February 10, 2016

An Oversupply Of Luxury Inventory

The Visalia Times Delta reports from California. “The Visalia Planning Commission will consider whether to grant a three-year extension to build a 219-home subdivision on the city’s west side. Members of the commission approved a tentative map for the planned Lowery Ranch subdivision back in March 2014, but the project never moved forward. Last year, the developers successfully received a one-year extension on that approval that will run out late next month. The delay in the planned Lowry Ranch development reportedly was due to the hit the local housing market took in the recent recession.”

“‘The reason for the request is that the housing market, while recovering somewhat, has not returned to its full strength yet,’ states a letter sent earlier this month to the commission by Visalia’s C.J. Ritchie Farms, which is working to subdivide the 72.5-acre parcel and turn most of the property into single-family home sites. It goes on to say that the developers expect to be ‘ready to go’ once the current inventory of available homes in the Visalia area is reduced.”

From Multi-Housing News. “Founded in 1983, Bethesda, Md.-based ROSS Cos. was the vision of Scott and Beth Ross, with the goal of becoming a leading owner, operator and renovator of multifamily assets in the Mid-Atlantic region area. MHN got a chance to catch up with the ROSS Cos. duo to see what’s in store for multifamily in 2016 and how the company adjusts to the continuously evolving state of the industry. MHN: What are some challenges coming up in the multifamily sector? Are there any supply/demand or pricing risks? Scott: With regards to D.C., we’re seeing an oversupply in the short run of new high-rent Class A units with small square footage.”

The Temple News on Pennsylvania. “Property values in and around Main Campus experienced the biggest jump in price increase in Philadelphia last year. The number and price of houses being sold has increased gradually since 2012, but hit its peak in 2015. Despite the recent sales spike, some are concerned that the price increase is creating a housing bubble, very similar to the one in 2007. ‘It is a classic situation with a bubble, when you have that many for-rent signs,’ said David Elesh, an associate professor of sociology. ‘You have a lot of vacant units. The costs don’t disappear and you pretty much hit a limit with the amount of students.’”

“‘Ultimately, you are going to see more abandonment. If they cannot rent those places or sell those places then they cannot take the strain on their finances,’ he said.”

The Aspen Times in Colorado. “Two reports issued last week showed a drop in January property sales volume in Aspen compared with January 2015. The city of Aspen’s Finance Department reported that its real estate transfer tax collections were down 69 percent for the affordable-housing fund last month, and down 67 percent for the Wheeler Opera House portion.”

“Also, the city’s collection of $140,258 in Wheeler transfer tax payments was 52 percent lower than the $293,000 budgeted for January. The housing portion reaped $253,985, 53 percent below the budget of $546,000, the report shows. Additionally, property broker Chris Klug’s newsletter noted that Aspen had $24.29 million in total sales volume last month, compared with $91.535 million in January 2015.”

The Houston Business Journal in Texas. “Houston home prices hit a new peak in 2015, but are now falling amid the oil slump, according to a new national report. RealtyTrac released its 2015 U.S. home sales report, which found that more than a third of 87 housing markets nationally — including Houston — hit all-time home price highs in 2015. However, Houston saw home sales prices start to slip in the fourth quarter of 2015, according to RealtyTrac. Some housing experts say Houston is most at risk nationally for falling home prices amid the oil slump.”

“Eight U.S. cities — including Houston — saw year-over-year declines in the median home sales price in December. The Bayou City was the largest of these cities nationally to post a decrease in December, according to RealtyTrac.”

From Greenwich Time in Connecticut. “It’s an economic concept that not even the Greenwich housing market can escape: when supply outstrips demand, prices drop. The average sales price for a Greenwich home fell 13 percent in the fourth quarter compared with a year ago, Douglas Elliman Real Estate said in a report released last week. The luxury home market, defined by the New York-based broker as anything the top 10 percent with the highest asking price, fared even worse, with a decline of 23 percent. In Greenwich, that’s anything listed north of about $4.5 million, including numerous eight-digit outliers like the $26 million former-Mel Gibson estate at 124 Old Mill Road, which has been on the market for well over a year.”

