January 28, 2015

Investors Counting On A Rising Market

The Sylva Herald reports from North Carolina. “Modern safety features; extra beds Western Carolina University can’t afford; investor money flowing into the local economy – there’s a punch list of benefits from the student-housing boom that added half again as many beds in a three-year frenzy. Some fear another real estate bubble, however, as developers – many new to the student-housing niche – make decisions that seem based on the amount of capital they can secure, not on market needs. The specter of urban blight in rural Jackson County grows as fields and forests give way to apartment complexes that look more like Charlotte than Cullowhee. ‘It is too much,’ said Rick Bennett, a longtime Cullowhee real estate agent who rents to WCU students. ‘At some point, the law of supply and demand will weigh out. I don’t know when. But it will happen.’”

From Lehigh Valley Business in Pennsylvania. “Residential home sales in 2014 rose by 4.4 percent throughout the Greater Lehigh Valley. Carbon County saw a 10.5 percent increase in homes sold, jumping to 621 last year. At the same time, average sales prices fell 4 percent to $97,167. ‘When I looked at these numbers [closed sales], … a lot of this was foreclosed sales,’ said Cass Chies, broker with Diamond 1st Realty, Palmerton. ‘That’s what really spiked these numbers. There have been a lot of foreclosures that have sold, which is a good thing because the banks are moving their inventory.’”

The Washington Post. “Half the loans on newly constructed homes in Fairwood during the housing boom in 2006 and 2007 wound up in foreclosure — 723 of 1,441 so far, according to a Washington Post analysis. In Fairwood, one of the nation’s most aspirational black communities, houses once valued at $700,000 are going for $350,000. Legions of homeowners who bought high have seen their equity evaporate, and still labor under hundreds of thousands of dollars in debt.”

“In August 2006, Edith Garner, who taught special education at Benjamin Tasker Middle School in Bowie, was one of those who fell in love with Fairwood. She bought a townhouse for $427,213. She signed an agreement for an adjustable-rate mortgage with an interest rate of 8.875 percent. She was counting on a rising house market. ‘Everything was going up and up and higher,’ Garner, 58, said of the housing market. ‘I wanted to make money, too.’”

From Vegas Inc in Nevada. “Builders sold 611 new homes in Southern Nevada last month, ending 2014 with a tally of 6,007 sales, down 18 percent from 2013, according to Home Builders Research. The median sales price of last month’s closings was $291,785, down 2 percent from a year earlier. Overall, the results ‘are less than anyone projected,’ Home Builders Research President Dennis Smith said in the report. ‘The annual totals leave us disappointed but with an ‘it could have been worse’ feeling,’ he wrote.”

“Perhaps in a sign of weak finances and tougher lending requirements, buyers at one point were increasingly canceling purchases. In October, they backed out of 21 percent of new-home sales contracts in Henderson, up from 12 percent in April, according to Home Builders Research. In North Las Vegas, cancellation rates jumped to 34 percent from 25 percent in that period.”

The Miami Herald in Florida. “Miami’s housing market continues to outperform the nation, but its growth still lags behind the faster pace of recent years. Developers and market analysts said the slowdown was expected, and healthy. The growth in prices began to lessen last spring, and home sales have also slowed in Miami-Dade recently as the number of units on the market returns to pre-recession levels. ‘The party can’t go on forever,’ said Kwame Donaldson, an economist at Moody’s Analytics.”

“Demand for houses over the past two years has largely been driven by investors with a nose for a deal and Latin American buyers looking to purchase second homes, according to Donaldson. ‘But as prices go up, the bargains aren’t there like they used to be,’ he said.”

Bloomberg on New York. “Lower Manhattan’s Trump Soho, the five-year-old tower that was seized in a foreclosure amid slow sales of its condominiums, may drop its focus on part-time residences and operate most of the property solely as a hotel. The building’s new owner, Los Angeles-based CIM Group, is ’stepping away’ from marketing the roughly two-thirds of condos that remain unsold, said Gary Schweikert, the building’s managing director. The company is considering converting the unsold units at the tower permanently into hotel rooms, he said.”

“Seventeen condo units at Trump Soho are currently listed for sale, with prices ranging from $825,000 for a studio to $50 million for a 10,000-square-foot (930-square-meter) presidential suite, according to property-listings website StreetEasy.”

From China Daily USA. “A Chinese real estate developer plans to put up a 95-story residential tower but not in the city. It will be across the Hudson River in New Jersey’s waterfront. China Overseas Inc is building the tower at 99 Hudson Street. It will have 760 condominium units and be the ‘most significant condo project ever’ in New Jersey, according to the Jersey City mayor’s office. At 950 feet, it will be the tallest building in New Jersey when it is completed. An apartment in the 104-unit building starts at $16.95 million.”

Bits Bucket for January 28, 2015

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