Prices of Houses just might drop in 2020

A report from the Augusta Chronicle in Georgia. “Earlier this year, the VA loan industry celebrated its 24 millionth loan. Chris Birk, a spokesman for Veterans United, the nation’s largest VA lender, said the program is as popular now as it’s ever been. Before the 2007-08 housing market crash, VA loans accounted for just 2% of all mortgages. Now they account for 12%.”

“VA loans are not one-time-only deals; veterans can get multiple loans over their lifetime, provided they don’t default on the loan. The only difference is that the closing-cost fee veterans are charged increases on the second and subsequent mortgage. Many simply roll the cost into their loan amount and can use the no-money-down strategy to build a small portfolio of income-producing rental homes.”

“‘It’s a vehicle for wealth creation,’ Birk said.”

The Reporter Herald in Colorado. “Loveland’s residential real estate market has relaxed from its frantic pace of a year or two ago, professionals say, when buyers were competing with each other the first day a home went on the market and sellers had to create spreadsheets to keep track of all the offers.”

“Rick Moehling, a Realtor with The Group in Loveland, agreed that ‘it’s definitely a much more friendly market for noninvestor buyers.’ ‘The market is not as shark-infested as it was a couple of years ago, 18 months ago,’ he said.”

“Both Realtor Robert Walkowicz and Moehling said as homebuilders catch up to the demand, the increasing inventory of new homes is taking some of the pressure off the market. Moehling and Walkowicz said they’re seeing prices reduced as sellers find what the market will bear.”

“Moehling said sellers who saw homes going for above-list prices a year ago are having to adjust to the change in the market. ‘As a seller, you want to get the most for your property,’ he said. ‘Some sellers want more than what their property was valued at.’”

The Oregonian. “In this week’s real estate gallery, we look at fixer-uppers and homes with reduced prices or those listed under median values. Price cut of $245,000, acreage: 14421 N.W. Springville Road in Forest Park is listed at $1.75 million (price was $1,995,000 June 3).”

“Price cut of $75,000: 3020 N.W. Monte Vista Terrace in Hillside is listed at $1.1 million (it was $1.175 million June 7). Price cut of $50,000: 2224 S.E. Lambert St. in listed at $749,000 (it was $799,000 March 22).”

From Mansion Global on New York. “At 432 Park Avenue—the supertall hotbed of extravagant real estate transactions on Manhattan’s Billionaires Row—two eight-figure sales have been logged in the past week and both changed hands for a significant discount, according to property records filed with the city.”

“The most expensive of the pair, a penthouse on the 94th floor of the 96-story tower, closed for $31.5 million, records show. The final sale price is $9.5 million less than the $41 million the three-bedroom condo had been asking since hitting the market in December 2017.”

“The second transaction, a three-bedroom unit on the 86th floor, was just a pinch less expensive at $29.54 million. But the final sales price was $10 million less than the $39.5 million asking price that had been attached to the apartment since 2014, listing records show.”

From Forbes. “The city of Seattle and the metro overall have been particularly hard hit by the slowing housing market. According to Redfin data, available housing inventory in Seattle rose from 1,064 in May 2018 to 2,175 in May 2019, an increase of over 100%. For the Seattle metro area overall, the increase in inventory is smaller, though substantial: from 5,257 available homes for sale in May 2018 to 7,675 in May 2019, an increase of 46% year-over-year.”

“Meanwhile, home values, according to Zillow, dropped by 4.5% over the last year. The bedroom community of Lake Forest Park north of Seattle has seen home values drop by 5.3% over the last year. Shoreline, another Seattle suburb, has seen home values decline by 5.1% year-over-year.”

“Like the tech-centered city of Seattle, San Jose and the San Jose metro area too have taken the housing slowdown quite hard. According to Zillow, home values in San Jose declined by 4.2% since last year. But that’s nothing compared to other cities in the San Jose metro area.”

“In Santa Clara, home values dropped by 8.4% from May 2018 to May 2019. In Sunnyvale, the decline is even more dramatic: Home values plummeted 10.7% since last year. Inventory has increased year-over-year in both Santa Clara and Sunnyvale, according to Redfin data, with the latter up 73.8% in terms of all homes for sale form May 2018 to May 2019.”

“The impact on San Jose metro area home values has been substantial. Out of the 24 cities in the San Jose metro area tracked by Zillow, 21 of them have experienced outright declines in median home value year-over-year.”

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