thehousingbubble@gmail.com
Blog

There Are Lot Of People Who Don’t Want To Take The Risk Because The Market Is Turning

A report from the Bakersfield Californian. “Bakersfield home sales took unexpected and, in some cases, confusing turns in June, leading one longtime observer to call the market unstable. The laws of supply and demand seemed to go unenforced as demand for existing single-family homes rose and supply sank but median sale prices fell 4.2% to settle at $374,500, according to a report by local appraiser Gary Crabtree. Newly built homes went the other direction: The sale price median increased by 4.1% to reach $467,850 despite a more than 50% drop in demand from May, the report said. Stranger yet, Crabtree noted that median prices are shifting up and down lately by as much as $15,000 from one month to the next, with comparable home prices ranging widely. ‘In some neighborhoods, prices and trends make no sense,’ Crabtree wrote in a monthly summary.”

“The local confusion came at a time demand around the state slipped 0.8% to $900,720 and California’s price median declined by the same share, according to a summary by the California Association of Realtors. It was the second consecutive month of stagnant home sales around the state, the group reported. The association reported that demand was down in all California’s major regions, with the Central Valley’s 5.5% decline in sales from May much lower that the drop in Southern California (-11.5%) and the Central Coast (-9.7%). CAR’s report also noted Kern County’s sales price median decreased by 6.3% in June to settle at $375,000 as demand slid 1%.”

The Star Tribune in Minnesota. “It’s been a status-quo summer for home sales in the Twin Cities with sales easing — as they always do — after a robust spring, according to a midyear sales report. New listings so far this year are up 10.6% over last year, causing a double-digit increase in the number of available houses. Despite the June retreat, sellers are still firmly in the driver’s seat. Kris Lindahl of Kris Lindahl Real Estate, said while his agents are reporting multiple offers on listings in some parts of the metro, stiff competition is less prevalent than it has been, meaning fewer buyers are waiving finance and inspection contingencies. ‘There are lot of people who don’t want to take the risk because the market is turning,’ he said.”

Aspen Daily News in Colorado. “How do I know if a property is overpriced? I wish sellers would ask this question as often as buyers. This is an especially important question in today’s market as we continue to see things shift, adjust and correct after the COVID-19 buying frenzy. I feel like a broken record talking about the COVID market, but the reality is it did inflate prices and create an appreciation rate that simply was not sustainable. If we kept up with that pace, which was well over 25% appreciation on an annual basis, we’d be seeing the entry level for the cheapest properties in Carbondale coming in at over a million dollars in just a few years. I’m sorry if you’re a seller trying to fetch a high asking price, but trust me when I say that would be really bad for our community.”

“This summer, it looks like inventory is building in some markets and that the market is slowing down — but that’s not the case at all. What’s happening is that properties are remaining in inventory because too many sellers are still trying to push the market. I’ll say it again: It’s not the same market it was two years ago. Those days are over. We’re back to what I’d call a more normal level of activity, which is a good thing in a lot of ways. When you have a big spike like that, prices will eventually hit their peak, then correct and then they’ll level out before appreciating at normal rates — that’s what’s happening now.”

“If you decide to price your property above the current market value, it’s more than likely that your property is not going to sell anytime soon. Your listing will go stale, and you’ll reduce the price. The longer your property is on the market, the more work it is, always having it ready for showings. Often, fatigue sets in and the seller just wants to be done with it. They end up reducing the price even further than they would have if they had just priced it properly in the first place.”

From KSL TV. “After years of skyrocketing prices, the rental market in Utah is softening a little. That’s thanks to a lot of new units currently hitting the rental market, prompting some landlords to offer more incentives to new tenants. In Salt Lake City’s Ballpark neighborhood, Rick Butterfield shows off the latest place to live. ‘Brand new, just completed,’ said Butterfield, who is co-owner of West Temple Townhomes. The three-story units on the corner of West Temple and 1700 South are designed with working professionals in mind. But Butterfield is finding this market is a little different than it has been. ‘Right now, there’s so many things available to rent,’ he said.”

