Thursday, April 16, 2015

Cracks in the ice, or nothing?

I haven't been paying attention to real estate as much as I normally do because sometime after Christmas - all the markdowns disappeared. January, February, and March basically had none. With all the housing shortages going on I figured there was too little supply for there to be many markdowns. Although I still couldn't resolve how sales kept falling but prices kept climbing. I don't understand a market like that.

At any rate - my rental is up so I'm keeping a closer eye now. I like to see what I'm competing against. Last night I'd gone through the available rentals and decided to look at the sales just for kicks. Just to see what prices across town were doing. I was a couple pages in and I started seeing markdowns starting on April 14. One of these particular houses piqued my curiosity so I went to check it out.

This is when I saw something really strange. It had a 30,000 dollar markdown - but it had only been on the market two days! Who marks down a house after two days!? I thought surely this must be a typo or a newbie realtor, so I went to the next house marked down on the same day - April 14. It had an odd 10,008 dollar markdown. I don't know if it's a lucky number thing, because that is an odd number. To my surprise it had only been on the market 10 days. These were both middle range houses.

Then I thought, maybe I'm mis-remembering the dates. I haven't been checking as much, so it's possible. The oldest markdown is from March 26. So I wasn't mis-remembering.

It's such a small sample, I don't know if it means anything yet. But it's super odd to mark down houses so quickly.

I've been reading that credit rejections are way up. I don't know the make up of which kind of credit so it's hard to make a good judgement. But when I read the article I thought - the banks see it now. They start refusing to lend in deflationary conditions. You are a worse risk for them. I also have been reading tons of articles where liquidity is drying up. Which also makes banks not want to lend.

I don't know if there are any conclusions to draw right now. But it is definitely an interesting development.

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