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We’re Seeing A Lot Of Offers Come In Considerably Lower And Tons Of Price Reductions On Land

A report from the Naples Daily News. “A luxury home in the sought-after Moorings community will be sold to the highest bidder. Minutes from downtown Naples, the nearly 5,000-square-foot home is described as the ‘very epitome of fine Southwest Florida living.’ Neither the property, nor the sellers are ‘distressed,’ rather the auction is designed to drum up more interest in a cooling market, with more homes up for sale and competing for attention, said Randy Haddaway, CEO of Elite Auctions. ‘It’s a well-maintained property, no distress, whatsoever,’ Haddaway said. ‘The sellers, they are just ready to move on. It will sell on auction day to the highest bidder, regardless of price.’ The home’s current listing price is $5,998,000. The home hit the market in January for $6.5 million. It has been on and off the market since then, with several price adjustments made along the way, according to Realtor.com. Property records show it last sold for $6.4 million in July 2022.”

The Coeur d’Alene Press in Idaho. “Kootenai County’s single-family dwellings, which are classified as being on less than 2 acres, went for a median sales price of $538,000 in May 2023. Now, one year later, that median sales price has remained flat. New construction in Kootenai County went from $551,000 to $540,000, said Windermere Coeur d’Alene Realty co-owner Jennifer Smock. ‘That does not mean the price of new construction is going down,’ she said. Larger parcels of 10-plus acres that went for $449,000 this time last year have been reduced to $424,000, she said. ‘The consumer has finally reached this limit,’ Smock said. ‘We all have reached this point, the paying point, where we’re like, ‘No, we’re just not going to pay that anymore for that.’ We’re seeing a lot of offers come in considerably lower and tons of price reductions on land.'”

“From 2023 to 2024, Idaho had the lowest percentage of year-over-year home appreciation. Smock said this was not a surprise. ‘Our values went up huge,’ she said. ‘It makes sense that there’s going to be pushback with the interest rates, they’re going to come back down, we’re not seeing the appreciation because we already enjoyed that appreciation two to three years ago.'”

Hawaii News Now. “Home ownership is a dream for many people. But experts and the federal government say you shouldn’t be spending more than 30% or your income to buy a home. In urban Honolulu, it costs way more than that, according to the National Association of Homebuilders and Wells Fargo. Based on Honolulu’s median home price of $1,085,800 and median family income of $120,100, the index said a mortgage requires 73% of the median paycheck. The same home would cost 147% of a low-income paycheck, based on half the median income.State Sen. Stanley Chang, who chairs the senate Housing Committee, acknowledges that things have changed since his father was a homeowner. ‘Now for me to buy that home that he bought in 1983 with one state salary would take over 40 years of my entire state salary,’ he said.”

From WKMS. “Tennessee counties are lowering their property taxes as housing values climbed to new highs over the past four years, but that doesn’t necessarily mean smaller tax bills for homeowners. Jim Lance, a homeowner in Jefferson County, told the Lookout his three-bedroom, four-bathroom house, which he bought in 2018 for around $578,000, increased in value to nearly $927,000 during this year’s reappraisal period. Most of Lance’s neighbors on Byrd Spring Ranch have seen similar increases. ‘We bought this house when we retired on a fixed income, and if our taxes go up, it will make it harder to afford,’ Lance said. ‘It seems like the way property values and taxes are going we’re going to be priced out.'”

Bisnow New York. “Despite nearly $3.5B in rental assistance being doled out in the last four years and an economy that has more than recovered all of the lost jobs from the pandemic, tenants in New York City’s affordable housing units are still not paying their rent at nearly the same levels as they once did. Landlords of subsidized housing are owed more than $100M in unpaid rent, according to a recent study. When adding in the rising cost of insurance, maintenance costs and labor, owners and operators of the most-needed residential properties say the rent shortfall is likely to cause the housing crisis to worsen if not addressed quickly. Speaking at the affordable housing conference, BRP Cos. Managing Director Andrew Cohen said there is ‘a culture of nonpayment’ among tenants who don’t want to pay.”