“That’s why Butterfield is now offering an incentive – one-month free rent for new tenants. The goal, he said, is ‘to get people in and get them to be here.’ He’s not the only landlord offering a concession like that. ‘You’re seeing that competition for tenants increase,’ said Gavin Gilbert, staff attorney and government relations director at the Rental Housing Association of Utah. Gilbert said the market in Utah is definitely softening. ‘For a large period, we saw home prices and rental prices skyrocket,’ Gilbert said. ‘We’re seeing that level off.’ Why is Utah’s market softening? Two words – new construction. ‘There’s now more apartments available than people looking for apartments,’ said Dejan Eskic, a housing analyst at the Kem C. Gardner Policy Institute at the University of Utah.”

The Naples Daily News. “Cape Coral has been named one of the best cities for first-time home buyers in the country. WalletHub points to Cape Coral’s ‘extremely high number of active home listings and new building permits per capita,’ (or per person). According to Realtor.com, there are more than 6,660 homes for sale and nearly 1,400 for rent in the city. In June, the median listing price for a home was $455,000, down 7% over the year. ‘Probably the biggest thing that we’ve seen in our data is that rental prices have come down a little bit,’ said Shelton Weeks, a real estate professor at Florida Gulf Coast University.”

“After damage from Hurricane Ian in September 2022 reduced the housing supply, rent in Cape Coral peaked at a little over $2,300 a month. Now, it’s at about $2,100 a month, Shelton said. ‘That’s the result of a good bit of inventory being added to the marketplace,’ he explained. ‘We’ve got a lot of new units, and we’ve got more on the way.’ Likewise, home prices are softening, with an increase in supply, from single-family homes to condominiums, Shelton said. ‘I do think it’s going to continue to improve,’ he added.”

The New York Post. “Pretty little lies led to a bonfire of the vanities. That sums up how rich millennials in the Hamptons are explaining the downfall of real estate developer Brandon Miller, who was found unconscious in the garage of his $8 million Water Mill home, leaving behind his social influencer wife, Candice Miller, and their two little girls. Brandon, 43, the principal partner at Real Estate Equity Corporation, was married to Candice, founder of the lifestyle and mommy blog Mama & Tata and a prominent face on the Hamptons social scene. He died July 3 after several days at Stony Brook Southampton Hospital, where he was taken after being found unconscious in his car.”

“Brandon was thought to be about $17 million in debt at the time of his death, a source told The Post. But while money was flowing out of the Millers’ hands like water, it was slow coming in, allegedly due to questionable business dealings and lawsuits that were piling up. Two sources told The Post that Brandon had borrowed about $17 million from friends in the couple’s social circle, ostensibly to buy a downtown Manhattan building. But the building was sold to someone else and Brandon was forced to tell investors he had used their money for something else. He had been hit with lawsuits — including one concerning a luxury furniture rental and another over $50,000 in boat-related fees — just months before his death. ‘ I call BS on everyone blaming Candice,’ said one prominent socialite who splits her time between the Hamptons and the Upper East Side. ‘No way. Brandon clearly he thought he was going to jail for embezzlement and he decided this was his way out.'”

The Globe and Mail in Canada. “27 Lytton Blvd., Toronto. Asking price: $3,995,000 (May, 2024). Selling price: $3.8-million (May, 2024). This five-bedroom house, less than a block west of Yonge Street, sold in standard fashion in May, much like other multimillion-dollar properties in the family-oriented community. The owner did not impose a deadline for house hunters to stop by or make an offer, giving one buyer a couple weeks to comparison shop, examine it several times, and negotiate a $3.8-million deal. ‘It’s nice to just have a normal market where buyers have some choices, and sellers don’t have to worry if their house doesn’t sell in two days. It’s a good balance,’ said listing agent Brayden Irwin.”

