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A Lot Of Price Reductions, Attributed To Sellers Overpricing In The Beginning

A report from the Denver Post on Colorado. “Home sellers in metro Denver came out ready to play ball in a big way in January, but buyers didn’t show up to meet them in equal numbers. The number of single-family home and condos sold in January fell 30.8 percent from December’s volume and is down 14.8 percent from the pace of a year earlier, according to the Denver Metro Association of Realtors.”

“In recent years, a lack of available properties held back sales. But sellers were game-day ready. They listed 3,312 single-family homes in January, up from 1,565 in December, and 1,509 condos, up from 734 in December. Despite lower mortgage rates, buyers didn’t engage as expected. The number of residential properties listed on the market, 5,881, is now 52 percent higher than January of last year.”

“The sluggish sales market continues to weigh on home-price gains. The median price of a single-family home sold last month was $425,000, down 1.16 percent from December and up only 1.67 percent over the past year.”

“DMAR has been hesitant to declare a buyer’s market, preferring to use the phrase ‘moving towards a balanced market.’ But for the high-end, homes worth $1 million or plus, it has acknowledged a shift in the balance of power.”

“‘There are 7.65 months of inventory in the $1 million plus price point, so the pendulum has fully swung and the luxury market has officially changed to a buyer’s market,’ Andrew Abrams, a member of the market trends committee, said in the report. ‘However, that hasn’t necessarily changed how quickly luxury buyers need to pull the trigger.'”

From Mansion Global on New York. “The number of sales in Manhattan and Brooklyn’s luxury market fell 28% in 2018, marking the largest year-over-year decline in the the past decade, according to Stribling’s year-end luxury report.”

“Garrett Derderian, director of data and reporting at Striblin said this drop in new development sales is partially the result of the large number of new homes available, leading buyers to take their time to make a move. ‘They want to negotiate a good deal, and the new development market has been slower to react to price drops,’ he told Mansion Global.”

“Alternatively, the resale market is regularly seeing price reductions.”

From Miami Today in Florida. “According to Redfin, over the past three months the market in Coconut Grove is ‘not very competitive,’ with a score of 7 out of 100. According to Redfin’s data, multiple offers are rare, homes sell for about 7% below their list price and go pending in around 105 days, and popular homes can sell for about 3% below their list price and go pending in around 43 days.”

“Interest in the Grove could be leading sellers and developers to overprice their properties. Over the past 12 to 18 months, Joe Higgins, broker for Grove Town Properties Inc, said he has noticed a lot of price reductions, which he attributes to sellers overpricing in the beginning.”

“‘There are so many variables when it comes to the market in general, when it comes to listing properties, pricing it to sell and actually getting it sold,’ Mr. Higgins said.”

The Santa Ynez Valley Star in California. “The local real estate market in 2018 performed well, but later numbers from the last part of the year indicate a downturn in the market. Sales and prices for all of 2018 were up significantly over the prior year, as shown in the chart, but the Santa Ynez Valley finished the year with a weak December and a weak fourth quarter.”

“In December, sales of single-family residences in the SYV decreased to 13 units sold from 23 units sold in December 2017, down 43.5 percent. The median price decreased 12.8 percent from $790,000 to $689,000 while the average sales price increased 60.8 percent from $898,256 to $1,444,192.”

“The average sales price is an exception to other weak numbers in December. This exception is not an indicator of underlying strength. With the small monthly volume in the valley, the average price can increase dramatically with a single sale of a property worth $5 million-plus, without any change to the median sales price.”

“As a further sign of weakness for the month, the average days on the market (DOM) increased significantly, from 81 days to 123 days, up 51.9 percent. Not only were sale and prices down, homes were taking longer to sell than the previous December.”

“In the fourth quarter, sales in the valley decreased from 75 units in 2017 to 48 units in 2018, down 36 percent. The median price decreased 2.5 percent from $735,000 to $716.500 while the average sales price increased 7.9 percent from $933,638 to $1,007,243. The DOM confirmed the broad market weakness for the quarter in the Santa Ynez Valley. The DOM increased from 105 days to 159 days, 51.4 percent longer to sell on average, than in the fourth quarter of 2017.”

