With Little Warning, Buyers Became King
A press release from the Florida used house salespeople. “To Realtors®, homeowners and others who ask, ‘Are we in another house price bubble?’ – the answer is ‘No,’ according to Dr. Len Kiefer, Freddie Mac deputy chief economist, who spoke to a crowd of more than 400 Realtors at the 2019 Florida Real Estate Trends summit. Kiefer said he and other analysts have been researching home price growth trends and other economic factors to answer the ‘bubble’ question.”
“‘Home prices are up, but that by itself is no indication of a bubble; you need an element of speculation or credit financing involved as well, he said. He added, ‘So, when I’m asked about a bubble, I do say no – but the way I pause before I say no has been extending a bit as home prices continue to rise more than incomes. However, in our view (Freddie Mac economists), house prices will moderate as mortgage rates rise.'”
From Business North in Minnesota. “Rising mortgage interest rates and home prices, along with a shortage of housing throughout the market has some fretting about a real estate crash on the horizon. While there has been a drop off of buyer optimism in recent months, Doug Kman, president elect of Lake Superior Association of Realtors said he believes a more balanced attitude is in the offing this coming summer.”
“‘I think we are going to see a better balance of available houses to buyers and therefore we will see prices drop a bit with a drop in buyers writing competitive offers,’ he said.”
“During the last two years Kman noted prices had been driven up by buyer competition, where in the recent past sellers would quickly get several offers over the list price creating a wave pushing up comparable sales. ‘A lot of people are wondering if we’re going to see another bubble because of the rising home prices, but I don’t have that concern because the charts are not the same, foreclosure rates are very low, the feds have raised interest rates to avoid an economic issue and everybody’s on the lookout for it,’ he said.”
From Realtor.com. “The question is no longer if the nation is in the throes of a housing slowdown, but rather how deep and wide it will wind up being—and how much of a blow it’ll deliver to the American real estate market. The signs are becoming ever more troubling. The number of existing home sales has dropped to the lowest level in three years, price growth has slowed precipitously, and some super-pricey, bellwether cities are actually seeing prices fall. (We’re looking at you, San Francisco, Dallas, and Miami!)”
“The fact that home growth has slowed in 70% of the United States’ 200 largest housing markets has economists debating whether the housing slowdown is the canary in the coal mine, warning of economic woes to come.”
“So why are some cities skyrocketing, while the rest of the country appears to have been clobbered by a double-whammy of rising mortgage rates and home prices that have risen too darn high?”
The Orange County Register in California. “Homebuying in Irvine and Tustin fell 13 percent from August through November vs. the same period in 2017 amid a steep countywide slowdown. Once primetime selling season ended in Orange County this summer, house hunters balked. That created the slowest-selling August-to-November period in seven years. Culprits were high prices and expensive mortgages. Meanwhile, homeowners and builders boosted the supply of residences for sale.”
The Houston Chronicle in Texas. “After sitting on the market for more than a year, the historic property at 3229 Groveland just underwent a price reduction of nearly $2 million. Situated on more than an acre of land, this stunning five-bedroom, 7,098-square foot Georgian-style house was originally listed at $14.8 million in November 2017. Now the house is being marketed at $12.9 million, a price reduction of $1.9 million, making it much more affordable for those with $13 million to spend.”
The Washington Post. “For eight years, we have been operating in a market that allowed sellers to ask record prices year after year while leaving buyers largely undeterred. To be clear, the past eight years should not be classified as a ‘normal market’ given that home prices in many neighborhoods have outpaced inflation by a lot.”
“Sometime around last September, it became obvious that houses, which just months before would have sold in the first weekend, were sitting on the market. They were desirable, priced in line with the market and well advertised.”
“I had a few listings in this category. In early fall, the stock market every few weeks would give back one to two months of gains in a day or two, leading to more volatility and concerns. To make matters worse, by Oct. 1 the best interest rate I could get my clients on a 30-year fixed loan was likely to be no less than 5 percent, and that assumed near perfect credit and sizable down payments.”
“So after eight years of 3, 3.5 and 4 percent mortgage rates coupled with down payments of 5 percent or less, borrowers were hit with the reality that buying a $700,000 house with a higher mortgage rate means hundreds of extra dollars in monthly payments and an allocation of a ton more of their savings (in down payment) to make the deal.”
