The Answer To Every Problem
It’s Friday desk clearing time for this blogger. “Is it a bubble? Not yet, say some Southern Nevada observers. ‘We may be building a foundation for what would become one [a speculative real estate bubble] in the future, but even the price increases we have seen would not bring us to parity,’ says Jack LeVine, a Southern Nevada real estate agent. By parity, he means the housing prices we would expect to see if we had continued a healthy, moderate growth rate of 2 or 3 percent from 2003 to the present.”
“It will take several years even at the startling rate of appreciation in today’s market to correct for the last six years of recession, he says. ‘We’re just undoing the extraordinary bust that happened,’ LeVine says. ‘The 30 percent increase in one year only reflects the rapid correction of an undersold market.’”
“John Restrepo, a Las Vegas financial analyst, says he doesn’t think we’re in a bubble — but he sees a few signs that it might be on its way. He says that we’ll know we’re in a real bubble when people get very excited, as they were in 2006. ‘There’s a lot of dust in the air right now. Just be careful. You start hearing the same type of hyperbole that you did in 2006 and 2007 — we should have learned, right?’”
“Even with buyers spending tens of thousands of dollars over the asking price, new numbers released show Austin home sales are up 32 percent compared to this time last year and prices are up eight percent. Houses are selling so fast some realtors like Theresa Bastian are putting personal letters in other homes in neighborhoods to appeal to other sellers. Bastian says ‘just making an offer on a house is not going to get you the house. There’s no time to look at the house and then talk to your mortgage lender. Those days are done. Whether you’re selling or buying, you need to be ready to do it, because if you take the time to think about it, the house is likely gone,’ she said.”
“If you’d rather not eat cat food in your retirement, you’d better invest in condos, according to Toronto-based real estate developer Brad J. Lamb. By buying, renting and re-selling urban condos in a market that, based on the past 30 years of real estate performance in Ottawa, Lamb believes has nowhere to go over the long term but up. Lamb, speaking to the Citizen after the workshop, was convinced he’s on the right track. ‘It annoys me our education system doesn’t teach (retirement planning). Also, it doesn’t hurt that I own properties, and some people (here) will buy some units.’”
“In Newtown, 27 registered bidders did battle for a three-bedroom property with rotten carpets, stained and peeling wallpaper and sunlight streaming through the upstairs ceiling, which had been marketed with price expectations of over $650,000. Zanita Morgan’s winning bid raised $800,000. She said she and her husband, who bought the house with friends, planned to renovate and on-sell.”
“Former London real estate agent and now host of Foxtel’s Selling Houses Australia Andrew Winter said within just a decade Sydney has appeared on the international property stage. ‘Years ago there was no comparing London and Sydney prices. But now despite what really is a minute population, Sydney is up there on the top 10 list of residential cities,’ he said.”
“Indonesia is still a long way from a housing bubble, even though property prices have risen by 100 percent over the past 18 months. But as prices continue to rise for houses occupied by middle-income as well as lower-income families, developers will have to boost supply to prevent an overheating market.”
“Residential rents are tumbling as a growing number of home owners balk at falling house prices and choose to lease their flats rather than sell. The head of research at Ricacorp Properties, Patrick Chow, said rents at Festival City in Tai Wai had fallen to between HK$18 and HK$20 per sq ft of gross floor area last month from HK$23 to HK$25 in January. He attributed the decline to an expected increase in supply once Riverpark, a nearby development, becomes due for occupation from this month.”
“A senior sales manager at Hong Kong Property’s Taikoo Shing branch, Rick Wan, said average rents at Taikoo Shing dropped 8 per cent to HK$34.50 per sq ft of saleable area, from last month’s HK$37.50 per sq ft. But he said it was insignificant in terms of total rent. ‘For instance, a unit rented at HK$20,000 monthly a month earlier and now cut to HK$18,000. The difference is only HK$2,000,’ he said.”
“Tens of thousands of homeowners will see their property taxes go up significantly this year as rising home values restore some or all of their homes’ lost equity, Santa Clara County Assessor Larry Stone said. Condos, and homes in areas hit by foreclosures and short sales, have seen the biggest investor activity, he said, helping fuel price increases. ‘It does add a short-term stability to the market, but long-term I think it presents substantial risks to the market. At some point, these folks are going to be bailing out of these investments,’ he said.”
“A new Florida Supreme Court ruling could reduce a huge backlog of homes stuck in pre-foreclosure. Many of those homes now sit empty and without a designated caretaker. George Griffith lives next to a home that hasn’t been lived in for three years. Griffith isn’t sure what the homeowner has planned for the home, but he does know that it’s condition is taking a toll on his own property value, which is already down nearly $200,000 in recent years due to the economy. ‘The trees haven’t been trimmed, the grass hasn’t been done. It’s a mess. Somebody drives by and they say, ‘Oh my gosh. I don’t want to live in this neighborhood. Look at that.’”
“Florida, has the second highest number of foreclosures. An estimated 1 million homes will be foreclosed on by 2016.”
“In the Classified section of Tuesday’s Arkansas Democrat Gazette, a reader could find 22 pages of foreclosure notices in the listings. ‘What we’re seeing come through now is that inventory that should have come through last year,’ said Ann Ball, president of Crye-Leike Realtors, REO branch in Little Rock. She works primarily with foreclosures. She describes this inventory as ‘considerably more’ than 12 months old because of the recent national moratorium on foreclosures. ‘Now we look for that to continue at least through this year. It will take at least through this year to clear out that inventory,’ Ball added.”
“RealtyTrac VP Daren Blomquist couldn’t put his finger on an exact reason the area’s foreclosure rate catapulted 66.45 percent. Todd Woodard, owner of SiteTech Systems, which keeps a close eye on the Grand Strand housing market, suggested that April’s statistics could have been swayed because a backlog of foreclosures are finally working their way through the court system. ‘The biggest challenge for the area is working through older foreclosure filings which were temporarily halted during the ‘robo signing’ investigation,’ he wrote in an email. ‘Of the (foreclosed) properties sold in 2013, almost 40 percent of them were filed prior to 2012. Additionally, approximately 61 percent of the active foreclosures were filed prior to 2012.’”
“Chancellor George Osborne really wants you to be able to buy a house. So here’s the question. Would you like him to help you do that by interfering with the market to ensure that you are offered a long-term loan you wouldn’t normally have been able to get? Or would you prefer that he didn’t interfere with the market at all, but prices fell to a level, relative to your income, that you could actually afford.”
“I’d go for the latter and I rather imagine most first-time buyers would too. Sadly it isn’t an offer Osborne is planning to make — for the next couple of years at least. Just in case there was anyone in the country who felt they might be deprived of the opportunity to spend their life in hock to a house, the state has introduced a variety of schemes to encourage them to overpay for property while simultaneously subsidising the housebuilders (win win!). On top of that, just to be sure, pressure has been put on the banks to hold off on repossessions.”
“It all sounds so stupid, doesn’t it? Why would you want to obstruct so completely the free operation of a vital market? We need to move away from attempting to create an economic recovery out of consumption, and work on increasing investment in productive areas.”
“All those people stuck and soon-to-be stuck with unnecessary debt aren’t, of course, the only losers from the ongoing policy of overstimulus. Savers, annuity purchasers and anyone on any kind of fixed income are hurting too. But homeowners are the only ones whom Osborne, in his apparent conviction that the answer to every problem is higher house prices, is quite so directly herding towards disaster.”
