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Southern California home sales plunge 20% in December to the lowest pace in 11 years


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2019 Jan 30, 12:46pm   4,873 views  58 comments

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Home sales in the region fell 20.3 percent year over year in December, according to CoreLogic. That is the lowest December sales pace since 2007.

From November to December, sales of new and existing houses and condominiums in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties dropped 8.2 percent.

Sales usually rise in Southern California between November and December, with an average increase of around 12 percent, so this was clearly a huge aberration.

•The housing pain persists in Southern California, as higher costs weigh heavily on potential buyers. Home sales in the region fell 20.3 percent year over year in December, according to CoreLogic. That is the lowest December sales pace since 2007.

•From November to December, sales of new and existing houses and condominiums in the area dropped 8.2 percent in December.

•Sales usually rise in Southern California between November and December, with average increase of around 12 percent, so this was clearly a huge aberration.

"Last month's sharp drop in home sales stands out in several ways," said Andrew LePage, a CoreLogic analyst, noting that it was the slowest pace in 11 years and the largest decline for any month in more than eight years. "This drop in activity reflects a variety of factors. Mortgage rates hit a 2018 high in November, affecting December closings, and stock-market volatility created an additional headwind in high-end markets. Meanwhile, some would-be buyers remain priced out or unwilling to buy amid concerns that prices have overshot a sustainable level."

Sales of newly built homes fared particularly badly, down more than 50 percent from their average over the last 30 years. Much of that is because builders are still building far fewer homes since the housing crash, and part is because prices for newly built homes continue to soar.

"Half of America can only afford a $230,000 mortgage, and the builders in good locations just can't get down to anywhere near that," said John Burns, CEO of California-based John Burns Real Estate Consulting. "Eleven of the top 19 builders, their average sales price is above 400 grand."

More: https://www.cnbc.com/2019/01/30/southern-california-home-sales-plunge-20percent-in-december-lowest-pace-in-11-years.html

If you go back and look what happened not so long ago, it is interesting to see the same type of headlines.

Type in SoCal Housing in the search tab on here.

#SoCal #Housing

Comments 1 - 40 of 58       Last »     Search these comments

1   Booger   2019 Jan 30, 3:43pm  

No mention of pricing in OP's post???
2   Ceffer   2019 Jan 30, 3:51pm  

More cleavage from female real estate agents!
3   RWSGFY   2019 Jan 30, 4:11pm  

Hey, Kaki-boy, how's prices in these awful concrete abominations you and your compatriots are living in the blessed city of St.Leningrad? Don't be shy: we're geniunely curious.
4   anonymous   2019 Jan 30, 4:34pm  

Our Dacha was passed down from Great Grandfather Felix. Perhaps you have heard of him - yes ? Last name Dzerzhinsky. You are familiar my family ? You want vodka and then talk fun times at Lubyanka ?
5   Eman   2019 Jan 30, 7:31pm  

Interesting the poster left this part out from the article.

“The median price paid for all Southern California homes sold in December was $515,000, up 1.1 percent year over year.”

No doubt the real estate market has turned the corner. However, it’s still holding its ground. Who the hell can afford anything with prices going up at an eclipse pace like they have been for the last 6+ years?

As of now, it looks like spring 2018 was the best time to sell. We’ll see how spring 2019 will fare. Too early to jump to the conclusion at the moment.
6   FortWayneAsNancyPelosiHaircut   2019 Jan 30, 7:36pm  

2020 there will be attempt to repeal prop 13 or at least increase property taxes.

So lots of uncertainty.

E-man says
Interesting the poster left this part out from the article.

“The median price paid for all Southern California homes sold in December was $515,000, up 1.1 percent year over year.”

No doubt the real estate market has turned the corner. However, it’s still holding its ground. Who the hell can afford anything with prices going up at an eclipse pace like they have been for the last 6+ years?

As of now, it looks like spring 2018 was the best time to sell. We’ll see how spring 2019 will fare. Too early to jump to the conclusion at the moment.
7   MrMagic   2019 Jan 30, 8:20pm  

E-man says
Interesting the poster left this part out from the article.

“The median price paid for all Southern California homes sold in December was $515,000, up 1.1 percent year over year.”


Ahhhahahhh hahah hahahah hahhahah

Kaki busted again!!!

8   just_passing_through   2019 Jan 30, 8:59pm  

DASKAA says
You want vodka


If you've got some pickles to go along with that my stomach is game.
9   just_passing_through   2019 Jan 30, 9:00pm  

FortWayneIndiana says
2020 there will be attempt to repeal prop 13 or at least increase property taxes.