Insauga in Canada. “A home that’s seen its asking price drop by half-a-million dollars in a month is one of two Oakville properties that made a dubious real estate list. According to Zoocasa, the home at 2218 Wyandotte Dr. was first listed for $1.79M on June 14. The following week, June 23, it was relisted at $1.69M. However, on Monday, July 15, the price dropped again, this time by nearly 25 per cent, to the current $1.29M. The home has seen a lot of turnover recently, it was twice sold in 2023 about eight months apart, both times listed for $1.19M and selling for $1.22M. It’s described as recently renovated, complete with a finished basement apartment. The second Oakville house on Zoocasa’s list, 142 Herald Ave., also has an interesting sales history. In January 2023, it sold for $880,000, $55,000 below its asking price. Now, 18 months later, it is back on the market for $2.55M, a reduction from two months ago when it was initially listed at $2.74M. According to June sales numbers, housing prices continue to fall across the GTA.”

Coventry Live in the UK. “Coventry Live readers aren’t shocked to learn that the overabundance of student housing in Coventry has led to many vacant rooms at Trinity View on Friars Road, a large city centre complex. Recently, the council decided to permit the rental of these rooms to non-students during the academic term. Our comments section has been busy with readers’ opinions on this development. A letter outlining the plans indicated that student demand in the city has declined since the building opened in 2019. The letter also highlighted an ‘oversupply of purpose built student accommodation’ in Coventry. These factors have had a ‘knock-on impact’ on the number of rooms rented in the building and the duration of students’ stays.”

“Commenter Westorchards says: ‘Like every single person in Coventry didn’t know that!’ Wler agrees: ‘Saturation point reached!! Council planning won’t know how to fill the time on their hands surely!’ Nicfontain thinks: ‘Given that the student housing market in Coventry is saturated (as evidenced by several applications for change of use), the Council does have grounds to turn down applications for new student housing.’ Covkid315 asks: ‘Here’s a thought, why not reduce the cost so home students can afford to live in them and not occupy family homes?’ Tim1983 agrees: ‘I’m super happy about this. Hopefully it will affect the renting market and bring it down. These landlords have been robbing people since covid.’”

“Mouse111 agrees: ‘Ha ha ha you couldn’t make it up could you. The times I have said here that there should be an independent enquiry into the massive number of student accommodation being built and is it really necessary. Well now we know the answer THERE’S FAR TOO MANY, and they are still building more.'”

From Bloomberg. “The source of the money is shrouded in mystery. But a major Chinese real estate developer appears to be trying a novel approach to resolving its debt: It is working with a buyer to purchase bonds at deeply discounted prices, and then cancelling the securities. The moves by China Fortune Land Development (CFLD), whose default in 2021 marked the beginning of China’s property crisis, are the latest twist in a debt debacle that has left more than US$140 billion (S$188 billion) of real estate bonds in default and become a massive drag on the world’s second-largest economy.”

“The developer is attempting to eliminate some of its bonds cheaply, and outside of its restructuring agreements, via private contracts with bond holders and a third party. Some investors are willing to accept big reductions from the bonds’ principal value – known as ‘haircuts’ – and recover a small amount of cash in the near term, rather than wait for years for larger payouts that may not materialise if the property downturn worsens. Over the past few months, representatives of CFLD have been in touch with some bond holders to negotiate sales of their holdings to a company called Bazhou Yongsen Real Estate Development, according to people familiar with the matter. The buyer has been paying 10 yuan for every 100 yuan of the bonds’ principal value, the people said, asking not to be identified describing private discussions. Some investors have agreed to sell their bonds at that price, given the uncertainty over CFLD’s repayment plan.”

“‘Asking bond holders to take heavy haircuts appears to be the only practical way for the distressed developers to survive,’ said head of East Asia corporates credit research at CreditSights Zerlina Zeng. She added that developers may default again post restructuring, unless there is a sustained improvement in their contracted sales and cash collection.”

