The Housing Bubble

The Calgary Herald reports from Canada. “According to the Calgary Real Estate Board, MLS sales in the Calgary apartment category this month, to Thursday, have fallen 38.1 per cent compared to the same period a year ago, with 245 transactions. The average sale price has dipped nearly 11 per cent, to $296,304. ‘If you own property in Calgary and are worried about your home’s value, it’s probably just best to wait this energy recession out and apply prudent debt management practices to your personal finances – reduce or consolidate high interest debt, make your payments on time and in full, and try to build up some emergency savings in the event that unemployment comes knocking.’ Lesley-Anne Scorgie, founder of MeVest and a bestselling author on personal finances.”

“Corinne Lyall, CREB’s president, said typically the condo market is going to be affected quicker than the detached market. ‘I think it’s because there’s more inventory available in the condo market,’ she said. ‘And there’s more choice for buyers looking in that housing segment and plus there’s not only resale inventory but as well new product available and being built currently.’”

The Cape Breton Post in Canada. “Janey Forrest has been trying to sell her three-bedroom Westmount home overlooking Sydney harbour for the past 18 months. Forres moved to Cape Breton from Mission, B.C., in December 2007, after visiting a friend in the area. She said she fell in love with the island and its low housing prices compared to the B.C. lower mainland. ‘I didn’t come here to buy a house. I just came here to visit for five days, and on the fifth day I bought this house,’ Forrest said. ‘I looked around (Sydney) and I saw what the costs were, and at that time in 2007 there was not one house for sale here. Every house I looked at had several offers on it, so I ended up buying this one.’”

“Sydney realtor Mary Ann MacCormick said it has become a classic buyers’ market, and that means sellers must remain patient as people looking to buy weigh their options. ‘For example, I may show (a client) 15 houses instead of five because there’s so much variety out there that they can choose from,’ said MacCormick. ‘And people with houses for sale have to be patient and do everything they can to make their houses appealing.’”

The Strait Times in Singapore. “Prices of completed private apartments were unchanged in June and last month although this could represent a temporary lull before they drop further. These properties are still about 3 per cent lower than a year ago and 9.8 per cent below their peak in July 2013, according to flash estimates for the NUS Singapore Residential Price Index (SRPI). Prices of small units are down 2.9 per cent year on year and have fallen about 9.5 per cent from an August 2013 peak. ‘Shoebox apartment rents and prices will be on the general downward trend, as the number of such completed properties grows, especially in suburban areas,’ said R’ST Research director Ong Kah Seng.”

From DNA India. “Here’s the big proof that real-estate prices in Mumbai are falling. A 13,000 sq ft sea-facing duplex apartment in Palm Beach Road in Navi Mumbai has been sold for Rs 12,500 per sq ft against the Rs 20,000-Rs 25,000 per sq ft quoted a few months earlier. ‘At Palm Beach, most apartments fall in the luxury segment. If rates are plummeting in this segment, it means property rates are likely to slide further. Because high-segment houses always face the first hit,’ said Pankaj Kapoor, MD, Liasea and Foras, a property research firm.”

“Kapoor said that the holding capacity of developers cannot stretch beyond a certain period. They have to pay high interests to banks, he said. ‘Investors are the first set of people to exit during a downfall. Currently, most investors are exiting because there is no significant growth or appreciation in the property market.’”

The Wall Street Journal on Brazil. “Not long ago, Brazil stood as the leading example of how a developing nation could rise toward global prominence on the force of a China-driven commodity boom. Now Brazil is looking like a symbol of something else: resource-rich nations’ habit of ending their booms with spectacular busts. ‘We went from Brazil mania to Brazil nausea,’ said Marcos Troyjo, a former Brazilian diplomat who leads a Columbia University center studying emerging markets. ‘We are looking at a lost decade, where growth stagnates, inflation is high, and, most sadly, a decade where you’ve learned nothing.’”

“China has caused turmoil in many places, but none more so than in this prime supplier of commodities to a country whose once-voracious appetite for them has dimmed. At the height of Brazil’s boom, movies and taxis in downtown São Paulo were more expensive in dollar terms than in New York. Many of Brazil’s problems were homegrown, though, said Alexandre Schwartsman, a former Brazilian central-bank official: ‘We managed to produce this recession ourselves.’”

