We Began To Think Of Our Homes As Investments
It’s Friday desk clearing time for this blogger. “International buyers are accounting for the smallest share of California home sales in at least eight years as prices climb and investors from China, the biggest source of foreign purchases, slow buying, according to the state’s Realtors group. The share of international buyers fell this year to less than 4 percent, compared with a peak of 8 percent in 2013, the California Association of Realtors said in a report. Chinese purchasers may be decelerating because it’s difficult to move money abroad, according to Leslie Appleton-Young, chief economist for the real estate association. The country limits individuals from spending more than $50,000 overseas and the central government has stepped up anti-corruption campaigns as the economy slows.
“‘It’s harder for Chinese to get money out,’ Appleton-Young said in a telephone interview. ‘One of my agents said on the last transaction, a Chinese buyer wrote that a check was for tuition when it was really for a home.’”
“In another sign that Miami’s luxury condo boom has reached its peak, South Florida’s dominant developer, Related Group, has dropped the required deposits on one of its Brickell area projects from 50 percent to 30 percent, The Real Deal has learned. Related, which is developing about 20 percent of all new condo projects proposed or under construction in coastal South Florida, has sent out fliers offering preconstruction units at its Brickell Heights 02, at the reduced deposit rate — at least temporarily. It is the first time the giant Miami-based developer has marketed a lower deposit structure during this cycle.”
“The lowered deposits come amid a flurry of new condo developments announced for South Florida, including more than 70 new condo towers with nearly 20,200 units in Greater Downtown Miami, including the Brickell area, according to Peter Zalewski. Related is not the first to lower the deposit structure on a preconstruction condo project in recent months, as developers battle to offset the strengthening U.S. dollar against many foreign currencies.”
“Technology job growth in Seattle is leading to a booming housing market, but the backlash against the rising cost of home ownership may finally be taking its toll. Two percent of renters in Seattle said they plan to buy in the next year, compared to 7 percent at the beginning of the year, the Zillow Housing Confidence Index said. However, confidence didn’t slip in Seattle quite as badly as other tech hubs – such as San Francisco, Denver and San Jose – and Seattle now has the highest homeownership confidence among these cities.”
“The drop in confidence over the first half of the year was significant among 18 to 34 year olds in tech hubs. In San Francisco, the percentage of them planning to buy a home within a year has plunged from 18 percent last to just 5 percent, and a similar pattern was seen in Seattle, Zillow PR specialist Jordyn Lee said in a blog post.”
“The luxury London property market finally appears to be in pause mode, and it could stay stuck for a while, as extra costs are piled on to the cost of buying a top-notch home according to high-end estate agent Knight Frank. The hike in the cost of buying homes at the top end of the market has ‘just stalled the market’ in Hong Kong and Singapore, Alistair Elliott, chairman of Knight Frank, told CNBC. In Asia-Pacific, Knight Frank’s offices have seen some cooling-off as countries outside China were affected by its slowing economic growth.”
“Thousands of homes under construction in Dubai are being put on hold as property prices in the emirate continue to fall and rents start to sink. Property broker JLL said average apartment prices in the city fell 11 per cent over the past year because of the strong dirham, higher sales transaction fees and mortgage caps. The broker predicted that average housing rents in the city would continue to fall by as much as 10 per cent over the coming 12 months.”
“‘We expected rents to fall sooner than they did, and actually we are surprised that they held up for so long,’ said Craig Plumb, the head of research at JLL’s Dubai office. ‘We expect it has a lot to do with a slowdown in the overall economy, meaning that employment growth has not been as strong as it was. With oil prices staying lower for longer than was at first anticipated, the Government has been cutting back spending, which has led companies to be a bit more cautious with their hiring.’”
“More Aucklanders are looking outside the city for work as new figures show a record number of houses selling for more than $1 million. Head of Trade Me Jobs Peter Osborne says over the past year there has been a noticeable lift in the number of Aucklanders looking outside the region for a new job. ‘Thirteen per cent of applications sent by Auckland candidates were for roles located outside the Auckland region. That’s up an impressive 47 per cent on the previous year.’”
