A Free, Open And Transparent Market
A reader posed these questions. “I approach this premise carefully. With a certain depth of thought and a lack of resultant clarity, I ask: What if:
1) Home prices rise to meet current rents.
2) Resulting in underwater homeowners newly afloat
3) Resulting in fewer foreclosures and more lenders/mortgage holders willing to forgive some debt, refi, or agree to a short sale because their loss margins are diminished.
4) Resulting in greater demand and greater supply.
5) Resulting in equilibrium; homeostasis.
6) It’s all local.
7) Given the current job market and prospects, the interest rates will need to be artificially suppressed, or GENX and GENY will be totally screwed without parental contribution.
Ain’t the future bright??”
A reply, “None of what you suggest makes sense in light of current market fundamentals. However, with enough government-sponsored gearing, I suppose any kind of wacky price movement is conceivable.”
Arabian Business. “Some assets in Dubai’s property market are now undervalued, and it is realistic to expect that prices can regain their 2008 highs, one of the emirate’s most prominent property bosses has claimed. Hesham Al Qassim, the CEO of Wasl Asset Management – which is the emirate’s largest landlord, managing the property portfolio owned by the Dubai Real Estate Corporation – said that current prices meant that now was ‘the right time’ to invest in the local market.”
“When questioned as to whether prices could regain the peaks of four years ago, Al Qassim said: ‘They might get higher.’”
From Gold Coast. “In a glimmer of hope that the city’s battered housing market may finally be turning around, median house prices in the June quarter increased 2.8 per cent to $467,000. ‘I do think this is a sign that finally the Gold Coast housing market has bottomed out and we are seeing a move in the right direction,’ John Newlands, Real Estate Institute of Queensland Gold Coast chairman, said. ‘This is the first positive move in house prices in four years, which is significant. First homebuyers have also been reasonably active over the quarter in certain price ranges. The $400,000 bracket is considered good value by buyers in the entry-level market.’”
“Mr Newlands said there were signs that interstate investors were returning to the Gold Coast market. ‘I think they have been waiting for signs that the market really was at the bottom before they finally committed,’ he said. ‘But affordability and increased confidence in the market are meaning we are definitely seeing a lot more sold signs around the suburbs.’”
The Wanganui Chronicle. “ASB chief economist Nick Tuffley said house prices here had stayed high compared to incomes and would likely continue to rise. ‘We may look like we’re over-valued and high compared to other countries. We’re still likely to see in the short term a little more house-price pressure coming through. We don’t have an oversupply of housing in general and we have some fundamental supply constraints in places like Auckland and Christchurch.’”
“Barfoot & Thompson managing director Peter Thompson said house prices here were set by a free, open and transparent market. ‘It’s what a person is prepared to sell for and to buy for,’ he said. ‘I admit it’s making it harder for people to get into property. Getting more properties on the market will stabilise it. We’re coming into spring so we might start seeing that.’”
“Last week, a two-bedroom Sandringham house valued at $720,000 fetched $1.1 million at auction. The 1940s weatherboard house at 23 Watea Rd surprised listing real estate agent Christine Wooding at Barfoots. Expectations were more around the mid-$800,000s, she said. Developers bid against one another for the property, which is on a section of more than 800sq m.”
The Globe & Mail. “The Vancouver housing market isn’t the pressure cooker it used to be, which makes buying a house a far less painful endeavour than in years past. But no one’s about to call Vancouver a ‘buyer’s market.’ Nice houses that are priced right are selling within days, some in bidding wars. But anything priced too high or considered undesirable is apt to sit idle in this market, which is, according to the Real Estate Board of Greater Vancouver, witnessing the lowest total sales for the region since July, 2000.”
“Teacher Barb MacKay says it took her about a year and a half to find the right house to buy. She found it recently on a 30-by-90-foot lot in New Westminster. She’d originally seen the bungalow a year ago, listed for $490,000. However, she thought it needed too much work. Someone else purchased the house, did the renovations, and recently relisted it. By now, Ms. MacKay knew the house was a good deal, especially with the renovations all done, and she made an offer. There were other offers, but she got the house a couple of months ago for $592,000. ‘I think there is still stuff out there, but a lot of it is unaffordable,’ she says.”
“Jay Berman, who lives in Manhattan Beach, Calif., purchased an 800-square-foot condo in Vancouver’s West End 20 years ago, with a dream of one day retiring there. His plan has changed, so he put the condo on the market two months ago, for $299,000, which would seem a steal for a large one-bedroom in one of the most desirable neighbourhoods in Canada. But so far, he’s had no interest.”
“‘We’re not in a hurry, so it doesn’t matter much, but yeah, I guess I thought it would be pretty quick at that price,’ says Mr. Berman. ‘I think in a neighbourhood as nice as that, it would be at least $100,000 more for a comparable condo in Southern California.’”
The LA Times. “If you are looking to buy a starter home in Southern California, then you are likely to pay a premium from last year. With fewer low-cost homes and foreclosures on the market, people looking to get into the market at a cheap price are paying more. DataQuick reported that the number of homes in the Southland that sold for less than $200,000 fell 5.8% from the same point a year earlier. Homes between $300,000 and $800,000 surged 13.4%. Sales of homes costing more than $800,000 rose 7.2%.”
“Those changes in the kinds of homes selling helped lift the overall median last month. The median price for the region last month was $306,000, a 2.0% increase from June and up 8.1% from July 2011. But the median is also far from a perfect measure of home price appreciation. It often reflects the kinds of homes selling during a certain period and the kinds of neighborhoods these homes sold in.”
“For instance, during the worst of the housing slump the median price dragged as foreclosures dominated the market, particularly in inland parts of California such as Riverside and San Bernardino. The trend for now is headed in the other direction. The firm DataQuick estimated that about half of the 8.1% annual gain in July’s median sale price could be attributed to the change in the mix factor.”
“PGA champion Tiger Woods has sold his condominium in Corona del Mar for $2,213,875. But like many other residential real estate owners, Woods landed in the rough when it came to selling a place bought before the housing downturn. Public records show he bought the property in 2004 for $3 million.”
The East Valley Tribune. “In a turnaround that may be nothing short of amazing, the price of the average home in Arizona rose more in the last year than anywhere else in the country. New figures today from the Federal Housing Finance Agency show a year-over-year hike in sales prices of 12.9 percent. And prices in just the last quarter are up close to 6 percent. What makes this particularly noteworthy is the same report issued exactly one year ago found exactly the opposite. The FHFA found prices had dropped almost 15 percent from the same time in 2010.”
“But Michael Orr said that there may be a bit less to the increase than the pure numbers show, at least as it affects the typical Arizonan. Orr, director of the Center for Real Estate Theory and Practice at Arizona State University, said much of the market is being driven by investors anxious for a bargain. As the inventory of affordable homes dries up, he said, the investors find themselves bidding against each other.”
“He said, though, that this double-digit price increase recorded by FHFA does not necessarily reflect what all homes in Arizona are bringing. Orr said the index tends to weigh heavier with the sale of new homes which are being financed with conventional mortgages. At the other extreme, he said the federal agency seeks to filter out ‘distressed’ sales forced by foreclosures. ‘It depends on what you measure,’ he said.”