The New Zealand Herald. “China, until this year, had been by far New Zealand’s biggest export destination, but a staggering 77 per cent decline in the value of whole milk powder exports put Australia back in the top slot in the year to March. JBWere investment strategist Bernard Doyle said the effect of Chinese capital flows could prove pivotal for property prices here and in Australia, where Chinese investment has played a part in the strength of both markets. ‘There is no doubt in my mind that if Chinese capital flows were to get crunched, it would have implications for our housing market,’ he said.”

The New York Times on China. ” In recent days, an advice column has circulated widely on China’s most popular social media phone app. It is aimed at young Chinese urban professionals. Its nuggets of wisdom include: ‘Work hard at your job so you are the last to be laid off’ and ‘In an economic crisis, liquidity is the number one priority.’ Many young middle-class Chinese who grew up during the nation’s glittering boom years, when double-digit growth was the norm, are suddenly confronting the shadow of an economic slowdown and even hints of austerity.”

“They are talking of canceling vacations and delaying weddings and even selling recently purchased apartments to have cash on hand. Those who have lost money in the ongoing stock market crash are especially anxious. One Chinese woman who posted Lin’s column on her WeChat account said it ‘echoed the zeitgeist.’ She had tried to sell an apartment but said, ‘Now I think I might hold off until the market recovers a bit.’”

“Gao Yike, 25, who works at a real estate company in the northeastern provincial capital of Harbin, said in a telephone interview that the project management department laid off employees in April. He said a growing number of midlevel and senior executives were leaving the real estate industry for technology companies and housing sales at his company were notably worse than last year. Gao had also lost half of his initial investments in the stock market. ‘The golden age of the real estate market has come to an end,’ he said.”

Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here:

http:tinyurl.com/http-hbb-com

A weekend topic on recent financial markets and the housing bubble. The Los Angeles Times. “Seven years ago when the housing bubble burst, it nearly took down Wall Street and the entire U.S. economy. This week, the concern was the reverse: That the prospect of an extended dive in the stock market, or even continued volatility, might spook buyers and sellers in Southern California’s housing market. Christian Lander put an offer on a Glendale house last week, before the stock market started falling. He’s proceeding as planned, because he’s investing for the long term and doesn’t want to react to fluctuations in the market. But Lander worries that other buyers may take a different view — because he’s a seller too, looking to unload his two-bedroom condo in Koreatown.”

“‘I am just hoping it won’t freak people out that this is a bad time to buy,’ he said.”

“George Pagano, a real estate agent with Immel Team Luxury Real Estate who specializes in coastal south Orange County, said his buyers are assuming that the stock drop-off is temporary and are not changing their intentions. But some sellers have been more willing to trim their asking prices from levels he considered unrealistic. This week, the owners of a five-bedroom house in Laguna Niguel reduced their asking price by $505,000, down to $3.9 million. ‘They are taking our advice to lower their expectations,’ he said.”

“Tom Berge Jr., president of the West San Gabriel Valley Assn. of Realtors, has had a different experience. He said three or four Chinese business owners looking to invest in homes have raised concerns to him over economic turmoil in China. But it wasn’t because they might no longer be able to afford local real estate. ‘Their fear is the government is going to limit the money that can freely move out of China,’ he said.”

Interest in New Zealand. “Last week I gave a presentation about the ‘big picture’ to a gathering of government officials in Wellington. I talked about China’s economy and financial market volatility, rather on-the-money topics given this week’s global stock-market meltdown! What’s unusual about this situation is that in the past large developing countries – and China is the largest – grew quickly and steadily. They provided a buffer during the business cycles of the developed world. The news out of China suggests that buffer is not as robust as it once was. It can’t keep acting as a sponge for the rest of the world’s economic over-spill.”

“New Zealand doesn’t seem particularly well-equipped to understand, prepare for and benefit from developments in China. Economists could do a much better job than they seem to be doing. We lack a good understanding of China. And that leads on to a second problem. We don’t understand how China affects us. There is a common pattern to the capital flows from China – the capital isn’t just flowing into stock markets and bank deposits in other countries (these are usually popular because they’re well regulated and it’s easy to cash up again) but into property.”

“As a country, we’ve been caught napping. We need to move beyond a focus on dairy prices and exports. What about unprecedented capital flows from China? Are the flows permanent or just hot money? Are we making the best use of the money? What are the social consequences of escalating house prices and how can we mitigate those?”