Where did you get this information?
10   anonymous   2019 Jan 31, 2:53am  

just_dregalicious says
If you've got some pickles to go along with that my stomach is game.


You like picketed eggs too comrade ? Papa Joe called great grandfather very important patriot - come comrade, eat , drink - we talk good times when the streets and sewers ran red yes ?
11   anonymous   2019 Jan 31, 2:56am  

E-man says
Interesting the poster left this part out from the article.


Whats interesting about it ?

How much of the original article do you want someone to copy and paste?

There is a link and you can access the full article or is that too much work ?

On a personal note I am not concerned with the median price of a house in California, only in the motherland.
12   anonymous   2019 Jan 31, 3:02am  

Home Seller Price Cuts Rise in January.

Analysis by realtor.com finds the housing market is off to a slower start this year.

Only six months following the most competitive home buying season of all time, realtor.com®'s January housing report released today shows the U.S. housing market is off to a slower start in 2019. Although home prices are increasing, 15% of U.S. listings had price cuts in January, and declines in days on market have significantly decelerated since last year.

Sellers are making price cuts, especially in the sunshine states

In January, the share of homes which had their prices cut increased by 2% compared to the previous year. This increase was driven by price reductions in the nation's largest markets. In fact, 39 of the 50 largest markets saw an increase in their share of price reductions compared to last year. Las Vegas saw the greatest increase in price reductions in January, up 16%. It was followed by San Jose(+9%), Seattle (+8%), Orlando (+6%), and Phoenix (+5%).

More including large graph with fair amount of data.

https://www.builderonline.com/money/prices/home-seller-price-cuts-rise-in-january_o
13   anonymous   2019 Jan 31, 3:30am  

just_dregalicious says
Where did you get this information?


Can't say where FortWayne got his info from - you can read these for a start

http://www.bubbleinfo.com/2019/01/28/prop-13-changes/

https://signalscv.com/2019/01/james-de-bree-proposition-13-is-repeal-on-the-horizon/
14   HeadSet   2019 Jan 31, 7:00am  

Ceffer says
More cleavage from female real estate agents!


Just cleavage? As a buyer, I want the "Willie Brown" treatment from Kamala Realtor.
15   FortWayneAsNancyPelosiHaircut   2019 Jan 31, 7:05am  

On the morning news they had CA politicians talk about their plan for 2020.

Will be promoted by “higher revenue for schools”. It’s coming. Channel 4.

just_dregalicious says
FortWayneIndiana says
2020 there will be attempt to repeal prop 13 or at least increase property taxes.


Where did you get this information?
16   Eman   2019 Jan 31, 7:23am  

FortWayneIndiana says
2020 there will be attempt to repeal prop 13 or at least increase property taxes.

So lots of uncertainty.

E-man says
Interesting the poster left this part out from the article.

“The median price paid for all Southern California homes sold in December was $515,000, up 1.1 percent year over year.”

No doubt the real estate market has turned the corner. However, it’s still holding its ground. Who the hell can afford anything with prices going up at an eclipse pace like they have been for the last 6+ years?

As of now, it looks like spring 2018 was the best time to sell. We’ll see how spring 2019 will fare. Too early to jump to the conclusion at the moment.


You too posting half of the news. There’s an attention repeal Prop 13 on commercial real estate. Residential properties are okay.
17   Eman   2019 Jan 31, 7:26am  

Kakistocracy says
E-man says
Interesting the poster left this part out from the article.


Whats interesting about it ?

How much of the original article do you want someone to copy and paste?

There is a link and you can access the full article or is that too much work ?

On a personal note I am not concerned with the median price of a house in California, only in the motherland.


You cut and pasted almost the entire article. However, the part about prices were up 1% YoY didn’t jive with your negative news so you left it out. It’s just so obvious. No need to justify.
18   FortWayneAsNancyPelosiHaircut   2019 Jan 31, 7:45am  

And it’ll pass too

Because of ballot harvesting, aka free made up votes to tilt the outcome.

FortWayneIndiana says
On the morning news they had CA politicians talk about their plan for 2020.

Will be promoted by “higher revenue for schools”. It’s coming. Channel 4.

just_dregalicious says
FortWayneIndiana says
2020 there will be attempt to repeal prop 13 or at least increase property taxes.


Where did you get this information?
19   anonymous   2019 Jan 31, 7:53am  

E-man says
your negative news


Moi ?

You certainly know how to flatter someone you rascal !
20   anonymous   2019 Jan 31, 8:18am  

More Housing News...

