October 14, 2015

The Gorilla In The Great Room

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The Denver Post reports from Colorado. “The total sales volume of luxury homes sold (sales over $1M) in the Denver metro market in September was 60 percent higher than September of last year, according to LIV Sotheby’s International Realty. ‘The luxury market is growing - both in the number of $1M+ properties being offered and the number of sales’ said LIV Sotheby’s International Realty president, Scott Webber. ‘Inventory is at an all-time high of just under 900 properties currently on the market. Meanwhile the number of properties sold has dropped each month since the high in June. Buyers have more choice now than they did this summer, and now is a great time to capitalize on our rising market.’”

“Boulder County is also experiencing a significant growth in its luxury marke. September was a particularly slow month, however, with only 17 sales, down 50 percent from August (statistics pulled from IRES LLC). The average selling price in Boulder stood at $1.45M in September, up 7 percent from August, and down -14 percent year-over-year.”

The Sun Sentinel in Florida. “A major condominium development planned for the Village at Gulfstream Park apparently won’t happen anytime soon. The 27-story tower planned in one of the area’s hottest pockets of condo development has been shelved, even though more than 120 people had reserved units in the building. Keven Klopp, development services director for Hallandale Beach, said Stronach shelved the project because it faced parking issues. The death of an executive on the development team also was a major factor, said Peter Zalewski, principal of the CondoVultures.com consulting firm.”

“But Zalewski said Gulfstream Park’s Canadian-based parent company, The Stronach Group may decide to wait two or three years in south Broward’s white-hot condo market. ‘It’s hard to imagine that Gulfstream Park Tower could be successful in this cycle,’ he said.”

“In the past few years, South Florida developers have relied primarily on wealthy foreign investors to finance condo construction, but those investors are growing more conservative as currencies weaken worldwide. Howard Elfman, a broker specializing in luxury homes and international sales for Weichert Realtors in Fort Lauderdale, said he expects domestic buyers to play a larger role in the local condo market. ‘Before, it was ‘Build it and they will come,’ Elfman said. ‘Now the developers have to be more cautious and understand where their buyers are coming from.’”

The Albuquerque Journal in New Mexico. “A creative marketing campaign centered on a voluntary auction with steeply discounted starting bids has been launched to generate interest in a small townhouse project. The 11-unit, two- and three-story Agave Condos hit the market in 2006 at prices ranging from about $375,000 to $450,000. None of the units sold and, after the housing market crashed, all were switched to rentals.”

“The entire property sold in 2012 to the current owner, a limited liability company associated with Granite Investment Group of Irvine, Calif. Already an upscale property – eight units have elevators – the new owner made more improvements and returned the units to for-sale condos. Two sold. The auction of the remaining nine is a way to dangle a pair of incentives for prospective buyers. The starting bids are running at 44 percent to 54 percent of the previous list prices, which were already marked down from the 2006 level. For example, the starting bid is $150,000 for a 1,850-square-foot unit previously listed at $319,900.”

“The auction strategy is a reflection of the comparatively slow rebound in Albuquerque’s housing market, Granite CEO Carey Levy told the Journal. ‘It’s unfair to paint a picture that this isn’t a viable property,’ he said. ‘This is a very viable property.’”

The Oklahoman. “If a million means a mansion, then mansions have been sprouting like oil rigs in Oklahoma County — at least through 2014. We’ll see what the gorilla in the great room has to say about it this year, since the oil patch, again, ain’t what it used to be. Put them all together and it would be a town the size of Cordell, or Drumright, or Bethel Acres — about 2,900 people. (That’s taking those 1,175 million-dollar homes and multiplying by the average Oklahoma County household size of 2.48 people.)”

“Imagine: Streets of gold in Cordell, Drumright and Bethel Acres! Actually, Edmond is the ‘winner’ if there is a race, with 381 million-dollar homes, followed by Nichols Hills with 380, then Oklahoma City with 360, Arcadia with 35, Jones with 15, Choctaw with two and two more out in the county, said Chief Deputy Assessor Larry Stein. Stein did point out that 380 million-dollar homes in 2-square-mile Nichols Hills comes to 190 per square mile.”

“‘Oklahoma property taxes are among the lowest in the nation, approximately 1 percent of the value,’ Stein said. ‘The owner of a million-dollar home pays approximately $10,000 a year in property taxes. That means all these homes would pay approximately $11,770,000 in property taxes.’”

The Advertiser in Louisiana. “Home sales tumbled in September in Lafayette Parish, a steep monthly decline from last September. The drop in sales not likely due to the availability of homes on the market. New listings in Lafayette Parish were up 36 percent, year over year, in September. New construction listings are up 17 percent. Bill Bacque, president of Van Eaton & Romero real estate, suggested some signs point to possible weakening in the market due to the continuing oil and gas slump. Despite boasting an economy that’s more diverse since the oil slump of the 1980s, the market continues to rely on oil and gas jobs for much of its health.”

KTAR News in Arizona. “There has been less action in the Maricopa County housing market as of late from out-of-state buyers. Less than 14 percent of all homes bought in the county in August were purchased from owners outside Arizona, nearly 3 percent lower than August 2014 and the lowest number since September 2008. In recent years, many of those buyers have been Canadians. But with a stronger U.S. dollar, homebuying has become more expensive for those north of the border.”

“Michael Orr with the WP Carey School of Business at Arizona State University said more Canadians are now selling their Valley homes. Orr said the rebounding Arizona housing market has also made it harder for investors. ‘Their objective is to buy homes at bargain prices,’ he said. ‘They can still do that, but it’s a lot harder work, so the volume goes down.”

“For those looking to buy in the Valley, Orr said more homes should be on the market in the next six to eight weeks.”