West Coast Home Prices Hit a Wall

Home prices have finally hit a wall on the West Coast

Slow sales and supply spikes indicate that homebuyers are regaining the upper hand

By Jeff Andrews  Oct 16, 2018, 3:30pm EDT

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Home sellers have had it easy over the last few years. Housing demand has risen along with the improving economy, and home builders have struggled to build at a pace that keeps up with that demand. The result was a shortage of housing inventory that allowed sellers to sit back and let buyers bid up the price of their home.

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California Real Estate Troubling

California real estate market shows troubling signs that may keep new buyers in their homes for years to come

Natalie Campisi @NatalieMCampisi

August 13, 2018  in  Mortgages

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In the California real estate market the “b” word is on the minds of many: bubble. With reports of sharp declines in home sales, shrinking inventory and rising home prices, it might be an understatement to call California’s situation a puzzle, and one that may have implications for the entire country.

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Buyers Market

Zillow.com:  BUYERS MARKET

After several years of rich home price gains, the market appears to have found a limit to what people can afford. Sellers are finally responding by lowering prices more often. Approximately 14 percent of all listings in June saw a price cut, that’s up from a recent low of 11.7 percent at the end of 2016, according to a new report from Zillow. In addition, home price growth is slowing in nearly half of the 35 largest U.S. metropolitan markets.

 

Rising mortgage rates and affordability are behind the change. As the housing market recovered from its epic crash in the last decade, home prices began to gain slowly. And then they suddenly took off in the last few years. The simple reason was supply and demand. As millennials aged into their homebuying years, homebuilders did not and are still not meeting the rising demand. In addition, millions of single-family homes lost to foreclosure were purchased by investors and turned into single-family rentals, further depleting the for-sale housing stock. The market was thus suffering a critical shortage, just as demand was taking off. Prices had nowhere to go but up.

 

“The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly,” said Zillow senior economist Aaron Terrazas. “A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsize price gains in recent years.” While Terrazas admits it is too soon to call this a buyer’s market nationally, “the frenetic pace of the housing market over the past few years is starting to return toward a more normal trend.”

 

And of course all real estate is local, so certain markets are tipping faster than others. In San Diego, 20 percent of all listings had a price cut in June, up from 12 percent a year ago. In Seattle, which continues to be the hottest market in the nation, 12 percent of all listings had a cut, the largest share in nearly four years.

 

In Austin, Texas, also a very strong housing market thanks to a recent influx of technology jobs, more homes are seeing price cuts as well. “We saw intense bidding on homes over the past few years, but that is calming down with more inventory in the area,” said B Barnett, a real estate agent at Reilly Realtors in Austin. “Our inventory of homes is going up with new construction, and it is helping transfer power back to the buyer.”

 

Barnett, who said about 60 percent of her clients are relocating into the Austin market, is still seeing multiple offers, but there are fewer bidding wars, meaning prices are no longer out of reach. Buyers, she said, are getting negotiating power back and some are even able to get repairs in the deal. For the past few years, in most hot markets, buyers had to take what they could get — no contingencies.

 

There are still some markets where prices gains are increasing, but those are markets that have seen smaller price growth in the past few years. San Antonio, Phoenix, Philadelphia and Houston had fewer listings with a price cut in June compared with a year ago. Among the largest housing markets, San Jose, CA, Indianapolis, IN and Charlotte, NC could see price growth slow the most over the next year, according to Zillow.

 

Zillow.com

August, 2018

 

 

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Mortgage Rates Rise

Mortgage Rates Back on the Rise

MCLEAN, Va., June 14, 2018 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB:FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing that after declining for two straight weeks, mortgage rates reversed direction this week and rose to their second highest level this year.

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No Slump Materialized after New Tax Law

The new tax law was supposed to cause a slump in housing values. It hasn’t materialized – yet.

By Kenneth R. Harney

June 13

What if Congress passed a massive tax bill with scary cutbacks in deductions for homeowners – prompting dire predictions of mass property-value declines – but nothing much happened?

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May – Homes Sold in Record Time

In May’s red-hot housing market, homes sold in record time
By Diana Olick
June 14

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Lien Priority According to Timing

Lien Priority Matters

By Bob Hunt

June 4

When it comes to liens, California has adopted a “first in time, first in right” system of priorities. As authors Miller and Starr, the widely-acknowledged gurus of California real estate law, put it, liens, “have relative priorities among themselves according to the time of their creation.” California Civil Code 2897 says, “Other things being equal, different liens upon the same property have priority according to the time of their creation.” That is why people who make private loans, secured by trust deeds, are encouraged to record that instrument ASAP. Someone who waits a month, a week, or even a day to record a trust deed may find that someone else has recorded another, on the same property, during that intervening time. The second person now has lien priority over the first. If the second person ever had to foreclose, the first person could be wiped out. Continue reading

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Baby Boomers hold onto their homes

Real estate headache: Baby boomers who won’t sell their homes

BY AIMEE PICCHI

June 6

Thanks to their sheer numbers, the baby boomers have shaped society, driving social change and the economic expansion since the 1970s. But now they’re influencing society in a new way — by holding on to their homes.

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Mortgage rates drop, but borrowers are not impressed

BY Diana Olick

May 30

After a sharp rise, mortgage interest rates stepped back a bit last week, but that did nothing to juice borrower demand. Continue reading

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Home Price Increase “not sustainable”

Run-up in home prices is ‘not sustainable’: Realtors’ chief economist

By Diana Olick

May 29

Home values have been rising for six straight years, and the gains have been accelerating for the past two years. Unlike the last housing boom, the gains are not driven by fast and easy mortgage money, but instead by solid buyer demand and very low supply. Still, like the last housing boom, some are starting to warn these price gains cannot continue.

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