“Right away that took a chunk of the would-be buyers out of the market — yet inventory levels of homes for sale did not adjust. Moreover, the new tax law in December 2017 took away some incentives — being able to deduct state and local taxes from federal taxes — which definitely impacted the market for homes $450,000 and over.”
“The results: Markets flipped from sellers’ advantage to buyers’ advantage. Almost immediately, for every one buyer there were three really good houses to choose from and no urgency in being outbid. With little warning, buyers became king, yet most sellers refused to adjust. With fewer real buyers in the market, all of a sudden the inventory levels got thrown way out of whack.”
“The bottom line is this: The housing market across the country is contracting. I see it every day in my business, and I speak with dozens of top-performing brokers in other major markets who are saying the same thing.”
‘Almost immediately, for every one buyer there were three really good houses to choose from and no urgency in being outbid. With little warning, buyers became king, yet most sellers refused to adjust. With fewer real buyers in the market, all of a sudden the inventory levels got thrown way out of whack’
It’s like somebody flipped a switch! Wa happened to my shortage?
Eeee-bola Washington DC!
Just wait until the government shutdown impact on the DC market comes to light. You ain’t seen nothing yet.
I do hope we have another shutdown. That would just kind of seal the deal on the downward housing trajectory.
It was 35 more days of paid vacation. Ask oide. They love it.
Poorly built shacks in Density Living areas in WA are still Way overpriced.
Salem, OR Housing Prices Crater 24% YOY As 25 Million Excess Empty And Defaulted Houses Trickle Onto US Market
“So after eight years of 3, 3.5 and 4 percent mortgage rates coupled with DOWN PAYMENTS OF 5 PERCENT OR LESS…”
This sucker could go down.
Five percent or less?!? Holy LEVERAGE Batman!
Debt$, like their Federal Fi$cal cousin$, … “Don’t matter$!” Will
U.$. on track to add $12 trillion$ to national debt by 2029 unless Washington changes course
Published: Jan 28, 2019 | MarketWatch | Jeffry Bartash
“The U.S. is likely to add $12 trillion$ in public debt$ from 2020 to 2029 through a combination of higher government spending and slower economic growth, according to the Congressional Budget Office. That’s on top of the $16.6 trillion$ the government is expected to owe to the public at the end of 2019
Not a fiscal conservative in the GOP since the 1960’s.
Not a fiscal conservative in
the GOPin Congress who wasn’t marginalized since the 1960’s.
Does debt matter when printing money to repay it is an option?
Does debt matter when printing money to repay it is an option?
Nope. Unless you care what the money can buy in the future. But if you print enough to corner the market in “real” assets then after that who cares?
When they start borrowing to pay interest on existing debt, it will be in the final Ponzi phase with no way out.
“Moreover, the new tax law in December 2017 took away some incentives — being able to deduct state and local taxes from federal taxes — which definitely impacted the market for homes $450,000 and over.”
But houses were flying off the shelves in Spring and Summer 2018 lol…
The general public has yet to digest the December 2017 tax law changes. The rude awakening should be starting right about now and culminating on April 15.
extend and pretend…
Cry me some SALTy tears.
Gainesville, FL Housing Prices Crater 15% YOY As Brokers Concede “Prices Are Collapsing”
“Home prices are up, but that by itself is no indication of a bubble; you need an element of speculation or credit financing involved as well, he said.”
Phew. So it’s not a bubble then?
Realtors are liars.
If you see one in your neighborhood, lock the doors and call the authorities immediately.
We had to put up a gate so they would stop driving into our long driveway to see if they could talk us into “selling” when the market was hot…putting up that gate was the best thing we ever did. No more RE Spies.
And keep your pets locked safely indoors. The Realtor Zombies are ravenous!
It’s time to ‘dismount’ from this stock-market rodeo, says Morgan Stanley’s Wilson
By Sue Chang
Published: Jan 28, 2019 2:59 p.m. ET
The Fed abandoning its tightening regime could be a game changer, Wilson writes
This stock market ride may have run its course.
Timing is everything and Morgan Stanley’s chief equity strategist Mike Wilson is telling investors that they need to get out of stocks right now even if the market still has some upside potential.
Employing a rodeo metaphor, Wilson on Monday urged his clients to “dismount” as the market’s rally since late 2018 is starting to look precarious.
“Maybe the bull ride since Dec. 24 has not gone a full ‘8 seconds’ but we’d look to dismount anyway—we’re close enough and bulls can be dangerous animals,” he said in a report, referring to the number of seconds a bull rider is required to stay on to earn a score for a ride.