Home Sales to Get Even Uglier in Near Future

“Dripping down, down, down. Frustrating that the housing market is not recovering”: National Association of Realtors

What will home sales look like in January and February? Very, very lousy, according to pending home sales, a measure that counts how many contracts were signed. Contract signings run roughly one or two months ahead of when the sales close and are reported as sales. The measure of pending home sales for December projects actual home sales in January and February. To that tune, the National Association of Realtors (NAR) said that its Pending Home Sales Index for December fell to the lowest level since April 2014:



“It’s been dripping down, down, down,” NAR chief economist Lawrence Yun said in the interview. “Frustrating that the housing market is not recovering.”

Compared to December a year earlier, contract signings dropped 9.8%, the 12th month in a row of year-over-year declines, and the worst year-over-year decline since the days of housing and mortgage crisis.

More: https://wolfstreet.com/2019/01/31/us-home-sales-to-get-even-uglier-in-near-future/
21   anonymous   2019 Jan 31, 8:21am  

The Most Splendid Housing Bubbles in America Shrink

Wolf Richter - Jan 29, 2019 at 3:35 pm. Bernanke himself explained that QE was designed to inflate asset prices, particularly house prices and stock prices. That was the only purpose of QE.

Seattle prices drop 5.1% in five months, most since Housing Bust 1; San Francisco Bay Area, Los Angeles, San Diego, Denver, Portland all decline.

This is the most obvious one: Seattle. House prices in the Seattle metro dropped 0.7% in November from prior month, according to the Case-Shiller Home Price Index released this morning. It brought the index down 5.1% from the peak in June 2018, the biggest five-month drop since the five-month period that ended in January 2012 during the final throes of Housing Bust 1.

The historic spike through June is getting systematically unwound. The pace of the price declines over the past five months pencils out to be an annual rate of decline of 12%. The index is now at the lowest level since March 2018. Over the past 12 months, given the phenomenal spike into June, the index is still up 6.3% year-over-year and up 29% from the peak of Seattle’s Housing Bubble 1 (July 2007):

More Including Graphs and Commentary for many large metropolitan areas in the country: https://wolfstreet.com/2019/01/29/the-most-splendid-housing-bubbles-in-america-deflate-seattle-san-francisco-bay-area-los-angeles-san-diego-denver-case-shiller/

Comments worth a read as well
22   MrMagic   2019 Jan 31, 8:30am  

Kakistocracy says
“It’s been dripping down, down, down,” NAR chief economist Lawrence Yun said in the interview. “Frustrating that the housing market is not recovering.”


Oh Kaki..... such bad reporting.

New-home sales soar 17% in November, hit an 8-month high

Sales in the first 11 months of 2018 were 2.7% higher than in 2017

The numbers: New-home sales ran at a seasonally adjusted annual 657,000 rate in November, the Commerce Department said Thursday. That was 17% higher than October’s sales pace and marked an 8-month high.

That trounced the MarketWatch forecast of a 563,000 selling rate.

Meanwhile, Freddie Mac Deputy Chief Economist Len Kiefer noted that new-home sales and inventory trends were drifting closer together, a better sign for the economy than if they were diverging.

https://www.marketwatch.com/story/new-home-sales-soar-17-in-november-hit-an-8-month-high-2019-01-31
23   MrMagic   2019 Jan 31, 8:47am  

Kakistocracy says
On a personal note I am not concerned with the median price of a house in California, only in the motherland.


Just wondering, what the average cost of a trailer in your neighborhood?
24   RC2006   2019 Jan 31, 12:29pm  

Where are these drops, in ghettos? Haven't seen drops here in nice parts(asian/white) around here in LA. My area is up 10+% over 12 months. Wish it would crash , my house is up 120% since I bought it and I want to upgrade without getting slammed in taxes.
25   RWSGFY   2019 Jan 31, 12:37pm  

RC2006 says
Where are these drops


26   RWSGFY   2019 Jan 31, 2:40pm  

jazz_music says
You should post the entire article otherwise you are manipulating the message.

Then the bastards can say that your post is too long and not to do it.

Really to please them just offer them money for nothing, that the only thing that works. Or tell them that they are smart.


Get a room, you two!

27   Booger   2019 Jan 31, 2:54pm  

Ceffer says
More cleavage from female real estate agents!


There is a whole genre of porn devoted to this.
28   anonymous   2019 Jan 31, 9:57pm  

New Home Prices Drop 12% as Supply Surges

Unwinding years of price gains as homebuilders try to make deals.

The Commerce Department has reopened for business, and the good folks there are now in hyperdrive to put together and release the data that was blocked during the partial government shutdown that had also shut down the Commerce Department. This morning, it released the sales data for new homes whose sales closed in November. This report had originally been scheduled for the end of December. In the near future, the Commerce Department will further catch up and release the new-home sales data for December, which had been scheduled for last week.