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This Post Has 71 Comments

      1. Hmmm…. you can say that about the entire planet, can’t you? RMS, I’ll bet you have never been there. Got Ice?

        2. So I google-mapped Santa Ynez. Compared to my Eastern stomping grounds, nope, it’s not beautiful. But it’s better than other parts of SoCal, with those ugly scrub hills everywhere.

          Yeah, long dreary winters aren’t great, but there are plenty of areas that have mild winters. Especially if you don’t have a job. You can just hole up for a couple days.

        3. Growing-up in San Jose, we visited grandma in Santa Ana, and every year it seemed like the San Gabriel mountains to the north were always on fire, a huge orange glow in the night sky. Most of southern California from San Diego to Santa Barbara directly face the Pacific Ocean, so when the storms hit they do so with a vengeance. San Jose rests in a valley with a mountain range between it and the ocean, so it gets a fraction of the rainfall, annually 130-inches on one side vs 14-inches in the Santa Clara valley.

  3. ‘In recent years, a lack of available properties held back sales. But sellers were game-day ready. They listed 3,312 single-family homes in January, up from 1,565 in December, and 1,509 condos, up from 734 in December. Despite lower mortgage rates, buyers didn’t engage as expected. The number of residential properties listed on the market, 5,881, is now 52 percent higher than January of last year’

    Wa happened to my shortage Denver?

        1. Except there is no shortage of housing stock, only a temporary shortage of “for sale” housing, due to rampant speculation.

        2. That article actually said that boomer homes are “held off-market” by people LIVING in them! It takes decades of extremely screwed up housing policy to produce that kind of distorted logic.

      2. “Damn you boomers, DIE ALREADY”

        When are the millennials going to push the rest of us into a wood chipper? 🙂

        1. Boomers won’t even stop working let alone die off! The poor ones love the free samples at Costco!

          1. Boomers do love Costco. My dad goes to Costco just for fun. I can always tell when he’s stressed because he just goes to Costco and comes in with tons of stuff that he doesn’t need.

          2. Heh. Costco has to the be the WORST place to go impulse buying. What does he com home with, a 12 pound bucket of cottage cheese and a 96-pack of paper towels?

            Send him to the dollar store or something.

          3. Boomers are still working because they can’t find health insurance otherwise, even if they have enough money stashed away. Even if the men are past 65 and can get Medicare, most of them got rid of the old battle-axe and took on a younger trophy wife, and he needs to work to get health insurance for her.

            So take that under advisement, guys in mid-life crisis. You want a younger thigh gap, prepare to work until you’re 75.

          4. the old battle-axe

            A more practical strategy would be for the older man to hook up with a young woman who has her own health insurance, her own income and her own retirement.

          5. “My dad goes to Costco just for fun.”

            You need a Hooters bar-n-grill for him, big titty hugs abound, which should cheer him up! 🙂

          6. A more practical strategy would be for the older man to hook up with a young woman who has her own health insurance, her own income and her own retirement.

            I suspect women like that have no shortage of suitors. No need to deal with some annoying needy old man.

          7. I suspect women like that have no shortage of suitors.
            She’d be better off as a cougar sugar-momma!

      3. Read the article, they are mostly referring to The generation before boomers. The greatest generation I believe what they were/are referred to as

        1. That makes sense. This cohort is also called “the silent generation” because they show up for work, do their job, and don’t complain. No sense of entitlement and no self-indulgence about making everything about themselves on social media.

        2. The silent generation has spent more years in retirement than they worked enjoying generous defined benefit pension plans.

          3. The “silent generation” or “greatest generation” are the ones who bought 5 acres of ocean view property for $5,000.

          4. I knew several triple-dippers who were retired, and they received more money in retirement than I did while employed as a Civil Engineer with considerable responsibilities.

