Trend of single family home prices dropping hard in "non-hot markets"

[alarmguy]

(if this helps you)
Local MLS boards feed directly into the consumer site http://www.realtor.com
If your looking for up to date MLS activity.

I agree if we are talking the same talk. The top of the market is here, as the economy opens up and people start putting their existing homes up for sale, prices will start to come down. AS builders, now able to get building materials ramp up production prices will come down.
Im talking a 2 year time frame, not 2 months.

 

[GON]

(if this helps you)
Most local MLS (maybe all) feed directly into the consumer site http://www.realtor.com

AG,

Thanks.

Also want to supplement.

Listing price to sold price is a lagging/ trailer indicator. Price drops on listings are a leading indictor. Leading and trailing indicators can be very useful statics. On a six figure home sale in a reported tight housing market, lagging/ trailing indicators may not be as helpful as leading indicators for some people/ situations.

 

[alarmguy]

Ha, was just about to walk the dog and wanted to add one thing.

Zillow is the marketing genius of Wallstreet and its shareholders. All their listings that are on MLS come from Realtor.com
Agree on asking price, the only thing is that the property owners are creating those prices so its based on a hope and dream.
Properly priced homes are based on facts = recent sale prices. (plus a little hope and dream in a rising market)

Nothing wrong with hope and dream. I was a top performing listing agent in one of the most affluent places in the country some time ago and I sold many, many homes on my clients "hopes and dreams" in a rising market. I had a ball, it was fun, exciting like I never thought possible, eventually years later I burned out from all the action and kicked back into a more sane lifestyle .... I think we are at a top right now but time will tell.

 

[GON]

AG,

You are nailing it.

We lost our "Dupa" on two homes, we still own one of the two. We had to pay $50k at closing to sell one, and that is after I updated it with major actions (doors, windows, crown molding, finished basement)to make it sellable. The other we still own, and may be able to break even today, but we have a tenant in it. I doubt when the lease expires next year we will be able to sell at todays price, because the state the home is located in has a declining population, huge taxes, a momentous entitlement obligation it can't service debt, and a negative business environment.

We owned both houses at the same time, I was transferred and then ended up not being able to sell the one, and went down hill from there. Had we used leading indicators, we might not of bought the second home (I was transferred), right before the RE crash of 2007. But when we bought in 2006, trailing indicators said "green light go", yet in 2006 leading indicators started showing issues.

Last Saturday we went to a get together with friends I worked with in the Midwest years ago. Those still in the Midwest all had the same story. Their plans are to sell and move to TN, NC, FL, or TX. Not a single one (all married in their 50s) plans to stay in the Midwest. What does that suggest about the long term future of prices in TN, NC, FL, and TX.... what does that suggest about long term housing prices in the Midwest...... very different end states likely.

BTW- my research shows South Dakota as the best retirement state. Affordable housing, great health care (with limits), low taxes, fully funded state pension. Everything looks great in that state except the cold weather. Something I am not able to currently overlook.

 

[GON]

Another interesting data point. The state of Utah does not publish the selling price if a home. I am sure appraisers ca get records, but appears the public can't. Posting links to UT and AZ homes. UT shows no sold price, AZ (and most every other state) does.

Recently Sold Homes in Utah - 48626 Transactions | Zillow

Browse data on the 48626 recent real estate transactions in Utah. Great for discovering comps, sales history, photos, and more.

www.zillow.com

Recently Sold Homes in Arizona - 509592 Transactions | Zillow

Browse data on the 509592 recent real estate transactions in Arizona. Great for discovering comps, sales history, photos, and more.

www.zillow.com

 

[PandaBear]

List price is psychology, sold price is a lagging indicator, whether your offer got accepted is the only real "market" price.

Don't forget real estate is seasonal, school is about to start and the hot summer moving season is over. If the seller didn't sell during the summer then they either wait till next summer or reduce price now.

Typically I look only at the most recent 3-6 months transaction of similar homes in the same school. I won't even pay attention to listing.

 

[Driz]

That's the dilemma in a lot of situation when the population is the decision maker and the population is the reason new economy is not coming in. Many cities transitioned from the older industry (farming, manufacturing) to newer (tech, finance), it saved the cities but it ruined the long time residents life. However without the change (and eventually drive out the long time residents) the city will decline with the population.