So, time to catch up, and here we go. The median prices of new single-family houses that sold across the US in November 2018 fell 11.9% from November 2017 to $302,400, the lowest median price since October 2016, and in the same range as the median price in November and December 2014:

What is particularly interesting is how much faster and further the median new-house price has fallen compared to the median price of “existing homes.”

Though the median price of “existing homes” – single-family houses, townhouses, condos, and co-ops – in December was down 7.4% from the peak in June, on a year-over-year basis, it was still up 2.9%. And this, despite a 10% year-over-year drop in sales volume, the biggest such drop since May 2011.

One of the major differences between the two is the entity that is selling these homes. New homes are sold by homebuilders. Existing homes are sold by regular homeowners and investors.

The biggest homebuilders are large stock-market traded companies that have to maintain their sales momentum, no matter what. Through their reach across markets, they have good current market data and know where the market – the buyers – is going. And when buyers don’t materialize at a given price point, then incentives are thrown in, such as free upgrades in the kitchen, and eventually prices get cut a tad, and ultimately less costly homes get built to meet the buyers.

A homeowner or investor who is not forced to sell might pull the home off the market if it doesn’t sell within a few months, and later put it back on the market, and dilly-dally around for years sometimes – though massive job losses, as they occurred during the Financial Crisis, can speed up that pace dramatically.

By contrast, homebuilders have to make sales happen, no matter where the market is. They continue to build homes, and they have to sell homes whatever the market conditions may be. They cannot just wait for a few years until the market turns their way. And so they’re the first to adjust to the reality of the market.

More Including Graphs Etc. https://wolfstreet.com/2019/01/31/new-home-prices-drop-12-as-supply-surges/

Link to Government Report Cited in Article: 5 pages https://www.census.gov/construction/nrs/pdf/newressales_201811.pdf
29   AD   2019 Feb 1, 12:09am  

I recall Patrick saying years ago that you are buying a monthly payment (principal+interest+tax+insurance+HOA fee+maintenance) when you buy a home.

As interest rates go up, the monthly payment goes up. Hence, the home price has to go down. That is why home prices peak when interest rates hit bottom. Ultimately the price of the home is determined based on the monthly payment being no more than 35% of household gross income. And in places where property taxes are increasing, home prices are suffering as well.

HOWEVER, if you have an assumable mortgage then you can sell them home to someone who qualifies to take over the mortgage. I know someone who has a 3% fixed rate, 30 year mortgage (financed starting in 2016) with the Veterans Administration through a local regional bank. They can sell their home with that assumable rate to anyone (not just veterans) who can take on that mortgage. An assumable mortgage makes the home more valuable.
30   anonymous   2019 Feb 2, 3:17am  

American home seller profits hit 12-year high. The average home seller profited $61,000 in 2018.

IRVINE, Calif. – Jan. 31, 2019 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its Year-End 2018 U.S. Home Sales Report, which shows that home sellers in 2018 realized an average home price gain since purchase of $61,000, up from $50,000 last year and up from $39,500 two years ago in 2016 to the highest level since 2006 — a 12-year high.

That $61,000 average home seller profit represented an average 32.6 percent return on investment compared to the original purchase price, up from 27.0 percent last year and up from 21.9 percent in 2016 to the highest average home seller ROI since 2006.



“While 2018 was the most profitable time to sell a home in more than 12 years, those along the coasts, reaped the most gains. However, those are the same areas where homeowners are staying put longer,” said Todd Teta, chief product officer at ATTOM Data Solutions. “The economy is still going strong and home loan rates remain historically low. But there are potential clouds on the horizon. The effects of last year’s tax cuts are wearing off as limits on homeowner tax deductions are in place and mortgage rates are ticking up ever so slowly, so this could dampen the potential for home price gains in 2019.”

Among 217 metropolitan statistical areas with a population greater than 200,000 and sufficient historical data, the highest returns on investment were almost exclusively in western states, with concentrations along areas of the west coast. Those with the highest average home seller ROI were San Jose, California (108.8 percent); San Francisco, California (78.6 percent); Seattle, Washington (70.7 percent); Merced, California (66.4 percent); and Santa Rosa, California (66.1 percent).

The U.S. median home price in 2018 was $248,000, up 5.5 percent from 2017 to a new all-time high. Annual home price appreciation in 2018 slowed slightly compared to the 7.1 percent in 2017.

Among 127 metropolitan statistical areas with a population of 200,000 or more and sufficient home price data, those with the biggest year-over-year increase in home prices were Mobile, Alabama (up 21 percent); Flint, Michigan (up 19 percent); San Jose, California (up 18.9 percent); Atlantic City, New Jersey (up 16.4 percent) and Las Vegas, Nevada (up 13.5 percent).