“Mr Osborne says the employment market had been hinting at a slowdown for several months. ‘A number of economic indicators suggested the Kiwi job market was cooling off this year with employers not hiring as often, but new job listings remained strong on Trade Me Jobs in the face of a pessimistic outlook,’ he says.”
“Whether September’s prices have set a trend for the remainder of the year has yet to be seen. In the last week of the month there was a fall in auction sales and there was less pressure on buyers to make immediate decisions. New regulations for international buyers are due to come into force in November and these have coincided with a tightening of requirements around the export of money out of China.”
“Data has revealed almost one in three houses sold throughout the Wide Bay in the June quarter this year sold at a gross loss. The RP Data Pain and Gain report placed the Wide Bay as the fifth highest gross loss region in the country with 31.9%. Just Mackay at 47.6%, Fitzroy with 35.6%, Townsville at 34.0% and the WA Outback with 32.6% saw a greater percentage of sales with a gross loss. RealWay Bundaberg sales manager Brent Illingworth said there were people who studied the market and were still prepared to sell in this climate.”
“‘They will sell in this market and possibly lose, but it might free up some cash to buy another good investment or maybe upgrade their own home,’ he said. ‘So it’s not stopping people selling, but unfortunately there are always going to be people that have to sell.’”
“Beware: Tampa Bay still has plenty of zombies. Just in time for Halloween, RealtyTrac reports that the bay area ranks fourth among major metro areas in the number of ‘zombie houses’ — vacant homes in some stage of foreclosure. Marilyn Bevan lives across Summit Lane from the zombie, a once attractive 1,800-square-foot ranch house now abandoned and largely neglected. Records show that a couple paid $205,000 for the house in 2003 and divorced in early 2011, just as the bank was starting to foreclose. Both already had moved out by then.”
“The ex-husband, now living in a condo that also is in foreclosure, declared bankruptcy in August in a move that will leave the Safety Harbor house in limbo for some time. ‘He rented it for some time and then he came back and said he was going to live there and blah blah blah, and the next thing we know, he had carted off everything he could,’ Bevan said. ‘It’s getting uglier all the time.’”
“Last month, in response to the news that Detroit’s white population is now growing for the first time in decades, with the number of residents surging in particular downtown, a local radio station paused to ask: ‘Is Detroit big enough for everyone?’ It was an odd question, given that the city’s population is less than half the size it was in 1950, with tens of thousands of empty lots and hollow homes attesting to the ample elbow room.”
“But a neighborhood, no less a continent, defies the knowable volume of boxes or bottles or stadiums. We know when a bathtub is full, because the water runs over. But a city? A city block? How would you even define such a thing? ‘When people say a place is ‘full,’ to me it’s shorthand for they’re not willing to even entertain the challenges of what it would mean to redevelop the space,’ says George McCarthy, the president of the Lincoln Institute of Land Policy.”
“Remarkably, researchers Peter Ganong and Daniel Shoag suggest that nearly a third of the decrease in economic inequality in the U.S. last century up to 1970 can be explained by workers moving from poor states to rich ones. But since then something has changed. Home prices in California used to be about the same as home prices in Michigan or Connecticut. Today, there is a vast difference in housing costs across the country.”
“William Fischel, who has long studied land use at Dartmouth, has some fascinating theories of what changed in the 1970s. For one, the national Environmental Protection Act empowered local residents worried about the environmental cost of new development. But the 1970s were also a time when we began to think of our homes not just as places to live, but as financial investments for the future.”
“And people who believe their homes will put their children through college, or fund their retirement, are bound to be more protective of them. ‘That’s when people began to look around and say ‘well what might threaten the value of this home?’ Fischel says of the 1970s. Residents were no longer worried about the old-school zoning concerns of keeping factories and housing apart. ‘They worried about ‘well, if there’s another housing development down there, it’s going to crowd the schools, and create more traffic.’ They became hyper-sensitive to community effects. And they started showing up in zoning hearings.’”
