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If You Look Around, You’ll Realize We Have Excess Homes That Are Unoccupied

A report from Hawaii News Now. “The median sales price for a single-family home on Oahu dropped again in January for a fourth consecutive month thanks to more inventory, new statistics from the Honolulu Board of Realtors show. ‘We started 2019 with very healthy increases in new listings for both single-family homes and condominiums, adding to the inventory available to potential buyers,’ said Jenny L. Brady, president of the Honolulu Board of Realtors.”

From KHON 2 on Hawaii. “According to the Honolulu Board of Realtors, new listings of single family homes increased by 21.8% while condominium listings increased by 18.8%. But sales for single family homes were down 2.4% and prices were down slightly to $767,000. Condo sales also dropped by 12.8% and the median price dropped to $399,000.”

The Denver Business Journal on Colorado. “The number of listings in metro Denver’s January 2019 housing market was up 52 percent compared to January 2018, according to the latest Denver Metro Association of Realtors report. Jill Schafer, chair of the DMAR market trends committee, said that buyers should be doing a ‘happy dance’ because they finally have choices.”

“‘Even though the Denver metro area is still a seller’s market in most price ranges, there’s no doubt this is the best time to buy in a long time,’ she said.”

The Real Deal on New York. “Westchester developer Michael D’Alessio, who pleaded guilty to fraud charges in November, sold multiple development projects at bankruptcy auctions over the last few months, court records show.”

“Among them are two boutique Manhattan condominium buildings on the Upper East Side. A development at 227 East 67th Street, where D’Alessio’s Michael Paul Enterprises and its broker originally planned to sell five units for $28.5 million, sold for $15 million at auction. And 184 East 64th Street, where D’Alessio put five apartments up for sale totaling $42.5 million, sold for $17.5 million to an anonymous LLC, records show.”

From Curbed Hamptons in New York. “Located in North Haven on almost a full acre of waterfront land, the shingled home of late fashion icon China Machado has just seen another cut in asking price. Originally listed for $9.8 million when it came on the market nearly a year ago, the former model’s unique and artistic house is now available for $7.85 million.”

From Fox 59 on Indiana. “A new study from Ball State University is shedding some light on the housing market in Indiana. Building a new home carries quite the cost, and in some counties, the cost is more than the value.”

“‘In most places in Indiana, in about two thirds of the counties, it’s not profitable to build a new home,’ said Michael J. Hicks, Director of the Ball State Center for Business and Economic Research. ‘If you look around the state, you’ll realize we have 300,000 excess homes that are unoccupied,’ Hicks said. ‘That’s enough to house one in three Hoosiers.'”

“‘Hamilton County is probably among the best places for new home construction in America right now,’ Hicks said. ‘I would say it leans a little bit more towards a seller’s market,’ Hicks said. ‘But we’re seeing a little bit more inventory coming on the market right now.'”

“As the state looks to address the issue of affordable housing, Hicks hopes his study will show the issue starts with supply and demand. In order for homes to be built, developers need a reason to build them. ‘I think most Hoosier policymakers need to understand we don’t just have one problem,’ Hicks said. “If builders don’t find it profitable, then there’s some more fundamental problem in that community, and just throwing tax dollars at it is not a good way to solve that problem.'”

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This Post Has 49 Comments

  2. ‘In most places in Indiana, in about two thirds of the counties, it’s not profitable to build a new home…If you look around the state, you’ll realize we have 300,000 excess homes that are unoccupied…That’s enough to house one in three Hoosiers’

    Sounds like you don’t need to build more shacks Mike. You just need the prices to crater. Don’t worry, it’s coming.

    1. Indiana is a poor rural state. How many of those 300,000 empty homes are within any kind of driving distance of a job, or are even habitable?

      2. Unlike all those rich federal workers out east who hit the food banks when their checks are delayed 2 weeks.

        1. To be fair, many of those folks at the food bank were on the low end of the payscale (never rich to begin with). Or they were contractors who area also low-paid (janitors, administrative assistants, computer techs)

          But at the higher pay levels, no sympathy. Feds have been under threat of shutdowns for the past decade. They should know to keep at least 5-6 weeks living expenses easily accessible.

  4. ‘Westchester developer Michael D’Alessio, who pleaded guilty to fraud charges in November, sold multiple development projects at bankruptcy auctions over the last few months, court records show’

    Reportedly a ponzi scheme. So we’re watching tens of millions go to money heaven, almost daily for over two years. Got a bubble yet Manhattan?

