Is market softening? How does your local market look?

108 Replies

Hey all,

There have been a few articles on CNBC talking about new home sales plunged 25% in recent months (YoY) and also today there is an article talking about existing home sales also seem to trend down comparing to a year ago.

What’s the temperature in your local market? Is it still hot or do you find more negotiation room? And what is your forward strategy?

Thanks!

Still hot. Prices are up 24% compared to last year this month for my local market. It has cooled some but DOM are still within a week and multiple offers is very common. Usually around August it cools due to school starting up then September-end of October it is hot. Then Winter it cools off

Hi Joanne,

I invest in vacation rentals in Branson, MO. The DOM is starting to creep up a bit, but it could be because we're coming to the end of the busy season. The prime properties are still getting snatched up quickly, but some of the others are not.

Just checked the MLS in our little suburb of Portland ( Canby Oregon) only 2 new constructions on the market in a town of 20k poeple.. 46 pending sales though so all the new product has been absorbed.

why sales is down is because there is no balance in inventory..  demand is greater than the supply  ergo price rises. not to mention in new construction cost to build went up significantly last year.  these things will always be regional and driven by supply / demand.   

No. Not softening at all in any of the 4 markets I am in. Sales are down because there is no inventory. If there were more houses for sale, they would SELL. Still multiple offers, above list price. Many all cash.

@Joanne Tsai we’re only seeing 6-10 offers on every listing, down from 20 a few months ago. Properties are only selling for $75k over ask, not $200k. So I wouldn’t call it softening, per se, but maybe just slightly less hard.

Originally posted by @Steve K. :

@Joanne Tsai we’re only seeing 6-10 offers on every listing, down from 20 a few months ago. Properties are only selling for $75k over ask, not $200k. So I wouldn’t call it softening, per se, but maybe just slightly less hard.

This. The market is still hot in most markets. It's lava hot, where it was surface of the sun hot. 

@Joanne Tsai YoY is trending higher than previous. I see demand staying strong into the fall. The new norm is homes priced to move, do so in 4-6 days, so buyers see defects that don't necessarily exist if DOM is longer. Is there a softening coming? Nope, demand will soften a little bit, but come September, home prices will jump up again. Money from elsewhere is still flowing into our area, there is as ton of cash in the market even though foreclosures have ticked up and many employers are letting their employees continue to work remotely. This will keep demand up. For homes that have fantasy Make Me Move prices on them initially, yes they sit longer, and have lots of price reductions. A few months ago I saw a 1,400 sqr ft house, nothing special, 7.5k lot priced at $890k in Vancouver. I am a little aggressive normally, but I couldn't help but LMAO.

@Joanne Tsai recently a buyer and could not find anything even new construction could not be completed within 6 months, My understanding is some buyers are being priced out and builders have lots of back orders. Sales have slowed a little due to lack of inventory. I snapped up a new on the market listing and happily paid 75k over what a person just paid for new construction 6 months ago. 

I had a property in Las Vegas on the market last month for $230,000 and the first buyer offered $351,000 cash. The buyer did his inspection and backed out because the previous tenant had a dog that urinated on the walls and some of the baseboards that were made of compressed sawdust had bubbles. The inspector told the buyer the foundation was leaking, but the concrete floor was 6 inches off the ground and the baseboard had bubbles on all the inside walls as well as the outside. That was my fault because I knew about the bubbles when I painted the house and I thought the carpets would cover them, but I think the water from the paint exacerbated the bubbles.

Regardless, I went to las Vegas, installed all new baseboards for the entire first floor this past Wednesday. When I was at the house two parties looked at the house and I got two offers for around $350,000. I haven't seen the exact prices because the offers went to my son in Colorado.

So, I don't think the market softened in Las Vegas and as far as Los Angeles County in California, I just spoke with one of my brokers I deal with and he said apartment units are still increasing in value and at their current prices I was surprised to hear that.

Originally posted by @Mark Whittlesey :

No. Not softening at all in any of the 4 markets I am in. Sales are down because there is no inventory. If there were more houses for sale, they would SELL. Still multiple offers, above list price. Many all cash.

Hi Mark, 

are you in CA markets? yes, I am hearing nothing is slowing down in CA yet, but I am curious if it's similar else where, such as FL or TX. I def see more price reductions and longer DOM in these markets. 

