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People Were Crying Out For Inventory And We Gave It To Them But They’re Not Buying

A report from WSMV in Tennessee. “A shift in the Nashville housing market is leveling the playing field for buyers and sellers. Zillow finds the number of homes selling above asking price in Nashville dropped more than any of the 50 largest markets in the country. ‘Nine months ago you could have priced your home higher, now I don’t know that you can really say that you’re able to do that,’ said agent Allyson Woosley with Park Realty.”

“Woosley says this was a necessary change to the Nashville housing market. ‘It really is better to have a balanced market. Even though we love those multiple offers, sellers love it when they’re in a bidding war, it just can’t sustain itself,’ said Woosley.”

The Real Deal on New York. “A marijuana investor just snagged the townhouse at Extell Development’s Carlton House for less than half its original asking price. The home at 19 East 61st Street
sold for $27.5 million, according to records filed with New York City’s Department of Finance. It was last asking $32.9 million, but had initially been listed at $65 million in 2014.”

The Houston Chronicle in Texas. “Brand-new, never-lived-in houses on the market are currently offering more price cuts than in years past. In Houston, the last quarter of 2018 featured a more-than-20 percent share of homes with price cuts that led to a median price of $408,900, according to Zillow.”

“By the fourth quarter of 2018, nearly 28 percent of homes with discounts resulted in a median price of $375,000. That’s an extra 4 percent off new-construction homes.”

The Monterey Herald in California. “The real estate market in Monterey County has seen a decline in almost all categories according to recent numbers released by MLSListings.com, which said the median cost for a single-family home was $595,500 in December, a drop of 2 percent from the previous year.”

“‘There is no doubt we are heading into a shift in the market. We have been on an 8- to 10-year run of home values going up. That can only happen for so long until things slow down a bit,’ said Mark Bruno, former Monterey County Association of Realtors president. ‘The overall lack of housing inventory in the state has contributed to the rise in prices. When you add the increase in interest rates to the higher prices for homes, it is no doubt things are going to have to slow down.'”

“In December, the year-over-year average price of a single-family home in Monterey County fell 9 percent. A closer look at November to December numbers show the average price contracted 11 percent.”

“Bruno said it’s not as bad as it sounds, but time will tell. ‘I personally don’t think we are headed into anything like the last downturn. The high-end portion of the market still seems to be robust,’ said Bruno. ‘The lower end of the market is going to be impacted the most in my opinion as there is very little inventory and price pressure will remain upward as long as there is no supply. And then there are the interest rates to worry about. … If you are thinking about selling your home, now is probably better than later to get on the market.'”

“Bruno said that real estate agents who do this for a living full time ‘will be business as usual.’ But he has seen many new agents that have ventured into the world of real estate during the recent uptick. ‘My guess is we will start to see more of those agents get out of real estate and the overall agent count will shrink not only in Monterey County but in the state,’ he said.”

The Napa Valley Register in California. “A slightly smaller number of people signed on the dotted line as buyers of Napa County homes in 2018, compared to the year before. The median price declined — from $642,500 in December 2017 to $635,000 in December 2018.”

“Napa NorBAR chair Suzi Moret, noted that inventory was up this past year in Napa County. ‘That’s interesting because people were crying out for inventory and we gave it to them but they’re not buying,’ said Moret.”

“That could be attributed to a ‘wait and see’ attitude that some consumers adopted in 2018. Some believed local housing prices might have reached a peak. ‘People are thinking that they will wait until prices go down,’ said Moret. Yes, list prices are coming down ‘but sold prices are not significantly down,’ said Moret. ‘We’re not seeing that here.'”

“For 2019, Moret said she thinks buyers and sellers ‘will get tired of waiting and they will go back to putting their homes on the market and buying again. ‘Are we going to see this giant shift of people coming out of the woodwork to buy or sell? I don’t see that happening,’ said Moret.”

This Post Has 29 Comments
  1. ‘We have been on an 8- to 10-year run of home values going up. That can only happen for so long until things slow down a bit…it is no doubt things are going to have to slow down’

    ‘Woosley says this was a necessary change to the Nashville housing market. ‘It really is better to have a balanced market. Even though we love those multiple offers, sellers love it when they’re in a bidding war, it just can’t sustain itself’

    Ah yes, the UHS apology tour. “Oh, it just had to happen. I feel for those poor bashtards that had to roll with it last spring, but hey, it’s supply and demand!”

  2. ‘inventory was up this past year in Napa County. ‘That’s interesting because people were crying out for inventory and we gave it to them but they’re not buying’

    Everybody is a shack gambler now Suzi. They only want to score that easy, quick sweet equity with nothing down and no risk. Can’t you give them that?