“‘There is an oversupply of luxury inventory in Greenwich,’ said Rob Vannucchi, executive vice president for Connecticut at Douglas Elliman. ‘Anytime supply is greater than demand, pricing will go down, and that’s what we’ve been seeing for some time now … the ultra-high end market is certainly not doing as well as we would hope.’”

“Vannucchi said the environment is not unique to Greenwich. Many of the affluent bedroom communities surrounding New York City — including Westchester County and Long Island — where former-city dwellers have historically moved to put their kids in good public schools, are facing the same issue as Greenwich: too many luxury single family homes, too few condos.”

Real Real Estate and How to Profit

Long time poster, guest writer and friend to this blog, Jack McCabe has launched a new service I wanted to pass along. I do this not for compensation, but for the benefit of those who read here and because of a sincere respect for Mr McCabe’s insight. Best wishes for the new venture.

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Bits Bucket for February 10, 2016

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February 9, 2016

One Of The Big Bads Is Starting To Emerge Again

The Globe and Mail reports on Canada. “A Vancouver MLA is demanding that the B.C. government appoint an independent investigator to hold an inquiry into how the real estate industry is regulated after a Globe and Mail report outlined a technique in which Vancouver-area properties flip one or more times before a deal closes. The technique, which brings profits for speculators but higher prices for buyers, has sparked a torrent of criticism in the province. ‘The investigation needs to be independent because the government has already said it doesn’t think there is a problem,’ said MLA David Eby.”

“In one example before the courts, a West Vancouver homeowner alleges that a real estate agent and a buyer devised a scheme to buy his home for $5-million, then sold that contract to other speculators – during the six-month closing period – until an end buyer agreed to pay $7-million for the property. The $2-million ‘lift’ would be shared between the middlemen.”

“‘There is a lot of speculation in this market – but lack of government intervention is as responsible as the speculators themselves,’ said Vancouver real estate agent Allyson Brooke of Macdonald Realty. Ms. Brooke said Vancouver homeowners should reverse the saying ‘buyer beware’ to ’seller beware.’ She said agents should not be allowed to act for both sellers and buyers, as was the case with some of the deals in question. ‘Lawyers and notaries do not act for a buyer and seller in the same transaction; neither should realtors. The scenario is fraught with potential for unprofessional behaviour, I am very sorry to say.’”

The Canadian Press. “Allegations of fraudulent practices and insider trading by some Metro Vancouver real estate agents have prompted the provincial New Democrats to call on the British Columbia government to investigate. NDP housing critic David Eby alleges some realtors have been avoiding property transfer and capital gains taxes while exploiting a clause in contracts that allows for a series of home flips.”

“He also alleges real estate agents have been assisting clients to hide foreign origins of money used in transactions by putting the broker’s address instead of the purchaser’s address on federal anti-money laundering forms.”

The Ottawa Citizen. “When the National Capital Commission set out its vision for LeBreton Flats in 2014, it said it wanted to see the vacant lands developed ‘for primarily non-residential animating uses, such as museums, galleries, special attractions hospitality and office space.’ Even so, residential uses are significant in the two proposals submitted by the Devcore Canderel DLS Group and the RendezVous LeBreton Group. The latter’s plan calls for nearly 4,400 housing units, while DCDLS envisions at least 2,500 units and possibly as many as 4,000.”

“DCDLS’s plan calls for 2,500 units, ‘based on how we see the market right now,’ says Daniel Peritz, a senior VP at Canderel. All but 200 of the 1,100 units planned for DCDLS’s first phase would be rental. That’s largely because there’s a glut of condos in Ottawa at present, Peritz says. ‘If the condo market comes back, it’s certainly something we would consider.’”

The Calgary Herald. “Single-family home buyers saw a downtick in selection and the lowest prices in 16 months through Calgary’s resale market last month. The benchmark price for single-family homes in Calgary was $509,300 in January, sinking 2.6 per cent from $522,900 a year earlier, says the Calgary Real Estate Board. A $505,600 benchmark in April 2014 was the last time the price was lower.”