Along with San Jose and Las Vegas, other major metro areas with a population of at least 1 million with a double-digit percentage increase in home prices in 2018 were Grand Rapids, Michigan (up 10.6 percent); San Francisco, California (up 10.3 percent); Columbus, Ohio (up 10.1 percent); and Atlanta, Georgia (up 10.1 percent).

88 of the 127 metros (69 percent) reached new record home price peaks in 2018, including Los Angeles, Dallas-Fort Worth, Houston, Atlanta, and Boston.

Homeowners who sold in the fourth quarter of 2018 had owned their homes an average of 8.30 years, up from 8.13 years in the previous quarter and up from 7.95 years in Q4 2017 to the longest average home seller tenure as far back as data is available, Q1 2000.

Counter to the national trend, 16 of the 108 metro areas analyzed in the report posted a year-over-year decrease in average home seller tenure including: Vallejo-Fairfield, California (down 5 percent); Reno, Nevada (down 3 percent); Redding, California (down 2 percent); Panama City, Florida (down 2 percent); Chattanooga, Tennessee (down 2 percent); Eugene, Oregon (down 2 percent); Crestview-Fort Walton Beach, Florida (down 1 percent); Tucson, Arizona (down 1 percent), Punta Gorda, Florida (down less than 1 percent); Manchester-Nashua, New Hampshire (down less than 1 percent); and Truckee, California (down less than 1 percent).

Much More to Read: https://www.attomdata.com/news/most-recent/year-end-2018-u-s-home-sales-report/
31   anonymous   2019 Feb 2, 3:21am  

Renting a Home More Affordable Than Buying in 59 Percent of U.S. Housing Markets - Home Prices Outpacing Wages in 80 Percent of the U.S. Housing Markets

IRVINE, Calif. – Jan. 10, 2019 — ATTOM Data Solutions, curator of the nation’s premier property database, today released its 2019 Rental Affordability Report, which shows that renting a three-bedroom property is more affordable than buying a median-priced home in 442 of 755 U.S. counties analyzed for the report — 59 percent.

The analysis incorporated recently released fair market rent data for 2019 from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics along with public record sales deed data from ATTOM Data Solutions in 755 U.S. counties with sufficient home sales data (see full methodology below).

“With rental affordability outpacing home affordability in the majority of U.S. housing markets, and home prices rising faster than rental rates, the American dream of owning a home, may be just that — a dream, “said Jennifer von Pohlmann, director of content and PR at ATTOM Data Solutions. “With home price appreciation increasing annually at an average of 6.7 percent in those counties analyzed for this report and rental rates increasing an average of 3.5 percent, coupled with the fact that home prices are outpacing wages in 80 percent of the counties, renting a home is clearly becoming the more attractive option in this volatile housing market.”

Renting more affordable than buying in nation’s most populated counties

Renting is more affordable than buying a home in the nation’s 18 most populated counties and in 37 of 40 counties with a population of 1 million or more (93 percent) — including Los Angeles County, California; Cook County (Chicago), Illinois; Harris County (Houston), Texas; Maricopa County (Phoenix), Arizona; and San Diego County, California.

Other markets with a population of more than 1 million where it is more affordable to rent than to buy a home included counties in Miami, New York City, Seattle, Las Vegas, San Jose, San Francisco and Boston.

Among the 40 U.S. counties analyzed in the report with a population of 1 million or more, the three where it is more affordable to buy a home than rent were Wayne County (Detroit), Michigan; Philadelphia County, Pennsylvania; and Cuyahoga County (Cleveland), Ohio.

Least affordable rental markets in Northern California, Hawaii, D.C.

The report shows that renting a three-bedroom property requires an average of 38.0 percent of weekly wages across the 755 counties analyzed for the report.

The least affordable markets for renting are Santa Cruz County, California (81.7 percent of average wages to rent); Honolulu County, Hawaii (74.4 percent); Spotsylvania County, Virginia (73.0 percent); Maui County, Hawaii (69.5 percent); San Benito County, California (68.6 percent); Monroe County, Florida (67.3 percent); Sonoma County (Santa Rosa area), California (66.0 percent); Marin County (San Francisco area), California (65.6 percent); and Kings County, New York (63.7 percent).

Most affordable rental markets in Ohio, North Carolina, Wisconsin, Pennsylvania

More to Read: https://www.attomdata.com/news/most-recent/attom-data-solutions-2019-rental-affordability-report/
32   anonymous   2019 Feb 2, 11:59am  

Can't afford SoCal ? Snap this beauty up before the multiple bids get too high ! Plenty of Old World Charm and possibilities galore ! Live like your ancestors - experience history and save on those pesky water bills.