I am certainly seeing a cooling period in my market, the southeast side of Chicago. On the 4th of July weekend, I bid 1k over the asking 49.9K for a 3bed 1.5 townhouse and won. Yesterday, I had an offer accepted for 80k on a house that was on the market for 93k for over a month. If this was in April, I probably wouldn't have had my offers accepted.

Originally posted by @Jay Hinrichs :

what i have seen though is the  properties that are investment  IE rentals  I see a lot of price reductions in the Portland market.

I suspect due to rent control and covid .. but for owner occ still quite robust.. 

Jay are things with the crime increase in Portland having an impact on pricing at all? I know it's a trend across the nation, but it seems like Portland has usually been more peaceful than these other cities. Wondering if there is an impact. 

Originally posted by @Shiva Bhaskar :
Originally posted by @Jay Hinrichs:

what i have seen though is the  properties that are investment  IE rentals  I see a lot of price reductions in the Portland market.

I suspect due to rent control and covid .. but for owner occ still quite robust.. 

Jay are things with the crime increase in Portland having an impact on pricing at all? I know it's a trend across the nation, but it seems like Portland has usually been more peaceful than these other cities. Wondering if there is an impact. 

Yup unfortunately the bloom is off the bud in the Rose city.. the city council and major allowed homeless to get out of control did not back the police .. made low level drugs Legal etc etc..  I suspect as it relates to rental houses SFRs its more about rent control than crime for sure. 

however as stated owner occ remains very robust in Portland..  those that have experience with rent control etc will probably do just fine over the long haul in Portland  but many of the SFRs  and there was not a lot to begin with are being taken out of the rental pool.  

Here in Lane County Oregon including the metro area of Eugene / Springfield, the latest data for June was median and average sales prices are up a touch over 20% from a year earlier. Inventory was at .7 month, same as May, but up very slightly from earlier in the year.  New listings were up 23.6% from June of 2020, and 4.1% from May.  This increasing amount of inventory may in part explain the bit of softening we are seeing locally since June.  Still it is still very very competitive for buyers, especially for the more desirable homes.  Often instead of seeing 10-20 offers, we are seeing 4-7 or so.  Some buyers are getting worn out or pushed out by prices, and this will hopefully lead to a more balanced market in the near future.   

I have been seeing some homes getting price reductions but these are ones that were way overpriced by optimistic sellers that are under the impression that anything will sell at any price. While the market is hot and over ask offers are the norm, people aren't stupid and an overpriced house will sit on the market until it's not overpriced. In our area (middle Georgia) I don't think the market is cooling but it seems to be a little less frenetic. We have a tenant right now that is between homes and they're pretty discouraged by their inability to lock anything down. I think that since they like living in our property, they'll keep looking but not be as frantic and maybe in a few months the inventory will increase slightly and they'll find what they want.

@Jay Hinrichs

Jay even worse than crime and rent control for us small PDX SFR landlords is the city council new gestapo measures dictating who we can and cannot rent to. As soon as they start fining me for ignoring their nonsense I'm going to start 1031'ing my rentals. I have hope that now antifa-friendly Chloe Eudely got booted things may not get worse. Good thing you aren't a landlord anymore, good timing.

@Joanne Tsai South Jersey market is still on fire. The higher end (over $600k) is showing signs of cooling slightly (about 21 days to sell now) unless the home is updated, updated homes still flying in days. Under $500k is still extremely hot. Just had a small listing at $185k had 85 showings in 4 days with 25+ offers. Condos still getting 5-10 offers.

Zillow leads aren’t coming in as fast.  I don’t think Central Oregon will appreciate 40% again.  (I hope not).  But sill going quick If I had to describe it I would say decelerating.

@Michael Brattelli yeah, our neighborhood is still crazy for the starter homes, esp the ones that don't require work. It's common to see 10% or 15% over asking. 

I know in NYC, the market is cooling a little bit, which is common for July/Aug. In order for a unit to go quickly, it usually requires no renovation, everyone seems to be aware it's extremely difficult to find contractors and good labors these days. 

@Joanne Tsai

1) Pasadena, Ca not really still on fire

2) San Antonio, TX yes sort of homes sitting on market longer

3) Cape Coral, FL not really. Inventory issue.

@Joanne Tsai

The LA area is still hot, particularly in the Pasadena area where I sell. A little bit of cooling in some segments of the market with buyer activity but prices are not dipping. It's gone from crazy frenzy to still hot and multiple offers.

It's typical to see a cooling off on August.