During the transition a lot of clashes will happen, politically and social economically. You see those argument online all the time about techbro bashing as well as Texans not welcoming Californians outbidding them with Californian money, and many prior clashes back in the cowboys and sheriffs days that turns bloody.

You also see that in companies when they transition, needing layoff and hiring new people of different skills.

 

[alarmguy]

Another interesting data point. The state of Utah does not publish the selling price if a home. I am sure appraisers ca get records, but appears the public can't. Posting links to UT and AZ homes. UT shows no sold price, AZ (and most every other state) does.

Recently Sold Homes in Utah - 48626 Transactions | Zillow

Browse data on the 48626 recent real estate transactions in Utah. Great for discovering comps, sales history, photos, and more.

www.zillow.com

Recently Sold Homes in Arizona - 509592 Transactions | Zillow

Browse data on the 509592 recent real estate transactions in Arizona. Great for discovering comps, sales history, photos, and more.

www.zillow.com

I was just curious. I looked up the first two homes in that second link and realtor.com is saying they are "Off Market"
When the public cant get the information it is due to MLS having exclusive rights to "their" information. More or less they limit who can publish sold prices to themselves.
Both homes in the second link were listed on MLS (realtor.com) and now showing off market. Disclaimer = *LOL* ALL state/local MLS boards work independently from other MLS boards, so I am only taking a reasonable guess here as to the "why" without spending my day trying to figure out the state of Utah.


Chances are very good if you go to the individual "county" tax websites in Utah you may be able to find out actual selling prices as taxes are public information in almost every state. Last sell price/market value is normally attached to the tax.

Ps!!! Yes, it looks like that is what is happening. I did a search in Utah based on your links. Every "sold" house is showing as off market on Realtor.com.
The only way to avoid putting a "Sold" price in there is change the listing status to "Off Market" when it sells instead of "Sold" then they get to "hold" the information to themselves instead of sharing it with the public. Person with the information wins, always, including against Zillow.
But I can guess it will only be a matter of time where they will lose the battle, but who knows... and again, disclaimer = I only briefly looked at this, this is my best guess without spending the day on it, though I find it fascinating. As our local MLS used to try to prevent sold information from coming out, they lost the battle a long time ago. But maybe not sharing vs county information... cant remember.

Here is one example for a county in Utah to look up property information = https://www.washco.utah.gov
Scroll down, click on property search, you only need one line of information to look up a property. Most counties have websites like these.

 

[Rmay635703]

Many houses in this area sold for 4 digit numbers in the last crash, what is funny is many times Zillow does not list tax deed and foreclosure sales amounts but you will find them on the county tax registar site

 

[SHOZ]

Zillow is there to help Zillow. My house goes up and down almost as much as my credit score from the scam Credit Karma types....

 

[GON]

My two cents on houses that will increase in value if purchased today.

Homes that I think will definitely gain value over the next decade will be very high end homes located in a very secure compound, with a dedicated guard force, and homeowners that are very wanting and able to pay a very large monthly fee for the private security force. These type of compound developments cost a lot to build infrastructurally, and require a certain amount of homes to pay for the security force, and physical security measures. I am not referring to a basic gated community. But a place that visitors and uninvited people can't make it onto the compound without proper credentials.

The states these will be in will likely be: TX, CA, AZ, ID, UT, FL, NC, and TN.

My speculation is if one buys a home in this type of development today- it will be worth more tomorrow, next year, five years, and ten years from now. I can't same the same about homes not in this configuration- they may rise in value, they may fall in value, or be stagnant. Homes in development with full physical security and a full time private security force in the right state will go up in value.

And this private security force is typically led by a former Chief of Police, retired SR administrator from the FBI, etc, making a low six figure salary. The security officers are retired LE. The security force in these developments are very well compensated- you are not getting security guards make $15 a hour.

JMHO.

 

[IndyIan]

I thought housing prices were stabilizing here; I was wrong. Single-family home prices reached all-time highs...
Local analysts wonder where all this buying power came from in the last few months.
They decided the money was always there, but but people were simply not spending it.

YOY, single-family home prices increased considerably, up 22% in San Mateo, 19% in Santa Clara, and 33% in Santa Cruz.
The median prices jumped, of course this perhaps implies that the mix included more higher priced area sales along with price increase.
Average days on the market shrunk to 18 days. In my neighborhood I see, "Coming soon" and then "Sale Pending".

