When We Know When It’s Going To End
It’s Friday desk clearing time for this blogger. “The housing dreams of families wanting to live in central Toronto will undergo a sea change in the coming decade as the supply of detached homes dwindles and the remaining ones soar in price, real estate experts say. ‘If you want to live in central Toronto, you’re going to have to live in a condo. Families will be forced to buy into high-density living. It’s the natural evolution of a city,’ says real estate mogul Brad Lamb, who develops condo projects in Toronto, Ottawa and Calgary.”
“About 53,000 new condo units are due to be completed in Toronto over the next 18 months alone.”
“Condo sales in Toronto’s downtown core took a large dip in June. RealNet Canada Inc. will release June preconstruction sales figures next week, but sales in the first five months of this year are 22 per cent below last year’s levels in that market, and May’s figure was 37 per cent lower than a year earlier. While the decline is significant, a large number of investors and Torontonians have still been scooping up yet-to-be-built units.”
“This week, one of broker Oliver Baumeister von Brettens’ clients who had bought a preconstruction condo last fall as an investment, and has already put 20 per cent down, said he wants to sell his contract to somebody else. ‘Builders are starting to feel it,’ said von Bretten. ‘They’re offering incentives to the clients, as well as larger incentives to the realtors to bring clients to the front door.’”
“Vancouver home sales have hit their lowest level in more than a decade. ‘This market has suddenly empowered buyers to get what they want in an offer,’ said associate broker Tony Ioannou, noting sellers no longer have the same number of offers to choose from now that sales have slowed. University of B.C. housing expert Tsur Somerville echoed that sentiment but noted it may not translate to cheaper homes just yet.”
“‘It’s not that they have more selection, per se - you’re just not all of the sudden needing to fight tooth and nail with other buyers to put offers on a place right after you’ve seen it,’ he said.”
“CIBC deputy chief economist Benjamin Tal says Vancouver shows where Toronto is headed. ‘The magnitude in Vancouver will be more significant but it is the same forces that really impact the Toronto market: namely we see some softness in investment activity, especially in the condominum market and we see less foreign money entering the city,’ Tal said.”
“Positive Real Estate CEO Sam Saggers says that the high-rise unit market in Surfers Paradise is particularly shaky at the moment. ‘There is a very depressed market at present, particularly the recently completed stock,’ he says. ‘Though prices have dropped, it doesn’t appear that the bottom of the market has been reached. Property values have dropped by up to 50% in some cases. On average, every property in the area has seen $100k stripped off its value from the last market peak. Luxury homes have gone from $4m to $2m. So unless you’re planning on buying a lifestyle property to live in, run the other way.’”
“Australia’s economy is dangerously dependent on China and the central bank will have to cut rates aggressively to protect the resource-rich nation from a slowdown comparable with that seen in struggling European states like Spain, said Andy Xie, an independent Shanghai-based economist and adviser to several Chinese banks. China is now Australia’s largest trading partner and the driving force behind its mining industry, which accounts for about 7% of GDP”
“‘Already the Chinese banks are having trouble lending money to fund [resources] projects,’ said Mr. Xie. ‘When a bubble is funded by foreigners, that’s when we know when it’s going to end.’”
“As early as 2009, SouFun Holdings Ltd. had organized a consumer group to US specializing in purchasing houses. It also helped many eager consumers take overseas houses and lands in Canada, Australia and Singapore. According to Zhuang nuo, the Managing Director of world SouFun, purchasing overseas house and lands has been a new tendency for Chinese buyers. The main impetus behind Chinese individual buyers has changed. In the past, they bought for housing demands, such as for children’s overseas education, emigration and retirement life, but now it is replaced by an expectation of investment returns.”
“‘It must be much more appealing for a freshman to have a 10,000 square meters villa land in US than an apartment burdened with mortgage loan and located out of rings in Shanghai,’ said Zhuang nuo.”
“California would become the first state to write into law much of the national mortgage settlement negotiated this year with the nation’s top five banks, and expand it to all lenders, under wide-ranging legislation state lawmakers approved Monday. Jose Vega drove 70 miles to Sacramento with his two young children to lobby lawmakers to pass the legislation after he spent three years battling to keep his home in the San Francisco-area city of Pittsburg.”
“In November 2009, he said, he found a trustee sale notice posted on his door 16 days after he was placed in a loan modification program. He was put into another modification program in the spring of 2010, only to have the bank again begin foreclosure proceedings. Vega eventually kept his home after filing for bankruptcy and getting help from the office of Democratic U.S. Sen. Dianne Feinstein. Now he and his family owe $466,000 - including the bank’s legal fees - on a home he said is worth about $200,000.”
“‘I’m not asking for a handout. All I’m saying is, you created this mess, let’s work something out,’ said Vega.”
“Northeast Ohio’s shaky housing market will grow more unstable and possibly drag down the local economy if banks don’t reduce the principals on more mortgages, foreclosure prevention advocates say. Nearly a third of mortgages in Ohio are underwater, according to RealtyTrac. Foreclosures also are increasing, after falling in recent years. They reached a 17-month high in May, RealtyTrac said.”
“Debbie Kline did a lot of research before buying her home in 2008 in Cleveland’s West Park neighborhood. She searched for a neighborhood with few foreclosures. She shopped around for the right mortgage. Maybe she should have looked into a crystal ball. Kline said foreclosures on her block have gone from two to about 15. The home she paid $79,000 for has dropped by at least $30,000. Frustrated, she, too, considered walking away.”
“Then she decided to fight. Kline heads Cleveland Jobs with Justice. ‘We, the taxpayers, bailed the banks out, now it is time for them to bail us out,’ she said.”
“Middle Tennessee home sales picked up momentum in June. In the April-June period, sales of single-family homes increased 26 percent compared to the same quarter in 2011, the latest data for nine counties in Middle Tennessee show. ‘Based on census data and other research, it appears that 34.1 percent of home owners in greater Nashville are paying significantly more than 30 percent of their income for housing,” said Loretta Owen, executive director of The Housing Fund, a group that works to increase the supply and financial resources to spur affordable housing.”
“‘While every situation is different, it seems clear that financial or credit counseling along with other preparation could help people who are paying a large percentage of their income for housing. They might be able to either reduce the amount they’re paying or begin to build equity through ownership rather than renting, and be better prepared for all that comes with owning a home,’ she said.”
“Others in the real estate sales community caution against overly restrictive bank lending on mortgages, though, saying it could undercut Middle Tennessee’s recent housing momentum. Certainly there were mistakes made by lenders during the housing boom, then bust, said Eddie Latimer, president of Affordable Housing Resources, a homebuyer education group. ‘While there is no way to defend the practices that caused the problems, the correction seems to be so overdone that the home ownership opportunity is being unnecessarily limited,’ Latimer said.”
“The Vue high-rise in uptown is converting to luxury apartments, ending years of speculation about the fate of a skyscraper filled with condos the developer couldn’t sell. One existing owner said he heard of the change when he received an email. The news, he said, wasn’t a surprise, but ‘I am disappointed that as homeowners there weren’t any options laid out in the letter. Obviously the value of our properties takes an immediate hit as our resale options are extremely limited. Again, not a surprise, but now a reality.’”
“The recession took a toll on Arizonans employed in real estate during the past five years with the loss of nearly 17,000 agents. Now that the market has turned, said Gordon Snyder, chairman of the Realtors group, he and other agents, brokers and title companies are seeing a tremendous amount of activity. Agents like Gary Holloway of Zip Realty Inc are dusting off an old joke about a recovery that goes something like this: ‘Dear God, give me one more real-estate boom and I promise I won’t spend it all on toys.’”