From Reuters. “The venerable Wall Street firm of Lehman Brothers went belly-up seven years ago. Since then, the Federal Reserve has engaged in an extensive monetary campaign involving near-zero interest rates combined with the central bank’s large-scale purchases of bonds. This experiment has delivered the weakest U.S. rebound on record while spreading what author Brendan Brown calls a ‘monetary plague’ into the furthest reaches of the global economy.”

“A recent study of historical periods of deflation by the Bank for International Settlements from 1870 to the present day finds only a weak connection between deflation and economic output. The BIS makes another important point: there appears to be a much stronger connection between a collapse in asset prices, in particular real estate busts, and economic growth than between deflation and output. The BIS argues that a bursting bubble produces a large immediate loss of wealth, albeit wealth of an illusory nature, while deflation simply redistributes a much smaller amount of wealth from debtors to creditors.”

“This points to a key problem with the Fed’s ‘Great Monetary Experiment,’ namely that it has inflated asset prices to unsustainable levels. Bernanke hoped that by making people feel richer, higher asset prices would induce them to spend more. After a run of good years, however, U.S. stocks have approached bubble valuation levels. Given the dollar’s role as the global reserve currency, Fed policy has also pushed down interest rates around the world, thus stoking real estate booms from Beijing to Vancouver.”

“In the wake of the global financial crisis, low U.S. rates also fueled a global carry trade, as yield-hungry investors poured into emerging market debt. At the same time, corporate borrowers in these developing nations availed themselves of low U.S. rates by borrowing in dollars, thus creating a potentially dangerous asset-liability mismatch.”

“The trouble is that asset prices – whether stocks, bonds or property, both in the United States and abroad – are now vulnerable to any future normalization of interest rates – just as the housing bubble and the subprime mortgage crisis followed from the Fed’s attempt to exit the Alan Greenspan easy-money era.”

The Indian Express. “Global markets were surprised by China’s devaluation of its currency, the renminbi, but they shouldn’t be. This is one of the inevitable outcomes of the bursting of its stockmarket bubble and Beijing’s lacklustre efforts to save the bubble as an engine of growth for a slacking economy. Besides losing face and wasting Chinese taxpayers’ money, the government has paid dearly for its misplaced faith in the power of the state.”

“It is unclear whether Chinese leaders realise this, but their expensive attempt to support a bubble has been a huge distraction from their real top priority — implementing difficult structural reforms to sustain Chinese economic growth. Instead of investing their time and energy in financial de-leveraging, squeezing out excess manufacturing capacity and reorienting the economy away from investment to consumption, Chinese leaders now find themselves helplessly watching the erratic gyrations of stock prices.”

“While the scale, timing and haste of Beijing’s operation may shock many, it does not come as a surprise to sceptics who have always doubted the CPC’s commitment to reforms. They have watched this bad movie many times before. Every time the party has to choose between wielding the power of the state or relying on market forces, it has consistently opted for the former. In this light, China’s decision to devalue its currency should not come as a surprise at all. As strong believers in the power of the state, Chinese leaders firmly believe they can fight the invisible hand. All it takes is strong political will. We can only hope that they will be proven wrong this time.”

Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here:

http:tinyurl.com/http-hbb-com

Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here:

http:tinyurl.com/http-hbb-com

It’s Friday desk clearing time for this blogger. “Diana Gonzales’ Wylie home was picture perfect when she put it on the market. Still, she was surprised when it sold in a flash. ‘We had about 12 offers,’ says Gonzales, “and the offers were way over the list price!’ Corporate relocations like Toyota and State Farm have delivered a steady supply of buyers. But, experts have warned:’The inventory is so slow, it’s driving the prices up,’ says Realtor Valerie Kirkpatrick, ‘it’s driving the buyers up, they’re having to pay more and more and more and the houses are not worth what they’re paying.’”

“The Green Line is a bragging point for the builders of a 30-unit condo building — some priced as high as $750,000 — on Washington Street near Union Square, its sales pitch concluding: ‘It’s not just a home, it’s an investment!’ When word came this week that the project is in danger of being scaled back or even canceled because costs could be as much as $1 billion more than expected, it landed like a sucker punch for buyers and investors who bought into the excitement.”

