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Buyers Continued Stepping Down In Price And Stepping Back From Resale Homes

A report from Bloomberg. “Home sales in the U.S. slumped in December, while prices inched up slightly, marking the smallest annual increase since the end of the last housing crash in 2012, according to data from brokerage Redfin. Previously hot metropolitan areas are cooling fast. Prices dropped 7.3 percent in San Jose, California.”

“‘It was like hitting the brakes when you’re going over the speed limit,’ Redfin Chief Economist Daryl Fairweather said of the slowdown. ‘You can’t have prices growing faster than wages year after year.'”

From the Denver Post in Colorado. “Metro Denver’s housing market saw sales slide and prices continue to rise last year, and that pattern dominated across much of the state, according to a monthly update from the Colorado Association of Realtors. Colorado Springs and El Paso County, the next biggest housing market after metro Denver, suffered a 5.5-percent drop in single-family sales and an 8.6-percent decline in condo and townhome sales last year compared to 2017, according to the CAR report.”

“‘2018 proved to be a very difficult year for the industry,’ said Colorado Springs Realtor Patrick Muldoon. ‘Many of us found it to be frustrating to figure out how buyers’ and sellers’ moods were swinging at any given time.'”

“‘Interest rates bumped up again in late summer and buyers continued stepping down in price and stepping back from resale homes,’ noted Fort Collins Realtor Chris Hardy.”

From Fox 10 Phoenix in Arizona. “If you are hoping to become a homeowner, but are waiting for prices to fall in the Valley, you might be waiting a while. Interest rates, confidence, and inflation all factor into the housing market, and 2019 could see a leveling off or plateau of housing prices. Realtors, however, are not panicking.”

“‘The housing market is softening a little bit,’ says realtor George Laughton. ‘It’s still continuing to be a seller’s market, but buyer’s are coming up with a little bit of an advantage than they used to have.'”

“He says they’ve been spoiled lately. ‘We’ve seen a great appreciating market over the last seven, eight years, and we’ve gotten used to that six, seven, eight percent appreciation over the years,’ Laughton says. ‘This year’s going to look a little different.'”

“Despite the slowdown, nobody is talking crash. At least not now. ‘I assure you the sky is not falling,’ Laughton says. ‘2019 will not be a crash. At least by the numbers we look at.'”

From WFAA in Texas. “Developer HALL Group received approval from Frisco’s planning commission to not only add 2,000 residential units to HALL Park, but to build towers more than 25-floors tall on the eastern side of the project — though final approvals must go through the city council, according to a report from the Dallas Morning News.”

“‘We believe if we don’t add a live-work-play mixed-use we are going to be a declining asset, which is not good for the city, not in our interest and not in our neighbors’ interest,’ Craig Hall, chairman and founder of HALL Group, told city planners.”

From KPIX in California. “Governor Gavin Newsom appeared to be emotionally touched Tuesday during a housing roundtable discussion in San Jose. Governor Newsom was meeting with Mayor Sam Liccardo of San Jose and five middle-class workers who are struggling with the high cost of living.”

“One of the participants, Nuemi Guzman broke down in tears describing how she and her husband see little of their 3 children during the week because they commute from Los Banos to Silicon Valley for jobs.”

“The Guzman family is considering ditching California. ‘I bought a house, how can I complain? But I don’t see my children. Can’t take them to basketball or soccer. I’m sorry I get so emotional. So I guess it’s Arizona here we come,’ Guzman said. ”

This Post Has 46 Comments
  1. ‘You can’t have prices growing faster than wages year after year’

    That’s exactly what happened Daryl.

    1. ‘It was like hitting the brakes when you’re going over the speed limit

      Not really Daryl. It was speeding ahead and all of a sudden you are going backwards. That’s more like meeting a Rhinoceros or a Freight Train head-on.

  2. ‘Developer HALL Group received approval from Frisco’s planning commission to not only add 2,000 residential units to HALL Park, but to build towers more than 25-floors tall..’We believe if we don’t add a live-work-play mixed-use we are going to be a declining asset’

    Prices in Frisco are sinking like a turd in a well Craig.

  3. ‘Prices dropped 7.3 percent in San Jose, California’

    A good thing everybody put 20% down.

    ‘Governor Gavin Newsom appeared to be emotionally touched’

    They’ve got some video of Governor Boo Hoo at the link.

