAIL>.

    As Denver housing prices climbed last year, there were even more empty residential units than before:

    “Denver’s rents are up, Denver’s home prices are up and Denver’s vacancy rate — the percentage of housing units that are literally just sitting empty, despite all the demand for more housing — is up. Everything’s up!

    New data released by the U.S. Census Bureau last week shows that the vacancy rate here in the city — 7.4 percent in 2017 — is up from the previous two years.

    “It’s frequently the case that supply and demand are out of sync,” Teo Nicolais says. He’s a Denver-based instructor at Harvard Extension School specializing in real estate. “In real estate, there is a very classic pattern which emerges.”

    “Demand will reach this feverish pitch as prices go up and scarcity is all around us, even as we’re building new buildings, because the new supply has not yet come online,” he says.

    https://denverite.com/2018/09/19/as-housing-prices-climbed-last-year-there-were-even-more-empty-residential-units-than-before/

  10. The next 30 to 60 days will be very interesting. B of A spokesperson and that economist from one of the GSEs both giving heavyweight warnings will definitely get some attention in both national as well as local press sources. Thinking back to around 06 and 07 and discussions with investors, professionals and homeowners, my impression was that it was loss of confidence that triggers actions. Metrics are the ingredients but emotions are the engine. Will be interesting to see if we retrace somewhat the curve seen from about 06 through 12. History repeating?

    1. 30 days?

      The next ten years will be interesting. The biggest financial bubble and housing mania in history did not correct in 06 – 12, it only started to.

      1. I say 30 to 60 days just due to the rate that things are evolving. A lot of things just in last 30 days. At some point writing will be on the wall. Used to live up in Tampa area for a long time. Interesting to see Zillow market description as “cool” on their activity meter. SW Florida markets are hot during booms. If Tampa is showing “cool” then that is a pretty significant bellwether. More locations to follow. In 6 months, outlook should be crystal.

        1. Adams/North – Will ONE Phone Call Drop Home Prices By 80%

          Published on Sep 22, 2018
          In this edition Economist John Adams and I discuss what happened in the Irish crash a decade ago, together with Sean Quinn who was there at the time. Specifically we look at how the banks were bailed out, and consider what would happen here in a similar scenario. There are lessons to be learnt, and questions to be asked.

          https://www.youtube.com/watch?v=EdFJtXWWf2U

  12. The Planet Money crew did a good episode about how change is in the air and how this is the first year where rents declined year-over-year. This is definitely a harbinger of things to come:

    https://www.npr.org/sections/money/2018/09/21/650564123/rent

    Perhaps the best part is at the end (8:20):

    Smith: “Coffee and bagels and CROW! Sorry, I’m just – I have – you have to give me this moment to enjoy my tiny victory.”

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