“‘On Tuesday, I got up, saw the news on my phone, and said, ‘oh, [expletive].’ There was just a pit in my stomach,’ said Rob Day, who with his wife bought a condominium near Union Square in December and expected to commute to his job in Boston on the new Green Line.”

“The Fayetteville regional market started the year with too large an inventory of resales. Seven months later, little has changed. The current absorption rate for pre-owned homes is a 9.93-month supply of inventory. ‘We’ve got too many existing homes. We’re slowly trying to fix that,’ said David Evans, a broker who works with Manning Realty. ‘That being said, we’re moving in the right direction. July closed with 525 existing homes. That’s way over average. It has been because people who have existing homes all these years, waiting to sell their house, have been dropping their (market) price.’”

“The boom times are long gone for Owatonna homebuilders. Realtor Matt Gillard with ERA Gillespie said housing booms in Rochester and Mankato give him hope that Owatonna could soon start to see its own resurgence. But a lot of that will depend on people like David Schlobohm of Ace Construction building the homes to sell, and he’s still wary. ‘I got stuck in 2007, I got stuck with a million dollars inventory for a couple years,’ he said. ‘I ended up giving it away just to get rid of it. … That speculation market’s not there unless you like losing money, even though the Realtors are calling for that.’”

“Schlobohm said homebuilders will only get back into the game once they can be confident in selling new homes quickly on the market. ‘If you sit on it for six months and pay interest on it, whatever profit you had on it is gone,’ he said.”

“After a decade labouring on building sites around New Delhi, Akhilesh Kumar lost his scaffolding job last month when his employer halted work on an array of 30 residential towers. He joins more than half a million workers let go from sites around India’s capital in the last 18 months. According to brokerage Ambit Capital, rural wages may now be falling after growing 4 percent in the year to March - a far cry from the double-digit annual rises between 2010 and 2014. ‘Labourers are starving and are ready to work even at lower wages as there are fewer or just no jobs,’ said Navendu Kumar Thakur of the Builders Association of India.”

“But the slowdown around Delhi, where unsold inventory is highest, shows no sign of ending. Around the site where Kumar worked, half-built high-rises dot the skyline. Cranes and diggers stand idle. Real estate association CREDAI’s Rohit Raj Modi estimates more than a million labourers worked in construction at Noida at its peak in 2013, at least double today’s number. ‘From a labour point of view, the peak is over,’ he said.”

“Subdivided units are a feature of Hong Kong’s housing market, Kowloon Developmen said, as it priced mini flats in its Hung Hom project at an average of HK$15,567 per sellable square foot after discounts. Prices of special units can see sharp drops, Far East Consortium Internationa chairman David Chiu Tat-cheong called such units ‘imitation luxury flats.’ Chiu said he wouldn’t be surprised if their prices fell by half. He said as wage hikes among the middle class can’t keep pace with the sharp rise of property prices, developers have no choice but to develop smaller units to satisfy demand. ‘Hong Kong people’s hard work and income, and the size of our homes have the most unfair ratio throughout the world,’ Chiu said.”

“Centaline Property’s Louis Chan Wing-kit said the pricing reflects the impact from recent stock market shock. This marks the start of a trend where developers cut prices on their new projects, Chan said.”

“Share market investors are unlikely to flee in large numbers to the property market — as they did in previous routs — because housing markets are perceived as overheated in Sydney and Melbourne, with entry costs high and rental yields low. But other commentators have suggested no-one really knows how things will pan out, as the global economy is in uncharted territory. Bank of England research shows global interest rates are at their lowest in 5000 years.”

“‘We’ve never experienced a combination of events like this,’ Gareth Hutchens wrote in the Sydney Morning Herald. ‘None of our (economic) models demonstrate how the world works when interest rates are this low.’”

“China was always the Ashley Madison of public money. Finance ministers with an infrastructure problem would sneak off to Beijing for a quickie billion and return with smiles on their faces. The Chinese seemed willing and no one need know. China has been tipping cash into worthless transport and energy projects around the world, or storing it in empty London towers. It encourages reckless governments to get involved with stupid projects that no sane banker would support.”