  3. ‘for less than half its original asking price…initially been listed at $65 million in 2014’

    I’ve been posting this carnage for many years but the media still won’t call it a popped bubble.

    1. Come now, Ben, you naysaying so-and-so. This isn’t a bursting bubble. It’s a “market shift.”

      1. ‘the median cost for a single-family home was $595,500 in December, a drop of 2 percent from the previous year…in December, the year-over-year average price of a single-family home in Monterey County fell 9 percent. A closer look at November to December numbers show the average price contracted 11 percent’

        Where’s Chris “prices aren’t gonna fall” Thornberg?

        Eeee-bola Monterey and Napa County!

  4. Even though we love those multiple offers, sellers love it when they’re in a bidding war, it just can’t sustain itself,’ said Woosley.”

    You know what I’m going to love, Allyson? Watching the winners of those bidding wars mailing their keys to the bank and slinking away under cover of darkness. And seeing the faces of the FBs who overpaid as foreclosures and short sales devastate the comps and wipe out their make-believe equity.

  5. “Bruno said that real estate agents who do this for a living full time ‘will be business as usual.’ But he has seen many new agents that have ventured into the world of real estate during the recent uptick. ‘My guess is we will start to see more of those agents get out of real estate and the overall agent count will shrink not only in Monterey County but in the state,’ he said.”

    If you are a puke who needs to sell a house and all of the realtor’s commissions are the same would your choice of a realtor be a well-experience realtor with a proven track record or would it be some newly-minted johnny-come-lately realtor with get-rich-quick stars in his eyes? Remember, whatever your choice the commissions are the same.

    BREAKING NEWS: The newly-minted realtors are screwed.

    1. I remember talking to an older REALTWHORE who was complaining how unfair it was that her associate got all of the foreclosure listings from a certain bank, and therefore all of the commissions. The associate was making like $600,000 per year off of foreclosures since the big bank just listed all of them with her.

  6. “Napa NorBAR chair Suzi Moret, noted that inventory was up this past year in Napa County. ‘That’s interesting because people were crying out for inventory and we gave it to them but they’re not buying,’ said Moret.”

    Okay Suzi, since the mythical inventory shortage has magically given way to a glut, clearly that was never the issue. Once again, with feeling: buyers want A-F-F-O-R-D-A-B-I-L-I-T-Y.

  7. Can someone post realtor numbers, active, newly active, currently active, how many agents before the last crash, how many after the crash, what they are now, could be interesting.

      1. that is a large increase in realtors. Up 30% between 2012 and 2017.

        apparently sharing 6% of overinflated prices can support 1.308 M salespeople.

    1. The beginning of the uptrend in the number of realtors coincides with the onset of the Fed’s housing bubble reflation program.

  8. Ah yes, more YOY quotes which only show mid level damage. Can’t wait until YOY gets 1 years past peak then will show cumulative effect of 12 consecutive months of down turns. Then the masses will be wondering what the hell just happened and the panic will be on. The game they have been playing will turn and bite them.

    When this happens I will just love to hear the explanations in realtorbabble. News media doesn’t get how that works and will spotlight the carnage as catastrophic which will lead to increased panic and Yun, who knows how it works, will act surprised and proclaim that realtors are baffled and that effect are an aberration and that the year ahead should show improvement.

    It’s so moronic. Can you imagine this being used for stocks? “Well XYZ has been declining for 26 consecutive weeks but fortunately prices are still showing modest gains since a year ago it was selling for 1.6% less. Therefore only the rate of appreciation has slowed. Must be a seasonal adjustment issue.”

    Hard to believe that some folks fall for this crap. No wonder we are doomed to repeat the past. Will be ready with checkbook in hand. Lots of opportunity to rise from the ashes when the time is right. The sad part is that those buying in the last year or two will be stunned when the reality hits.

  9. ‘I personally don’t think we are headed into anything like the last downturn. The high-end portion of the market still seems to be robust,’

    Guys like this who offer opinions solely based on local factors, while ignoring the unbalanced global macroeconomic environment left behind by a decade of extraordinary accommodation, are talking out their arses. The same factors that are driving down Monterey home prices have hammered housing markets from Silicon Valley to Sydney, including the Chinese investor disappearing act and the gradual rise of interest rates off the lowest levels in the history of mankind.

  10. Some people call them ‘bull traps.’ I call them ‘bubbles.’

    Opinion: The evidence is in: Stocks are in a ‘bull trap’
    By Sven Henrich
    Published: Feb 2, 2019 9:40 a.m. ET
    The stock market today mirrors the years 2000 and 2007, when prices peaked
    Getty Images

    The bulls are back.

