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It’s Been Slow, I Have A Lot Of Sellers Waiting

A report from the Bay Area Newsgroup on California. “The seven-year fever driving up Bay Area home prices may finally be breaking. The number of home sales plunged 20 percent from the previous December, and marked the slowest holiday month in 11 years, according to CoreLogic. ‘Last month, the San Francisco Bay Area logged one of its sharpest declines in home sales since the end of the last housing downturn,’ said CoreLogic analyst Andrew LePage.”

“Santa Clara County saw home sale prices plummet 10 percent in December. In 2018, homes prices in the county rose by double digits every month through the spring and summer. Year-over-year prices fell in three other Bay Area counties: prices dropped 2.5 percent to $1.33 million in San Mateo, 5.2 percent to $632,500 in Napa and 6.6 percent to $590,000 in Sonoma. Overall, the median sale prices for an existing home in the Bay Area sold in December was $775,000, down from a peak of $935,000 in May.”

“Agents say buyers are unable to stomach higher prices and are waiting for deals. Sellers are receiving fewer offers on homes, and house hunters who haven’t given up hope are finding some slight relief. ‘My phone’s not ringing like it did six months ago,’ said agent Matt Rubenstein in Contra Coast County.”

“Santa Clara County agents report homes staying on the market longer and sellers making more concessions. Sandy Jamison of Tuscana Properties in San Jose said sellers are looking for peak prices, while buyers are looking for discounts. She has seen deals collapse over $10,000 price differences. ‘It’s been slow,’ Jamison said. ‘I have a lot of sellers waiting.'”

The San Francisco Chronicle. “The Bay Area real estate market went into 2018 with a bang and out with a whimper. In the first half of the year, the median price rose almost 17 percent to an all-time high of $875,000 in June. In the second half, it fell 10.3 percent from that peak, ending at $785,000 in December.”

“An earlier report from the California Association of Realtors — which only includes existing, single-family homes entered into a multiple listing service — said the Bay Area median price fell to $850,000 in December, down 6.1 percent from November and down 3.6 percent from December of 2017. That was the first year-over-year drop since March 2012.”

“Many sellers, perhaps unaccustomed to a less-than-ridiculous market, took their homes off the market or let their listings expire. A total of 2,493 listings in the nine Bay Area counties were withdrawn or expired in December, compared to only 1,154 in December 2017 and 1,487 in December 2016, according to analyst Patrick Carlisle of the Compass real estate firm.”

“After hitting $1.15 million in June, Santa Clara’s median price has fallen to $1 million in December, exactly where it was a year ago.”

From KRON 4. “If you’re fed up with traffic, the high cost of living and the lack of affordable housing… Well, you’re not alone. The once Red Hot real estate market is cooling. Prices are coming down and a growing number of people are selling out, cashing in and moving on says Santa Clara Realtor Myron Von Raesfeld.”

“‘I currently have two listings coming on the market, this being one of them, both are leaving the state,’ Von Raesfeld said. ‘This one has already moved to Austin, Texas. My other couple is moving to Boston, and I have another listing coming up where the people are moving to Seattle.'”

“Redfin says migration is reaching a record high with one in four people searching for a home looking to leave the Bay Area. San Francisco, New York, LA, and Denver have the highest net outflows, which means more people looking to leave than to move in.”

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This Post Has 57 Comments

  1. ‘She has seen deals collapse over $10,000 price differences’

    So I guess the squirrel thing is done…

    January 19, 2019

    “‘We don’t have a debt problem. We don’t have an overbuilding problem. We don’t have an economic problem — prices are not going to fall,’ said Christopher Thornberg, founding partner of Beacon Economics, who called last decade’s housing crash.”

    http://housingbubble.blog/?p=807

      1. That’s a sort of re-write of history. The way I remember it, he was more skeptical of the market when he was at the Anderson School at UCLA. He left and became vocal about a bubble, the crash was implied. This was at a time when the MSM (and most economists) pretty much considered a bubble to be a conspiracy theory.

    2. “We don’t have an economic problem — prices are not going to fall,’ said Christopher Thornberg.”

      He’s like a weatherman who fails to see the tornado clearly visible out his office window because he is staring so intently at the fancy radar screen on his desk.

  3. Moves to Austin, Boston and Seattle tell me these sellers aren’t retirees but still working in the technology or biotechnology sectors. Moving from the hottest frying pan to a slightly cooler one.

    1. People fleeing CA underestimate the high utility costs and property taxes in TX when they buy that big home. Taxachusetts is MA nickname.