    1. As Governor Releases First Budget Proposal, Controller Reports State Closed 2018 Short of Expectations

      On the day Governor Gavin Newsom proposed his first budget, State Controller Betty T. Yee reported California’s revenues IN DECEMBER FELL SHORT of assumptions in the 2018-19 fiscal year budget by
      $4.82 billion. For the fiscal year, revenues of $55.63 billion are
      4.4 percent ($2.54 billion) less than projected in the budget, which was enacted at the end of June.

      https://www.sco.ca.gov/Files-EO/2019_01summary.pdf

      1. We’ve been calling him Greasy Gavin since his SF mayor days due to his overuse of hair product.

  4. ‘2019 could see a leveling off or plateau of housing prices. Realtors, however, are not panicking…Despite the slowdown, nobody is talking crash’

    I am.

    ‘At least not now. ‘I assure you the sky is not falling,’ Laughton says. ‘2019 will not be a crash. At least by the numbers we look at’

    That’s why people say used house salespeople are liars George.

    1. ‘I assure you the sky is not falling,’

      Home prices are not the sky, and it pays to know the difference.

  5. There still using yoy figures because MOM figures would be showing quite a different story.

    Will any of the folks start being real. Have done the analysis in my area and things are changing QUICKLY. Price reducions are,becoming commonplace, listings up substantially, and sales not increasing at all. In my focused island zipcode, a very desirable, traditionally high demand area with #1 beach in the country, SFR listings are at 178 and average closing over last 3 months is 7 per month! That is over 25 months supply with many properties over 200 days on market and counting. Downward price pressure is obvious.

    This downturn may prove to be worse than last one.

  6. ‘But I don’t see my children. Can’t take them to basketball or soccer. I’m sorry I get so emotional. So I guess it’s Arizona here we come’

    You know Nuemi, I hear Nevada is really nice.

  7. “‘It was like hitting the brakes when you’re going over the speed limit,’ Redfin Chief Economist Daryl Fairweather said of the slowdown.

    No, it was like hitting the brakes after you’ve been going over the speed limit for 6 hours straight and got caught, then claiming to the cop who pulled you over that you only went over for 5 minutes.

  8. while prices inched up slightly, marking the smallest “…annual increase since the end of the last housing crash in 2012, according to data from brokerage Redfin.”

    You can kiss the specuvestors goodbye unless the Fed steps in to restart bubble-era rates of price appreciation.

  9. “Home sales in the U.S. slumped in December, while prices inched up slightly, marking the smallest annual increase since the end of the last housing crash in 2012, according to data from brokerage Redfin.

    Prices dropped 7.3 percent in San Jose, California.”

    Is the 7.3 percent drop for San Jose a year-on-year change? Can’t wait to see the recent monthly rate of decline!

    1. I believe those numbers are YoY as we have yet to see the NARs Jan 22 report for dec. I would expect that number to go up though because of interest rates going up but then back down, gov shutdown at the end of last month, normal seasonal slowdown, buyers on vacation, anticipation for the super bowl, fires, too cold, too hot, I’m probably missing more but yeah…

  10. Jdog

    Good color. Do you have access to MLS or? Local board has stopped publically publishing data after 2012. Curious how you get stats? Also another poster asked in the last couple days why hbb has any concern since it seems that loans are solid.

    I suggest that you read mark Hanson at mhanson.com
    You may come away with a new conclusion. Hint: it’s not different this time, as was noted recently on hbb, “non banks” have been huge market share this time around and they’re supported arm’s length by the big guys. Do it’s same s#it different pile is all.
    Also foreclosure data is somehow being “papered over”.

    Love hbb read daily rarely comment

  11. ‘…“non banks” have been huge market share this time around and they’re supported arm’s length by the big guys.’

    Like I said on the previous thread, this allows them to profit from the unregulated nonbank lenders without themselves skirting regulations. And it may also qualify them for bailouts when the whole scheme proves to be systemically risky.

    1. The next GSE implosion should rightfully be attributed to Mel Watt, who cast the die.

      Dec 24, 2018 12:25
      Blog: GSE reform is coming with or without Congress

      There was a hearing last week on Capitol Hill about housing-finance reform and the future of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. This was notable not because anything is close to happening on that front, but because it has been a dead issue in 2018 for Congress.