The San Francisco Examiner in California. “The huge Emporium Centre San Francisco mall that dominates the intersection of Market and Fifth streets is like a large, half-empty ocean cruise liner crashing through stormy seas, with retailers as recently as this month getting ready to jump ship amid the economic headwinds. At the wheel, working to keep the ship aright through the gale, stands Gregg Williams, a receiver appointed in October by a San Francisco Superior Court after the mall’s owners said in June that they would walk away from their mortgage, making him a captain with wide authority and a mandate to stabilize the massive property. Gerard Keena, president of the Bay Area Receivership Group, which provides services similar to Trident’s but on an admittedly smaller scale, said the receivership business was relatively quiet for years but picked up more recently as property owners faced financial difficulties. ‘Now is an exciting time for receivers,’ Keena said.”

Western Producer. “Ag equipment buyers were willing to take almost anything they could get their hands on when the COVID-19 pandemic severely hampered manufacturers’ ability to deliver new machines to customers. That, combined with strong farm commodity prices adding to the demand, drove up the price of used equipment considerably. But now that manufacturing has returned to normal and commodity prices have fallen, the demand for used equipment pulled back.”

“‘The new manufacturers are catching up and supplying the void,’ says Jordan Clarke, senior vice-president and head of Canadian sales at Ritchie Bros. Auctioneers. ‘We’re finding dealerships are putting more into the market on the used side, and we’re being contacted by more dealerships to sell and help with volume. The supply has caught up on everything. There’s definitely been a correction in the marketplace, for sure. If you had to generalize things out, I’d say we’re down maybe 20 per cent in overall pricing. Certain categories are more and others less. With air drills, there are some one-, two- and three-year air drills that are selling as well if not better than they did last year. But the 10,15, 20 (year old), the bottom has fallen out of that age group.'”

Blog TO in Canada. “A Mississauga condo sold at two drastically different price points in two years shows just how much real estate prices in the GTA tend to fluctuate year-over-year. The two-bedroom, two-bathroom apartment, located at 80 Absolute Ave., is just across the street from Square One Shopping Centre. The condo was first sold for $751,000 in April 2022, when an uptick in demand skyrocketed prices across the GTA. During this peak, prospective buyers flooded to the region’s real estate market to take advantage of the cheaper borrowing rates. However, prices began to drop once again shortly after when the Bank of Canada started raising interest rates. Just two years later, the same condo apartment was listed for $549,000 and eventually sold below its asking price at $505,000 — representing a loss of nearly $250,000.”

The Independent on the UK. “It’s hard to pinpoint the exact moment in Buying London that well and truly turned my stomach. After all, there were so many potential contenders from the first episode of Netflix’s new property series slash love letter to unfettered greed. There was the scene in which Daniel Daggers, founder of the show’s central luxury estate agency DDRE Global, declares that ‘there’s no ‘I’ in team… but there is an ‘I’ in super-prime,’ like high-end property’s answer to David Brent. Or perhaps our introduction to Oli, an agent who dresses like he is constantly on the verge of being summoned to attend a shooting weekend. ‘Us poshos stick together!’ he declares of his wealthy clientele. On reflection, though, the most sickening scene occurs in the agency’s group meeting, when it’s announced that a £25m property has officially been sold, and everyone starts squealing in glee.”

“It sums up everything that’s grotesque about this nightmare fusion of Selling Sunset and Made in Chelsea. The programme is a celebration of pure acquisitiveness that venerates lavish displays of wealth for wealth’s sake, with precisely zero self-awareness. Buying London is just the latest in a string of reality shows obsessed with gawping at the lives and homes of the super-rich. The trend was already feeling tired, but this latest offering is so tone deaf, so unabashedly out of touch, that it makes a convincing case for killing off the micro-genre entirely.”

From ABC News. “On both sides of the Tasman, there are massive shifts on the horizon in the news and production industries, with a raft of closures and cancellations already hitting in New Zealand and mystery surrounding the next moves of one of the world’s biggest media empires. In a sign of just how tough things are in Aotearoa, The Block NZ has been cancelled ahead of its upcoming season and the pre-renovation, unfinished properties put on the market. It’s telling that even a reality show that delivers the audience a play-by-play drama of people competing to win at housing cannot survive. The tough real estate market saw The Block NZ’s 2022 competitors earn just about nothing at auction, while last year’s season was postponed.”

