October 15, 2019 by Ben Jones
A report from the Wall Street Journal. “In 2019, about 19% of U.S. households with six-figure incomes rented their homes, up from about 12% in 2006, according to a Wall Street Journal analysis of Census Bureau data that adjusted the incomes for inflation. Jacob Neuberger, a 30-year-old who works in Denver for an investment firm, considered buying when he moved out of his one-bedroom downtown apartment. He and his girlfriend opted to rent a townhouse for $2,700 a month. The one next door sold for $550,000.”
“Mr. Neuberger estimated that his costs to own would be about 20% higher than renting and that he would need the townhouse to appreciate by about 10% to cover transaction costs if he needed to sell to buy a bigger home or if he had to move for work. ‘The price appreciation can’t go on forever,’ he said.”
From KTVB on Idaho. “Meridian has come in at No. 7 in a Wallethub listing of the fastest-growing cities in the U.S. When matched up against other mid-sized cities – those with a population between 100,000 and 300,000. One effect the growth has is on the housing market. Phil Mount, President of Boise Regional Realtors, said Meridian currently does not have a housing shortage but they are behind.”
“Currently, Meridian has 622 homes available and the majority of those, 409, are new homes. The average home price in Meridian for 2019 is $343,528.”
The Orlando Sentinel in Florida. “Although nationwide mortgage denials are at an all-time low since the housing crisis, homebuyers are most likely not to get loans in Miami, Orlando and other Florida cities, a new report found. The report by Lending Tree, an online lending marketplace, named Miami, Orlando, Tampa and Jacksonville as the top 4 cities with the highest denial rates. In Orlando, more than 1 in 10 people who applied for a loan were denied. Having bad credit and too much debt were the main reasons for denials.”
“Daniel Betancourt, an agent with ReMAX Town Centre in Orlando, said he hasn’t had any problems with clients getting approved, and pointed out that lending standards have actually loosened In the last few years.”
“Brad Siebert, branch manager for The Mortgage Firm in Maitland said he was ‘shocked’ by the report. ‘I will tell you that it’s been years since I submitted a loan that hasn’t gotten approved,’ he said. ‘I’ve had more loans approved every year going back since I can remember. I don’t answer the phone and say, ‘Oh boy, it’s a Florida loan.’”
From The Title Report “During September, a mere 11 percent of offers written by Redfin agents faced a bidding war, according to a report. Redfin said the bidding war rate was down from 41 percent a year earlier. The most-competitive market in September was San Francisco, where 28 percent of offers faced a bidding war, down from 69 percent a year earlier.”
“In San Jose, Calif., 18 percent of offers faced competition in September, down from 83 percent a year earlier. ‘More sellers are pricing their homes a little below the price they expect to sell at, which is encouraging bidding wars to drive up price,’ Redfin San Jose agent Kimberly Douglas said. ‘In addition to teaser pricing like this, I’ve seen very aggressive price drops happening more often lately.’”
From PR Newswire. “Knock, on a mission to make trading-in a home as easy as trading-in a car, today released the results of the Q4 2019 Knock Deals Forecast, predicting which of 45 of the largest U.S. Metropolitan Statistical Areas (MSAs) will have the highest percentage of homes that sell at a discount to their original list prices, or at a ‘Deal,’ among current on-market listings.”
“‘Many cities in the West that saw increased competition during the recent housing market uptick are now experiencing some of the more significant slowdowns in sales activity,’ said Paul Habibi, Economic Advisor to Knock and Lecturer of Real Estate at UCLA Anderson School of Management. ‘This mild softening of the market seen in Knock’s Q4 Forecast is reflective of other recent studies, and the year-over-year increase in the rate of deals in markets like Los Angeles warrants continued observation.’”
“Homes that are priced over market value tend to sit on the market longer, which can result in them selling for less than if they had originally been priced to market. Nearly 20% of homes that sold in the West in Q3 2019 were on the market for at least 90 days, and sold at an average discount of 5.2%, compared to 1.9% for the overall region. In a market like Los Angeles, CA where homes are frequently priced $800,000 and above, that difference could have resulted in an additional discount of at least $26,400.”
“As markets continue to top the list on reports like the S&P CoreLogic Case-Shiller, which reflect data from two months prior to publication, sellers’ expectations of current market value are inflated, leading to price reductions and eventually more deals. Further evidence of this trend in the West is that the three markets that saw the highest increase in homes selling below original list prices in Q3 2019 compared to Q3 2018 were in the West: San Jose, CA (+22.4% YoY), Las Vegas, NV (+18.7% YoY), San Francisco (+13.9% YoY). Las Vegas in particular has been seeing rapid change and made both the top 10 markets for predicted deals in Q4 2019 and the top 10 markets in terms of Q3 2019 home sales.”
From Politico. “‘WeWork Planned a Residential Utopia. It Hasn’t Turned Out That Way,’ by The New York Times’ Matthew Haag, Rebecca Liebson and Andrea Salcedo: ‘After first pledging to upend the way people worked, WeWork vowed to change how they lived: WeLive, a sleek dormitory for working professionals with free beer, arcade games in the laundry room and catered Sunday dinners, would spread around the world. It has not quite turned out that way. WeLive has not expanded beyond its first two locations and efforts to open sites in India and Israel have collapsed.’”
“‘In addition to long-term rentals, WeLive offers rooms at its only locations, in New York City and Virginia, for nightly stays on hotel sites. In fact, New York City has investigated whether units legally meant to be long-term apartments were being advertised as hotel rooms in WeLive’s Lower Manhattan building once billed as a residential utopia with shared living space, communal meals and social gatherings.’”
The Seattle Times in Washington. “The fault lines in the crumbling real-estate empire of formerly high-flying coworking startup WeWork have reached Seattle. WeWork’s first local casualty: a mixed-use project in Belltown, due to be occupied by WeWork and its residential subsidiary, WeLive. Martin Selig Real Estate owns the 36-story project which had been slated to be the third WeLive location in the country.”
“On Friday, the deal was dissolved by mutual agreement between We Co., WeWork’s parent company, and Martin Selig Real Estate, the parties confirmed. Until this summer, WeWork seemingly could do no wrong. In January, the last time it raised funds, the startup was valued at $47 billion.”
“And as WeWork is rocked by turmoil, the company has put on the back burner any new leases, meaning hundreds of thousands of square feet it was considering in Seattle could be up for grabs. WeWork, already one of the Seattle area’s largest office landlords, previously planned to scale up further by subleasing from Amazon close to 400,000 square feet at the Rainier Square skyscraper now under construction. The slowdown throws that deal into question. So far, the company hasn’t inked a contract on the space.”
The Daily Astorian in Oregon. “Attempting to bring timber jobs back comes with risk. There’s greater competition from foreign markets, plus a strong dollar that makes Oregon timber harder to sell. An unstable housing market has sunk the price of lumber during the past year. On private lands, the amount of timber sold is a function of market forces.”
“‘When markets are good, we produce a lot of lumber; if the demand doesn’t catch up, we have too much,’ said Bruce Daucsavage, general manager of Prineville-based Ochoco Lumber.”
Peter is a Real Estate Broker at Professional Brokers Group (License No. 023000), covering the greater Short Sale area of Colorado.
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Peter Janisch specializes in short sales in Short Sale Realtor. I am your Short Sale Realtor Short Sale Specialist Realtor and Short Sale Realtor loan modification and distressed property expert. This article and content is for general informational purposes and may not be accurate. This should not be taken as legal advice, technical or tax advice under any circumstance. Seek legal advise and representation in all legal matters.