      The chief executives and top lobbyists from some of the largest mortgage and housing-trade groups in the country were called before the House Financial Services Committee this past Friday. Most of them repeated what has been said for years — that it is crucial for Congress to pass a legislative solution that will end the 10-year status quo that has essentially left the federal government as planner, overseer and direct backer of all loans purchased by Fannie and Freddie, which comprise about half of the U.S. mortgage market.

      Next year, possibly, Congress may find a way to negotiate through a minefield of competing interests and pass a law that reforms the system and sets a path to end the government’s control of the GSEs. Something else is going to happen first, however, that could change the landscape much more quickly: the Federal Housing Finance Agency (FHFA) is getting new leadership in January.

      FHFA Director Mel Watt will be leaving in early January. His term may end even before the government reopens due to a budget impasse and battle over President Donald Trump’s desired wall along the Mexican border. On Jan. 7, the current comptroller of the currency, Joseph Otting, will take over as acting FHFA director.

      The bigger change will come later next year, though, when Watt’s permanent successor takes over the agency for a full five-year term. In terms of the impact on the mortgage industry, that person will likely become the nation’s most important federal regulator for years to come.

      The White House has signaled that Mark Calabria, the chief economist for Vice President Mike Pence, will be nominated for the permanent FHFA director’s role. On first glance, this should scare small nonbank lenders who make a living by originating loans that are sold to Fannie and Freddie.

      Calabria has written extensively about the mortgage market, where he has been a critic of 30-year, fixed-rated mortgages and a system built on loan securitizations, which has enabled nonbank lenders to thrive.

      Calabria has been widely endorsed by trade groups for his knowledge and experience, however. Experts say that, as a regulator, Calabria will have to implement policies that may differ substantially from his identify as a conservative economist and think-tank scholar.

      One person who recently weighed in on the matter was Jim Parrott, a nonresident scholar at the Urban Institute. In a paper published last week, Parrott wrote, “The most important question in housing policy heading into the new year has nothing to do with interest rates, housing supply, or home sales. It’s what kind of director of the Federal Housing Finance Agency (FHFA) Mark Calabria will be.”

    2. “it may also qualify them for bailout$ when the whole $cheme prove$ to be $y$temically ri$ky.” of

      “Non.bank$” = Lehman Bro$. x 486 … coming $oon!

  12. OT: Abuse of guardianship system
    Hard to believe old people can be basically kidnapped and robbed, even with family around. This happened in Las Vegas, but Palm Beach, Sarasota, Naples, Albuquerque and San Antonio are mentioned in the New Yorker articles as hot spots for this kind of crime.
    newyorker.com/magazine/2017/10/09/how-the-elderly-lose-their-rights

    The perpetrators were just sentenced:
    lasvegasnow.com/news/local-news/april-parks-2-co-defendants-sentenced-in-nevadas-largest-elder-exploitation-case/1687024977

    1. “The perpetrator$ were just sentenced:”

      $750,000 of my late Irish uncle’s lifelong postalworker.$avings went mi$$ing over x1 year bye his only child & her husband, whilst his wife was dying in a rest home. … (Ye$, they purcha$ed them$elves a $hack .$helter!)

    2. “The judge also ordered that the defendants pay restitution in the amount of $559,205.32. ”

      Sounds to me like they stole millions from their victims. Is the state certain these cretins don’t have off-shore bank accounts or something similar?

      1. From what I read on city-data, many more people were involved but never charged.
        Still checking there to see if anyone’s worried about the rising inventory in the housing market here – nope.
        Go team.

  13. Email I just received:

    Following the continued success of our sales to reach HNW buyers from China, Europe, and the Middle East, we are partnering once again with The Wall Street Journal and Mansion Global for our fifth global collection of luxury homes with additional outreach to Chinese buyers worldwide.

    We are now considering homes for this collection, selling on March 28.

    SUBMIT YOUR PROPERTY >>

    In conjunction with our global platform and targeted outreach to members of our client list of over 550,000 luxury buyers and agents worldwide, additional exposure includes:

    Launch events in Shenzhen and Singapore with The Wall Street Journal and Mansion Global, and outreach to the Dow Jones China network
    Multi-language advertising and marketing, including exposure with Mansion Global and Juwai
    National print advertising in The Wall Street Journal
    The deadline is February 15 for final signing, so call now.

    PS — As always, sellers pay no upfront costs, buyers cover all fees, and agents retain full commissions.

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