From Barron‘s. “Suffering badly are consumer sentiment and real estate, two areas entwined because housing prices have tumbled since 2021—including 10% since the start of the year—yet property is where most Chinese put their investments and savings, so the slump is causing a freeze on spending. New home prices in April fell for a tenth consecutive month by 0.6% month-on-month, the fastest decline since November 2014. ‘We’re buying basically nothing but food,’ said 58-year-old Zhong Weiyi, who owns an auto dealership just outside the sprawling western city of Chengdu. ‘If property prices start to go back up, then we’ll see,’ Zhong said, adding that both he and his daughter own residences with much of the family’s life savings.”

“Many beleaguered developers have defaulted on at least $124.5 billion of dollar debt, and hundreds of millions of homeowners who once bet on a now-collapsed property bubble have lost much of their life savings. One former deputy head of the statistics bureau said the number of unfinished units that buyers have already paid for could number in the billions, and that there is no guarantee they will ever be finished. Lower-tier cities have been hit the hardest, with vast numbers of unfinished units, for which there is no official figure but which blanket smaller localities across the country.”

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This Post Has 64 Comments

  2. ‘It’s a well-maintained property, no distress, whatsoever,’ Haddaway said. ‘The sellers, they are just ready to move on. It will sell on auction day to the highest bidder, regardless of price.’ The home’s current listing price is $5,998,000. The home hit the market in January for $6.5 million. It has been on and off the market since then, with several price adjustments made along the way, according to Realtor.com. Property records show it last sold for $6.4 million in July 2022′

    That’s a mighty a$$ pounding Randy and it hasn’t even sold yet.

  3. ‘The Block NZ has been cancelled ahead of its upcoming season and the pre-renovation, unfinished properties put on the market. It’s telling that even a reality show that delivers the audience a play-by-play drama of people competing to win at housing cannot survive. The tough real estate market saw The Block NZ’s 2022 competitors earn just about nothing at auction, while last year’s season was postponed’

    NZ shacks have been sinking like a turd in a well since late 2021. It was one of the first sh$tholes to roll over after minor respiratory illness.

    1. “Communist Democrats in the Denver statehouse”

      Make Southern Colorado Texas Again.

      Denver is a FAILED city. And Colorado is a FAILED state. Muh sanctuary, muh murder muh baby, muh child groomer mutilators, that’s what one party rule gets you.

      All the non-urban counties should break off and join other states, and let Denver / Boulder fester and rot in what they voted for.

        1. The Republican Party in El Paso county is bought & paid for by the developers that control the Front Range political scene. If Republican base voters could bilge the “Conservative, Inc.” RINOs and neocons and replace them with populists & patriots, maybe we could get momentum going to join the red counties wanting to link up with Greater Wyoming or Greater Idaho.

          1. The Republican Party in El Paso county is bought & paid for by the developers that control the Front Range political scene.

            Which sounds like the recently resigned Ken Buck (good riddance). The press has been very quiet on who is going to be the nominee for his seat this November, though IIRC Loren Boebert was leading the last time I heard anything.

  5. ‘It’s a well-maintained property, no distress, whatsoever,’ Haddaway said. ‘The sellers, they are just ready to move on.

    Bought at the peak of the market & now they’re schlonged, bigly.

  6. “Director Andrew Cohen said there is ‘a culture of nonpayment’ among tenants who don’t want to pay.”

    So you want to be a landlord…..

  7. New home prices in April fell for a tenth consecutive month by 0.6% month-on-month, the fastest decline since November 2014.

    Oh dear – you mean the velocity of the cratering is accelerating, despite all of the central planners’ extend-and-pretend?

  8. “Many beleaguered developers have defaulted on at least $124.5 billion of dollar debt, and hundreds of millions of homeowners who once bet on a now-collapsed property bubble have lost much of their life savings.

    Few things are as heart-warming as watching the Housing Bubbleonians get their heads handed to them. Let them be a cautionary tale for future generations.