“Any bubble stock market is a danger to all. As Shanghai’s prices more than doubled it was clearly going to burst. When the regime is as dirigiste as China’s, that doubles the risk to others. China’s sovereign wealth can be withdrawn as quickly as it was splurged. Whether the Chinese market crash can single-handedly return the west to deflation is doubtful, but that is the risk.”

“The nosedive reveals just how addicted markets have become to the flow of central bank stimulus and the faith that cheap money remains the path to economic deliverance. A recent working paper by the VP of the St. Louis Federal Reserve Bank finds that after six years of quantitative easing that swelled the Fed’s balance sheet to $4.5 trillion, ‘casual evidence suggests that QE has been ineffective in increasing inflation’ and only seems to have boosted stock prices.”

“Complaints once in the realm of conspiracy theorists wearing tin foil hats are now being embraced by the Wall Street establishment. In a note to clients, Deutsche Bank analysts warned that ‘the fragility of this artificially manipulated financial system was exposed’ and that ‘the only thing preventing another financial crisis has been extraordinary central bank liquidity and general interventions from the global authorities.’”

“They argue that ‘the genesis of this recent sell-off has been the threat of the Fed raising rates next month, but China’s confrontational move two weeks ago and the subsequent knock-on through [emerging markets] have accelerated us towards something more serious.’”

“Alberto Gallo, head of credit research at RBS, is more direct: ‘Policymakers responded to the financial crisis with easy monetary policy and low interest rates. The critics — including us — argued against ’solving a debt crisis with more debt.’ Put differently, we said that QE was necessary, but not sufficient for a recovery. We are now coming to the moment of reckoning: central bankers look naked, and markets have nothing else to believe in.’”

Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here:

http:tinyurl.com/http-hbb-com

A report from the New Zealand Herald. “An Auckland property agent is the latest beneficiary of a series of sales of a modest West Auckland house which has rocketed in price by $153,000 in 13 weeks. Barfoot and Thompson managing director Peter Thompson says he understands the three-bedroom home was sold at the weekend for a negotiated price of $628,000. That makes it the fourth time the property - which has a CV of $340,000 and was listed by his company just last week - has changed hands since late May. Neighbour Joanna Pou said no one had lived in the house since Mrs Wilson moved out on July 10 but the property kept going back on the market. ‘They’re all investors. It’s just constantly being flicked over.’”

The International Business Times on the UK. “Home sales to first-time buyers in the UK continue to decline, according to the latest market report. ‘It’s alarming that the number of sales being made to first-time buyers is steadily falling; with reports of house prices increasing and expectations of rising in the future, first-time buyers will continue to be pushed out of the market,’ said Mark Hayward, managing director at the estate agents’ association. A flood of housing coming on to the market has given some optimism to estate agents who hope that ‘over the next few months we’ll see activity in the market increasing and more sales completing,’ Hayward said.”

Bloomberg on Brazil. “Not long ago, Brazil’s real-estate market was one of the biggest symbols of the country’s burgeoning economic might. Now, it’s fallen victim to an ever-deepening recession. The real-estate industry, which is equal to about 10 percent of Brazil’s economy, is emerging as one of the latest casualties of a recession. Earlier this month, Rossi Residencial SA, which has 2.5 billion reais in debt, also brought in advisers to ‘restructure operations and review strategies.’ Since 2010, the builder has lost 99 percent of its stock-market value.”

“‘There is no real estate company that survives without sales,’ Bruno Mendonca Lima de Carvalho, the head of fixed income at Guide Investimentos SA, said from Sao Paulo. ‘You can’t import or export apartments. You’re relying solely on domestic activity.’”

“That’s a reversal from just two years ago, when real-estate prices in places like Rio de Janeiro and Sao Paulo had surged as much as 230 percent as rising incomes, a soaring real and record-low borrowing costs ignited a wave of home buying.”

CTV Kitchener in Canada. “In Waterloo, only a few years ago students were spreading into nearly every part of the city due to a rental shortage – people in the student housing industry say it’s more and more becoming the exception. Rob Jackson says he’s already felt a major shift to a market less favourable to landlords, and worries about what will happen once even more student housing comes online. Jackson rents out a converted house to students. He expected the income from that house to pay for an early retirement, but now says that’s unlikely to happen. ‘This isn’t the cash cow that people think it is,’ he said.”

