The Funny Money Is In Shorter Supply
It’s Friday desk clearing time for this blogger. “Lin-Lin Tsou-Otani is a real estate agent with DeLeon Realty. It’s Saturday morning, and our housing search starts in Cupertino, in a van filled with about 10 other people. The van seats are full – so Tsou-Otani stands in front, guiding buyers on a tour conducted half in Chinese, and half in English. ‘Raise your hand if you think the housing market is going crazy,’ she says. The crowd chuckles.”
“And these investments are paying off. Three years ago, the average home price in Palo Alto was $1.2 million. Now it’s around $2.5 million. ‘If you bought three years ago,’ says DeLeon International Outreach Director Kim Heng, ‘you’d be a millionaire now, sitting on a pile of gold.’”
“San Francisco condominium prices fell last month and home sales lagged as the frenzied market cooled off. New condo prices fell 3 percent and resales slipped by 2 percent as the number of sales declined by nearly 20 percent between August and September, according to the Mark Co., a condo marketing firm. Paragon Real Estate Group also tracked a slight decline in median condo and home prices due to seasonal changes, dropping 4.5 percent to $1.155 million.”
“Glenn Kelman, CEO of Redfin, said he was already seeing homes get fewer offers because many Bay Area residents ‘pay for houses with stock, so that willingness to bid $300,000 over asking is being limited by the stock market.’ Condo prices slipped by 10 percent last month, according to Redfin. ‘The funny money that people have had to pay for houses is in shorter supply,’ Kelman said.”
“Irina Kim Sang, broker associate for Coldwell Banker Miami Beach who said her specialty is Russian-speaking luxury buyers interested in residential and commercial real estate, said she received more inquiries from new-to-market prospective homeowners before the ruble’s decline in value. ‘I continue to receive inquires from Russians wanting to rent but am seeing less interest from those who started looking when the ruble decreased considerably,’ she said. ‘These first-time homebuyers in South Florida decided not to move forward, with the main reason being they make their money in rubles and would have doubly high carry costs for a second home.’”
“Canadian homebuyers are retreating from metro Phoenix. The number of Valley houses purchased by people north of the U.S. border has fallen by half during the past year. And a growing number of Canadians who bought houses in the region during the past five years are getting out of the market. ‘Canadians are now doing more selling than buying in the Valley now,’ Arizona State University housing analyst Mike Orr said.”
“Canadians helped start metro Phoenix’s housing market recovery when they began finding foreclosure deals and buying in late 2009. Then most other buyers weren’t in the market. ‘Canadians aren’t feeling as wealthy as they did a few years ago,’ Orr said.”
“About 80 people have gathered in Barfoot & Thompson’s downtown auction room for the company’s regular Wednesday fire sale. The room is a mix of ethnicities and prospective buyers, from seasoned investors to nervous first-timers. Latest sales figures for some firms have seen the rate of properties selling on the day falling to as low as 20-30 per cent from recent highs of up to 90 per cent. It comes on the back of skyrocketing prices and new rules targeting property investors, designed to take the heat out of Auckland’s overcooked housing market.”
“With no other bidders on the sun-drenched ‘casa’, the action stalls. by lunchtime the auctioneer has a 50 per cent success rate; of the 24 properties offered for sale, 12 sold outright, seven were passed in and five others attracted no bids. The afternoon session goes a similar way, with 14 of 26 properties selling under the hammer, seven passed in and the others drawing no bids.”
“Chennai’s developers are now resorting to perhaps their last option: heavy discounts. CNBC-TV18’s Jude Sannith reports that the city’s well-known player Doshi Housing recently stunned competitors by launching a project at 25 percent below prevailing market rates. ‘There was an apprehension in people’s minds that ‘If I delay my purchase, I would get a better price’. So, we tackled that by offering an investment protection guarantee,’ says Doshi Housing director Mehul Doshi. ‘What we said is: ‘This is the lowest price you can get, and if there is anybody who launches a product which is lower than this price tomorrow, we will refund the difference to you.’”
“South Korea’s brisk property market has been a bright spot in an economy that has struggled for much of this year. Now, an oversupply of new homes and tougher lending rules may signal an end to the boom. ‘Regions where there’s been a surge in new apartment sales in recent years may experience problems like a price correction,’ said Kim Kyu Jung, a real estate analyst at NH Investment & Securities Co.”
“Perth house prices are falling, rents are dropping and sales turnover decreasing, and there is little sign of an imminent turnaround, property experts have warned. CoreLogic RP Data research shows there are almost as many properties on the market in Perth as there are in Sydney, despite the latter having more than twice the population. Craig Kelson, of Kelson Real Estate in East Victoria Park, said in his 20 years in real estate, he hadn’t seen as many properties on the market now.”
“‘The gap between what properties are being advertised at and what they sell at is growing,’ Mr Kelson said. ‘Agents were still trying to be upbeat a few months ago, but now they just can’t see how the market is going to turn around.’”
“Prospective homeowners in Sydney have been heartened in the wake of more positive price outlook for Australian property, with news that a piss-stained cardboard box in Sydney sold for as little as $530,000. Piss-stained cardboard boxes, which sold for no less than $580,000 in June, have experienced a rapid drop in price which has both property speculators and regular mum and dad investors talking about the possibility of a more accessible housing market.”
“New homebuyer Fiona Wilkins, 25, was overjoyed at the news. ‘Only three months ago I thought that a urine-dampened cardboard box slowly melting in the rain on a suburban street corner would be well out of my reach,’ she said. ‘But now I’m heartened by the possibility that I may only need to enter a lifetime of debt in order to feebly shelter myself in a foul-smelling abode.’”
“Newly incumbent Treasurer Scott Morrison urged caution at the looming end of the housing bubble. ‘We need to keep consumer confidence up – certainly for new home-buyers the prospect of a Westpac interest rate adjustment looks positive,’ he said. ‘And as a Sydneysider I’m quite pleased that a mouldy piss-box has seen such eminently reasonable price adjustments. To young people I say this: now is the time. Embrace home ownership, like your parents did. Enter the piss-stained cardboard box market.’”
“Adam Wells, 27, has been actively seeking a first home for several years. ‘As recently as June, I thought the prospect of owning a mouldy old box seeped with the acrid stench of piss was only for baby boomers. Now I see a ray of light. Home ownership is within my reach.’”