  5. I came across this press release:

    https://www.pressadvantage.com/story/24435-real-estate-consultants-offer-advice-on-short-sales-in-nashville-tennessee

    ‘Many homeowners may find themselves wondering when the best time to start a short sale is. The answer is very simple. The sooner, the better. If they have tried other options such as refinancing, modifying their loan, or even trying to sell their home in Nashville, TN, and those options have not worked, then it is a good idea to go the route of a short sale.’

    ‘Doing a quick sale is common for homeowners in Nashville, Tennessee who have fallen behind on their mortgage payments. Dependable Homebuyers has been helping homeowners for years that have fallen behind on house payments in Nashville. They are local agents who have helped many homeowners in Nashville who are facing foreclosure and want to sell their home.’

    ‘Simply put, a short sale is a real estate deal that allows a homeowner to sell their home for less than what is actually owed in order to prevent foreclosure in Nashville. At that point, the lender has to approve the deal. In approving it, they are agreeing to accept less than what is owed on the remainder of the mortgage. Upon approval, the loan is then forgiven and the homeowner get out from under the property.’

    Oh dear…

    1. Woah, short sale. Haven’t heard that term since 2011-ish.

      But Nashville was the hottest of the hot not long ago. Everyone was moving to Nashville!

      1. Even people who already lived there were going to move away just so they could move to Nashville again.

      2. I remember hearing about how hot Nashville was 3 years ago, with stories of flippers. The jig on the pig is up.

    2. “Many homeowners may find themselves wondering when the best time to start a short sale is. The answer is very simple. The sooner, the better….”

      __________________________________________________________________________

      “How did you go bankrupt?”

      “Two ways. Gradually, then suddenly.”

      ~Ernest Hemingway

  6. ‘DMAR has been hesitant to declare a buyer’s market, preferring to use the phrase ‘moving towards a balanced market.’ But for the high-end, homes worth $1 million or plus, it has acknowledged a shift in the balance of power’

    ‘There are 7.65 months of inventory in the $1 million plus price point, so the pendulum has fully swung and the luxury market has officially changed to a buyer’s market’

    Translation: we gotta lot of Audi and BMW loans that aren’t going to pay themselves.

    1. Prospective buyer Celena Vittorio may become the new “Suzanne researched this” running joke of this bubble bust: Here is what she said, and I quote: “You certainly don’t want to buy at the top of the market”. Vittorio was referring to the top of the MORTGAGE RATE market, but was it a Freudian slip? Vittorio had a look on her face that she had just said something that didn’t sound quite as intended in retrospect.

      Agent Laura Barnett: “We actually did aget a surge in buyers coming in. I worked with two this weekend, one of which is under contract, the other one is about to be”.

      Tells you right there how Laura thinks of buyers. It is *buyers* that are “under contract”, not properties, in her mindset. Go get those buyers under contract, Laura!

      1. “…Prospective buyer Celena Vittorio may become the new “Suzanne researched this” …”

        I saw that segment on NBR also.

        The whole segment had a staged quality about it.

        Now, in retrospect, the stand up interview of Celena Vittorio seems *too* perfect, as if she was rehearsed.

        I wonder if there is a “Take 2 or 3” of her speech in the outtakes.

    2. But wait, there is more. The woman presented as prospective homebuyer Celena Vittorio appears to be also known as Celena Rae, a singer and American Idol contestant in 2004. She has a website where she touts her availability for, among other things, speaking engagements. There is probabaly even more to this story that we do not know yet.

  8. A blast from the, oh, so distant past. Oh, wait, this, oh, so distant blast is from … is from last December. Sorry, my bad …

    “Lack of affordable homes is hurting the housing market”

    (snip)

    “More inventory of affordable homes is needed to get the housing market back on an upward path. There is still a sizable pent-up demand.”

    “There is still a sizable pent-up demand” that apparantly went poooof in just one month.

