A Sense Of Blinding Positive Anticipation
It’s Friday desk clearing time for this blogger. “National Association of Realtors Chief Economist Lawrence Yun said he ‘would not be surprised’ if U.S. home prices jumped 10% by June of next year. ‘This time next year, there could be a 10% price appreciation. I would not be surprised to see that,’ Yun said.”
“Nat Bosa, the Vancouver developer responsible for many of San Diego’s downtown condo towers, says his next project will top all those. He’s planning a 41-story, 232-unit tower at the southeast corner of Broadway and Pacific Highway. But it will be the most expensive with a starting price of $750,000. Bosa, who has completed seven downtown condo towers so far and has at least five other sites to come, said he plans to start construction on this newest one next year because it is what he considers his most dramatic to date.”
“‘Why leave great wine in the cellar for someone else to drink?’ he asked. ‘I want to drink it.’”
“After the sluggish post-recession period when trophy homes with eight-figure price tags seemed to linger on the market for years—if they were even listed at all—there’s movement in this rarefied segment. In the last few months, a handful of these pricey properties, which are invariably located on the Upper East or West Sides, have traded hands. Buyers are now nosing around others in the $30 million-plus category with an intensity not seen in years, say brokers, who explain that the renewed interest is due to an uptick in inventory as well as a change in buyers’ attitudes.”
“‘People weren’t listing these types of homes for years because they were worried about dropped value,’ says Bonnie Pfeifer Evans, a salesperson at the Corcoran Group, adding that ‘uncertainty’ about the markets in Europe has made New York real estate seem like a safe long-term investment.”
“Over the next seven months, an 838-meter-high (0.52 mile) skyscraper will be constructed in Changsha, China Business Journal reported. The structure will be 10 meter higher than the Burj Khalifa Tower which is currently still the tallest building in the world. The number of skyscrapers under construction in China now exceeds 200, which equals the total number of all skyscrapers currently standing tall across the U.S.”
“But beware! Research by foreign-funded institutions shows that over the past 140 years, a craze for skyscraper construction is a reliable signal for an impending economic crisis. The latest examples of this theory would be those skyscraping office buildings and hotels in Dubai, including the Burj Khalifa Tower. Soon after these buildings were completed, economic crisis hit the country. ‘The building boom starts with easy credit,’ said Andrew Lawrence, a Hong Kong-based analyst for Barclay’s Capital, ‘But it also comes with a sense of blinding positive anticipation. By the time the building spree has ended, the local economies will already have taken a turn for the worse.’”
“To tap into the growing demand of Malaysians investing in Australian properties, Maybank has expanded its ‘Overseas Mortgage Loan Scheme’ for purchase of residential properties in Melbourne, Australia. The bank first introduced the scheme in ringgit last January to finance the purchase of London properties. As at May 2012, it had successfully approved new loans from this portfolio exceeding RM260 million, it stated.”
“‘The right investment property in Melbourne offers great returns and exceptional growth potential given that the Australian market has not suffered a fall in median house prices, in fact it has grown by an average of 9.1 per cent per annum on average for the past 10 years,’ Maybank deputy president Lim Hong Tat said.”
“There is no danger of a collapse in Australia’s housing market. Indeed, if anything the market is undersupplied, assistant Reserve Bank governor Guy Debelle told a mortgage conference in Adelaide. For the nation as a whole there weren’t enough houses to go around. The Economist magazine recently found Australian home prices among the most overvalued in the world on the basis of mismatch between rent and home prices.”
“Dr Debelle told the conference such claims were more a sign of economists in search of a headline than a reflection of reality.”
“The latest property update from the Real Estate Institute of NSW has found prices for residential properties in Sydney stabilised in the three months to March, and the annual median house price for the 12 months to March dropped by 6.7 per cent to $560,000. REINSW CEO Tim McKibbin said the figures reveal a buyer’s market. ‘If you’re sitting and waiting for the market to ease further I frankly can’t see that happening,’ Mr McKibbin told AAP. ‘Now is an excellent opportunity for purchasers to be coming into the market.’”