View attachment 66422

I think you can assume single family house prices are going up but there is a lot of variance in the type/location of a "single family home". This graph may show that a larger percentage of desirable/more expensive homes are selling lately than in the past? You don't really know. Really there needs to a comparison of value of similar homes in the same areas that did sell last year vs this year to really get an idea of home price increases.

 

[Wolf359]

I was just curious. I looked up the first two homes in that second link and realtor.com is saying they are "Off Market"
When the public cant get the information it is due to MLS having exclusive rights to "their" information. More or less they limit who can publish sold prices to themselves.
Both homes in the second link were listed on MLS (realtor.com) and now showing off market. Disclaimer = *LOL* ALL state/local MLS boards work independently from other MLS boards, so I am only taking a reasonable guess here as to the "why" without spending my day trying to figure out the state of Utah.


Chances are very good if you go to the individual "county" tax websites in Utah you may be able to find out actual selling prices as taxes are public information in almost every state. Last sell price/market value is normally attached to the tax.

Ps!!! Yes, it looks like that is what is happening. I did a search in Utah based on your links. Every "sold" house is showing as off market on Realtor.com.
The only way to avoid putting a "Sold" price in there is change the listing status to "Off Market" when it sells instead of "Sold" then they get to "hold" the information to themselves instead of sharing it with the public. Person with the information wins, always, including against Zillow.
But I can guess it will only be a matter of time where they will lose the battle, but who knows... and again, disclaimer = I only briefly looked at this, this is my best guess without spending the day on it, though I find it fascinating. As our local MLS used to try to prevent sold information from coming out, they lost the battle a long time ago. But maybe not sharing vs county information... cant remember.

Here is one example for a county in Utah to look up property information = https://www.washco.utah.gov
Scroll down, click on property search, you only need one line of information to look up a property. Most counties have websites like these.

Probably more like the MLS only pushes out certain info. Ours does the same thing. Once it's under agreement, or something else happens, it basically disappears from realtor.com and you get that off market status. Usually for sold, you can look things up in the registry of deeds and that's usually public information. All I can think of is that they didn't the info online or Zillow just doesn't want to pay to access it. Some local registry of deeds charge per page for access.

 

[JeffKeryk]

I think you can assume single family house prices are going up but there is a lot of variance in the type/location of a "single family home". This graph may show that a larger percentage of desirable/more expensive homes are selling lately than in the past? You don't really know. Really there needs to a comparison of value of similar homes in the same areas that did sell last year vs this year to really get an idea of home price increases.

Agreed. Median price is simply the middle number is the list of homes sold. I included this in my post.
I can tell you this... I sold my parent's home in Sunnyvale 2 years ago in July 2019 for $1.9M. The house is valued at $2.3M right now.
$400K in 2 years. Oh yeah, they bought it for $28K in late 1969.
I just don't get it. Who the heck can even pay the property taxes?

 

[Job]

Agreed. Median price is simply the middle number is the list of homes sold. I included this in my post.
I can tell you this... I sold my parent's home in Sunnyvale 2 years ago in July 2019 for $1.9M. The house is valued at $2.3M right now.
$400K in 2 years. Oh yeah, they bought it for $28K in late 1969.
I just don't get it. Who the heck can even pay the property taxes?

Speculators, if married they can take 500k and not pay a dime of federal taxes on it if they live in it two years. 500k just like that, boom, tax free. I don’t know if CA tax is due never used the tax break myself, can’t remember. I see people doing this so much it is sickening. Now there is prop 19 which has messed up a lot of people royally, while benefitting others greatly and real estate agents.
Then there are those who can afford any property tax. As long as they keep their high paying jobs.

 

[PandaBear]

My two cents on houses that will increase in value if purchased today.

Homes that I think will definitely gain value over the next decade will be very high end homes located in a very secure compound, with a dedicated guard force, and homeowners that are very wanting and able to pay a very large monthly fee for the private security force. These type of compound developments cost a lot to build infrastructurally, and require a certain amount of homes to pay for the security force, and physical security measures. I am not referring to a basic gated community. But a place that visitors and uninvited people can't make it onto the compound without proper credentials.