“In recent years, he’s lost one of the five bedrooms he rented out – and now, he says, he might have to lower the rent just to attract tenants. ‘Utilities have increased. Property taxes have increased. I should be getting two per cent more than what I’m getting right now,’ he said. ‘(Students) know that they can wait until the very end and start negotiating down.’”

NDTV Profit on India. “A day after RBI governor Raghuram Rajan advised builders stuck with unsold inventories to cut rates, realtors’ body CREDAI today said there is no scope to reduce housing prices and demanded that interest rates on home loans as well as taxes should be reduced to boost demand. ‘From the developer’s side that a substantial reduction in prices has already happened across the country,’ CREDAI president Getamber Anand told PTI. ‘Any further decrease in sale prices would mean an out of pocket expense for the developers thereby acting as the last nail in the coffin of an industry which contributes so much to the economy and employment at large.’”

The Australian Financial Review. “While Chinese investors, the largest group of foreign investors in property, are still coming to Australia in droves many are more cautious about foreign-investment rules and are no longer thinking ‘just because we have money, we can buy anything,’ Asian property agent, House 18’s Michael Zhu said. ‘The rules have always been there. In the past, there were fewer Chinese investors and so the control of investments were not as tight. Now people especially the smaller investors are very worried.’”

“Mr Fang, a Chinese investor from Suzhou said he has postponed an investment in a house in Melbourne. ‘I don’t want to break the law. I am happy to get a lawyer but it costs money so I have to think about it more carefully,’ he said. ‘I am buying to support my only child who may go to Australia to study but now I am not sure if I want to do it.’”

“Sydney prices have leapt 20 per cent in the last 12 months, and Melbourne prices nearly 12 per cent. The inter-governmental body, The Financial Action Task Force identified property as a ‘high risk’ sector for laundering in Australia and noted AUSTRAC had no power over real estate agents, accountants and lawyers. ‘Australian housing is viewed across Asia as an attractive vehicle for parking illicit funds, particularly among corrupt officials,’ its latest assessment has found.”

CNN on China. “Faced with this new rout, local investors — many of who are still reeling from the meltdown that began in June — posted reactions across Chinese social media ranging from dark humor and despair to a revealing mistrust of the government. ‘The stocks I bought have dropped so cruelly,’ one Weibo user posted. ‘In a previous session, I made 200,000 (yuan). Because I was greedy I wanted to make more, like a snake trying to eat an elephant.’”

“‘What a great Chinese dream! The stock market bubble should just burst… Last month, my father went back to his hometown of Jiangyang (in Sichuan),’ one cynic said on Weibo. ‘Our relatives said in the last two years many businesses have closed and even a large factory wasn’t able to get enough orders to keep going. Compared to 2011 when he visited, it’s day and night. Who are you fooling?’”

“Another chimed in: ‘If housing prices would fall like this that would be great, then the Chinese economy would completely collapse and the government would also collapse. (You) can only rebuild after it breaks.’”

Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here:

http:tinyurl.com/http-hbb-com

KPCC reports from California. “Los Angeles officials will hold citywide meetings on short-term rentals in the coming weeks as they move toward regulating the rapidly-growing industry. Sebastien De Kleer was among the handful of professional short-term rental operators who spoke. De Kleer noted his 80 LA properties have generated more than half a million dollars in lodging taxes in the city in recent years. That’s ‘money that I love to spend, money the city and residents desperately need,’ DeKleer said.”

“Dozens of Airbnb hosts showed up to defend the site and their right to home-share. Many said that income generated from renting out a room has allowed them to do things such as pay the mortgage and send their children to college. Councilmember Mike Bonin, who authored a motion for regulations with Council President Herb Wesson, said he didn’t have a problem with home-sharing. His motion aims to allow people to rent out part of their primary residence. But he said the ‘bad’ kind of short-term rental is proliferating throughout his district, which includes tourist magnet Venice.”

“‘Real estate speculators are coming in and buying up entire apartment buildings and using them as rogue defacto hotels in our neighborhoods,’ Bonin said.”

From Seattle Weekly in Washington. “Alice doesn’t have a job—not in the traditional sense, anyway. She’s self-employed. Instead of working nine to five, Alice is a host for Airbnb. Alice (who asked to be identified by a pseudonym) operates two apartments as full-time Airbnbs. ‘I started to realize that there was a huge number of people coming into Seattle, and realized I could pay off my student debts a lot faster if I could host more than just a couple times a month,’ Alice explains. ‘And now I have two [apartments] in the city that I do full-time for Airbnb.’”