“The market for single-family homes expanded by 1,488 listings in January. Single-family home sales also cooled off in January. There were 465 transactions last month in Calgary, easing 67 sales from activity a month earlier. Year-over-year, sales dipped 13 per cent from 534 in January 2015. ‘The recent slide in energy prices has raised concerns about near-term recovery prospects for the city,’ says CREB chief economist Ann-Marie Lurie. ‘Energy market uncertainty and a soft labour market are weighing on many aspects of our economy, including the housing sector.’”

From Metronews. “The word among oil executives who pass through town on their way to the mine sites is the slump could last until late 2017, early 2018, she says. The plunge in the world price of oil, from a high of $100 (U.S.) a barrel to $30 in just 18 months, has already taken a huge toll on the country. It has wiped out 40,000 direct industry jobs and an estimated 150,000 indirect ones. Canada’s economy has lost $50 billion in national income — roughly $1,500 per person, according to the Bank of Canada.”

“It has taken a big toll on Alberta, which is now in recession and it is magnified in communities like Fort McMurray. Hotel worker Mary Anne Guray’s husband lost his job as a janitor in May 2015. He worked cleaning executive offices at the oil industry sites outside the city, she explained. As the price of oil plummeted, those companies slashed expansion plans, and some of the work camps closed.”

“Now she’s worried they won’t be able to hang on to the home they bought last year. A modest row house built in the ’70s costs $500,000 in Fort McMurray, where sky-high wages also brought sky high inflation during the boom. Average house prices, at $560,000, are the highest in the province, higher even than Calgary, where the oil industry is headquartered. ‘Maybe we’ll just have to surrender the keys,’ Guray says, echoing a popular phrase in town that refers to handing the house back to the bank for resale and sucking up the loss on your down payment. ‘A lot of people already did that.’”

From CBC News. “One of the big bads from the 1980s is starting to emerge again in Alberta. Jingle mail — the act of walking away from an underwater mortgage by mailing your keys back to the bank — is a peculiarity of the Alberta residential market and an act of desperation. However, a combination of high debt and lost jobs make it an option in a province going through a significant economic reckoning.”

“‘We’re slowly starting to see it in Grande Prairie and Fort Mac,’ said Don Campbell, senior analyst with the Real Estate Investment Network. ‘People saying that we can’t make a go of it and mail the keys to the bank. In the big cities, not so much because the average sale prices haven’t really dropped much, we haven’t seen the pain yet. But Calgary is getting pretty tight.’”

“Bruce Alger, an insolvency trustee at Grant Thornton in Calgary, said he is dealing with one such case and has heard of more. ‘It’s when you see high-end home prices drop 20 per cent below the peak,’ said Alger. ‘I think there are people considering walking away and I’ve talked to one or two myself.’”

“Alberta is the only Canadian province to broadly offer non-recourse residential mortgages. Those are loans with at least a 20 per cent down payment and thus are not insured by the Canada Mortgage and Housing Corporation (CMHC). If you walk away, you lose your home, but otherwise have no personal liability. Elsewhere in Canada, your lender can take you to court and seize other assets, such as RRSPs, vehicles, and even garnishee your wages. ‘These non-recourse mortgages could create incentives for some homeowners facing an income shock to pursue a strategic default and thus place further downward pressure on prices,’ read one of the reports obtained by CBC News.”

“Joel Semmons, a realtor in Calgary with Re/Max, said that while the average home price in Calgary is only down by a few per cent, homes worth more than $1 million have seen their value drop by much more. ‘In the million-dollar plus markets, I was quite active in January,’ said Semmons. ‘I had four higher end sales last month, all four transactions, the values were off 20 per cent to get a buyer to the table, in order to get a deal to stick. If you took out your mortgage say the summer of 2014, just before everything started to come unglued, you would have purchased right at the peak,’ said Alger.”