    Somebody is a lion.

    https://thehill.com/opinion/finance/422485-lack-of-affordable-homes-is-hurting-the-housing-market

    1. The top comment on that TheHill article sums everything very nicely:

      “There is no money in building $125,000 houses.
      And neighborhoods in that price point don’t really hold up very well. Turn into rental ghettos pretty quick”

      1. There is no money in building $125,000 houses.

        There may soon be no money in building $500,000 or $million houses.

        1. There’s even less money in the $500k+ market, because when nothing sells, you’re out MUCH more cash.

  10. In fannie/freddie specified market condition reporting requirements, the acceptable definitions for market conditions are: stable, increasing, or declining. There is no option to report as “returning to balance”

    The only place where the term ” balance” is used is in supply and demand descriptions. I do not think this is what the RE agents were referring to. Since there were reduced sales in a supposed inventory shortage and prices leveled, then one does not reinforce the other in today’s changing market.

    In other words. It’s all just realtorbabble.

  13. A couple of years ago we were discussing the gigantic credit expansion in China being some $26 Trillion. Now this:

    “China entered 2008 with $8 billion in officially counted debt; 10 years later that debt is $40 trillion, plus unknown trillions more in the shadow banking system which expanded the options for risky speculation and massive expansions of credit.”

    What was unimaginable is apparently alot worse!

    http://charleshughsmith.blogspot.com/2019/02/chinas-s-curve-of-expansion-stagnation.html

  14. Reductions, reductions, drip, drip, drip. GAH! Can we just have a clusterfark of a collapse like in 2008?

    1. We’re still in the white hot part of the credit cycle. Money is sloshing around everywhere, households are partying like the good times will never end, etc.

      1. I’m hearing June is when we’re going to see the horrors. Of course, this is coming from the Greg Hunter guest pundit crowd.

        1. I’m skeptical. There’s too much money out there right now. The traffic is unbearable, much worse than 2005. All the eateries and stores are packed. That’s my anecdotal evidence that we’re still in the belly of the beast.

          1. “The traffic is unbearable, much worse than 2005. All the eateries and stores are packed.”

            Are you in San Jose?

      2. For Blue and everyone who talks about the bubble going back 40 years, you might enjoy this chart –

        SF Bay Area Real Estate Market Cycles 1984-2017*

        1984-1990: + 100% (6 years)
        1991-1994: -11% (3 years)
        1995-2001: +100% (6 years)
        2001: -10% (1 year)
        2002-2007: +59% (5 years)
        2008-2011: -27% (3 years)
        2012-2017: +80% (5 years)

        It’s too bad they don’t go back to the late 70s (where I’ve seen house price histories that doubled from 79-81), but still pretty comprehensive. What’s surprising is how the alleged Great Bubble of 02-07 pales in comparison to previous, unrecognized early stages of the bubble.

        *https://www.bayareamarketreports.com/trend/3-recessions-2-bubbles-and-a-baby

  15. Someone has finally found a practical use for cryptocurrency: To support traditional gambling activities…

    A record number of people are gambling on blockchain — literally
    Published: Feb 6, 2019 12:53 p.m. ET
    ‘It’s fun and people are making money,’ says head of Diar research
    Getty Images
    By Aaron Hankin
    Reporter

    Detractors of blockchain technology often label investing in the nascent industry as gambling. Now, ironically, one of the biggest growth areas in blockchain technology is just that: gambling.

    After raising more than $4 billion in token distribution, EOS has surpassed ethereum as the most active blockchain, accounting for around half of all U.S. dollar-traded volume on dApps, thanks in part to developers of decentralized gambling apps, according to blockchain analytics firm Diar research.

    “As of January this year, to date, EOS dApps are accounting for 55% [and] Tron 38%, leaving ethereum applications with a mere 6% of total on-chain USD volume. But there is a clear group levitating towards the two new blockchains — gamblers. Of the $5.5 billion already transacted on EOS, 70% go towards gambling dApps. This number is over 95% for Tron,” Diar said.

    https://www.marketwatch.com/story/a-record-number-of-people-are-gambling-on-blockchain-literally-2019-02-06

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