      1. We just left the Austin (2 years ago) area for Tampa and no kidding the property taxes are high in TX.

    2. “these sellers aren’t retirees but still working”

      Interesting point. I wonder how many of these workers leaving California are from other states originally. We always hear that the high cost of housing in SF was a deterrent to jobseekers, but maybe some saw it as an incentive – work in Silicon Valley for a few years while getting some nice appreciation from the house they bought, cash out and move. (Plenty of CA natives leaving too, of course.)

      1. My husband and I discussed doing that. We weren’t comfortable spending so much $ on housing – SF would cost 5x minimum for the same townhouse. I told him we could rent a teeny tiny studio. If you’re going to “throw away” money on rent ( and I don’t consider that a waste) then at least get the smallest feasible unit.

    3. I know many in the tech industry that have moved abroad. Primarily to TX to buy that BIG house at 1/2 or less than what they sold there Bay Area shacks for. Smart move IMO but I would have a hard time with the transition in climate, proximity to family / friends, and mainly departing from the coast / ocean. I do get fed up with the politics, traffic, drugs, crime, and homeless problems we have here which sometimes out weighs the “perks”. Sorry ranting..

  5. “Many sellers, perhaps unaccustomed to a less-than-ridiculous market, took their homes off the market or let their listings expire.

    You stick to your guns, greedheads. You’re ENTITLED to a ridiculous wish price. Surely just the right buyer will come along with a full-price offer, any day now. Pay no heed to all those alarmist headlines or that grim data. Surely the Fed’s Ponzi markets and asset bubbles have yet to have their finest hour, so you just hang tight.

          1. Successful tech companies aren’t “naturally” occurring. Hollywood and MSM would like you to believe otherwise.

        2. Google > Be Evil.

          It is interesting that the employees that currently work for Google are very opposed to doing anything that looks like a partnership with any military organization. Even giving presentations at say the Annapolis Naval Academy might be tough to gain permission for. And yet for these naive shit weasels the irony is lost on them that if it wasn’t for DARPA money they would likely not be Alphabet employees.

        1. As damning as that argument (I’m actually not sure it’s that damning, say what you want but taxis fooking sucked in DC prior to uber/lyft. that industry needed a kick in the ass) is he didn’t even touch on the real problem with Uber.

          From what I’ve heard, they are using Yellex bux to subsidize every ride. They are doing this to try and drive the competition, i.e. taxis, out of business. Call this predatory pricing, dumping, whatever you like. It ought to be illegal (I think it is???).

          This has also left Uber massively in debt. The idea is to build a ton of momentum and IPO to idiot bagholders.

          2. I had to go look into this. Uber is indeed getting government subsidies. I thought fares were just subsidized by investors and drivers. (And, yes, DC cabs were the worst that I’ve experienced!)

          3. No, not government subsidies. Uber is subsidizing its own rides. They lose money on each ride. They do this to increase their market share (lower price means more costumers). They want ridership (active users) to be as big as possible when they IPO. They are paying for this by borrowing money.

            Uber is one of those things everyone uses, like Netflix and Amazon. So retail investors will buy it –“Oh, Uber. I love Uber. Great product.” Then they will get schlonged.

          5. Uber appears to have expanded from fares subsidized by investors and drivers to fares subsidized by local governments and debt.

          6. As a consumer, I have no use for their product. As an investor, their business model alone was enough of a red flag. I hadn’t payed enough to attention until your comments to notice the other red flags.

          1. It’s from 2017 but still relevant. I sent it to a friend who claimed Musk was a disruptor. Tesla is following in Enron’s footsteps. I suggest you find a copy of Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports by Howard M. Schilit & Jeremy Perler.

    2. Surely just the right buyer will come along with a full-price offer

      Ironically, this is actually still true in many cases. You only need one buyer, and it’s not like they all suddenly get smart together.

      1. That seems to be where we’re at right now in Folsom. Play your cards right and you can still snag a sucker. But we’ll see how that system holds up when the spring inventory comes online.

    1. “Anbang Insurance Group, which had purchased the Waldorf Astoria in New York for nearly $2 billion in 2014 and which in 2016 handed Blackstone Group $5.5 billion for a portfolio of 15 hotel properties, collapsed and has been taken over by Chinese regulators, and its founder was sent to prison. Now these investments are up for sale.”

      Looking ugly.

  7. ‘The Bay Area real estate market went into 2018 with a bang and out with a whimper. In the first half of the year, the median price rose almost 17 percent to an all-time high of $875,000 in June. In the second half, it fell 10.3 percent from that peak, ending at $785,000 in December’

    So it blew out to an all time high in six months, (17% in six months), only to immediately sharply reverse. Classic bubble peak.