“He uses the example of a home bought for $1.8 million, with 20 per cent down and a roughly $1.4-million mortgage. ‘There are lots of houses in that price range in the newer, higher end suburbs and the appraisals have been coming in at less than the $1.4 million on the mortgage.’”

Bits Bucket for February 9, 2016

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February 8, 2016

A Slowdown In Sales And A Potential Supply Glut

A report from the Wall Street Journal. “Quicken Loans’s Super Bowl ad has sparked rumblings over whether we should worry about a new housing bubble. ‘What if we did for mortgages what the Internet did for buying music and plane tickets and shoes?’ a narrator says. The 60-second spot then opines about how Quicken’s new product, called the ‘Rocket Mortgage,’ might do that. It would unleash ‘demand for necessary household goods as our tidal wave of ownership floods the country with new homeowners who now must own other things.’ CNET says the ad ‘might send a shiver down your spine.’ Bloomberg Business says it falls into the realm of having ‘forgotten that the financial meltdown ever happened.’”

The Real Deal on New York. “Wary of a slowdown in high-end apartment sales and a potential supply glut, lenders are beginning to retreat from Manhattan’s luxury condominium market. Many banks are either cutting down their luxury condo construction lending or stepping away from the market altogether, according to brokers and lenders interviewed by The Real Deal. Developers, however, remain bullish that their product will sell, and are trying new avenues to obtain the financing.”

“‘Everyone’s a little worried,’ said Michael Stoler, a managing director at investment firm Madison Realty Capital. ‘With anything at $2,500 (per square foot) or more, lenders are very cautious,’ he added.”

The Miami Herald in Florida. “When Latin America sneezes, Miami catches a cold. So what happens when South Florida’s vital economic partner comes down with something really nasty? Real estate brokers aren’t shy about admitting that 2016 will be rough. ‘We’re going to see a slowdown [for condos] in 2016 across the board,’ said Philip Spiegelman of condo marketing and brokerage firm ISG. ‘We used to be able to close a deal with a foreign buyer in two visits,’ Spiegelman said. ‘But a lot of times now it takes four or five visits. It’s taking a lot longer to get to that ‘yes’.”

The Jamestown Press in Rhode Island. “Following a glowing statewide report, the island’s realty firms confirmed the bullish news that housing sales in 2015 were the highest in more than a decade. On the minus side, some of the prices — especially for luxury properties — sank ’significantly,’ according to Bob Bailey of Lila Delman Real Estate. Also with supply and demand, he described a mismatch between property conditions and the expectations of today’s luxury buyer. However, many of those listings were scooped up in the fourth quarter after anxious sellers lowered their asking prices, he said, leading to 30 percent of the year’s sales closing in the last quarter.”

The Tyler Morning Telegraph in Texas. “Home sales in Tyler in 2015 were great and sales in the East Texas region were good. Yet, while 2016 seems off to a solid start, there could be trouble brewing if oil and gas prices remain low. John Jarvis is a real estate agent in Emory, whose specialty is rural properties. ‘We’re starting to see oil prices affect sales in our five major cities, but not the degree it did the last time, in the 1980s,’ Jarvis said. ‘A friend of mine has just gotten laid off from his oilfield job, and he thinks oil might drop to the low $20s (per barrel of West Texas Intermediate crude). If that happens, and we start losing even more oil and gas jobs, that would trickle down to the home market.’”

“Claudia Carroll, chairwoman of the Greater Tyler Association of Realtors agreed. ‘For our area, the big question is oil and gas prices and whether that will negatively impact the market,’ she said. ‘I’m beginning to hear anecdotal indication that it might. I’ve had a couple of my own clients call and tell me they’re being affected. One is having to put his home on the market, and the other is pulling back from plans to move up.’”

The Dickenson Press in North Dakota. “Though contractors are still constructing speculative homes for market, Dickinson’s housing boom has largely tapered off. City Administrator Shawn Kessel said the city expects the number of permits issued this year to be ’significantly down’ compared to previous years, but that the trend does not come as a surprise. ‘It’s not unanticipated based on quantity that has been built in the last three or four years,’ he said. ‘Thousands and thousands, literally, of housing units — whether they be single-family or multi-family — have been constructed.’”