“Alice rents a third apartment for herself, and works as housekeeper, booker, and concierge for the Airbnb units. ‘I rarely meet my guests,’ Alice says. ‘Getting into the building is pretty automated. Everyone just kind of helps themselves.’”

The Citizen Times in North Carolina. “In Asheville, short-term rentals mean homes rented out for less than 30 days - typically to tourists - when the owner or a main resident isn’t present. Council members voting for the high fine spoke in unusually impassioned language about why they were against short-term rentals despite pleas from some residents. They said there was a very real possibility that businesses would buy up chunks of neighborhoods, turning once residential areas into defacto hotel districts.”

“Vice Mayor Marc Hunt and council member Gordon Smith said ‘organized money’ was already appearing on the scene. Despite a local housing crisis, long-term rentals that had housed locals were being turned into more lucrative short-term rentals for tourists, they said. ‘What I don’t want is for predatory investors to come in and gobble up our neighborhoods and housing stock,’ Smith said. ‘That is exactly what is happening in other cities around the world. So let’s not pretend it can’t happen here.’”

The Boston Globe in Massachusetts. “The vast majority of people who advertise Boston homes on the online rental website Airbnb list just a single property — presumably to occasionally rent out their home or an extra room. But 15 percent have posted multiple listings, according to a Globe review. Airbnb acknowledges that some people are not renting out their own homes. A survey of its Boston users released by the company last year found that while 82 percent of users were renting a primary residence, 8 percent were renting an investment property, 6 percent were renting a secondary residence, and 4 percent were renting an in-law unit attached to the primary residence.”

“One Everett landlord said that he and his business partner recently converted 13 of the 100 apartments they own across Boston, Everett, and Chelsea from standard yearlong rentals into short-term rentals, and then listed them on Airbnb. ‘It’s more profitable for us . . . and we don’t have to deal with the hassle of a regular tenant,’ said Jose, 25, who asked that his full name not be published because he fears that officials would try to shut his operation down. ‘You can easily triple the income going through Airbnb, compared to a regular rental.’”

The Arizona Daily Star. “Hundreds of Tucson-area homeowners were surprised to learn this year that their properties had been reclassified as commercial. The move by the Pima County assessor targeted people who rent their houses, guesthouses or condos as short-term or vacation rental properties for profit. For some people who own vacation and short-term rentals, the move feels like a government money grab.”

“‘What they did was slam us with twice the property tax,’ said Chris McGuire. He and his wife, Shana McGuire, at one point owned two vacation rentals in Oro Valley but decided to sell them after the assessor notified them of the changes. The reclassification changed their property tax payment ratio from 10 percent for residential to 18 percent for commercial. ‘I’m trying to make a little bit of money and trying to make the mortgage,’ Chris McGuire said. ‘It just wasn’t worthwhile.’”

The Real Deal reports from New York. “With the stock market sliding, sales of luxury Manhattan real estate dipped last week, according to Olshan Realty’s latest report. Buyers signed just 21 contracts at $4 million and up last week, and the average number of days on the market was 345, up from 264 at this time last year.”

The Denver Post in Colorado. “Metro Denver home prices jumped 10.2 percent in June from a year earlier, double the pace seen nationally, according to the Standard & Poor’s/Case-Shiller 20-city home price index. But the June report might already be outdated. Local real estate agents say a chill set in on the market in July and August that will make it harder to maintain that strong rate of appreciation. ‘Prices are beginning to level off, and in some cases, we’re seeing price reductions come back into the marketplace,’ said Anthony Rael, who tracks housing market trends for the Denver Metro Association of Realtors.”

“Rael said that cooling trend is continuing into August, although it isn’t certain whether home prices set a near-term peak in June or whether the usual seasonal slowdown started earlier than normal this year. ‘It feels like the market is at a standstill,’ said Redfin agent Michelle Ackerman. ‘Showings have dropped off significantly.’”