Related Posts
This Post Has 72 Comments

  1. ‘The buyer has been paying 10 yuan for every 100 yuan of the bonds’ principal value, the people said, asking not to be identified describing private discussions. Some investors have agreed to sell their bonds at that price’

    They were junk bonds. Good luck collecting that other 10% knife catcher.

    1. *”Some investors are willing to accept big reductions from the bonds’ principal value – known as ‘haircuts’ ”

      Monopoly board game 2024. “Bond Reduction Haircut: Pay $20”

  2. Does it seem like we have entered a new era, where guaranteed riches await those who speculate in risk assets like stocks and real estate?

    1. Lessons from History: A new age of stock market speculation
      Author John Kenneth Galbraith’s lessons from the Wall Street crash still have relevance, nearly 100 years on
      May 21, 2024
      by Christopher Akers

      On 24 October 1929, Winston Churchill looked down from the visitors’ gallery of the New York Stock Exchange at the dumbfounded crowd that had gathered below as panic and fear engulfed the market. The former UK chancellor of the exchequer had put Britain back on the gold standard in 1925 at the pre-war exchange rate, the consequences of which some argue spurred on the devastating Wall Street Crash.

      After years of misguided optimism, that crash brought the US back to reality with a horrible jolt. It had widespread consequences, setting the scene for the Great Depression of the 1930s and a global economic slump. The greatest sell-off of shares in US market history meant that dreams of lucre ultimately ended in penury. Given its historical significance, every crash since has been compared to it.
      …
      https://www.investorschronicle.co.uk/content/8a8fa910-5b39-5a96-9685-6aa5c62a27c8

    3. Are you convinced that the chances of a stock market crash are so low that there is no need to trim your HODLings?

      1. Nvidia, Super Micro, Broadcom — and 22 other stocks most likely to crash
        Published: July 22, 2024 at 7:58 a.m. ET
        By Mark Hulbert
        It’s a bad sign when investors believe the probability of a crash is particularly low — like now

        The higher a stock soars, the more likely it is to plunge.

        The U.S. stock market is likely to be a below-average performer over the next 24 months, according to an obscure sentiment index — as are 25 high-flying, popular U.S. stocks including Nvidia NVDA , Super Micro Computer SMCI and Broadcom AVGO .

        The market indicator, known as the “U.S. Crash Confidence Index,” was created 40 years ago by Yale University’s Robert Shiller and is now maintained by the Yale School of Management. Each month a group of individual and institutional investors are asked, “What do you think is the probability of a catastrophic stock market crash in the U. S.?” As with other sentiment measures, this one has contrarian significance: It’s a bad sign when investors believe the probability of a crash is particularly low.
        …
        https://www.marketwatch.com/amp/story/nvidia-super-micro-broadcom-and-22-other-stocks-most-likely-to-crash-737a3b40

      3. Business
        How a Kamala Harris candidacy could wreak havoc on the stock market: ‘She’s not stable’
        By Social Links for Charles Gasparino
        Published July 21, 2024, 6:05 p.m. ET

        Predictions on Wall Street that Joe Biden would lose enough of his mental faculties so as to be forced out of the 2024 presidential race go back for more than a year.

        Yes – it was becoming increasingly obvious to investors by early 2023 that the man had no business running the country, and even less business running for another term.

        Now that he’s out, it’s a big political story but also a big market and economic one.

        Markets hate uncertainty. One reason for last week’s selloff after the blue-chip Dow hit an all-time high, my sources say, was uncertainty about who former President Donald Trump and JD Vance will be running against.

        That’s also why the Street was preparing for the worst of all worlds: that Biden – just before being officially nominated at next month’s Democratic National Convention – would drop out and endorse his inept vice president, Kamala Harris, who if you believe in the polls has a fighting chance to win the presidency.
        …
        https://nypost.com/2024/07/21/business/how-a-kamala-harris-candidacy-could-wreak-havoc-on-the-stock-market-shes-not-stable/

        1. ‘She’s not stable’

          I was just watching some video of her and she seems dumb to me.