“While he said it’s too early to judge 2016, Tracey Hoff, owner of The Real Estate Co. in Dickinson, said housing remains active and the increase in availability is good for buyers. ‘In the past, if you went back to ’12, ’13 and ’14, (buyers) didn’t have a lot to look at — there was no inventory,’ he said. ‘I think the buyers are benefitting from this, and I think it’s a great opportunity because there’s a little more selection and they’re probably getting more house for the money.’”

Bits Bucket for February 8, 2016

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February 7, 2016

Creating This New, Smaller Tsunami

It’s Friday desk clearing time for this blogger. “Housing experts insist that getting more millennials to buy homes in 2016 will go a long way in determining the future of the Valley’s housing market. ‘If we really want to see a healthy real estate market in Phoenix, these millennials are going to have to jump in,’ Realtor Tricia Amato said. Brandi Porter, 22, is a recent Arizona State University graduate who thinking about buying a house, especially now, with the cost of rent going up around the Valley. ‘I want to make sure I can stay here, and throwing money toward a rental seems like throwing money away,’ she said.”

“You’re scared. You purchased your dream home in Summerlin or Green Valley a few years ago and now you find yourself still underwater on your mortgage. What happened with the economic recovery? Some 22 percent of Southern Nevada homeowners have mortgages that are underwater, according to Zillow. Michelle Johnson, CEO of the Financial Guidance Center, explained another problem she is seeing with clients coming to the center for help. She said many of the unique loan products, like the 80/20 loan that allowed people to buy a home with two loans and none of their own money or home equity loans that people got when home prices were soaring, are just now coming to fruition.”

“‘I think all of those together along with the underwater is creating this new, smaller tsunami,’ Johnson said.”

“Even with the real estate market recovering, more than a quarter of all South Florida home and condominium sales in 2015 involved a distressed property. Short sales, bank-owned homes and properties in some stage of foreclosure accounted for about 27 percent of all sales last year in the tri-county region, according to RealtyTrac Inc. Judy Trudel, a real estate agent in Palm Beach, Broward and Miami-Dade counties, said she’s surprised that distressed sales remain such a big part of the housing market in South Florida. ‘Nine times out of 10, you can’t even find a foreclosure,’ Trudel said.”

“During the heady years of Manhattan high-end real estate, one dirty little secret was that buying a condo in a pre-construction development was an easy way for buyers to avoid scrutiny. Amid a buying wave—like the one Manhattan saw over the past five years—not every developer was willing to rock the boat, despite potential liability. ‘It was a no-questions-asked’ environment, one prominent high-end Manhattan broker recently said.”

“This year, labourer Fan Fu and 20 or so colleagues working on the Zixia Garden apartment complex in Hebei province have not joined China’s legion of migrant workers returning home to celebrate new year with their families. Instead, they have camped in the offices of the property developer’s subcontractor, demanding almost a year’s unpaid wages and too angry and proud to go back to native towns and villages empty-handed. ‘The developer has kept using the fact that they have no money as an excuse. As of now they haven’t paid us a single penny,’ said Fan, who brought others from his home town in the western province of Sichuan to work on the apartments.”

“With China’s economy growing at its slowest in 25 years, more workers face Fan’s predicament and labour unrest is on the rise, a concern for Beijing as it seeks to avoid social unrest even as financial pressures build. According to Geoffrey Crothall of the Hong Kong-based group China Labour Bulletin, which tracks worker issues, there was a spike in protests in the last quarter of 2015. Its data show that in December and January, there were 774 labour strikes across China, from 529 in the previous two months, most of them over wage arrears.”

“At a printing factory in the western city of Chongqing, a Reuters reporter was present when a local official visited last week to make sure the boss paid his workers before the Year of the Monkey begins. The official declined to speak with Reuters, although the boss later said it was an attempt to prevent unrest. ‘That’s (unrest) what the government is most fearful of,’ said the factory owner, who did not want to be named.”

