A report from Knowledge Wharton. “Susan Wachter, Wharton professor of real estate and finance, noted that at the top end, housing prices have moderated and are decreasing in major markets like New York, San Francisco and Washington, D.C., and said that was ‘due to a supply response to price increases in the new home luxury market.’ As it happens, the pipeline of new housing supply is increasing in those markets despite a fall in demand, said Wachter. That, she said, is because of a rise in construction starts in those markets in response to prior price increases. ‘The demand and supply side factors continue to contribute to price declines in these markets, and 2020 is likely to see further downward price adjustments in the high-end markets in these cities,’ she added.”
From Nasdaq. “Growth indicators for Lennar in the final quarter of the fiscal year, such as deliveries and new orders, were up smartly at 16% and 23% respectively. While deliveries were up 16%, revenue rose by only 8%, which was a result of lower average sale prices. Average sales prices fell from $413,000 to $400,000.”
The Bucks County Courier Times in Pennsylvania. “The Middletown planning commission voted 6-0 Wednesday night to not recommend approval of 111 townhomes on Woodbourne Road. Lisa Bowman, who owns a rental property very close to the proposed townhomes, added she’s been unable to sell the property because of fears the townhomes might be coming and worsen traffic. ‘The reason she couldn’t sell the property is because it’s overpriced,’ responded Lennar attorney Allen Toadvine, a claim denied by Bowman.”
The Clarksville Leaf Chronicle in Tennessee. “Edsel Charles, one of the leading housing market analysts in the nation, has been high on Clarksville-Montgomery County and its economy for many years. Charles urged a continued healthy ratio of new construction to new, unoccupied home inventory. ‘In Montgomery County, if we get in a position of having more than 32% of all housing that we have going sitting finished and unoccupied, that’s really disturbing to me,’ Charles said.”
“That rate is currently 25%, which Charles considers to be within the desirable inventory range. ‘It’s not just about putting up houses. It’s about putting up houses and making money.’ There are 2,019 home lots in Montgomery County’s developed inventory, according to Charles. There are 501 homes under construction in the county, and 206 that are newly finished and unoccupied.”
From WFAA in Texas. “Homes now on the market at or about $750,000 come in a wide range of sizes, ages and conditions, says Ben Caballero, CEO of Dallas-based HomesUSA. Right now, there are 132 new and pre-owned homes for sale in North Texas counties priced between $740,000 and $760,000, Caballero said. In the past year, 108 homes sold in the $740,000 to $760,000 range in North Texas. The number of sales at the price point and the number of listings works out to a 14.7-month inventory of homes on the market, Caballero said. ‘It’s a buyer’s market,’ he said.”
The San Francisco Chronicle in California. “The median price paid for a single-family home in San Francisco fell to $1.45 million in December, down 10.4% from November and down 3.3% from December 2018. That was the worst showing of any Bay Area county. Prices in all of Alameda County fell 2.1% last year. Prices were also down in Marin, San Mateo and Sonoma counties. Of the nine Bay Area counties, Santa Clara had the biggest price drop, 5.6%. The median price in San Francisco hit a high in the second quarter of 2019, ‘probably driven by IPO hype,’ said Patrick Carlisle, chief market analyst with Compass.”
“Jason Buttorf, a Compass agent in San Francisco, had a client who works for Slack. He and his wife had been renting in Golden Gate Heights and eyeing homes there for years. In July, shortly after Slack went public, their ‘dream home’ came on the market and they snapped it up for over $2.5 million. By the time fall rolled around, however, the market ‘was mysteriously quiet and uneventful,’ Buttorf said. Carlisle agreed. ‘The hype might have affected (the market) more than the reality,’ he said.”
From Forbes on New York. “Actress Jennifer Lawrence has lowered the asking price of her New York City penthouse for a second time in a move that reflects current conditions in the Manhattan luxury condo market. Many of New York’s unsold condos are the result of a boom since 2013 that has produced thousands of new units most city residents can’t afford, according to StreetEasy. Lawrence put her penthouse at The Laurel up for sale last July. Amid a downturn in the Upper East Side’s condo market, she has lowered the original price of $15.45 million to $14.25 million and now down to $12 million.”
From The Wall Street Journal on Florida. “One Thousand Museum, the futuristic, ultra luxury condo tower, isn’t sold out after nearly seven years on the market. Expensive and complicated to build, the 62-story tower has large units asking two to four times the average price a square foot for downtown Miami condos over $1 million. Many affluent buyers prefer beachfront homes, brokers said, and a pullback of international buyers has led to a slowdown in Miami’s condo market amid a glut of inventory.”
“Miami developers typically aim to presell 85-90% of their units before closings begin, said Peter Zalewski of Condo Vultures. ‘Now they’re stuck having to peddle them one by one. When you get into a situation like that, the only way to differentiate one unit from another is to cut the price or offer incentives.’ A challenge for One Thousand Museum is keeping prices up. There is a 5-year inventory of $1 million-plus condos in downtown Miami, said Mr. Zalewski.”
“One Thousand Museum is now moving into a crucial phase. The developers must sell the remaining units to pay the outstanding balance on their $256 million in construction loans, and they must do so in a soft market. Louis Birdman, one of the project’s developers, said prices, which range from just under $5 million to $25 million, are negotiable. Each floor has only one or two units, ranging in size from about 4,600 square feet to 10,400 square feet and each has at least four bedrooms. ‘Given what’s going on in the market now, I think all of us developers are competing for a similar buyer, so there’s obviously flexibility on price,’ he said.”