  3. According to June sales numbers, housing prices continue to fall across the GTA.”

    If shack prices are falling, why would anyone buy now?

    1. If you have kids, school starts soon, and it’s easier to get settled down and unpacked before it happens. That said, I’d be bidding low to account for falling prices.

    2. Once price declines are common knowledge, Fear, Uncertainty and Doubt replace Fear Of Missing Out, and buyers stand by and stand back while prices plummet. Prices can fall a long way over a multi-year period before capitulation locks in an affordable bottom. In previous housing busts, the bottoming out process took half a decade once underway (roughly 1990-1996, 2007-2012).

      Try not to catch yourself a falling knife.

      1. Take it from REIC paid shills and the real journalists who report on them: No housing crash is coming this year.

    1. “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”

      It is difficult to understand how DEI specialists have succeeded in twisting the meaning of Dr. King’s words into a call for discrimination against people of European or Asian ancestry.

      And anybody who points out the mistake is racis’.

    1. “Rachel Maddow is speechless as Biden drops out of presidential race”

      That alone is priceless.

      3. “Hey Gen X and millennials, what you don’t understand is that Joe Biden dropping out is like 9/11 for Gen Z.”

        What a mess of a young man.

    4. Well, whatever tears they’ve shed, they forgot them awfully fast. Everyone is endorsing and praising Kamala to the skies, for she is the second coming. And she is young and vigorous, you see.

      The Photo needs to be on every campaign ad.

    2. It’s not obvious on first glance, but Kamala’s gained some weight. They’re tailoring her suits to maintain a waistline, but her overall self is looking rather wide.

      1. jeff the Denier
        July 21, 2024 at 10:43 am

        “The 2020 election was stolen”

        Bennie Sez the 2020 election was stolen!

        Some background.

        In 1974 I played baseball on a Junior Babe Ruth team sponsored by a liquor store named Bennie Sez. Drillers was the name of the team thus… Bennie Sez Drillers

        Henceforth when I see a statement about the results of the 2020 I will be covering it with… Bennie Sez the 2020 election was stolen!

        A Field of Dreams for Bennie Benvenuto

        By Greenwich Sentinel
        February 22, 2016

        Born and raised in Greenwich, Benvenuto chose public service in a roundabout manner. For years he worked door-to-door, first as a Fuller Brush salesman, then installing wood floors. Finally, after his knees began to ache, Benvenuto opened a liquor store in Riverside. Another followed soon after. By the early 1970s, Bennie Sez was one of the best-known commercial establishments in town.

        https://www.greenwichsentinel.com/2016/02/22/a-field-of-dreams-for-bennie-benvenuto/

  12. This big shot in the hamptons killed himself…..there was another big shot developer in Miami last week that killed himself. It must be stressful being rich….or looking rich.

    1. The guy in Florida shot himself. Tip from the NY article: don’t try kill yerself in the garage with the car running if police get an electronic message about the carbon dioxide.

    1. For eight years the globalist scum media, the Biden regime, and the Democrat Party all demonized Trump as “Hitler” and a mortal threat to “Our Democracy,” with the obvious connotation that he needed to be taken out. They are Crooks’ unindicted co-conspirators.

  17. Shocking revelations from landlord-tenant board

    Mark Turcotte

    16 minutes ago

    Get ready for some intense landlord-tenant board drama in this video as we dive into the world of dealing with non-paying tenants. Watch as the Landlord Tenant Board struggles to make decisions in a timely manner, leaving landlords in a frustrating and challenging situation. Stay tuned to see the outcome of this high-stakes dispute in 2024. If you’re a landlord or tenant dealing with similar issues, this video is a must-watch for valuable insights and tips on navigating such difficult situations.

    https://www.youtube.com/watch?v=P9HoowwC0uo

    16 minutes. K-da.

