From the Wall Street Journal:
As real-estate prices surged across most of America, some of the biggest gains swept coastal resorts. Now there are signs the tide has finally turned.
In Naples, Fla. — a year ago the fastest-appreciating community in the country — prices slipped 1% in February, says the Florida Association of Realtors. In Ocean City, N.J., the median price fell 7% in March from a year before, according to an estimate by the Ocean City Board of Realtors. Most other places nationwide have yet to show a fall in median prices, which typically lag a sales slowdown by several months.
Sellers in Ocean City, a densely populated barrier island with a long boardwalk and broad beaches, have cut prices as their properties languish. Bill Beible had listed his four-bedroom, two-bath condominium for $1.35 million last spring. Mr. Beible, a manufacturing executive who bought the place in 2003 for $725,000, admits the price was a bit steep, but other homes like his had sold in a matter of days.
Mr. Beible now says he aimed too high. After getting no takers, he cut the price to $1.25 million. A buyer materialized, but asked for concessions — and then backed out. When Mr. Beible relisted the condo late last year he dropped the price to $1.195 million, but didn’t get any offers. So last week he cut again, to $1.059 million — down 28% from his initial price. “I wish I had priced it lower from the beginning,” he says.
…
Like much of the Jersey Shore, Ocean City was ignored by New York vacation buyers until the early 2000s, when exploding prices in the Hamptons finally persuaded buyers to take a look. Suddenly, prices soared and supply dried up. “Things went through the roof,” says Nicholas Marotta, president of the Ocean City Board of Realtors, adding that “we all knew it was going to come to an end.”
Both single-family and condominium sales in March fell by two-thirds from a year earlier. Meanwhile, the supply of homes on the market mushroomed. The inventory of single-family homes has more than doubled, while the condo inventory nearly tripled.
Broker Mark Grimes says many sellers are trying to unload properties they bought only two years ago, when prices were rising rapidly. “Now they’re going the other way, and they’re thinking ‘This could get worse,'” he says. Some sellers aren’t waiting for that to happen, and are cutting prices drastically — last week, one of Mr. Grimes’s clients dropped his listing 20% to $1.995 million. Others, like respiratory therapist Gabe Dunn, whose three-bedroom furnished condo is on the market for $499,000 — $110,000 more than he paid last June — are advertising for summer rentals as a hedge against a softening market. “Sellers have to be flexible,” he says. (Emphasis added)
Caveat Emptor!
Grim
(Thanks to everyone that either sent this link or gave me a heads up)
Another example:
For months, Los Angeles-based aerospace consultant Doug Roberts has stewed over a real estate deal that went sour last November. It was bad enough that the seller first accepted but then rejected his full-price offer of $699,000 for the modest three-bedroom house near the airport, Roberts says, but even worse that the busy Realtor took three weeks to call him back to break the bad news.
“I was in limbo for almost a month, not knowing whether I had a deal or not,” Roberts says. “The seller was a real jerk, and the agent wasn’t any better.”
But Roberts’ anger turned into laughter last week, when the same Realtor he finally fired last December called to say that the previous deal with the other buyer had fallen apart and the house is now back on the market, for $50,000 less than he offered to pay last fall.
http://thehousingbubbleblog.com/?p=482
How does that go, Bob? Oh yeah:
Booooooyaaaaaa!
Ah, there’s more:
Despite the price reduction, Roberts isn’t biting. “I told the Realtor to get lost, and I told her to tell the seller the same thing,” he says. “They treated me like garbage when the market was strong, but now it’s a different story that sales are tanking. A year from now, that same house is probably going to be worth $200,000 less and the agent will be working at McDonalds.”
Get used to it Greedy sellers.
The downtrend is in place.
You expect another fool to pay 100% more than you paid just 5 years ago.
NOT!
Collapse!
Grim,
I really want to thank you for openning my eyes, my husband and I were on the market for our first house and after coming to this blog I have learned so many things about the market, we just told our RE we want some time to think, now we feel so much better because we knew we were going to buy something way over our heads
hopefully one day we’ll be able to
own without being afraid of ending up A-loosing the house, B-divorce.
Thank you very Much
Judi
Kudos to roberts,
I put a bid on a house in November and was treated like $#!^. The house was 45 years old needed work.
Next time i bid desperation will be widespread in housing along with much lower prices. I will treat this as a business transaction and leave emotion out of it.
Will be pushing very hard for further price reductions and my ears will be blocked to any sympathy stories by the seller.
And from this, we take away the idea of… this inventory isn’t going to disappear anytime soon… it might go down a bit or even grow… but it is going to remain strong and large… the idea that people have of millions of buyers sitting on sidelines, waiting for prices to drop, is false! As has been stated from previous threads, 47% of all properties purchased were for investment purposes… meaning those people are finished buying and are either trying to rent it out or are hanging out enjoying it for themselves or are trying to sell it… basically, they are NOT in the market, looking to buy… the pool of buyers has significantly contracted… soooo… there is NO STANDOFF BETWEEN BUYERS AND SELLERS… there are now just less buyers in the market.
look ,, its easy to get negative.
but the numbers dont lie.
in my opine,,, if you want to be a buyer,,, approach it very business
like.. and low ball it.
but be ready to close,,, after
an inspection,,
In Ocean City, N.J., the median price fell 7% in March from a year before, according to an estimate by the Ocean City Board of Realtors.???????
Ocean City merits a Board of Realtors. I thought these things were usually county based.
following up on my earlier post.Will only buy when house prices a much lower. I will bid less and will demand concessions. Also my bid will only stand for 24 hours.
It will be fun sitting in the driver seat and watching the desperate seller and realtor get panicky.
***Another good links, scroll down to bottom to see links. It has been updated everyday.
http://patrick.net/housing/crash.html
This house sold last summer for $1.3M, and is now listed at a $100,000 LOSS:
MLS 2261656
http://www.realtor.com/Prop/1057139140
Anon 1:43
So do you really think that a wholesale collapse of the real estate market will have no negative effect on you whatsoever?
I’m doubtful.
It’s one thing to hope that values come back to earth; it’s quite another to wish that the entire sector nosedives. It’s not insular, ya know. Renters and owners alike would feel those ramifications, and the lack of consumer spending and widespread layoffs inherent in a “collapse” wouldn’t be fun for anyone.
MLS # 2255465 – Montclair, NJ
Purchased 1/27/2005 for $1,800,000
Currently listed for $1,550,000
36 Days on Market
grim
sellers have to be flexible? LOL! these ‘sellers’ want $100k more than they paid for the property a year before and they wonder why the buyers aren’t magically appearing. they’re getting ‘anxious’ a real estate agent friend of mine told me. i said if they were really feeling so anxious, why aren’t the prices reflecting it? isn’t a $50k profit good enough to clear your conscience? sit back and watch folks. i expect inventory to continue to build and DOM to increase and prices to stop and start falling. it’ll take 6-9 months before the stagnation really seeps in and we see sellers start to go after each other’s throats. just wait.
It’s one thing to hope that values come back to earth; it’s quite another to wish that the entire sector nosedives. It’s not insular, ya know. Renters and owners alike would feel those ramifications, and the lack of consumer spending and widespread layoffs inherent in a “collapse” wouldn’t be fun for anyone. ………
I agree but I believe the sentiment here is that the cheerleaders over at the NAR and bad leadership in DC made this mess. I for one do not want to see the collapse happen fully, it just seems to be inevitable.
“MLS # 2255465 – Montclair, NJ
Purchased 1/27/2005 for $1,800,000
Currently listed for $1,550,000
36 Days on Market”
Nice, shooting for a $250K loss.
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