September 8, 2014

Snapshot: Further Evidence Of A Weakening Trend

The Buffalo News reports from New York. “Fewer homes changed hands in the Buffalo Niagara region in July, prices fell, and the number of homes available for sale dropped as the hot local housing market appeared to stall in early summer. Stan Palczewski and his fiancée, Jennifer Lowell, are selling their two houses in Ashford and Cheektowaga, respectively, and buying a third one in Eden to move in together. They listed their separate homes in late May, with Lowell’s home finally going under contract last month. Palczewski’s has been on the market for $125,000 with no luck since the first few days. ‘It is quite frustrating,’ he said. ‘I don’t understand. You hear that it’s a sellers market, and I’m not seeing it here.’”

The News Journal in Delaware. “Edward C. Ratledge, a University of Delaware professor, said annual building permit activity bottomed out a few years ago and has increased since, but only to about half the more than 8,000-unit peak before the recession. About 3.2 percent of the state’s mortgages are in foreclosure, Ratledge said, down from a peak of about 4 percent but still far above 1 percent rate pre-recession. ‘I haven’t looked at it thoroughly, but it appears that a lot of developers that had land also had options that would run out if they didn’t do something,’ Ratledge said. ‘Some of they may have started building, but building things that sell at considerably lower prices than what they were selling before.’”

The Seattle PI in Washington. “After surging to a record in July, Seattle’s median house price settled down a bit last month. August’s median sales price was $499,950, down 8 percent from July’s record of $543,500. Some of the dropoff in sales may be due to people getting frustrated with not being able to find a home to buy, or getting outbid by other buyers, and deciding to sit on the sidelines, said Stephen O’Connor, director of the Runstad Center for Real Estate Research at the University of Washington. ‘People are kind of exhausted.’”

The Arizona Republic. “Metro Phoenix’s housing market didn’t heat up in July. Both sales and prices dipped. The housing market’s moderate slowing is proof another housing bubble isn’t about to pop anytime soon in the Phoenix area, said Mike Orr, director of the Center for Real Estate Theory and Practice at W.P. Carey. ‘Usually when demand is weak for an extended period, supply starts to grow, as it did in the second half of 2005 and throughout 2006 and 2007, heralding the collapse of the housing bubble,’ he said. ‘However, this summer, supply is slowly weakening. It appears that the lack of enthusiasm among buyers has spread to sellers, instead of causing them to panic. Many sellers clearly have the patience to wait for better times and are unwilling to drop prices to dispose of their homes.’”

The Bakersfield Californian. “Bakersfield’s residential real estate market continued to weaken in August, further shifting from a sellers’ market to one favoring buyers, according to appraiser and local housing observer Gary Crabtree. As further evidence of what he called a ‘weakening trend,’ Crabtree noted that sellers overall accepted less money than what they originally asked for. ‘All of this, in spite of continued declining mortgage rates,’ he wrote in a note accompanying the report. ‘I have noticed that more sales are now requiring seller concessions to consummate the sale, indicating the buyers are losing purchasing power and need financial assistance just to pay closing costs.’”

The Ottawa Citizen in Canada. “Six months ago, Diane Osborne put her parents’ Ottawa condominium apartment on the market for $209,900. Today, the asking price for the second-floor unit is $189,900 and ‘all reasonable offers shall be considered.’ So far, there have been no offers, reasonable or otherwise. Mark Hartley keeps a close watch on the condo market, both as an agent in Kanata and as an owner, with his wife, of a pair of downtown rental units. ‘We had ours appraised about two or three years at about $300,000 or so, and we just had them appraised again a year ago at $260,000,’ he reports.”

“And the market keeps getting softer. Condo sales across the city were down 19 per cent in August from the same month a year earlier, the Ottawa Real Estate Board reported.”

NTD TV on China. “According to Chinese media, property sectors in China are facing a serious financial crisis. Over 40% of property sectors’ debt ratio has exceeded 100%. Some companies’ Net Gearing Ratio increased to over 300%. In China’s second and third tier cities, ghost towns are everywhere. Recently, a director of property management bureau has published an article in Xinhua website. He said that the quantity of houses in newly designed areas is scary. According to national statistics, at the end of last year, projects of new cities in new areas can take a 3.4 billion population. To add up an existed 7.3 billion populations in urban areas. It reaches 4 billion populations in total. It means China’s cities can take over 50% of the global population.”

“Niu Dao, China-based economic commentator: ‘That’s all of its purchasing ability. Once the purchasing ability is consumed out, it will collapse. It happens sooner or later. The Chinese Communist Party has difficulty sustaining itself. If it cannot carry on, it should hand over to other people. But it won’t do so. If you kill me I will kill you, the entire society is at unrest.’”

“Now property developers are escaping because of fund chains being broken. Tragedies of jumping off the buildings often happened, incidents of owners of properties going for appeal is taking place one after another.”

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