Former squatter house without running water in Oakland priced at $235,000

It's currently the lowest-priced home in Oakland, and might offer a patient, ambitious buyer who wants to squeeze into the Bay Area real estate market an opportunity.

The tiny, ramshackle house with 364-square-feet at 7010 Herbert Guice Way near the Oakland Coliseum is priced at $235,000 — which requires a $47,000 down payment if you put down 20 percent.

The roof leaks and the exterior paint is peeling, but the interior is clean and tidy, if unassuming.

Listing agent Robert Collett of Berkshire Hathaway says there's the opportunity to build a two-story home on the 2,299-square-foot lot. He admits the profit from a quick flip would be slim, as the price of a major renovation would be high and the average sale price in central East Oakland is about $575,000.

The current owner spent countless hours of dealing with the city to address liens on the home, but after only a couple months of owning it, realized she couldn't afford to take the home to the next level.

"She bought it for $225,000 a couple months ago," Collet says. "She's not trying to make a profit. Just wants to break even."


https://www.sfgate.com/realestate/article/7010-Herbert-Guice-Way-East-Oakland-real-estate-13573432.php#photo-16856928

33   anonymous   2019 Feb 4, 12:02pm  

Home values see largest single-month decline since 2012. The average home lost $1,361 in value since August

After years of steady recovery in the housing market, home values have begun to decline, experiencing the largest single-month decline in November since housing recovery began, according to the latest data from Black Knight.

Home values fell 0.2% in November, down $580 for the month and marking the first time the market has seen a consecutive three-month decline since early 2012.

Now, the average home is down $1,361 in value since August 2018.

Black Knight also revealed that the annual rate of appreciation fell in November, down 4.9% from last year.

Still, home prices are up from 2017 in all 50 states and in 99 of the largest 100 markets, Black Knight said.

But the rate of growth is certainly slowing, a trend most obvious in the western part of the country.

In California, home price growth is now 3.7%, down from 10.3% just nine months ago.

Washington has also slowed, its current growth rate at 6.7% compared with 12.5% in February 2017.

Here is a map illustrating home price growth rates across the country as of November 2018:



https://www.housingwire.com/articles/48094-home-values-see-largest-single-month-decline-since-2012
34   MrMagic   2019 Feb 4, 12:07pm  

Kakistocracy says
Home values see largest single-month decline since 2012. The average home lost $1,361 in value since August

After years of steady recovery in the housing market, home values have begun to decline


Wait Kaki....

Are you telling us that home prices don't go straight up, year after year?? Really?

What would we do without your crackerjack reporting here?

Kakistocracy says
Still, home prices are up from 2017 in all 50 states and in 99 of the largest 100 markets, Black Knight said.


Oh, snap....
35   MrBark   2019 Feb 4, 4:28pm  

Friends bought a place in 2015 for $510,000. Second set of friends just bought the same floorplan, same condition, two doors up, for $565,000.

Both homes original, dated, from the early 70's.

So after 4 years, they've made $55,000 in equity from market movement, $13,750 per year. Better than nothing right?

Of course, the above scenario assumes they didn't spend any time/month on upgrades and just kept a dated house. But, they've sunk money into it, remodeled, so it's probably worth closer to $670-700 now.
36   AD   2019 Feb 5, 12:36am  

30 year fixed mortgage is about 5%

About 3 years ago is was around 3.5%

Over the next 2 years I figure the rate will level off between 6.0% to 6.5% , which was the late 1990's level

That means at best housing prices will remain flat or likely go down 5% to 15% over next 2 years
37   anonymous   2019 Feb 8, 3:22am  

Another Long Leading Indicator, The Senior Loan Officer Survey, Turns Negative

Summary

•Long leading indicators are those which typically peak a year or more before the economy as a whole.

•Credit conditions, particularly as measured by the Fed’s Senior Loan Officer Survey, are one of those indicators.

•The Q4 Survey, published yesterday, for only the second time during this expansion, was uniformly negative.

Introduction

The Fed reported its Senior Loan Officer Survey for Q4 yesterday, and it was not good news. Credit conditions, particularly as measured by the survey, are a long leading indicator (i.e., tending to turn a year or more before a cycle peak (and substantially before a trough as well)). In Q4, they turned negative.

Metrics in the Survey

The premier metric in this survey is whether banks are tightening credit for large firms (blue), and also small firms (green). While there have been several false positives, these have turned negative (i.e., more banks have tightened credit) at least 4 quarters before each of the last three recessions. In the below graph, values are inverted so that tightening shows as a negative number:



Banks tightened credit for both sizes of firms in the 4th Quarter, for the first time in nearly three years.