  10. DJT addressing the Libertarian Convention yesterday:

    “We believe that Marxism is an evil doctrine straight from the ashes of hell. Having Marxism in our government is intolerable, and teaching it to our children is considered to us child abuse.”

    Sounds about right.

    1. shouldn’t you be downsizing as we all get older? i have at least 1/2 of what i had 10 years ago and maybe 2/3 less then 15-20 years ago. everything today is digital, so not much need for psychical items unless you are married to them.

  13. Will a New Era of tiny houses enable Millennials to defeat the Boomers who are trying to gouge them?

    1. Instead of paying greedhead wish prices, would-be buyers can opt out of the REIC’s con game by renting until the long-deferred financial reckoning day overtakes the Fed’s asset bubbles & Ponzi markets.

    2. Housing Market Takes ‘Interesting’ Turn
      Published May 23, 2024 at 4:50 PM EDT
      Updated May 23, 2024 at 5:15 PM EDT
      By Omar Mohammed
      Reporter, Economy & Finance

      The percentage of sales for homes priced below $300,000 is increasing, government data showed on Thursday, in what some housing economists say is a signal of a possible shift in which builders might be constructing smaller homes that can be priced lower to attract first-time homebuyers.

      In April, 17 percent of new homes sold were priced at less than $300,000. This was higher than the 14 percent recorded at the same time a year ago, according to the latest data from the U.S. Census Bureau. Meanwhile, the percentage of homes sold between $300,000 and $399,999 fell to 27 percent last month compared to the April 2023 figure of 32 percent.

      The shift comes at a time when buyers are reluctant to purchase property when mortgage rates are high and houses are expensive.

      Home builders say that they are moving toward constructing of smaller-size properties as a way to entice Americans into homeownership.

      In 2023, new homes built were the smallest median size in more than a decade, according to the National Association of Home Builders (NAHB). Close to 40 percent of builders said that they developed smaller properties last year, while more than one-quarter indicated that they plan to go even smaller, NAHB said.
      …
      https://www.newsweek.com/housing-market-takes-interesting-turn-1904221

    1. BUSINESS
      San Diego’s life science industry has a new challenge: Too much space
      Exterior of Illumina’s i3 campus in University City. The local gene-sequencing company offloaded this office to cut expenses.
      (Courtesy of CoStar)
      San Diego’s labs and life science offices hit record vacancy this year.
      By Natallie Rocha
      May 24, 2024 3:27 PM PT
      San Diego’s world-renowned life science cluster broke a new record at the start of the year: The vacancy rate for lab and office spaces hit 14 percent — an all-time high.

      Three years ago, businesses were fighting for space in San Diego’s main life science hubs like Sorrento Valley, La Jolla and Del Mar. But now, there are more buildings on the market than local companies want to lease.

      The area’s overall vacancy rate for life science space jumped to 14.3 percent — up from 5.7 percent during the same period last year, shows first quarter data from commercial real estate firm Jones Lang LaSalle.

      A big driver of this trend: Several companies have downsized or left offices completely in recent months.

      Gene therapy firm Locano Bio, for example, ceased operations and vacated 39,000 square feet of space in Torrey Pines. Then there’s San Diego’s gene-sequencing giant, Illumina, which offloaded its UTC office to save millions of dollars.

      More local life science companies are subleasing their unused offices to save money or accommodate a smaller staff following layoffs. There are roughly 1.2 million square feet of available sublease space on the market — almost double what it was this time a year ago, JLL said.

      “It’s been significant,” said Taylor DeBerry, senior associate of JLL’s life science group. “We’re tracking about a million square feet of sublease space in the market right now, and that’s a higher number than we’ve ever seen before.

      “A lot of that has to do with the over-exuberance and oversubscribing of space that happened during COVID. Companies are needing to pull back because the venture capital market is not as easy to raise money as it was during that time.”
      …
      https://www.sandiegouniontribune.com/business/story/2024-05-24/san-diego-life-science-office-leasing-picks-up-to-start-2024-while-rent-continues-to-decline

      1. My son’s MIL was part of this San Diego biotech downsizing trend. She lost her steady administrative job of multi decades’ duration last year. She landed a new job in a few months, but outside of biotech.

