The Market Feels A Bit Surreal Again
It’s Friday desk clearing time for this blogger. “Only 95 African-American couples or families applied for home-purchase mortgages in all of Multnomah County in 2012, a paltry 1.5 percent of the total, according to federal data. Six years earlier, before the housing bubble popped, 575 black families or individuals applied for home-purchase loans in the county. African-American families are losing a time-tested way to stabilize their finances while building assets for retirement or economic and social advancement, says Tom Cusack, a retired federal housing official. ‘What are you going to do to accumulate wealth?’ Cusack wonders. ‘You’re not going to get rich or pass along money by putting money into a 1 percent CD.’”
“As Inland home prices move closer to unaffordable levels for many working Janes and Joes, homeowners and shoppers are clamoring for a timeout moment, like the one you get just before a roller coaster car crests the hill. Dennis Kolbeck, an Inland-area home shopper, called last week to say something’s got to give because the market feels a bit surreal again. ‘I was ready to pounce on a house, but the prices got the best of me,’ he said.”
“In the Phoenix-Scottsdale, Arizona market, the summer market is drowsy. ‘We seem to have sluggish demand,’ said Floyd Scott, owner of Century 21 Arizona Foothills. In the luxury market of $1 million and above, supply is more like 18 to 24 months, he said. Scott noted the number of transactions has been ‘trending down’ for three years. Buyers are taking longer to decide on their purchases, shopping around more. ‘We’re not seeing multiple offers on any of our properties,’ he said.”
“‘Sales are lower this year than they were last summer,’ said Bonnie Roberts-Burke, president of the District of Columbia Association of Realtors. ‘Buyers are worried that they’re over-paying. They’re pickier than I’ve seen in the last few years,’ she said. ‘More deals seem to be falling apart than in the past.’”
“The foreclosures in Frederick County, according to RealtyTrac, jumped from 109 in June to 199 in July. Hugh Gordon, a mortgage loan officer with Fitzgerald Financial, said there are mortgagors barely hanging on. Some of those walking away from the house, even though a foreclosure means a loss of credit standing, are doing so because of the condition of the house, Gordon said. ‘What do you do with a town home in a group of town homes that no one wants because of its condition?’ Gordon said. ‘I also continue to see far too many buyers entering the market thinking prices are as negotiable as they were during the recession.’”
“The Austin housing market is overvalued, according to the latest Trulia Bubble Watch report. At the end of an alley off East 11th Street is a one bedroom, one bath, 780 square foot home. It’s described by realtors as a likely ‘tear down.’ The asking price is $310,000. Cathy Conley and her husband bought their first home in the 80s. Then Austin’s biggest bubble, burst. ‘We watched the investment in our home dwindle before our eyes,’ said Conley. They were able to wait it out until the 1980s housing market recovered. But, many weren’t so lucky. ‘Austin was booming at the time and everyone was investing in new homes and life was great and then the rug was pulled out from under most people in Austin.’”
“What makes Countrywide special isn’t just that they gave out a lot of bad loans, it’s that they sold those bad loans to others while keeping the good ones for themselves. In a 2005 email, the Countrywide Financial Corporation’s chairman—not named in the statement, but it was Angelo Mozilo—wrote that he was ‘increasingly concerned’ about a certain adjustable rate loan. He feared that the average borrower was not ’sufficiently sophisticated to truly understand the consequences’ of their mortgage, making them increasingly likely to default. He wrote: ‘…the bank will be dealing with foreclosure in potentially a deflated real estate market. This would be both a financial and reputational catastrophe.’”
“According to the CMHC survey, ‘about half’ of condo investors in Toronto and Vancouver currently rent out their last purchased unit. However, one glaring omission from the survey are foreign investors, as it only included condo owners who reside inside their CMAs. And, as several brokers have pointed out, the survey assumes all participants truthfully filled out their paperwork at time of funding.”
“‘I believe that this report is based on a survey or condo owners and is also based on what was reported at the time of funding; So in reality we have no idea how accurate these numbers are,’ commenter M. Robertson said. ‘From experience as a lender I can tell you that a lot of brokers will put owner occupied on an application so that they can get it approved. A lot of lender underwriters also turn a blind eye.’”
“Weekly advertised rents have fallen 3.6 per cent in Docklands and 6.4 per cent in Southbank over the past 12 months while they have stayed still in the central business district, RP Data figures show. Over the past five years, rents in Docklands have fallen 8.6 per cent. In Sydney, Hugh Eriksson tells a similar story. The marketing executive, who owns a townhouse in Neutral Bay, says he has bent over backwards to keep rents near to stable and has even allowed pets. ‘There might be low vacancy in the inner city but renters are still in a position where they can choose,’ he says.”
“Jason Plevras paid $600,000 for a two-bedroom apartment in Melbourne’s Southbank last May. The real estate agent assured him he would have no trouble finding a tenant, Plevras says. ‘I remember when I was signing the contract to buy, I made clear that I was worried we won’t be able to rent it,’ the 33 year old says. ‘They said ‘renting will never be a problem. You’ll always have tenants,’ His starting price was $600 a week, but that went down to $525 before it rented. It’s been a ‘yo-yo’ of tenants coming and going ever since, Plevras says. ‘Because it’s so competitive, we’re almost putting anyone we can in.’”
“More wealthy Chinese are moving their money out of China to invest in Australia’s property market as a corruption crackdown in the world’s second-largest economy gathers momentum, according to property consultants and lawyers. Chinese citizens received approvals to invest nearly $5.58 billion into the sector, up 41 percent from a year ago. ‘They are worried, so they are looking for a safe place,’ said a Sydney-based immigration lawyer, who is advising on setting up a new fund exclusively for Chinese investors and regularly travels to Beijing and Shanghai. ‘They don’t want returns, not necessarily. They want a safe place to park their funds.’”
“At a new luxury apartment project called International City Park, a salesperson said sales have slowed sharply since the start of the anticorruption drive. Kaili is the capital of Qiandongman prefecture and the home of many government officials, who used to be big customers. ‘Government officials here have two or three apartments,’ according to the salesperson. They aren’t looking to buy more. ‘They are secretly trying to sell them,’ she said.”
“A group of students from a Communist Party school in Kaili, for instance, recently toured the prison and received a ‘vivid warning’ of the dangers of succumbing to corruption. The climax of the show: songs and dances performed by the prisoners about their crimes and their feelings of remorse. The performers were dressed in prison gray-and-white striped uniforms. ‘We are all party officials,’ said one of the attendees. ‘We all have had similar experiences. Now they have to spend their lives in jail.’”