  6. Jill Schafer, chair of the DMAR market trends committee, said that buyers should be doing a ‘happy dance’ because they finally have choices.”

    Ya know, Jill, I think I’ll hold off on doing a ‘happy dance’ until this glut of inventory is priced to sell. But I may start getting happy feet when foreclosure notices start going up on every street.

    1. (snip)

      “The layoffs are happening at the wrong end of the spectrum,” one anonymous poster wrote on the message board. “Should have been a top down changeover.”

      This puke is definitely clueless as to how the real world works. I wish I could find out who he is so as to float him a killer loan or two.

      A nation of dummies.

    2. The boots info is more valuable than all this crap analysis from Attom and whoever else. So if home improvement is down, maybe it’s a good time to get an electrician to do a few things.

      (side whine: my nabe is constantly beset by door-to-door folks trying to set up estimates for doors/windows/roofing. Same thing at the home-n-garden conventions. I can’t walk past a booth without being accosted by doors/windows/roofing! It must be a really profitable field if so many outfits are doing it.)

      1. A good contractor NEVER goes door-to-door. Those are scammers. Don’t even hire one of those. I mean, EVER.

    1. The paroxysms of fear rippling through global asset markets have sparked a flight-to-quality move into risk-free bonds and government-guaranteed mortgage-backed securities. As a result, mortgage rates have plummeted, tempting knifecatchers to buy a home at a very risky point in the economic cycle.

      Mortgage rates fall to 10-month low
      February 7th, 2019 by Staff and wire reports in Business Around the Region
      Read Time: 2 mins.
      U.S. long-term mortgage rates fell this week to a 10-month low, spurring on potential homebuyers for the upcoming season.

      Mortgage buyer Freddie Mac said Thursday the average rate on the benchmark 30-year, fixed-rate mortgage eased to 4.41 percent from 4.46 percent last week. Despite the declines in recent weeks, home borrowing rates are above last year’s levels. The key 30-year rate averaged 4.32 percent a year ago.
      …

  10. I’m starting to get the impression that the Bernanke Fed’s short squeeze on housing is busted.

  11. What’s vexing Mr Market today? After a record run since December 24, Wall Street is facing its second baby bear dip in a row.

    1. Think the stock market will rally once a U.S.-China trade deal is struck—think again, says one Wall Street vet
      By Mark DeCambre

      Published: Feb 7, 2019 9:03 a.m. ET
      Share
      I guess by this logic, no China trade deal would trigger lots of selling.

      Think the stock market will rally once a U.S.-China trade deal is struck—think again, says one Wall Street vet
      By Mark DeCambre
      Published: Feb 7, 2019 9:03 a.m. ET
      Matthews says that a China trade deal may trigger selling in the market
      …
      Since accelerating a December selloff on the last trading session before Christmas, the Dow Jones Industrial Average (DJIA, -0.98%) and the S&P 500 index (SPX, -1.08%) have both gained more than 16%, while the Nasdaq Composite Index (COMP, -1.17%) has advanced by 19.3% over the same period.

      In other words, a potential Sino-American trade deal is already baked in to stock prices and may result in a selloff rather than a rally once an agreement is reached, in keeping with the market adage, “buy the rumor, sell the fact.”
      …

      1. So when China sneezes, the US catches the flu? That’s not really a place I would want my country to be in.

    2. It’s called suck ’em in and shake ’em out. The rally sucks ’em in and the dip shakes ’em out.

      In a logical world a rally should shake people out because the higher prices go the closer to the top they get. A dip should draw people in because the lower prices go the more value one gets for his money.

      This works for Macy’s but it doesn’t work for stocks. Or for houses.

      A nation of dummies.

      1. This works for Macy’s but it doesn’t work for stocks. Or for houses.

        Or anything where prices get set by speculators. Thanks to Ben for getting that through my skull…

    4. The Zectron bouncing ball, just landed x1 $tep lower, known as “European output$” landing … (more $teps below, $tay alert$!)

      1. Oof…check out the German 10-year bond yield. A 5-basis point move exerts a lot of leverage near the zero bound!

        Treasury yields slip as forecast for eurozone slowdown stokes global growth worries
        Published: Feb 7, 2019 1:54 p.m. ET
        Recent eurozone data suggests global economy is fast losing steam
        By Sunny Oh

        Treasury yields fell Thursday, dragged lower by a slide in European yields after eurozone growth expectations for this year were slashed, adding to mounting concerns a global economic slowdown was under way.