  18. ‘Utter contempt of democracy’: Rees-Mogg argues President’s are ‘PUPPETS’ for ‘power manipulation’

    GBNews

    2 hours ago

    Jacob Rees-Mogg calls out the lack of transparency surrounding Biden’s health as an ‘utter contempt of democracy.’

    https://www.youtube.com/watch?v=iH6f-zPcQ8w

    4 minutes.

  19. ‘median sale prices fell 4.2% to settle at $374,500, according to a report by local appraiser Gary Crabtree…CAR’s report also noted Kern County’s sales price median decreased by 6.3% in June to settle at $375,000’

    All time highs Larry.

  20. ‘while his agents are reporting multiple offers on listings in some parts of the metro, stiff competition is less prevalent than it has been, meaning fewer buyers are waiving finance and inspection contingencies. ‘There are lot of people who don’t want to take the risk because the market is turning’

    So the people in multiple offers are overpaying Kris?

  21. ‘This summer, it looks like inventory is building in some markets and that the market is slowing down — but that’s not the case at all. What’s happening is that properties are remaining in inventory because too many sellers are still trying to push the market. I’ll say it again: It’s not the same market it was two years ago. Those days are over’

    Yer so honest. If I’m ever in the market for an Aspen shack, you will be the UHS I call!

  22. ‘For a large period, we saw home prices and rental prices skyrocket,’ Gilbert said. ‘We’re seeing that level off.’ Why is Utah’s market softening? Two words – new construction. ‘There’s now more apartments available than people looking for apartments’

    Wa happened to my shortage Dejan?

  23. ‘After damage from Hurricane Ian in September 2022 reduced the housing supply, rent in Cape Coral peaked at a little over $2,300 a month. Now, it’s at about $2,100 a month, Shelton said. ‘That’s the result of a good bit of inventory being added to the marketplace…We’ve got a lot of new units, and we’ve got more on the way…I do think it’s going to continue to improve’

    That’s the spirit Shelton, worser!

  24. ‘sold in standard fashion in May, much like other multimillion-dollar properties in the family-oriented community. The owner did not impose a deadline for house hunters to stop by or make an offer, giving one buyer a couple weeks to comparison shop, examine it several times, and negotiate a $3.8-million deal. ‘It’s nice to just have a normal market where buyers have some choices, and sellers don’t have to worry if their house doesn’t sell in two days. It’s a good balance’

    Well, the 200,000 K-dn peso a$$ pounding played a role Brayden.

  25. The pre-printed Kamala Harris ballots have already been delivered. And another 20 million “spares” just in case

      1. In my travels, I see a lot of gov buildings. It seems that flags are at half-mast quite a bit, maybe even half the time.

    1. Even Jaime Raskin called on her to resign. Raskin was the most vocal member of Congress during the Trump impeachments and Jan 6 committee stuff. If you’ve lost Raskin, that’s lights out.

  28. So, what are the odds that it will be announced later this week that Biden has passed away?

      1. While all I can do is guess, I wouldn’t be surprised to learn that he has already gone to meet his maker.

        1. Which could explain why so many are falling into line to support Harris, because they know she will soon be sworn in and will be the incumbent.

        2. Twitter/x has gone crazy with rumors, and most of those rumors are plausible. Main rumors:
          1. He’s been stroking out for the past few days and may not last the week.
          2. Several D factions are in a tug of war. There’s a theory that they want to make K the nominee now, but then replace her at the last minute at the convention. K is fighting against that.
          3. On the other side, the plan was to have no leading candidate and no chosen VP, leading to another open convention resulting in Deep State Nikki.

          But everything got foiled when T turned his head, and J may not last until the D convention. They’ve run out of contingencies and now the deep state is winging it.

          omg

          1. and most of those rumors are plausible

            Just about anything is plausible these days. Welcome to the Fourth Turning!

Comments are closed.