The states these will be in will likely be: TX, CA, AZ, ID, UT, FL, NC, and TN.

My speculation is if one buys a home in this type of development today- it will be worth more tomorrow, next year, five years, and ten years from now. I can't same the same about homes not in this configuration- they may rise in value, they may fall in value, or be stagnant. Homes in development with full physical security and a full time private security force in the right state will go up in value.

And this private security force is typically led by a former Chief of Police, retired SR administrator from the FBI, etc, making a low six figure salary. The security officers are retired LE. The security force in these developments are very well compensated- you are not getting security guards make $15 a hour.

JMHO.

I know you are just being sarcastic, but most high end home does not do well in long term appreciation. In general I found upper middle class home hold value the best in recession, solid middle class home do well over long term growth, and condos / lower income single family home swing up and down and is good only for timing the market (buy in recession and sell at boom time for upgrade). Multiplex are good for long term cash flow holding but it is hard to manage if you are not willing to actively manage, not for everyone.

 

[GON]

I know you are just being sarcastic, but most high end home does not do well in long term appreciation. In general I found upper middle class home hold value the best in recession, solid middle class home do well over long term growth, and condos / lower income single family home swing up and down and is good only for timing the market (buy in recession and sell at boom time for upgrade). Multiplex are good for long term cash flow holding but it is hard to manage if you are not willing to actively manage, not for everyone.

PB,

Actually I was not being sarcastic. I don't want to get political, but sense that "safe haven" homes will be in higher demand over the next decade. The developments that can support a safe haven home are expensive to zone, build, reach critical mass to pay for the "security zone". Many wealthy people in unsecured housing, minimally secured housing, etc. My gut is they will want to live in that "green zone" development.

One hard example of this is Haiti. Haiti is considered by many as the poorest country in the western hemisphere. Yet safe housing in Haiti can compete with high end housing by price in FL, CA, and TX. Why? Because Haiti is tough to get things done, lock in land for a new safe haven development, etc. So what is safe is very expensive.

Another example in New Zealand. Considered by many as the most self sufficient, safest remote county in the world, with almost all the benefits of any western country. Many of the USAs most wealthiest people own estates in New Zealand. They own these estates as a "backup position" if the USA goes crazy because of a potential failing USD. Many of Wall Streets most wealthiest bankers have bought into the New Zealand safe haven.

The billionaires of Silicon Valley and other rich Americans are reported to be buying extensive areas of land in New Zealand in preparation for a feared apocalyptic event such as a nuclear war or an outbreak of a global virus that would end our civilization as we know it. With New Zealand being one of the world’s remotest locations, it is perceived as one of the safest and most politically stable, with plentiful unpopulated land and clean water, and thus an attractive spot for the ultra rich to escape to in an emergency situation.

Billionaires buying up New Zealand property in preparation for apocalypse - The Futures Centre

The billionaires of Silicon Valley and other rich Americans are reported to be buying extensive areas of land in New Zealand in preparation for a feared apocalyptic event such as...

www.thefuturescentre.org

 

[The Critic]

PB,

Actually I was not being sarcastic. I don't want to get political, but sense that "safe haven" homes will be in higher demand over the next decade. The developments that can support a safe haven home are expensive to zone, build, reach critical mass to pay for the "security zone". Many wealthy people in unsecured housing, minimally secured housing, etc. My gut is they will want to live in that "green zone" development.

One hard example of this is Haiti. Haiti is considered by many as the poorest country in the western hemisphere. Yet safe housing in Haiti can compete with high end housing by price in FL, CA, and TX. Why? Because Haiti is tough to get things done, lock in land for a new safe haven development, etc. So what is safe is very expensive.

Another example in New Zealand. Considered by many as the most self sufficient, safest remote county in the world, with almost all the benefits of any western country. Many of the USAs most wealthiest people own estates in New Zealand. They own these estates as a "backup position" if the USA goes crazy because of a potential failing USD. Many of Wall Streets most wealthiest bankers have bought into the New Zealand safe haven.

The billionaires of Silicon Valley and other rich Americans are reported to be buying extensive areas of land in New Zealand in preparation for a feared apocalyptic event such as a nuclear war or an outbreak of a global virus that would end our civilization as we know it. With New Zealand being one of the world’s remotest locations, it is perceived as one of the safest and most politically stable, with plentiful unpopulated land and clean water, and thus an attractive spot for the ultra rich to escape to in an emergency situation.