    The S&P 500 Index (SPX, +0.09%) rose nearly 8% in January and was 14% off the December lows. Which begs the questions: What slowing global growth? What reduced earnings expectations? What trade wars?

    Who cares. It’ll all sort itself out. All that matters was the Federal Reserve caving in spectacularly and laying the foundation for the big bull case. The “Central Bank Two-Step” is back: Dovish + dovish = nothing but higher prices. The lows are in; what else can I buy? This pretty much sums up current sentiment.

    And so goes the familiar script during emerging bear markets: A general sense of relief that the lows are in, and a return of optimism and greed after an aggressive counter rally following an initial scary drop. Long forgotten are the December lows after six weeks of higher prices.

    While indeed a renewed fully dovish Fed may be all that’s needed to keep 2019 bullish (after all, this playbook has worked for the past 10 years), there is evidence that this rally may turn out to be a big, fat bull trap.

    1. Any thoughts on for how much longer the gap between U.S. stock prices and underlying macroeconomic reality can persist?

      The World Economy Just Can’t Escape Its Low-Growth, Low-Inflation Rut
      Just when we thought we were out, global deflationary forces have pulled us back in.
      By Neil Irwin
      Jan. 27, 2019

      Last year began with signs of a new economic era. In early February, the stock market was falling amid concerns that the United States economy was overheating; that wages and prices would start rising too fast; and that the Fed would need to raise interest rates faster to rein things in. Shifts in bond markets suggested investors were betting on higher future inflation, and on higher interest rates in the distant future than in the near future.

      For the first time in ages, most of the major advanced and emerging economies were enjoying simultaneous growth surges. As 2018 progressed, inflation in the United States finally moved back up to the 2 percent level that the Federal Reserve targets, and the Fed’s pattern of once-a-quarter rate increases became mostly a nonevent in markets.

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      It was starting to look as if the old economic rules — that low unemployment would translate into higher inflation, that large government deficits would crowd out private investment — were becoming true again.

      But in the sell-off that knocked about 10 percent off the S&P 500 from the start of October to Christmas Eve, long-term interest rates fell by more than half a percentage point. Bond prices pointed to lower future inflation, as did plunging oil prices.

      The expected annual inflation rate in the next decade — reflected in the price of inflation-protected bonds — rose to 2.18 percent in April 2018 from 1.66 percent in June 2017. It hovered in the 2.18 range for a few months, then plunged in late October to a recent low of 1.7 percent.

      And prices in futures markets reflected expectations that the Fed would enact no more interest rate increases in 2019. Even as the consensus view of Fed officials at their December meeting was that two interest rate increases were on tap for 2019, markets were essentially flashing a signal of “Oh no, you don’t.”

      At the same time, weaker growth in China — a reported 6.6 percent in 2018, still strong by American or European standards — removes a source of strength for the global economy. China is trying to wean itself off debt-driven growth.

      “Chinese policymakers are well aware they probably have a credit bubble and have tried to be more temperate in response to the current slowdown,” said Julia Coronado, president of MacroPolicy Perspectives. “But it is hard to accept low growth potential. We see the political instability that that brings around the world, and China is now faced with the uncomfortable decision of re-initiating stimulus or living with notably slower growth.”

      1. “China is trying to wean itself off debt-driven growth.”

        Will the U.S. eventually follow suit?

  11. People aren’t buying because it’s not either the overpriced shacks that are built like “A HALL” – like the Grange Halls you find in every small town. They are w/out character, poorly built, and still highly overpriced. Even the new fashionable Peppercorn with white trim/Blue is not folling anyone. These houses look like you could blow them down and you can reach out and touch your neighbors house with your finger from your bedroom and bathroom window. People are sick of density living in shacks that that the big bad wolf could blow down in one breath.

  12. The confounding paradox of bubbles is that their size is inversely proportional to the number of people who believe they exist. Their formation is predicated on misallocation of wealth driven by misperception of risk. Until that misperception becomes all pervasive, bubbles are prohibited from forming. I suspect this bubble may eventually prove to be worse than the previous because so few people believe it exists. The psychological reversal will be more dramatic as the incredulous masses become stunned to realize they got suckered again. At least, in the last bubble, there were a few lonely voices allowed to speak on MSNBC to sound the alarm. But folks like Peter Schiff have long since been banned from voicing their opinions in the main stream media. To borrow and repurpose a phrase from Gil Scott Heron “the bubble will not be televised”. The most reliable indicator of a bubble peaking and popping may well be the obligatory swelling chorus of experts who reassure the public that there is nothing to be concerned about.

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