    Basically the states major metros have all tanked. And the most expensive areas have fallen the most, just like London, Manhattan, Miami Beach, Seattle, Toronto, Vancouver, Hong Kong and Sydney. Why? Cuz that’s where the speculation is concentrated.

    1. “So it blew out to an all time high in six months, (17% in six months), only to immediately sharply reverse. Classic bubble peak.“

      Thanks for confirming my subpar math ;).

    2. “Basically the states major metros have all tanked.”

      San Diego included, as our market had the same midyear bubble top timing as other California cities before commencing to tank. And all the local experts are spinning like crazy…

      San Diego Union-Tribune
      San Diego home sales drop to lowest point since 2007
      By Phillip Molnar

      San Diego County’s median home price ended the year at $550,000, one of its lowest points of 2018, real estate tracker CoreLogic reported Wednesday.

      December’s price is reflective of reduced sales in the home market across the nation as rising mortgage rates at the end of the year kept buyers on the sidelines. There were 2,642 home sales in San Diego County, the lowest for a December since 2007. It was the seventh consecutive month of declining year-over-year sales for the county.
      Southern California as a whole also recorded its lowest sales for the month since 2007.

      Mark Goldman, an analyst with C2 Financial Corp., said it was important to note it appeared sales were increasing in January because of the end of the holiday season and as interest rates have started to drop.
      “Is the market reversing? I don’t think so,” he said. “I think we’ll continue to see price appreciation, but the rate at which prices go up will not be as fast as we’ve seen in recent years.”

      Goldman noted the Federal Reserve announced Wednesday that it would not raise interest rates during its meeting this week, as well as patiently deciding future moves based on “global economic and financial developments.” Mortgage rates typically track the yield on the U.S. 10-year Treasury, so the Fed’s decision could mean lower rates for the short term.

      Although November and December are seen as slower months for the housing market, sales typically increase in December. Sales were down 10 percent in San Diego County between the two months, notable because the last time there were less sales in December than November was in 2000.
      All types of housing saw sales decrease. The resale single-family home market, considered the most important part of the total market because it has the most sales, had 1,673 sales in December — its lowest since 2007 when 1,074 homes sold.
      The median price for a resale home was $595,000, dipping from the all-time high reached in June and July of $630,000. Yet that is up from January’s median of $565,000, representing a gain of $55,000 in a year.
      …

      1. “It was the seventh consecutive month of declining year-over-year sales for the county.”

        I’m sure that seven straight months of declining year-over-year sales is completely typical.

  10. “Overall, the median sale prices for an existing home in the Bay Area sold in December was $775,000, down from a peak of $935,000 in May.”

    If my math is correct, that’s about a 17% drop in 7 months.

    2. I wonder what all counts as “bay area”? When I was looking in San Jose 2 years ago close to work I saw almost nothing under a million. So I’m surprised by that median price…they must count the “commutable” stuff way out at the edges.

  11. Well I am not seeing any drop in real estate prices in the midtown and downtown Sacramento housing market yet! For example:

    https://www.zillow.com/homes/for_sale/Sacramento-CA-95814/house,condo,townhouse_type/25783373_zpid/98423_rid/2-_beds/400000-600000_price/1566-2348_mp/globalrelevanceex_sort/38.598895,-121.459137,38.562327,-121.529689_rect/13_zm/0_mmm/

    I work downtown and no way will I ever be able to afford anything here on a govt paycheck unless market crashes which I don’t see happening anytime soon. Who is buying this crap at these prices?

    1. “Who is buying this crap at these prices?“

      Good question. My observations tell me no one anymore. Chinese specuvestors may have been buying this units up previously but they have moved on since tail end of last year. The greedhead seller can ask any dream price they want but the odds are they will not get it and likely sit on, in this case, an empty airbox. Even Zillow is estimating about 60k less. Stack on those good ole HOA dues, ouch!

  12. fastFT US economy
    US jobless claims rise to highest level since September 2017
    Holiday over period may have affected the data that come ahead of key monthly jobs report
    Matthew Rocco yesterday

    The number of Americans filing for first-time unemployment benefits rose to the highest level in more than a year, the US labour department said on Thursday.

    Jobless claims, which touched their lowest mark since October 1969 during the prior week, jumped to 253,000 for the week ending January 26. It was the highest since September 2017, when Hurricane Harvey hit Texas with major flooding, and topped expectations for jobless claims to come in at 215,000.
    …

  14. Any way to find some stats on RealTurds, how many active, how many deactived, for the years 2008 2009 2017 2018, see if there is a bubble popping within the agents world, I bet the numbers are close, probably a rise in registered agents before the bubble popped in 2008/9, then a mass exit as sales dried up, then they started to rise around again in 2013 then peaked last year, bet we see them decrease this year.

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