A report from the Wall Street Journal. “Housing markets across the world, from the U.K. to China to Australia, are losing steam. In 18 large economies, world-wide residential investment dropped on a year-over-year basis for four consecutive quarters through September, the longest stretch of declines since the 2008-09 crisis, according to Oxford Economics’ analysis of national accounts. For global cities like New York, London and Vancouver, Canada, another factor is at work, according to the IMF. In the period of low interest rates following the global financial crisis, wealthy investors in the hunt for better yields swooped in to buy properties in major financial hubs. In effect, residential prices in those cities have become globally synchronized much as stocks and bonds are.”
“Now, home prices in large cities are pulling back, according to an index of high-end markets in 45 cities maintained by Knight Frank. ‘It matters because…the housing market is a big asset market which has quite large potential impacts on consumer spending,’ said Adam Slater, an economist at Oxford Economics. ‘It tends to be a sector when it booms, it booms; when it busts, it busts.’”
From Crain’s New York Business. “Homebuyers are interested in the Hamptons again. It took the biggest price cuts in more than four years to bring them to the closing table. Seller discounts averaged 12.9%, the largest since 2015. ‘This confirms that the buyers are there but they’re waiting for the sellers,’ said Jonathan Miller, president of Miller Samuel. ‘Sellers are traveling farther to meet the buyer, but they were much more aggressive in setting high prices to begin with.’”
“But sales were still tepid in the context of history: With 400 deals, it was the second-weakest fourth quarter in 11 years, Miller Samuel and Douglas Elliman said.”
From Patch Charlestown on Massachusetts. “This townhouse, situated on Pier 7 right on the water in Charlestown is the most expensive home on the market in Charlestown right now. Is it too expensive? It appears to have been on the market for a little while. It was listed in 2016 for $1,850,000, then in 2017 the price dropped to $1,825,000. It was relisted later that year at $1,799,000, and then later the price dropped by $9,000. This October it was listed again at $1,650,000.”
From Narcity on Tennessee. “Laguna Beach and The Hills were the shows that ruled television in 2006 and during our peak childhood. Aside from Lauren Conrad, Kristin Cavallari was another front runner in these shows and even has her own E! show and she resides in our great state of Tennessee. Her Tennessee estate is up for sale and you can buy it for yourself.”
“Kristin Cavallari and her husband, Jay Cutler, put their enormous Nashville estate up for sale in June of 2018 for $7.9 million. Since then, the price has been cut down to $4.95 million. In 2012, the reality TV star and ex NFL quarterback bought this beautiful home for $5.3 million and completed many renovations and add ons, hence the original asking price.”
From Autoevolution on California. “You’re out of luck if you’re still on the market for new real estate, because this mansion in Bel Air sold at the end of last year – for pennies, compared to the asking price. But it’s so unspeakably glamorous and unreal that it’s worth revisiting. It’s called the Billionaire Mansion and it’s situated at 924 Bel Air Road, in an enclave that ensures maximum privacy and the most spectacular views of Los Angeles and the ocean. It spans 38,000 square feet across 4 stories and includes anything from a non-functional helicopter slash art display to a mind-blowing car collection with only the rarest, bespoke cars and motorcycles.”
“Real estate developer Bruce Makowsky personally curated the car collection, making sure to offer the lucky owner of this stunning mansion only the best that money can buy. Oh, and in case of a fire, you can use extinguishers with Dom Perignon to put out the flames, because Makowsky thought to turn champagne bottles into working fire extinguishers fit just perfectly with the idea of the Billionaire Mansion. ‘I wanted to redefine what super-high-end luxury homes are all about,’ Makowsky explains. ‘I wanted to break all the molds.’”
“Makowsky was able to break all the molds, indeed. When the house was first listed for sale at $250 million, it was the most expensive in the U.S. and among the priciest in the world. However, despite it’s jaw-dropping attributes, the massive cost and the many years spent working on it, it proved too much of a gamble: its price dropped to $188 million in 2018 and $150 million in early 2019. In October 2019, Billionaire Mansion finally found its owner for ‘just’ $94 million – pennies compared to the asking price and the treasures amassed inside.”
The Shawnee Mission Post in Kansas. “I am comfortable saying that many areas of KC ended 2019 with more housing inventory than they had seen in several years. For example, at the end of 2019, the city of Leawood had 6.4 months of housing supply. That is the highest housing inventory that Leawood has seen in December in several years. The annual average of inventory is 3.9 months which is technically still a seller’s market. But the front line indicators such as days on market and current inventory levels are suggesting otherwise. Lastly, median home prices in Leawood are down 9.8 percent when you compare the last two Decembers, or $49,425.00 in real dollars.”
“Now let’s consider the luxury housing market in Mission Hills. This may complete the picture for you and give you a hint as to how the market is changing and will continue to change in 2020. Mission Hills ended 2019 with 13.5 months of housing supply. Yes, that means it would take over a year for all of the active homes for sale to sell in Mission Hills. You might think, ‘oh that’s normal for luxury homes. They probably don’t sell that quickly and there probably aren’t that many buyers for those homes, right?’”
“Not really. Just a few months earlier in April 2019, there was only 4.4 months of housing supply, which is technically a seller’s market. That is right, a seller’s market in Mission Hills, Kansas. Oh how quickly things can change. The annual average of housing inventory in Mission Hills is 10.6 months, which means that they are now in a buyer’s market. This is most evident when we look at median home prices in Mission Hills. The two year average median home price is $935,000.00, but in December 2019 it was $790,000.00 which represents a 24.7 percent drop in home prices.”
“The seller’s market that once existed all over KC and in almost all price ranges is now being compressed. Please visualize our real estate market in layers with the luxury home market on top (750K+) all the way down to the last of the starter homes under 200K that are still available in areas like Prairie Village, Mission, Roeland Park, Merriam and Lenexa.”
“Now visualize the market correction as a big foot stepping on our market and pressing downward. The pressure from the foot (market correction) is pushing the seller’s market down to only the most approachable price ranges while leaving anything over 300K to feel the effects of the market correction such as an increase in housing supply, higher days on market, and a drop in median home prices.”
From Fox Business. “Due to a global housing market slowdown, purchasing a home now seems harder than ever. For buyers who are looking to complete their first home purchase, it’s important to avoid several critical and expensive home buying mistakes. One-third of home buyers go over their initial home budget, according to research from Owners.com. Aside from going over budget, having a low down payment and entering the housing marketing with a large student loan debt burden can also put homeowners in a difficult financial position post-purchase.”
“Those who overspend often end up regretting it. 68 percent of millennials in a Bank of the West survey said they had buyers remorse after purchasing their first home. The 2019 NerdWallet Home Buyer Report echoes these findings: 25 percent of respondents in the report no longer feeling financially secure following their home purchase.”