“While strong economic performance has bolstered residential real estate activity in Alberta to date, recreational markets are still feeling the pinch, says a report released by RE/MAX. The report said Sylvan Lake and Canmore have seen price declines in recreational property. For example, the report said the typical starting price for a three-bedroom, winterized recreational property on a standard-sized waterfront lot in Sylvan Lake has dropped to $750,000 from $800,000 a year ago. In 2010, it was $1.2 million.”
“With just three waterfront sales to date, Sylvan Lake appears to be heading for another year of modest activity, said the report. ‘The market for recreational properties continues to steadily improve after bottoming out in 2010, yet the pace is exceptionally reserved as buyers take time to make their decisions,’ it said.”
“After years of decline, the Treasure Valley housing market has started to echo the pre-2007 boom. Prices have turned upward. Bidding wars have broken out. Builders are rushing to take out permits. And investors are back. Mike Turner, CEO of Front Street Brokers, said the biggest reason so few homes are for sale is because so many people owe more on their mortgages than their houses are worth. That negative equity affected one in four Idaho mortgage holders in the last three months of 2011, according to Core-Logic.”
“‘A lot of us are just stuck in our homes,’ Turner said. ‘The silver lining is it’s actually helping our market improve faster than expected by keeping the supply low.’”
“Stacie Cudmore, an agent with Keller Williams Realty Boise said most of her recent clients have had to pay more than the asking price, especially when buying a home in foreclosure. At least one paid about $37,000 more, she said. ‘If I had more money or more buying power, I’d be buying everything I could to invest,’ she said.”
“House foreclosures are sad for the people losing their homes. But they are also unpleasant for neighbors who find themselves looking at neglected, unmowed lawns of houses that now belong to unresponsive financial institutions. Township Committeewoman Betty Ann Fort said the township’s zoning official, John Barczyk, is ‘getting complaints’ about the appearance of vacant houses. Fort said she emailed the township’s planning consultant, Michael Sullivan, about what she termed the ‘dilemma’ of foreclosed houses. ‘His recommendation was a property maintenance ordinance,’ Fort said. ‘I wonder if there is another way.’”
“The question of who is responsible for the costs associated with foreclosed homes has once again surfaced in Illinois courts. First, and still unresolved, is the dispute centering on whether Fannie Mae and Freddie Mac are required, as the owners of foreclosed properties, to pay fees to register and maintain vacant buildings in Chicago.”
“‘The Federal Housing Finance Agency recognizes the difficulties faced by local officials that are struggling with shrinking tax bases,’ the agency said in a statement. ‘However, FHFA must resist when local governments impose unlawful tax-raising programs on Fannie Mae and Freddie Mac that, in turn, create a cost for taxpayers across the country.’”
“According to the National Conference of State Legislatures, a bipartisan organization serving the legislators of all 50 states, more than 400 foreclosure laws were enacted across the United States in 2011 alone, and most slowed down the process. The Nevada law, passed in October, has led to a dramatic drop in foreclosures.”
“Ricky Beach, a real estate agent in Reno, Nevada, said the new law, AB 284, ‘has pretty much killed the market here.’ The lack of foreclosure activity has led to a dearth of inventory, he said, with the number of homes for sale in the area down to 778 today from more than 1,700 in September. This has triggered a ‘mini-bubble’ in housing prices because the few properties available are receiving multiple bids. The only problem: No one thinks the gains are sustainable.”
“‘The bill did nothing to solve the crisis — it’s just prolonged it,’ Beach said. ‘Sooner or later the banks will work out how to deal with the law. And then foreclosures will hit the market, and prices will crash back down.’”
‘Malik Ahmad, a Las Vegas foreclosure defence lawyer who has spent the last six years trying to help vulnerable borrowers deal with unscrupulous banks, said the law had completely changed his view of the nature of the crisis. ‘This law has become a mockery,’ Ahmad said. ‘I am now turning down clients every day who I know have no intention of ever trying to pay their mortgage. They just want to stay in their homes for free. And that is a bad situation for everyone, lenders and homeowners.’”
