Sellers Have This Phantom Value Of Their Home That Was Yesterday’s Value And Not Today’s

It’s Friday desk clearing time for this blogger. “There were 4,000 homes up for sale in the Des Moines metro in July, which is up 20 % compared to a year ago. Eric Webster of the Des Moines Area Association of Realtors says buyers have a lot more negotiating power and choices with the increased inventory. Webster compares it to the housing market during the pandemic, when inventory was low and it was difficult for buyers to acquire a home. ‘Interest rates plummeted and there was a feeding frenzy to purchase a home. And prices just doubled and tripled and skyrocketed. And it was a sellers market.’ Webster says the median cost of a home in the Des Moines metro last month was $300,000.”

“Some industry reports are buzzing about trends of home sellers lowering their asking prices, unable to command the lofty numbers seen over recent years. ‘Price reductions are not red flags—they’re signals,’ Ryan Melvin, a real estate pro with Huntington & Ellis, A Real Estate Agency, in Las Vegas, recently told Real Estate Today. ‘They reflect how the market is moving and offer buyers leverage and opportunity. Sellers can no longer rely on aggressive pricing to draw offers immediately. It’s important to have price reductions that actually move the needle, typically, a price reduction of 2% to 5% can increase showings and generate offers.’ Lawrence Yun, NAR’s chief economist notes that some markets may be experiencing more variability than others. ‘For example, the condo market—particularly older condos—in Florida have ‘seen quite a steep rise in inventory,’ he notes. ‘Consequently, there are some price declines of 10% from one year ago—that is not unusual.'”

“It’s a tough time to be a condominium owner in Florida. At properties facing millions of dollars of repairs, owners are contemplating whether their homes are worth saving. In Tampa, a group of owners at the Grande Oasis sued the condo board and an investor called West Shore investor that has taken over a majority of units there. They tried to argue that the association’s bylaws were changed unlawfully to pave the way for termination. They lost. Condo owner Doreen Roselli, who organized the lawsuit, said West Shore now has the numbers to force termination, which could leave her with no choice but to sell. She said the holdouts are facing increased pressure to sell from real estate agents. ‘They said sell now and you’ll get this much. If you wait you’re going to get crap,’ she said. ‘I’ve been looking around at other places but there ain’t no way I can afford to stay anywhere near here.'”

“Homeowners in Newton County are facing a financial nightmare as they discover liens on their newly purchased homes, placed by contractors who claim they were not paid for their work. The liens, known as mechanic’s liens, have left some homeowners not only worried but also facing foreclosure notices on properties they thought were secure. ‘A nightmare, an absolute nightmare,’ said Rachel Bradford, a homeowner affected by the liens. ‘If he can’t pay the people who actually work for him, what is he going to do to my family and me? How is he going to screw us over?’ Adding to the homeowners’ distress, Bradford revealed that over $200,000 of her money is still tied up in escrow. ‘That’s all the money I have,’ she said.”

“The housing market balance of power is tipping towards buyers, according to a new report from the Colorado Association of REALTORS. In July, the average price for a single-family home in the Pikes Peak Region was $574,276 according to PPAR. REALTOR Jay Gupta is a broker associate with Equity Colorado Real Estate. He didn’t want to give an exact timeline on when we could see average home prices eclipse $600K, as he didn’t want to mislead anyone. With more than 4,200 active listings in July, Gupta said that is a very healthy supply market, which sat at about 3.7 months. Gupta warns that if sellers list their home for too much, it may result in just one offer after months of being on the market, giving the seller a disadvantage. ‘If you only have one buyer, then basically that one buyer is negotiating your price,’ Gupta explained. ‘You have nobody else to talk to.'”

“Perhaps the best news for California’s ailing housing market is that mortgage problems remain below historical norms. That’s what my trusty spreadsheet review found in bill-payment data for consumers from the Federal Reserve Bank of New York. Lofty home pricing certainly put lenders on edge about buyers’ creditworthiness. And those ridiculous costs mean that only well-financed house hunters are buying. Ponder one early warning signal: The number of Californians entering foreclosure. The second quarter’s new foreclosures equaled 13 for every 100,000 California borrowers. Yes, that’s up from the recent bottom of 2. But look at the history books. Current foreclosure starts are below the average of 87 per 100,000 since 2003 and the 500 peak amid the Great Recession. Nationally, new foreclosures ran 18 per 100,000 in the second quarter, up from a recent low of 3 but below the 70 average or the record 240 after the housing bubble two decades ago.”