      2. ‘A lot of that has to do with the over-exuberance and oversubscribing of space that happened during COVID’

        When CRE thinks they’ve found a new pot of gold they always over build it. Layer in 15 years of free money and they’ve overbuilt most everything.

      3. This same thing happened in the Boston/Cambridge area to be close to MIT etc. The services’ companies built out spec capabilities (with large capacity that they thought would last years) so they could cash in on all the research $s from biotechs and govt.

        There was actually 1 facility (3 blocks from the MIT campus) with 24 genome sequencers where only 3 were used for years. The other 21 are probably 2 generations of machines behind by now.

        1. There was actually 1 facility (3 blocks from the MIT campus) with 24 genome sequencers where only 3 were used for years. The other 21 are probably 2 generations of machines behind by now.

          So they actually rent the space out with the gear? That’s weird.

          1. Squencers have very specific requirements. These services provide the full service – building, sequencers, full certified staff.

            That way biotech firms, researchers etc., dont have to ramp up these capabilites themselves – it is turnkey. It is a very interesting buisness approach – but very dangerous.

        2. “…same thing happened in the Boston/Cambridge area…”

          A friend’s sister got FOMO in the Raleigh, Durham and Chapel Hill Research Triangle area.

  15. “…hundreds of millions of homeowners who once bet on a now-collapsed property bubble have lost much of their life savings.”

    It’s certainly comforting to know that this could never happen to Americans who used massive leverage to gamble their life savings on housing.

    1. But…but…the REIC shills assured me that getting up on that property ladder was a surefire way to build up generational wealth! I’m starting to think Suzanne’s research might’ve been based on flawed assumptions.

      1. I don’t get the “generational wealth” thing. Given the birthrates there won’t be many heirs to all these airboxes.

    1. U.S. Markets
      DoubleLine CEO expects imminent US recession, government debt surge
      By Davide Barbuscia
      May 23, 20242:53 PM PDT
      Updated 3 days ago
      People walk around the Financial District near the New York Stock Exchange (NYSE) in New York, U.S., December 29, 2023.
      REUTERS/Eduardo Munoz/File Photo

      NEW YORK, May 23 (Reuters) – Jeffrey Gundlach, the chief executive of investment management company DoubleLine Capital, expects a U.S. recession as soon as this year, he said on Thursday, as higher interest rates pressure U.S. consumers and companies.

      Signals of brewing trouble in the U.S. economy such as rising credit card delinquencies and softer retail sales data suggest the possibility of an economic contraction is more imminent than the risk of an inflationary rebound, he said.

      “There’s a lot of recessionary signals out there,” he said, speaking at a webinar hosted by David Rosenberg, founder and president of Rosenberg Research. “There’s more of a recessionary feel than an inflationary feel,” he added.

      The money manager, often dubbed ‘the bond king’, said he was staying away from the riskiest parts of the corporate debt market such as triple-C rated companies’ bonds as well as private credit investments because he expects companies’ debt defaults to surge.

      Specifically, regarding private credit, he said investors looking for higher returns in private markets than in public debt markets run the risk of remaining stuck with illiquid assets in case of a sharp economic slowdown.

      “There is no factor on which private credit looks better than public credit at the present moment. It’s riskier, it doesn’t have the same reward, it’s the absolute worst,” he said.

      On the other hand, DoubleLine is heavily exposed to U.S. government debt, he said, despite concerns over rising U.S. debt levels and soaring government interest debt payments caused by higher rates. “We have more Treasuries now in our strategies than we’ve ever had,” said Gundlach.

      Over time, a growing debt burden could however lead to the need to restructure U.S. government debt, which would be unprecedented.

      “I’ve got this crazy idea that I want buy only the lowest coupon Treasuries … because if I have a very low coupon Treasury I don’t have to worry about being restructured,” he said. “I worry that the federal government might be forced to restructure the Treasury debt.”
      …
      https://www.reuters.com/markets/us/doubleline-ceo-expects-imminent-us-recession-government-debt-surge-2024-05-23/

      1. CEO expects imminent US recession, government debt surge

        Predicting what already happened.