This is in contrast to the weekly Chicago Fed Financial Conditions Indexes, the Adjusted index of which is shown in red in the graph above. None of those Indexes are negative at this point.

Another portion of the survey which measures demand for loans also has a history of turning well in advance of the economic cycle itself. This has been negative, off and on, for several years. After turning positive at twice in the last 5 quarters, it has turned back negative for the last two:



While the picture isn’t perfectly clear, because the Chicago Indexes have not turned negative, this is the first time outside of the shallow, energy-sector focused downturn of 2015-16 that the Senior Loan Officer Survey has shown a tightening in credit conditions

https://seekingalpha.com/article/4238027-another-long-leading-indicator-senior-loan-officer-survey-turns-negative?page=2
38   anonymous   2019 Feb 8, 3:29am  

Here are the 10 markets where home prices will rise most in 2019 - This year will see significant price softening in the West

After nearly two years of continuous projected year-over-year increases in nationwide residential real estate appreciation, we predict that properties in the largest 100 markets will appreciate at just 3.9% in the coming year – a half-percent drop from the previous quarter's forecast of 4.6%.

While this is a significant change from one quarter to the next, I do not see it as a sign that a crash is coming. The market fundamentals are expected to remain solid and the overall housing market remains healthy. This is simply part of a slowing down as the strength of the past few years dissipates somewhat in most markets.

This projection is based on the VeroFORECAST, which analyzes data from 359 Metropolitan Statistical Areas that include 13,870 zip codes and 1,004 counties, representing 82% of U.S. residences.

Perhaps the biggest surprise in this softening is what is projected to happen during 2019 in the West.

Although western MSAs continue to dominate the report's list of the 10 markets projected to appreciate the most over the next year, all four MSAs in Nevada and California that were in the last report's top 10 have dropped out.

The other characteristic of those top 10 markets is that only one is among the 100 largest MSAs in the report, and that one is Boise City-Nampa, Idaho, which sits atop the list with a projected 9.5% appreciation.

Here is our list of the top 10 cities expected to appreciate the most in 2019. We forecast that, together these 10 will have average appreciation of 8.3%, which is down from 10.3% one quarter ago.

1.Boise City-Nampa, ID MSA...................................................... 9.5%
2.Olympia, WA MSA.................................................................... 8.8%
3.Midland, TX MSA...................................................................... 8.7%
4.Idaho Falls, ID MSA.................................................................. 8.6%
5.Odessa, TX MSA...................................................................... 8.4%
6.Pocatello, ID MSA..................................................................... 8.2%
7.Bellingham, WA MSA................................................................ 8.2%
8.Mount Vernon-Anacortes, WA MSA.......................................... 7.8%
9.Boulder, CO MSA...................................................................... 7.7%
10.Grand Junction, CO MSA.......................................................... 7.5%

Turning back to California, the markets representing the Southern California counties of Los Angeles, Ventura, Orange, Riverside, and San Diego are forecast to appreciate less than 5% over the next year, a considerable drop in projected appreciation.

San Francisco-Oakland-Fremont, the one California market among the previous 10 MSAs predicted to appreciate the most, has dropped from a 9.6% rate a quarter ago, to 7.2% in this report. Likewise, the Los Angeles-Long Beach-Santa Ana MSA has slipped.

Last quarter's projections showed it had a projected appreciation rate of 6.7% for single-family residences and slightly higher for condos and townhouses. That was comfortably above the 4.6% average of the largest 100 markets. This quarter we are forecasting that, on average, its single-family residences will appreciate just 4.5%.

Other areas that will be appreciating at lower rates are the previous hotspots of Denver, Las Vegas, Reno, and Dallas, with Manhattan and its surrounding New York market forecast to appreciate at just one percent through Dec. 1, 2019. There are also lower predictions for Salt Lake City and the rest of the state of Utah.

As further indication of the softening real estate market nationwide the number of depreciating markets has increased from 3% to 5% since last quarter's update. There are now 18 markets, twice as many as in the third-quarter 2018 report, that are predicted to depreciate over the course of 2019.

The projected range for depreciation in those bottom 10 markets is -2.6% to -0.4%, for an average of -0.92% compared with the last report's comparable average of -0.58% depreciation.

While the economy remains strong and nationwide unemployment is continuing to drop, it is the increasing housing supply and rising interest rates that are now key contributors to the softening of the market.

