It Is Price That The Borrower Is Getting Married To
It’s Friday desk clearing time for this blogger. “Lack of housing inventory to feed consumer demand is a growing concern in San Diego County and statewide, a chief housing economist told local Realtors. Leslie Appleton-Young, with the California Association of Realtors, said competition for homes began to heat up earlier this year in light of declining foreclosure resales and increased investor activity. ‘The market is in the process … of healing,’ she told local real estate pros at a housing summit held by the San Diego Association of Realtors.”
“Lawrence Yun, chief economist at the National Association of Realtors, highlighted San Diego’s lack of housing construction due to an issue that’s specific to this county. ‘You’re running out of land,’ said Yun.”
“In July, Los Angeles metro and Inland Empire real estate agents had, respectively, 3.6 and 3.4 months’ worth of unsold homes on the market. Those numbers, from the California Association of Realtors, are about half the inventory levels that can be expected to be on the market during normal conditions. Marty Rodriguez, who owns the Century 21 Marty Rodriguez office in Glendora, expects to see another round of foreclosures take place.”
“‘When you have people in their house for two years without making a payment, we’re sending the wrong message,’ she said.”
“Tamara Harris and her neighbors are gambling that lenders won’t foreclose on their Spanish-style homes in the Las Vegas neighborhood of Southern Highlands. Harris stopped paying her mortgage three years ago after her accounting business lost its biggest client and her home’s value plummeted 52 percent. Some neighbors are also delinquent on their mortgages. ‘There are so many people like me who aren’t paying their mortgage so they can buy groceries and gas,’ said Harris, who was rejected for loan modification programs. ‘It’s creating this whole false economy.’”
“Some 20 Occupy Eugene activist volunteers turned out at the group’s current occupation site: the yard of a Eugene house in foreclosure and empty for more than two years. RealtyTrac reported that 673 Lane County households received a foreclosure notice between January 1 and June 30, 2012. Among them is a River Road area house Occupy volunteer Vickie Embree purchased in 2008 — just before the bottom fell out of the national housing market. ‘I never thought this would be me,’ Embree said. ‘The last two homes I bought, I left with a bunch of money to put toward my next house. I bought this house for $190,000,’ she said. ‘I still owe $170,000, and it’s only worth $130,000.’”
“To live out his retirement years, He Zhongkui was counting on steady income from an investment that promised interest payments five times higher than what he could earn in a Chinese bank. Now He is cutting back on food and gasoline, having found himself one of a growing number of victims of China’s nebulous world of shadow banking. A ‘friend,’ who he said had been paying him 2,400 yuan ($379) a month after He gave him one-third of his 600,000-yuan life savings to invest in real estate, suddenly disappeared. So did the payments and principal.”
“‘I called, but the number was no longer in existence,’ said He. ‘I went to his home, but nobody was there. I was even invited to his daughter’s wedding, for heaven’s sake. It was all a scam.’”
“Facing severe budget shortfalls, a number of local governments in China are attempting to sell large parcels of land in order to raise revenues, but not every region will be able to sell land. Only in the coastal cities where development has been good can the government sell land, said Cheng Xiaonong, a Chinese economist who resides in the United States. ‘[To name an example], in Shaoyang City, Hunan Province, the unemployment rate is as high as 88 percent. No real estate company wants to buy land there because the houses won’t sell,’ said Xiaonong.”
“China built Australia last year — 1.9 billion square metres of residential floor space. Actually, that’s not quite true — the total floor space of all of Australia’s housing isn’t quite that big. In the previous 15 years, China pretty much built Europe as 300 million people or so moved from the farms and villages into cities. And the really neat thing is that they’re going to do it again in the next 20 years, which means they’re going to be buying a lot more iron ore and coking coal. Yes, Twiggy, Gina and Marius, there is a Santa Claus and he speaks Mandarin.”
“At this stage the China bears inevitably start growling about bubbles and over-building and ghost cities and empty luxury unit towers and, as usual, they’re a little bit right but mostly wrong. It’s never simple, which is what makes it all interesting and makes foolish or political those who want to reduce arguments to three-word chants and only see the dark lining in silver or even gold clouds.”
“Being on ‘the list‘ is a fabled concept, especially in September in Toronto when the film and fashion movers are sequestered in glamorous exclusivity behind velvet ropes. And now King Street condo agents M5V has taken that desire to be part of the privileged inner circle and made it pay. To get into M5V’s parties — where they’re selling condos on the spot — you have to be on the list. M5V is taking a page from the VIP-events playbook to keep folks signing on the dotted line — cocktails, masseuses, DJs, violinists, photo booths, flipbook booths, sushi from BloFish, a gossip columnist tweeting live updates, not to mention free furniture or paint jobs for your new condo.”
“‘We have a list, a tight list, of about 500 active names, downtown professionals, actively looking to buy a condo in this hot zone,’ says Co-founder Sherard McQueen. ‘They are as young as 24, and some are in their 40s with families. About 40 per cent are looking for investment purposes.’”
“The M5V approach has its critics, who make the obvious arguments that prospective buyers get swept up in the party atmosphere and might awake next morning with something worse than a hangover: buyer’s remorse. ‘Event-based selling, in my opinion, is problematic,’ says Paul Johnston, of Unique Urban Homes. ‘Alcohol, jugglers and dancing girls are fun until you sober up and see what you have signed.’”
“The Federal Reserve is doing everything in its power to get you to buy a house. On Thursday the Fed’s rate-setting committee said it will start buying $40 billion of mortgage-backed bonds every month from now until—well, it didn’t say when. ‘If the outlook for the labor market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases and employ its other policy tools as appropriate,’ the Federal Open Market Committee said in a statement.”
“At a press conference, Fed Chairman Ben Bernanke said that while the U.S. has ‘enjoyed broad price stability’ since the mid-1990s, the employment situation remains a ‘grave concern.’”
“Like every festive season, this year also has banks and builders coming together with lucrative offers for home buyers. Several banks have cut rates on home loans by 25-50 basis points and real estate developers are offering freebies and discounts on under-construction and ready -for possession properties. Bank of Baroda, Allahabad Bank, Central Bank of India, IDBI Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank and Union Bank of India have cut rates by 25 to 50 basis points on a home loan of Rs 25 to 50 lakhs.”
“In many cities, builders have sold it to investors. A recent Knight Frank report said almost 80,000 flats were unsold in Mumbai. There will be registration and stamp duty to be paid from the pocket. And that’s not all. Many builders will charge separate fees for car parking and so on. Builders, on their part, are trying hard as well. There are freebies on offer such as free parking, electrical appliances and furniture. Some are also offering gifts like gold coins and foreign trips.”
“But, these factors should not really push consumers to go ahead and buy a house. Currently, property prices are very high. The cut in interest rates will only boost sentiments. A cut in interest rates can at best improve eligibility of the borrower. Ramesh Nair, managing director (West India) at Jones Lang LaSalle’s says the property price is more important than interest rates. ‘If interest goes up, the borrower will have to pay more and if to goes down, he will save. But it is price that the borrower is getting married to.’”
