A Bit Of A Herd Mentality
A report from the New York Times. “For the past several years, wealthy buyers from China have been purchasing investment properties and pieds-à-terre in luxurious Manhattan high-rises. Lately, though, some have moved their portfolios east to the exclusive enclaves of Long Island. Last year, Jennifer Lo, an associate broker with Douglas Elliman in Great Neck, N.Y, sold a five-bedroom house on Long Island to a family from China. As soon as the deal closed, the new owners handed Ms. Lo the key and asked her to keep an eye on the place. ‘They told me they were returning to China and would not be back for two years,’ said Ms. Lo, incredulously. ‘I said, ‘But what about the house and upkeep on the garden?’ The wife suggested I pour cement over the grass, maybe turn it into a basketball court. I tried to explain this isn’t how things are done on Long Island.’”
“Theresa Wang has decided her home is too big for a family of two. It is listed for $3.68 million. The price tag is purposeful — the numbers 3, 6 and 8 are all considered lucky for the Chinese. ‘We actually have another property in Sands Point, and we also listed it at $3.68 million,’ said Andrew Wu, who is marketing the house. ‘We might soon list my mom’s house, and I’m thinking we will ask the same price.’”
The Calgary Herald on Arizona. “A sagging loonie and a gradually improving Arizona resale housing market have taken a bite of Canadian snowbirds’ appetite for buying homes in the Sonoran Valley resale sector, say industry experts. During a five-year run, ending in 2013, there was a time during that span when Canadians were the largest segment of out-of-state buyers laying down cash for Arizona real estate. Nowadays, not so much. Diane Olson, a former Winnipeg police officer who now does much of her real estate business in the Phoenix area, sees as a possible silver lining to this whole scenario is Canadians who bought low beginning to sell high.”
“‘With so many Canadian buyers who purchased their homes while the dollar was at par or better they now have a nice foreign exchange gain. That exchange gain, coupled with property appreciation, is providing food for thought for some investors who are trying to decide whether to hold or sell,’ she says.”
The Charlotte Observer in North Carolina. “The title of a slide at last month’s Charlotte Commercial Real Estate Forum asked the question that’s been on a lot of people’s minds: ‘Too many apartments?’ It’s hard to ignore the high-end apartment complexes seemingly sprouting on every corner in town. David Ravin, CEO of Northwood Ravin, said he’s optimistic. His company is building a 384-unit development in Plaza Midwood, and 400-unit Holly Crest in Huntersville, both set to be completed this year. But he does think the market will change in coming years. ‘We do have a bit of a herd mentality,’ he said of developers. ‘One person announces a project on one corner and everyone wants to put projects on the other three corners. This last wave, it’s relatively the same product.’”
The Washington Post on Maryland. “Angry homeowners packed a community meeting in Bowie on Saturday, demanding officials probe the foreclosure and housing crisis that has decimated wealth in Prince George’s County and find more ways to help residents still reeling from financial losses. Nick Charles said appraisers are part of the problem. His home is valued at a fourth of the price at which it was purchased. ‘When you have people outside coming into a community to appraise homes where they don’t live, it’s like having someone criticize your parenting without having any knowledge of what goes on inside the home,’ he said. ‘The fact is our homes are being valued by people who need to be held accountable,’ he said.”
Aljazerra on Florida. “Under a Florida law, companies that own more than 80 percent of condo units in one building can terminate a condo complex under certain conditions and turn it into apartments for rent. The companies have to pay the owners they’re evicting the ‘current market value’ for their units, which may not even cover their mortgage. Some owners, who have diligently paid their bills and fees, are left without a home and drowning in debt.”
“In 2005, Joe Cunningham, a retired Philadelphia cop, and his wife Linda Cunningham, a retired school teacher, were hoping to split their retirement years between Florida and Cape May. So, they bought a $240,000 condominium in a Lansbrook Village near Tampa, paying $160,000 upfront. In 2008, the original developer faced a foreclosure on the property. Then, the bank that backed the project was declared insolvent, so the Federal Deposit Insurance Corporation oversaw the auctioning off of its assets for just pennies on the dollar.”
“That consortium now owns more than 80 percent of the units in the complex. The Cunninghams and their neighborhoods have been told a termination is coming. If the complex is terminated at the current market value of $80,000, they said they’d lose their entire investment. The Cunninghams say their $160,000 investment would simply evaporate, as would their dream of spending the winter months of their golden years in Florida. ‘We’d have nothing. We would get nothing back,’ Linda Cunningham said.”