“A delayed spring market in Toronto-area real estate led to an uptick in July as buyers jumped at substantial price reductions. Andre Kutyan, broker with Harvey Kalles Real Estate sold about 10 of his own listings during July after cutting prices as the spring market wound down. ‘Every single one had price adjustments.’ He sold one three-bedroom house near Yonge Street south of Lawrence Avenue for $1.925-million after listing the property with an asking price of $2.199-million in May. The homeowners at 14 Brynhurst Ct. were selling at a substantial discount to the $2.52-million they paid in a bidding war at the peak of the market, Mr. Kutyan said. ‘That’s a big haircut,’ he notes, ‘but there was motivation.’ That was the theme with many of the transactions in July, he said. ‘They all had a reason to sell.’ As for buyers, they are weighing the benefit of buying now versus waiting to see whether prices continue to slide. Many are building some insurance into their offers. ‘They’re budgeting further drops in price.'”

“Mike Rampf, advisor with Engel & Völkers Vancouver, said there’s a lot of inventory in Vancouver’s downtown core, but return-to-office mandates could drive a resurgence in luxury condo demand. ‘During COVID, we had clients move to Nelson, and then all of a sudden the boss is saying, ‘Actually you need to come into the office a few more days,’ so their life in Nelson is now being squeezed,’ he said. Lower sale volumes across the board—detached, attached and ultra-luxury—suggest a mismatch between buyer and seller expectations. ‘I think buyers are reading articles saying the market’s taking a massive turn. Sellers spoke to their agent or advisor and got a number from them,’ Rampf said. ‘With the market shift, [sellers] haven’t adjusted their expectations and have this phantom value of their home that was yesterday’s value and not today’s.'”

“A builder accused of defrauding customers of more than £2m denies his business was nothing but a pyramid scheme. Mark Killick, 56, from Paulton in Somerset, denies 46 counts of fraud against homeowners across the west between December 2019 and November 2021 and is on trial at Bristol Crown Court. Customers allege they paid thousands of pounds for work that was barely started before Mr Killick disappeared. Mr Killick said the company had gone into liquidation due to factors beyond his control, and that it had cash flow problems. ‘The reason you had a cash flow problem was because you were running it as a fraud. A pyramid scheme,’ James Tucker, prosecuting, said. Mr Killick did not answer when asked where all the accounts setting out the company’s assets and liabilities were, or if any such documents had ever existed. ‘Is the reason there’s no full documents because all you need to run a Ponzi scheme is to keep selling and to put off any costs for as long as possible before the company inevitably goes pop?’ Mr Tucker said. Jurors have been told Mr Killick served time in prison after pleading guilty to fraud charges in 2014, and had previously pleaded guilty to further fraud charges in both 2008 and 2009. The trial continues.”

“The number of people making losses when they sell their homes is at the highest level since 2014, property data firm Cotality says, and Auckland sellers are being hit particularly hard. In three months, there was $128,362,612 lost by sellers. In Auckland, the number losing money increased to 15.9 percent. In Tauranga, it was 13.2 percent and Wellington 11.9 percent. Gareth Kiernan, chief forecaster at Infometrics, said the current downturn was so far shorter than one recorded from 1998 to 2001 and from 2008 to 2012. But he said there were signs that people who bought in the peak might have to hold on longer than in previous downturns to get back to neutral.”

“‘It’s worth noting that house prices are currently still sitting about 13 percent below their 2021 peak. At the same stage of the cycle, 13 quarters after the December 1997 and December 2007 peaks, house prices were only 2.0 percent and 5.5 percent below those respective peaks. In other words, although the 1998-2001 and 2008-2012 loss-making periods were getting close to ending by this stage of the cycle, this time around we’re still a long time away from everyone not facing a loss when selling property. Our current house price forecasts could see people in 2030 who bought at the peak of the market in 2021 still be making a loss if trying to sell. In the context of the NZ housing market experience of the last 75 years, that would be an incredibly long time to still be making a loss.'”

“Cotality chief property economist Kelvin Davidson agreed the downturn was ‘fairly prolonged.’ ‘The current cycle is deeper – in the GFC prices only fell about 10 percent peak to trough. This time they were down closer to 17 or 18 percent, we’re three-and-a-half years into the cycle and nowhere near the peak. This has been a deeper and more drawn out episode. In some ways we’re only halfway through or even less. It’s taking longer to accumulate gains and I guess it’s also taking longer to avoid losses.'”