The Houston Chronicle in Texas. “Houston’s real estate market hasn’t avoided the slowdown triggered by collapsing oil prices, but a more diverse economy will help offset weakness in housing and vacancies in area office towers, industry experts said Tuesday. Ricardo Rivas of Allied Orion Group, a multifamily firm, said west Houston’s apartment market has been relatively stable, but there are 3,000 units under construction with more proposed. Overall, the multifamily market has peaked, Rivas said, and over the next few years ‘will be going back to normal.’”

“Mollie Carmichael, principal of John Burns Real Estate Consulting, said there could be a slight oversupply of homes on the market in certain pockets and sales and prices will soften, particularly in the higher end of the market where much of the recent growth came from. ‘We’re producing a few more homes than we are jobs,’ she said.”

The Capital Gazette in Maryland. “Currently, there are around 350 detached waterfront properties listed for sale in Anne Arundel County, and the range of pricing is dramatic. More recently, there seems to be a resistance with respect to what people are willing to pay for these homes. During the 12 month period ending July 31, 2015, the average list price had fallen to $933,734, and the average sales price was only $868,568, a decline of over 25% from the peak.”

“Although the housing market in general seems to be strengthening, we’ve been feeling some softness in demand for waterfronts. This weakness might be traced to an oversupply of waterfront homes, given the current level of demand. As we said, there are about 350 waterfront homes available for sale in Anne Arundel County. Unfortunately, only 39 such homes sold last month, meaning that we have about a 9 month supply of inventory. In a healthy housing market, where you have a good balance of buyers and sellers, there should be a 5 month supply of inventory. For waterfronts, it’s almost twice that.”

“When you look at waterfront homes priced over $1 million, the situation becomes even worse. In that price range, there are currently 140 homes on the market, yet only eight $1 million plus waterfront homes sold during the last month, giving us a whopping 18 month of supply for this group. So, what’s wrong with waterfronts? Well, it could be traced to a number of factors. Most likely, the culprit is a weak economy.”

“Additionally, because waterfront homes are expensive, they’re often owned by people reaching retirement age, and because of the high tax rates in Maryland, many are opting for retirement on the Gulf Coast, rather than the banks of the Chesapeake Bay. As a result, they seem to have been willing to let the waterfront house up here go for a low price, just so they can get on with retirement down there. Nevertheless, we expect that if the economy improves, and we work our way through the current glut of waterfront homes available for sale, we’ll once again see strong growth for these properties.”

The Dayton Daily News in Ohio. “Foreclosures increased in 44 states last month, including Ohio, where the number of properties repossessed by lenders rose 69 percent from a year ago, according to RealtyTrac. The trend was even more pronounced in the Dayton area, where the number of bank-owned properties climbed to 352 from 46 over the same period — a whopping 665 percent increase, the analytics firm reported.”

“Ralph Mantica, president of the Dayton Area Board of Realtors, said the surge in bank repossessions likely reflects the culmination of the foreclosure process for many homeowners whose foreclosures were originated months, even years ago. ‘It takes a long time to get a lot of these houses to go through the foreclosure process,’ Mantica said. ‘Once the process starts, people can literally live in a house for more than a year before the bank actually takes possession of it.’”

The Winston-Salem Journal in North Carolina. “The Winston-Salem metropolitan statistical area experienced another sharp year-over-year increase in foreclosure filings in July, according to RealtyTrac. Daren Blomquist, vice president at RealtyTrac, said properties foreclosed in the second quarter had been in the foreclosure process an average of 629 days — ‘the longest in any quarter since we began tracking in the first quarter of 2007.’ ‘It’s also evident that the recent surge in real-estate owned properties is in fact clearing out more of the bad bubble-era loans from the so-called shadow inventory,’ he said.”

“RealtyTrac data shows 61 percent of loans still in the foreclosure process were originated during the housing bubble years of 2004 to 2008, down from 68 percent last year and 75 percent two years ago.”

From Michigan Radio. “Bank repossessions of Michigan homes in foreclosure were 137% higher in July than the same month a year ago. ‘It’s a much better time from the bank’s perspective to foreclose on these homes,’ says Daren Blomquist of RealtyTrac, ‘and then put them on the market, because they can sell them for a much higher price point than even just a few years ago.’”

“And while public outcry a few years ago criticized banks for foreclosing on people too fast, the opposite is now happening. With so many homes in poor condition dotting neighborhoods, ‘the banks are getting criticized for almost taking too long to foreclose now.’”

Post off-topic ideas, links, and Craigslist finds here.