Billionaires buying up New Zealand property in preparation for apocalypse - The Futures Centre

The billionaires of Silicon Valley and other rich Americans are reported to be buying extensive areas of land in New Zealand in preparation for a feared apocalyptic event such as...

www.thefuturescentre.org

In general, the high-end home market has a very limited audience. As @PandaBear stated (correctly), this portion of the market does not tend to appreciate in the same manner as the entry to middle of the market.

Also keep in mind that most develops containing armed security (especially police officers) are extremely difficult to insure, so by default, those tend to be far and few. In a prior life I used to insure a lot of HOA developments.

 

[PandaBear]

PB,

Actually I was not being sarcastic. I don't want to get political, but sense that "safe haven" homes will be in higher demand over the next decade. The developments that can support a safe haven home are expensive to zone, build, reach critical mass to pay for the "security zone". Many wealthy people in unsecured housing, minimally secured housing, etc. My gut is they will want to live in that "green zone" development.

One hard example of this is Haiti. Haiti is considered by many as the poorest country in the western hemisphere. Yet safe housing in Haiti can compete with high end housing by price in FL, CA, and TX. Why? Because Haiti is tough to get things done, lock in land for a new safe haven development, etc. So what is safe is very expensive.

Another example in New Zealand. Considered by many as the most self sufficient, safest remote county in the world, with almost all the benefits of any western country. Many of the USAs most wealthiest people own estates in New Zealand. They own these estates as a "backup position" if the USA goes crazy because of a potential failing USD. Many of Wall Streets most wealthiest bankers have bought into the New Zealand safe haven.

The billionaires of Silicon Valley and other rich Americans are reported to be buying extensive areas of land in New Zealand in preparation for a feared apocalyptic event such as a nuclear war or an outbreak of a global virus that would end our civilization as we know it. With New Zealand being one of the world’s remotest locations, it is perceived as one of the safest and most politically stable, with plentiful unpopulated land and clean water, and thus an attractive spot for the ultra rich to escape to in an emergency situation.

Billionaires buying up New Zealand property in preparation for apocalypse - The Futures Centre

The billionaires of Silicon Valley and other rich Americans are reported to be buying extensive areas of land in New Zealand in preparation for a feared apocalyptic event such as...

www.thefuturescentre.org

In general, the high-end home market has a very limited audience. As @PandaBear stated (correctly), this portion of the market does not tend to appreciate in the same manner as the entry to middle of the market.

Also keep in mind that most develops containing armed security (especially police officers) are extremely difficult to insure, so by default, those tend to be far and few. In a prior life I used to insure a lot of HOA developments.

Maybe I am not a mob boss driver so I do not know how the secret society operates or how the kingpins run their cartels.

What I can only describe based on my personal observation is that high end Hermes hand bags, fine arts, cars, and homes for example, do not follow the same predictable growth and valuation of the middle class assets. Middle class assets have large quantities and easy to afford (relatively speaking compare to the former royals, cartel boss, warlords, politicians, oil prince possessions) and you know how much they can make, how much they can borrow, how much they will take if you want to buy them out. They tends to have a simple need for a simple life and as long as they are together, safe, make a decent living, raise a decent family, they are ok.

The true high end stuff people don't value the same way. So if you are in the Jackson Hole Wyoming market it might be very different, and if you can afford those good for you. However don't expect trying to replicate it and see nobody buy it. It will just turn it into a Chinese ghost town with Western theme where they copy everything and people only buy it to speculate. Those cannot be mass produced and their demand and supply are not in large number like middle class assets.

 

[PandaBear]

Armed security community not only has high insurance cost, but they are not to be trusted and they do not like to live in a "community" in the US. It may be a selling point in South Africa but who do you protect when one rich scumbag decided to start a shoot out with another in the same armed community with their own guns? What would Securitas do? If you are worthy to have an armed bodyguard like a Fortune 500 CEO then you likely have to have your own, instead of living in a community.

Regarding to being safe, if you buy in good school district far away from the bad one you are usually fine. At least in the US even if you have bad area they don't drive into good area to rob, they know most don't have cash at home and may have guns, and security alarm and camera, and is high risk low reward.