The Global Change Is Only Just Starting
It’s Friday desk clearing time for this blogger. “After trending down during the recession, new homes are getting bigger again, according to a recent report from the U.S. Census Bureau. David Crowe, chief economist at the National Association of Home Builders says the current mortgage lending environment might have something to do with the seeming growing appetite for larger homes. ‘Size fell during the recession because people were being more careful with their money,’ Crowe says. ‘The customer who’s buying a new home now is the only one who can get credit approval for a mortgage, [they are] economically comfortable and are therefore picking the house that they want. We’ve essentially eliminated a customer that would’ve wanted smaller homes because that’s all they could afford.’”
“Prime central London residential prices are nearly 50% above their post-Lehman low, reached in March 2009, and are now more than 12% higher than their March 2008 peak, according to Knight Frank. ‘While it looks very much that the surge in Greek buyers has fallen off sharply since the beginning of the year as those who had the funds to buy have done so, we are now seeing a noticeable uptick in interest from France, Italy, Spain and even German based purchasers looking at the prime London market,’ said Liam Bailey, head of residential research. ‘If the crisis in the Eurozone leads to a break up, will this flow of funds continue to London? Well, the final form of a break up will dictate that. Any country which seems at imminent risk of ejection is likely to see a massive outflow of capital, some of which will end up in bricks and mortar in London.’”
“The revolution in the Phuket condo market is expected to continue with the launch of a new large Sansiri development that is likely to sell out within a day or so. Prices start at 1.1 million baht for the studio apartments - less if you want to bring your own furniture - and 2.5 million baht for the family apartments. Construction is expected to begin in October and finish within a year. As with last year’s offering, the whole project is expected to sell out in the first day. Buyers of the initial dcondo offering were known to snap up 20 units as an investment, and some are said to have already taken a profit.”
“Suriya Wannabuit, Executive VP, said that he thought the central swimming pool took the dcondo Creek project to a new level. ‘We will have to look carefully at what we can do to improve a very good product next time,’ he said.”
“Rumours of the death of the resources boom have been greatly exaggerated. A message that ‘the boom is over because China is slowing down’ is typical of the simplistic twaddle peddled by economists suffering from limelight-deficit syndrome and repeated by lazy journalists. In reality the resources boom is only just starting. Brisbane property adviser (and national buyers’ agent of the year) Simon Pressley says we should be calling it ‘the resources revolution,’ and I agree. The global change inspired by new growth nations like India and China will extend decades into the future, as will Australia’s role in the process – though not without hiccups along the way.”
“The international media and so-called global analysts have been predicting the end of China’s runaway growth for the past four years. The doom-and-gloomers are chortling because property developers in China are currently selling their inventory at a 40 percent to 50 percent discount. And large new residential construction projects have resulted in an estimated 60 million unoccupied apartments.”
“Jonathan Levine, a lecturer of American Studies and English at Tsinghua University in Beijing, presents further ammunition on why China’s housing bubble will have a soft, not a hard landing. Levine concedes that ‘while public-sector largesse has led to as many as 60 million unoccupied apartments and a few other embarrassments, it demonstrates the ability of China’s central planners to control supply and perhaps influence demand.’”
“For example, he states, ‘Unoccupied homes in Florida continue to depress surrounding local neighborhoods because their very existence creates an excess of supply. The same situation in China would be a non-issue. The government would simply demolish the unoccupied homes–like erasing a mistake on a piece of paper.’”
“More than half of B.C. homeowners have refinanced their home or property, a new survey by Mustel Group for the Society of Notaries Public found. Of those who have refinanced, 49 per cent used the money for renovations; 23 per cent to buy other real estate; 23 per cent for other investments; 10 per cent to purchase a new car; and 8 per cent to consolidate or pay off other debts.”
“‘B.C.’s homeowners have enjoyed a healthy real estate market in most areas of the province,’ said John Eastwood, president of the Society of Notaries Public of B.C. ‘Many homeowners find themselves in the fortunate position where the current value of the house or property has far surpassed the price they initially paid, meaning a significant amount of their equity is tied up in the home. Mortgage refinancing allows them to access this equity without having to sell or downsize.’”