“The nation’s only listed broker’s housing price index for the fourth quarter of last year was down 4.1 percent from the same period in 2014, led by corrections in the greater Taipei area — which had seen prices rise to the extent most people could not afford to buy a property, the report said. ‘The pace of the retreat is actually more than 10 percent in Taipei, if price levels are compared with mid-2014, and challenges the popularly held belief that houses in central locations hold prices more than those in suburban and outlying areas,’ said Sinyi researcher Tseng Chin-der.”

“Perth’s surging housing supply last year added eight more properties for every one buyer, according to the Real Estate Institute of WA. ‘Overall sales to listing ratios have gone from one property being sold for every 19 listed in November 2014 to one sold for every 27 listed in ­November 2015,’ REIWA president Hayden Groves told the forum. ‘In theory that means buyers have eight more property options to consider when they buy.’”

“Daniel Kavishe, manager of market research at FNB Namibia, said that the volume and value index retreated on the eve of the fourth quarter 2015 as the housing market eased across the country. He added that the deeds office recorded a 40% drop in transactions year-on-year due to a slowdown in purchases in the northern and central towns. These transactions, combined with developments at the coast, pulled the median house price down to N$694 000, Kavishe said. ‘Taking a look at the last five years, we realise that Namibia’s housing market has changed considerably. Volume growth has increased by 30,5% while prices have grown by an estimated 87,8% across the board,’ he said.”

“In Windhoek those struggling to pay bonds are from Khomasdal and Katutura areas but are ironically office-based workers or semi-professionals, he said. ‘The interest rate environment in Namibia is bound to change drastically over the course of 2016 and that will not bode favourably with the already indebted consumer. Irrespective of inflation and general economic slowdown expectations for 2016, consumers will face headwinds on the back on the rise in the cost of servicing their debt. So save where possible and curb unnecessary spending,’ he said.”

“Aberdeen, a city whose prosperity was recently measured in the number of Bentleys leaving car showrooms and million pound homes in estate agents windows, now finds itself holding out the begging bowl. Once among the wealthiest cities per capita in Europe, it is relying on the sort of state handouts that would make a banker blush.”

“Stories abound of struggling businesses, from restaurants and hotels, to the bookies and even the discount stores. The 70% fall in the oil price over 18 months has ripped a massive hole in the economy and few cities as self-dependent as Aberdeen could expect to bear the downturn without substantial casualties. But just how tough has life become?”

“According to the shop workers, restaurateurs and property people, the city is now in a state of meltdown as thousands are laid off and even those left in a job have stopped spending. There is no doubting these horror stories, but there is a danger of over-doing the tales of woe.”

“One report this weekend gave an example of a ‘former high roller’ turning up at a food bank in a Porsche clutching a welfare reform grant from the local authority. Seriously? If the story is true, this guy had the temerity to drive to a food bank in a Porsche and expect a carrier bag of free groceries? Mmm… I’d like to have a word with him and find out how he could afford a Porsche - even if he does have to hand it back - but doesn’t have enough money in the bank from his high-earning days to feed himself and his family.”

Bits Bucket for February 7, 2016

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February 5, 2016

Bits Bucket for February 5, 2016

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February 4, 2016

From High Cotton, Coming Back To Reality

The Union Tribune reports from California. “San Diego County home prices were up 0.7 percent in November, below the national average, said the S&P/Case-Shiller Home Price Index. In the last 12 months, San Diego County home prices increased 6 percent, passing the national average of 5.3 percent. But the last three months have shown a comparatively slow market for San Diego. From August to November, home prices increased an average of 0.4 percent. ‘Prices, and rents too, are bumping up against peoples’ ability to pay,’ said Dana Kuhn, real estate lecturer at San Diego State University. He said San Diego was, in part, losing ground to other cities because the local population is moving away for financial reasons. ‘It’s now becoming more and more common for people to leave for more affordable locations,’ Kuhn said.”

