What’s your housing bubble predictions for the new year? Six months ago. “I’ll lose 20 pounds by year’s end? Or is that wishful thinking? I see a decent chance of economic downturn in Q4, how much though is anyone’s guess. Too much jerking around of rates and credit to call it. Housing price wise, I think we’ll see accelerating/steepening declines in Q4. It’ll get blamed on the weather, etc, but a LOT harder for the MSM, etc to ignore or talk over than it is currently.”
From one year ago. “I predict more mortgage loan shenanigans by .gov to stimulate demand for grotesquely overpriced houses as price declines and weakness in most markets becomes impossible to ignore.”
From Nevada Business. “Nevada’s residential housing should be stabilized and sustainable throughout 2020. ‘We’ve gone from a high appreciation market to a more normalized market,’ said Tom Blanchard, president of the Greater Las Vegas Association of Realtors. ‘We could not sustain the high appreciation market we were in the past couple years. If you don’t sell, you don’t make money, but it’s healthy for us as a housing market to have taken a breather from what we’ve seen in the past, which was just unsustainable.’”
“Las Vegas home prices are predicted to fall, according to Realtor.com. A drop in home prices seem to go against all other information and basic economic principals as the same report predicts Nevada will see a surge in homebuyers, Blanchard said. ‘We still have a draw, we still have a need and people want to buy. But, supply is limited, and the price is going down?’ Blanchard said. ‘That goes against all the laws of the economics of supply and demand.’”
The Bellingham Herald in Washington. “Whatcom home sales, which have hovered around 3,000 sold units a year for the past three years, should remain flat in the coming years, said Troy Muljat, of Muljat Group Realtors. He also expects home appreciation to return to historical norms, increasing around 4% a year. ‘Those appreciation gains of the past decade are not sustainable,’ Muljat said.”
From CBS Boston in Massachusetts. “Home sales in November tumbled by 11.9 percent compared to last November and sales over the first 11 months of 2019 are down 2.3 percent compared to the same period last year, The Warren Group reported . ‘It’s not uncommon for single-family home sales to take a dip towards the end of the year, but a near 12 percent decline is unprecedented,’ said Tim Warren, CEO of The Warren Group. ‘The last time November Massachusetts single-family home sales declined by a larger percent was nine years ago in November 2010 when sales plummeted almost 30 percent.’”
From WMFE in Florida. “Florida’s economic outlook for 2020 is good but not great, according to economic commentator Hank Fishkind. Fishkind: First of all, it’s important that our listeners understand we have already passed the peak for this business cycle. The peak occurred in 2015. In 2015, US GDP growth peaked at 2.9%. And since then it’s slowed down, and last quarter it was at 1.8%. Florida has a similar trend. Florida’s gross state product peaked at 4.2% in 2015, Orlando’s peaked at 5% in 2015, Daytona, Melbourne, Palm Bay, Tampa, you name it, they peaked in 2015.”
“Q: Okay, so are there other factors you’re looking at more locally that caused you to expect good but not great growth in 2020? HF: Yes, there are. So population again, peaked in Florida, in 2015 at 425,000, which is quite a good number. It’s slowed to about 350,000 this past year. Now 350,000 population growth, obviously a big number Matthew, but it’s the average population growth that has occurred in Florida since 1970. And what’s important about that is, given the very long trajectory of this growth expansion cycle a whole decade, very low interest rates, very strong housing markets in most places or at least modestly strong housing markets in some, we should have seen much more population growth in Florida: we’re simply not seeing it.”
The San Francisco Chronicle in California. “John Solaegui, Compass: The market has been cooling lately. Properties are taking longer to sell and some sellers have had to reduce their prices. Some of it may be the seasonal autumn/winter slowdown. Market fundamentals point to slower growth in 2020, depending on the neighborhood and property type. Buyers: watch for opportunities, paying particular attention to properties that have been languishing on the market.”
“Do not expect prices to plummet, but you may be able to write a winning offer with more contingencies, or even contingent on the sale of your current home. Sellers: accept that the market has shifted. Your home must shine above the competition. Employ ‘just right’ pricing, within 2 to 3% of the true market price. Pricing above market is deadly. Pricing below market may result in lowball offers. Do not expect multiple offers, but remember that all you need is one good buyer.”
The Times of London in the UK. “Fears about the health of Blackmore Bond have grown after the company missed another deadline to pay thousands of investors their interest. Blackmore is behind on its quarterly coupon payments, having failed to pay its bondholders the interest they were due in October. The company has invested the money raised in property developments around the country. Blackmore unnerved its investors after it was late paying the quarterly interest that had been due to bondholders in July and failed to meet a pledge to pay the delayed October coupon by the end of November, blaming a slowdown in property sales.”
“A scandal last year involving another minibond issuer also fuelled worries about Blackmore and thrust the minibond industry into the spotlight. London Capital & Finance collapsed last January owing more than £237 million to 11,625 investors, who are expected to receive only 25 per cent of their money back.”
The Sydney Morning Herald in Australia. “A two-year slowdown in Sydney’s economy has exposed entrenched challenges for the city which need to be address in the coming decade, economists have warned. The report’s author, economist Terry Rawnsley, said the slowdown highlighted problems Sydney has with housing affordability and access to jobs, services and business opportunities which had become more difficult due to congestion. The past decade underscored the degree to which Sydney’s economic fortunes are linked to the property market.”
“Economist Chris Richardson said the longer-term outcome of a boom and bust in house prices is higher mortgages and slower population growth. ‘The pain of higher mortgages and the servicing of them began to be apparent – people started to leave Sydney in greater numbers or they didn’t come here in the first place because prices were through the roof . . . and that began to weigh on the economic performance of NSW.’”
“Mr Richardson warned Sydney’s apparent reliance on rising property prices for stronger economic growth ‘doesn’t augur enormously well for the coming decade as a whole.’”
The Wall Street Journal. “The Census Bureau released on Monday state population estimates for the year ended July 1. California is an exception to the Western state growth trend. This month the state said its population grew 0.35% in the year ended July 1, the slowest pace on record since 1900. The new census estimates show that more residents left the state than moved in for the third consecutive year.”
“The 2010 Census marked the first time California didn’t gain a congressional seat since it became a state. Its high cost of living, tight supply of housing, threat of natural disaster and restrictions on foreign workers have all helped slow the state’s population growth, said Jeanne Gobalet, a vice president at Lapkoff & Gobalet Demographic Research who is based in Saratoga, Calif. ‘California’s less appealing as a destination,’ she said. The lifelong Golden State resident has noticed that people she meets outside the state ‘talk about California as a place they might like to visit in their lifetimes, and they don’t really want to live there.’”