In fact, interest rates appear to be softening the forecasts in many markets by 1-2% over what they would have been had the flat interest rate environment continued as it has for the past several years.

https://www.housingwire.com/blogs/7-pulse/post/48127-pulse-here-are-the-10-markets-where-home-prices-will-rise-most-in-2019
39   anonymous   2019 Feb 10, 4:35pm  

Triple digit increases in real estate inventory: Las Vegas inventory up 106 percent year-over-year.

The housing market is in a state of adjustment. Inventory is up dramatically in many places. In the last housing correction, Las Vegas was a leading indicator for California and we are now seeing some dramatic increases in inventory in the area. Las Vegas inventory is now up 106 percent year-over-year. In Seattle, inventory is up 168 percent year-over-year. For anyone looking to buy, the market has dramatically shifted. There is no urgency anymore and the tides have turned as affordability has collapsed. In California, many counties are now renting majority areas and the government is looking to cater to the majority of voters. Last time inventory rose this sharply price adjustments followed. What is in store for the housing market in 2019?

Las Vegas a canary in the real estate mine?

Markets across the U.S. are seeing a sharp rise in inventory. One key area:

“(Calculated Risk) Active inventory (single-family and condos) is up sharply from a year ago, from a total of 4,352 in January 2018 to 8,957 in January 2019. Note: Total inventory was up 106% year-over-year. This is a significant increase in inventory, although months-of-supply is still somewhat low.”

First, the Las Vegas market has been on an incredible uptrend like many markets:



Prices have more than doubled since 2012. This market has been incredibly hot. However, the Las Vegas market is highly dependent on the overall economy doing well. The nature of Las Vegas employment is highly linked to people feeling wealthier to spend on vacations and entertainment. This is a cycle that was seen in the last housing bubble as well. Speculation has been happening for a couple of years now but to a lesser degree from the last housing bubble.

Looking at things as they stand today, why would you expect any sort of correction? The only thing we are seeing is that inventory is rising sharply but prices are still holding steady. However, having inventory rising by 106 percent year-over-year is definitely going to add more supply to the market which means buyers will have more options.

As mentioned before, a good portion of the employment in Las Vegas hinges on people spending freely:



Leisure and hospitality alone is 30 percent of the employment market. The Las Vegas market reacts quickly to changes in the overall economy faster than other areas because it is a barometer on people’s non-essential spending. Obviously someone is going to cut back on taking the family to Las Vegas first before cutting back on other essentials in the home. And since this market is heavily tied to California, it also signals what is happening in the adjoining area.

Sales volume is tapering off a bit in California while inventory is up:



It will be interesting to see if there is any significant bounce in the housing market in spring as winter is usually a seasonally slower period as the chart above highlights. The large rise in inventory in Las Vegas is very telling and signals that a slowdown is here. The only question that remains is if this rise in inventory will translate into price corrections.

http://www.doctorhousingbubble.com/triple-digit-increases-in-real-estate-inventory-las-vegas-inventory-up-106-percent-year-over-year/#comments
40   anonymous   2019 Feb 10, 4:41pm  

Number of homes selling above list price drastically declines - Homes selling above list price hits three-year low in December

In the second half of 2018, the amount of homes selling above list price drastically retreated, according to new data from Zillow.

In December, only 19.4% of homes were sold above list price, marking a three-year low.

Furthermore, December was the seventh consecutive month to experience a rate drop.

Zillow attributes December’s decline to several factors including, inventory improvements and increasing mortgage rates.

“Both of these factors shifted in late 2018. Mortgage rates reached above 4.9% in November, the highest level since 2011, causing some buyers to be more conservative in their bidding,” Zillow writes. “The last months of 2018 also saw the first inventory gains in three years, alleviating some of the competitive pressure on buyers.”

Notably, Zillow highlights not only did the share of homes that sold above list decline, but the average price above list dropped, too.

“Among homes sold above list, the typical amount above list has remained above $6,000 for the last several years,” Zillow writes. “As of December, the median amount had dropped to $5,860, while the median discount for homes selling below list held steady.”

Zillow suggests this narrowing means buyers and sellers are syncing up on their price expectations. In fact, across the country, the share of homes that sold above list price has been moving between 15% and 25% since 2012.

That being said, Zillow makes note that national trends don’t always directly represent separate metropolitan data. This is because homes are selling above list price at higher frequencies in some metro areas.

“So while the seller’s market appears to be waning, it’s certainly not over, and this is not a result of weak demand,” Zillow writes. “Homes are more likely to sell at the listed price as a result of convergence in the market expectations of buyers and sellers.”

The image below highlights the metros that experienced increases in homes sold above list price:



https://www.housingwire.com/articles/48135-number-of-homes-selling-above-list-price-drastically-declines

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