Indeed, the strategist said the market’s action has been a “short and volatile ride” since the December plunge and the sell signals aren’t as obvious as from when the S&P 500 (SPX, -0.78%) traded above 2,900 but it is time to look for greener pastures.
“We struggle to see the upside in hanging on just to see how long we can. We think it is better to hop off now and rest up for the next rodeo,” said Wilson.
Seeing as the world is supposed to end in 12 years (oh noez!!), do the banksters still give out mortgages longer than that or is that limit just for dumb-azz millennials and other fools educated well beyond their intelligence?
2016: Scientist says humans will be extinct in 10 years:
He said this just over two years ago so that means we only have about eight years left.
“We don’t have 10 years. The problem is when I give a number like that, people think it’s going to be business as usual until nine years [and] 364 days.”
‘A lot of people are wondering if we’re going to see another bubble because of the rising home prices, but I don’t have that concern because the charts are not the same, foreclosure rates are very low, the feds have raised interest rates to avoid an economic issue and everybody’s on the lookout for it,’ he said.”
Keep whistling past the graveyard, Realtor Boy. When you and your fellow dissemblers of the NAR get together behind closed doors, I’m guessing your appraisal of the situation is a lot more dire.
The title: “Demand for housing drives up real estate prices”
Central banker’s easy credit drives-up real estate prices, but Doug Kman continues parroting the NAR’s narrative.
Tom you’ve inspired me to be politically and rewrite this old Ditty.
NEW YORK (AP) — NBC’s Tom Brokaw says he feels terrible that his comments on “Meet the Press” Sunday that Hispanics should work harder at assimilation “offended some members of that proud culture.”
I’m Hetero the eighth, I am
Hetero the eighth, I am, I am
I got married to the widow next door
She’s been married seven times before
And every one was a Hetero (Hetero)
She wouldn’t have an LGB or T (No T)
I’m her eighth old man, I’m Hetero
Hetero the eighth I am
Second verse, same as the first
HERMAN’S HERMITS- “I’M HENRY VIII, I AM”
“NBC’s Tom Brokaw says he feels terrible…”
He looks terrible too, but I didn’t find his comments offensive. The media are too sensitive these days.
I got to say that,the comments from realtor.com were pretty straight on. Feels very stark and real in comparison to the word salad served up by so many others. Sobering actually, but nothing that we on the HBB haven’t known for some time. Still validation is good.
Get ready for the time coming soon where the veil gets removed from the psyche on the public. When consumer confidence is lost you will really see the stats provide shocking numbers.
Any doubts as to what follows?
Are you worrying about Wall Street earnings? I’m not.
Asian markets fall amid worries that Huawei charges may hinder U.S.-China trade talks
By Associated Press and Marketwatch
Published: Jan 28, 2019 10:56 p.m. ET
Worrying Wall Street earnings also weigh on investors
Trouble in paradise …
“Huntington Beach sues state, claiming housing law is unconstitutional”
“Under SB35, the state has mandated that cities that don’t meet their housing targets set by the Regional Housing Needs Assessment must approve housing permits for projects that are at least 50 percent affordable.”
Hmmmm … “affordable”. Now there is an interesting word. I wonder is there is a clear, firm definition of this word when it comes to housing?
“In doing this, the lawsuit said, SB35 violates the state constitutional authority of charter cities to exclusively legislate over municipal affairs, which include land use and zoning.”
Translation: The state gets to dictate to the cities as to just what is what.
“State Sen. Scott Wiener, D-San Francisco, who authored the bill, released a statement Sunday emphasizing the lack of housing in California and the need for the state to set standards.
“’Huntington Beach’s dismissive approach to housing — claiming there is no problem and that the state should just mind its own business — is Exhibit A for why we have a crisis in this state,’ he said.”
Great news for wannabe home buyers: The rate of decrease in home affordability reaches a four-year nadir! Better yet, home affordability has even begun to improve again in some markets!!
U.S. home-price growth slumps to a four-year low: Case-Shiller
Economy & Politics
Home price growth skids to a 4-year low, Case-Shiller says
By Andrea Riquier
Published: Jan 29, 2019 9:00 a.m. ET
There’s still a lot of catch-up from the most distressed cities going on: Vegas saw 12% annual price growth
Coppell, TX Housing Prices Crater 9% YOY As Dallas Area Mortgage Meltdown Heats Up
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