The News & Observer in North Carolina. “A New York developer has acquired SkyHouse, the 23-story luxury apartment tower that opened in downtown last year, for a record $103 million, according to Wake County property records. World Wide Group acquired the property from the development group behind the project. The price shatters the previous record for the most ever paid for a Triangle apartment complex on a per-unit basis. WWG paid nearly $322,000 per unit for the 320-unit SkyHouse tower.”

“The price is all the more impressive when you consider SkyHouse, which opened in April, is still leasing up. More than 80 percent of its units are now rented, according to the Downtown Raleigh Alliance. ‘World Wide Group takes a long-term view to all of our real estate investments and we see a tremendous growth opportunity in Raleigh’s luxury marketplace,’ David Lowenfeld, WWG’s chief operating officer, said in a statement.”

Crain’s Chicago Business in Illinois. “With only a few days left before the post-Super Bowl home selling season, homeowners in some Chicago suburbs might consider waiting on the sidelines a little longer. In Burr Ridge and Lake Forest, 2016 dawned with enough homes on the market to feed at least 10 months of sales, according to a report from Midwest Real Estate Data. When the inventory is so high, ‘if you need to list your house, it has to be in the top 10 percent of the prettiest and the bottom 50 percent on price,’ said Tracy Wurster, a Berkshire Hathaway HomeServices KoenigRubloff agent in Lake Forest. Otherwise, ‘it won’t get noticed.’”

“While an oversupply of homes bugs sellers, it gives buyers a strong advantage. They have many options and likely can take their pick at a nice price. Yesterday buyers closed their $1.55 million purchase of a house on Ashton Drive in Burr Ridge whose sellers first put it on the market in early 2014 at just below $2 million.”

“At the moment, all the suburbs with the tightest inventory are generally lower-priced than all those where it’s loosest. One reason for loose inventory is that more affluent homeowners may be more financially able to wait for their price, Nugent said. ‘A famous line with sellers is, ‘I don’t need to sell,’ she said. ‘My question is, ‘Then why are we sitting here at this listing meeting?’”

The Tampa Bay Times in Florida. “Florida might have a short supply of homes for sale, but there’s no shortage of people hoping to sell them. Last year, 28,507 people passed the Florida real estate exam and became licensed sales associates. That’s the most in nine years and a whopping 142 percent jump from the low point in 2010. The dramatic increase gives Florida a total of 221,000 real estate agents, right at the time when many are bemoaning the dearth of homes on the market.”

“Bob Hogue in St. Petersburg, whose school is one of the state’s largest, has been in business since 1978. He said it could take years for inventories to return to normal because so many borrowers — more than 100,000 in the bay area — are still underwater on their mortgages and don’t want to put their homes up for sale if they can’t at least break even. ‘There are still so many people stuck in that spot, it casts a negative pall over the market,’ Hogue said. ‘I don’t think we’re going to see a real strengthening until almost everybody is out of that spot.’”

The Odessa Amercian in Texas. “Odessa home sales fell more than 25 percent in the last three months of 2015, while median home prices dropped just 3.5 percent, according to a new report from the Texas Association of Realtors. Meanwhile, rent prices in Odessa and Midland have fallen quickly. A one-bedroom in Odessa now averages $830 per month, less than the state average and more than 25 percent less than at this time in 2015, according to a February 2016 report about Texas rents released by Apartment List on Monday. A two-bedroom in Odessa averages $1,090. Rates in the Tall City saw a similar change but remain higher, with a one-bedroom averaging $950 per month, or about 22.5 percent less than at this time last year.”

“Ivey said he would not expect home prices to drop by such a percentage, reasoning that home values did not soar to the same degree that apartment rates did during the boom. Still, he said some relief in the housing market is long overdue. ‘Everything’s down — the median sales price is down, the number of active lists is up — and so you think Man, we are falling off the face of the Earth,’ said Warren Ivey, owner of Century 21 in Odessa. ‘But we are not. A year ago we were in high cotton. Now our consumers, our buyers, are starting to get a little breathing room and it’s coming back to reality.’”

Bits Bucket for February 4, 2016

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