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The Housing Market Appears To Be Running On Fumes

A report from Bakersfield.com in California. “There’s been considerable discussion since Trulia, a property listing website owned by Zillow, in November ranked Bakersfield fourth on its list of the top 10 housing markets to watch in 2019. Home appraiser Gary Crabtree has cast doubt on Trulia’s bullish pronouncements about the Bakersfield market.”

“The problem with declaring Bakersfield a ‘hot market,’ he said, is that it amounts to the same kind of hype that overinflated the city’s real estate during the last bubble. ‘The point that I was trying to make,’ he said, ‘is I didn’t want a national company who doesn’t have local people, boots on the ground, that doesn’t know the market, you know, come out with something like this and then deceive the market into thinking, ‘Oh my gosh, … you’d better buy before it goes up too high that we can’t afford it,’ which is the same scenario we saw in the bubble days.'”

The Victorville Daily Press in California. “After a red-hot market, several industry experts have predicted that 2019 will see a downturn in the housing market. But Amanda Vaage, a Realtor with Shear Realty Spring Valley Lake, echoed other High Desert industry leaders who shared the same views on the predicted housing downturn.”

“‘The High Desert has its own unique housing market so this expected downturn won’t be the same as the rest of California,’ Vaage told the Daily Press. ‘We’re the High Desert, not Orange County, Los Angeles, or the Silicon Valley so you can’t compare apples to oranges.'”

“‘The High Desert housing market has evened out over the last 4 to 6 months, with the area having a good inventory,’ Vaage said. ‘But interest rates are scheduled to go up three times this year so now is the time to buy.'”

The Dallas Morning News in Texas. “North Texas home sales slowed significantly in the final months of 2018. The number of homes for sale in the region has grown almost 25 percent. ‘The housing market appears to be running on fumes; momentum is keeping price growth in the positive, but signs of a slowdown are officially here,’ Cheryl Young, Trulia senior economist, said in a statement.”

From Chicago Agent Magazine on Illinois. “The residential property market continues to look better for prospective buyers as the trend of falling prices extends into the new construction segment. In the fourth quarter of 2018, according to data from Zillow, more than a quarter of listings for newly constructed homes experienced a price cut. For comparison, about 19 percent of new construction listings on the market in Q1 had their price reduced.”

“In the Chicagoland market, 21.3 percent of new construction listings in Q4 saw a price cut. ‘As home value growth slows, the prospect of buying a new home becomes less attractive, because the return on investment becomes less of a sure thing,’ according to Zillow economist Matthew Speakman, author of the report.”

From Reuters. “U.S. homebuilder PulteGroup Inc reported its worst quarterly fall in orders since 2013 on Tuesday and said it was having to spend heavily on incentives for buyers, weakening its margins, in the face of the shakiest outlook for spring sales in years.”

“‘Thinking about 2019, there is less certainty about demand heading into this spring selling season than the industry has experienced in a number of years,’ said Chief Executive Officer Ryan Marshall on the call with analysts.”

“RBC Capital Markets analyst Michael Dahl said in a note to clients that Pulte orders were well below expectations. ‘We still expect margins to decline in the coming quarters as others such as Horton and Lennar have leaned into incentives,’ he said.”

From Business Insider on New York. “New York City has more super-expensive and ultra-luxurious penthouse apartments than it knows what to do with. Many of these penthouses sit on the market for months or years and eventually get significant price chops. In the first five months of 2018, 58.6% of luxury homes — priced at $4 million or above — sold in Manhattan were let go at discounted prices, according to an analysis of StreetEasy data by Mansion Global.”

“‘Like any commodity, when the market is saturated with them, their value declines,’ Jason Haber, an agent at Warburg Realty in Manhattan, told Business Insider. ‘If under every rock you found a diamond, diamonds would decline in value. That’s what is happening right now.'”

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This Post Has 39 Comments

  1. “But interest rates are scheduled to go up three times this year so now is the time to buy.’”

    😁

    Some of the best humor on the Net is to be found on this blog.

      1. Is there any reason to live in the High Desert (unless you work at the glass plant) if you could afford the coast?

        1. Here’s one reason I just got in an email:

          13187 CHALON RD, BRENTWOOD, CA | $4,399,000

          $1.6M price reduction
          Prominent development opportunity nested within a private canyon on a quiet street off of Mandeville Canyon. Neighboring the Brentwood Country Estates, this hidden gem is completely surrounded by opulent greenery, where both a residence and retreat will be created amidst ~1.3 acres of peacefulness and prestige. Property can be delivered RTI.

      2. Baker$.fried, will always bee a “hot market” … Free pe$ticides in the $pring! + Amazon deliver$ there too!

    2. Is it the suggestion that the Fed will raise rates three times this year when they are on hold which seems amusing? Or the spurious notion that buying a home when a bubble is bursting is a good idea?

  2. Zillow, in November ranked Bakersfield fourth on its list of the top 10 housing markets to watch in 2019.

    Oh I’m watching.

    “The problem with declaring Bakersfield a ‘hot market,’ he said…

    Who said anything about hot?

  4. “With our affordability along with the great single-family loan products available,” she wrote in an email, “it’s the right time and Bakersfield is the right place to invest in the American Dream.”

    “The reason they call it the American Dream is because you have to be asleep to believe it.” —George Carlin

  7. “‘The High Desert has its own unique housing market so this expected downturn won’t be the same as the rest of California,’ Vaage told the Daily Press. ‘We’re the High Desert, not Orange County, Los Angeles, or the Silicon Valley so you can’t compare apples to oranges.’”

    It’s different here. Got it.

    You’re still going to crater just like every other overpriced bubble market.

    1. Baker$.fried realtor$ gift ba$ket:

      1 quart of motor oil, 1 lb of baby carrots, 1 pint of pesticide

          1. Trona, just this side of paradise.

            From Wikipedia …

            “Trona is known for its isolation and desolation, as well as the nearby Trona Pinnacles. The local school plays on a dirt football field because the searing heat and highly saline soil kills grass. At one point it boasted an 18-hole golf course that was all sand except for the “greens”, which were a softer grade of brown colored dirt.”

    1. I was thinking from the name OILdale it was the pass through town off the 46 (I take it from 101 to 5 on my way to socal). Lost hills a mad max looking, oil fracking, desolate, run down looking town. I’ll have to brave up and detour to Oildale next time I’m passing through.

    1. I know some of the members are from Bakersfield. The video paints a very dire picture of oilsdale, at least Korn rose up and away from that place.

  13. I was driving home early Sunday morning through Bakersfield
    Listening to gospel music on the colored radio station
    And the preacher said, “You know you always have the
    Lord by your side”
    And I was so pleased to be informed of this that I ran
    Twenty red lights in his honor
    Thank you Jesus, thank you lord

    The Rolling Stones – Far Away Eyes –
    https://www.youtube.com/watch?v=VyK1bZZ7E-s

  14. Do your favorite stock picks keep going up, even though revenues are falling and the outlook is bleak?

  15. “New York City has more super-expensive and ultra-luxurious penthouse apartments than it knows what to do with.”

    Suggestion: rent them out at the market rate. Attracting tenants from older luxury buildings. Which would then be forced to attract tenants from upper middle class buildings. Which would then be forced to attract tenants from middle class buildings. Etc.

    Once again, we see housing held off the market because they can’t be sold/leased for prices people can’t afford.

    1. Once again, we see housing held off the market because they can’t be sold/leased for prices people can’t afford.

      …Someone Who Matters might lose money.

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