        The 10-year Treasury note yield (TMUBMUSD10Y, -1.80%) slipped 4.1 basis points to 2.663%, while the 2-year note yield (TMUBMUSD02Y, -1.45%) was down 3.6 basis points to 2.488%. The 30-year bond yield (TMUBMUSD30Y, -1.19%) fell 3.2 basis points to 3.006%. Bond prices move inversely with yields.

        The German 10-year bond yield (TMBMKDE-10Y, -28.83%) retreated 5 basis points to 0.115%, while the Italian 10-year yield rose 12.4 basis points to 2.961%. Treasurys and their German peers often follow each other as they’re both considered haven investments.
        …

    6. Oh snap!

      ft dot com
      US-China trade dispute
      Donald Trump rules out Xi Jinping meeting before key trade deadline
      Equity markets fall as hopes fade for agreement before tariff increases are triggered
      Donald Trump answered ‘no’ when asked by reporters in the Oval Office on Thursday if he would meet Xi Jinping before the March 1 deadline © Bloomberg
      James Politi and Demetri Sevastopulo in Washington 3 hours ago

      Donald Trump has ruled out a meeting with Xi Jinping, the Chinese president, before a March 1 deadline for the US to reach a trade deal with Beijing, dashing hopes of an agreement to prevent an escalation in tariffs between the countries next month.

      Mr Trump had stoked expectations of an upcoming summit with Mr Xi just last week, when he said that no trade deal would be reached with China until the two presidents met “in the near future” to agree on the “more difficult points” in their economic relationship.

      On Thursday, however, the US president answered “no” when asked by reporters in the Oval Office if he would meet Mr Xi before the deadline, and shook his head.
      …

  14. “‘Even though the Denver metro area is still a seller’s market in most price ranges, there’s no doubt this is the best time to buy in a long time,’ she said.”

    I’m shock! Just shock!!! So not last year or 6 months ago but NOW…

      1. I generally respect Mauldin, but he is grossly oversimplifying Modern Monetary Theory and and also higher marginal tax rates. The way to think about Modern Monetary Theory is that it would be an inflation tax by increasing the money supply, much like how deficit spending beyond normal productive increase in the economy results in a reduction in purchasing power in the aggregate for dollar holders. A mild Modern Monetary Theory would be similar to the effect of tariffs in the sense that higher costs get passed on although the mechanism of transmission is different. MMT is just liberals wanting to deficit spend differently than Republicans.

        Mauldin is right about the practicality of a wealth tax and the efficiency of such as tax, however. But even so, the fact of the matter is that the effective US tax burden is very low compared to other OECD countries. Not sure 70% is the right number for the top bracket, but I do think it should be higher than it is. Rather than raising the top marginal income tax, I would rather see focus put on taxing capital and income similarly.

        The other assumption implicit in this is that people work and start companies mainly for money. Of course monetary rewards are a major impetus for economic activity, but it is not the sole economic driver. All good companies and economic activity do not sprout from the lowest tax haven. Nordic countries have abundant start-ups and they have a high tax rate and higher equality.

        1. Is for MMT, the Fed already does this

          It isn’t complicated.

          As for MMT, the Fed already does this. How’s that been working out for us in general?

          The issue behind all this tax the rich chatter is Socialism. Some people want more central control and they want to be at the center of power themselves. They will become rich doing this and the rest of us poorer. Witness Venezuela or Bernie Sanders.

          I don’t want to pay for your flying car or a 4th house for Bernie. I want to pay for my own beer and pizza.

          1. The issue behind all this tax the rich chatter is Socialism.

            Not really. There are some things the private market does better and there are some things that should be “socialized” and done by the government. Also, there are some on the right, left, and the middle that still believe deficits do matter. The boogie monster of “Socialism” is trotted out to avoid critical analysis of the issue at hand. Ray Dalio was right: the top .1% of the population has more wealth than the 90% of the population. We won’t be able to balance the budget on the backs of the poor and the middle tax alone. Taxes have to go up, but mostly on the wealthy because they have been very richly rewarded, more than any other group by far.

            We shouldn’t be running trillion dollar deficits and eventually we will need to pay for the debt we are running.

  16. The word from Boise: ” I don’t see a crash coming, but I do see prices are going to most likely level off, if not drop a bit. The problem I see is there still is an influx of people moving here and the inventory is low. ”

    Real Estate Professional

  18. Oh yes, now is a great time to buy with the current conditions per the realtor comments. How about a year from now or longer? Sounds better to meeeee. That might be a really good time to buy.

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