        1. I think the “recession” has been delayed, since the gooberment is borrowing and spending a trillion every 100 days.

          1. Meanwhile, while SpaceX launches rockets on an almost daily basis now, the government’s pet, Boeing/ULA, can’t get anything to work. It’s so bad that are going to launch even though there is a helium leak in the capsule, which could end in a Challenger like disaster.

            We are the can’t do country. How long until foreign airlines throw up their arms, announce they are done with Boeing and cancel their orders? The only thing saving Boeing’s caboose is that Airbus is backordered for about a decade.

          2. a helium leak in the capsule, which could end in a Challenger like disaster

            Can you explain? Do you mean the capsule failed a High Vacuum Helium leak test?

          3. I recall reading that the previous launch was scrubbed because of a helium leak, which hasn’t been fixed and they are going to launch anyway

          4. I think the “recession” has been delayed, since the gooberment is borrowing and spending a trillion every 100 days.
            the end of this year, so that money will also help delay the recession.

          5. Helium is used as a test gas for air leaks in high vacuum, because it is a very small molecule. Pass/fail is tricky. It doesn’t mean something will explode. There is always some leak in any seal. No details, I can’t say much.

          6. “…borrowing and spending a trillion every 100 days.”

            There’s vote buying happening in this spending according to an episode of podcast, Thoughtful Money.

  18. Do you feel like the prospect of ever owning your own home becomes ever more hopeless by the day?

    1. “Do you feel like the prospect of ever owning your own home becomes ever more hopeless by the day?”

      Paying rent on a primary residence, and paying the carrying costs on a buildable lot with utilities.

      I sold ALL my stonks. All of them. Fidelity paying me near 5% on idle cash while inflation runs north of 10%.

      This whole country is in a cost of living crisis. Young people are royally f*d.

        2. Especially those poor cash-strapped debt donkeys living paycheck-to-paycheck on $200+ thousand a year income.

  19. ‘New construction in Kootenai County went from $551,000 to $540,000, said Windermere Coeur d’Alene Realty co-owner Jennifer Smock. ‘That does not mean the price of new construction is going down’

    We know Jen, it’s the mix. But you guys only mention that when prices are down.

    1. “…Kootenai County went from $551,000 to $540,000…”

      Clearly they’re dealing with the equity locusts because the local spuds don’t have that kind of earning power.

  20. ‘a homeowner in Jefferson County, told the Lookout his three-bedroom, four-bathroom house, which he bought in 2018 for around $578,000, increased in value to nearly $927,000 during this year’s reappraisal period. Most of Lance’s neighbors on Byrd Spring Ranch have seen similar increases. ‘We bought this house when we retired on a fixed income, and if our taxes go up, it will make it harder to afford,’ Lance said. ‘It seems like the way property values and taxes are going we’re going to be priced out’

    It was still way cheaper than renting Jim.

  21. ‘the receivership business was relatively quiet for years but picked up more recently as property owners faced financial difficulties. ‘Now is an exciting time for receivers’

    That’s the spirit vultures, feast on the bay aryans!

  22. ‘Ag equipment buyers were willing to take almost anything they could get their hands on when the COVID-19 pandemic severely hampered manufacturers’ ability to deliver new machines to customers. That, combined with strong farm commodity prices adding to the demand, drove up the price of used equipment considerably. But now that manufacturing has returned to normal and commodity prices have fallen, the demand for used equipment pulled back’

    Gosh, I hope no one overpaid in such an environment Jordan!

  23. ‘We’re buying basically nothing but food’

    This is just never ending. You have it completely backwards Zhong. No food, no eating for winnahs!

    1. From Simple English Wikipedia, the free encyclopedia

      Five and dime (also known as five-cent stores, dime stores, and ten-cent stores) is a type of store that was popular in the United States in the early to mid-20th century. They sold many different items, most of which were worth five or ten cents. Many transitioned to general department store format by the mid-20th century. Today, the format has returned to popularity as the dollar store format.

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