“A notice published this week announcing that the home of former Tennessee Titans running back Eddie George and his wife, Tamara, will be auctioned June 7 took the Georges by surprise, according to an accountant who has been trying to get a loan modification for the couple. ‘Because the loan and equity is not in balance where it should be, we want to go through a loan modification process,’ said Larry Goodman.”
“‘We’re not trying to walk away from anything,’ Goodman said. ‘They love living there, it’s a great house. Like anybody else who buys an expensive house, it flipped on him.’”
“VOICE has lobbied for loan modifications and other changes to help affected homeowners. It estimates that Prince William alone needs anywhere from $300 million to $500 million to fix the damage caused by the foreclosure crisis. Meanwhile, the $25 billion National Mortgage Settlement would provide just $480 million to all of Virginia. Wasiu Adedeji said his real estate agent told him he qualified for a $425,000 loan on his $35,000 annual income. Adedeji was suspicious but agreed to sign a loan that had an 8 percent interest rate but that could have gone up to 14 percent. His monthly payment was more than $3,000. He ended up short selling his home.”
“‘Looking back I should have known better,’ he said. ‘I never should have signed those papers. But I also know I was taken advantage of.’”
“When Evaristo Aguirre filed for personal bankruptcy in 2010, he asked permission to keep his assets – a $5 radio, $55 worth of furniture and linens – instead of the feds auctioning them off to pay back his creditors. The measly list of assets, totaling $995, wouldn’t have gone very far in paying his debts anyway. Aguirre owed almost $86,000, including a $77,000 legal judgment against him for a loan on a home that he’d already lost in foreclosure. ”
“When Aguirre bought the house in 2005, he described himself in his loan application as an auto body repair shop owner making nearly $8,000. In reality, he was a farmworker. Heritage Pacific Financial, a so-called ’second mortgage’ debt purchaser, sued Aguirre for fraud, claiming he’d lied about his business and income on his loan application. Ben Ganter, Heritage Pacific’s co-founder and legal director, says the company’s playing fair. ‘They look at people like us and think, ‘Oh, these dirty little debt collectors… ’ But our economy is based on the honesty of a borrower borrowing money and paying it back as they are supposed to.’”
“On June 15, Wells Fargo is set to auction off Gayline Hudson’s home in Oakland’s Fruitvale District. Hudson, who bought the two-bedroom house for $370,000 in 2005, lost her job as an adult education teacher when the Oakland Unified School District laid her off last June. The 44-year-old now owes more than $19,000 on her mortgage, an amount she says is impossible to make up. Hudson, who has secured part-time work as a teacher, said she makes about $1,600 a month, the same as her combined monthly mortgage payment, including property tax and insurance.”
“‘It’s crazy,’ said Hudsonr, who is ineligible for a principal reduction under the Keep Your Home program because her lender, Wells Fargo, does not participate. ‘My house has lost most of its value, so it’s not like they’re going to make any money on the foreclosure,’ she said. ‘Why won’t they let me live here – especially if the government would pay for it?’”
“Even as foreclosure filings have slowed, stagnant cases are one of the lingering symptoms of the six-year housing slump. The fallout continues to be felt in Palm Beach County in the form of abandoned homes and a clogged court system. At Valencia Isles, a 793-home community in Palm Beach County, one house has been in foreclosure for four years. ‘We have a few houses in foreclosure, and our biggest problem is getting the banks to move forward,’ resident Ron Wertheim said. ‘They don’t return your calls.’”
“In Palm Beach County, some foreclosure cases are six years old, and the average case lasts more than two years, longer than the statewide average and more than twice the national average. Many homeowners in default on their mortgages also do not pay their association fees, a shared concern by the board members gathered Monday. Roy D. Oppenheim, a national foreclosure expert, recommended working with the homeowners but ultimately upholding the community’s interests.”
“‘You need to get them out so they don’t pull down your entire neighborhood,’ Oppenheim said.”
