Creating This New, Smaller Tsunami
It’s Friday desk clearing time for this blogger. “Housing experts insist that getting more millennials to buy homes in 2016 will go a long way in determining the future of the Valley’s housing market. ‘If we really want to see a healthy real estate market in Phoenix, these millennials are going to have to jump in,’ Realtor Tricia Amato said. Brandi Porter, 22, is a recent Arizona State University graduate who thinking about buying a house, especially now, with the cost of rent going up around the Valley. ‘I want to make sure I can stay here, and throwing money toward a rental seems like throwing money away,’ she said.”
“You’re scared. You purchased your dream home in Summerlin or Green Valley a few years ago and now you find yourself still underwater on your mortgage. What happened with the economic recovery? Some 22 percent of Southern Nevada homeowners have mortgages that are underwater, according to Zillow. Michelle Johnson, CEO of the Financial Guidance Center, explained another problem she is seeing with clients coming to the center for help. She said many of the unique loan products, like the 80/20 loan that allowed people to buy a home with two loans and none of their own money or home equity loans that people got when home prices were soaring, are just now coming to fruition.”
“‘I think all of those together along with the underwater is creating this new, smaller tsunami,’ Johnson said.”
“Even with the real estate market recovering, more than a quarter of all South Florida home and condominium sales in 2015 involved a distressed property. Short sales, bank-owned homes and properties in some stage of foreclosure accounted for about 27 percent of all sales last year in the tri-county region, according to RealtyTrac Inc. Judy Trudel, a real estate agent in Palm Beach, Broward and Miami-Dade counties, said she’s surprised that distressed sales remain such a big part of the housing market in South Florida. ‘Nine times out of 10, you can’t even find a foreclosure,’ Trudel said.”
“During the heady years of Manhattan high-end real estate, one dirty little secret was that buying a condo in a pre-construction development was an easy way for buyers to avoid scrutiny. Amid a buying wave—like the one Manhattan saw over the past five years—not every developer was willing to rock the boat, despite potential liability. ‘It was a no-questions-asked’ environment, one prominent high-end Manhattan broker recently said.”
“This year, labourer Fan Fu and 20 or so colleagues working on the Zixia Garden apartment complex in Hebei province have not joined China’s legion of migrant workers returning home to celebrate new year with their families. Instead, they have camped in the offices of the property developer’s subcontractor, demanding almost a year’s unpaid wages and too angry and proud to go back to native towns and villages empty-handed. ‘The developer has kept using the fact that they have no money as an excuse. As of now they haven’t paid us a single penny,’ said Fan, who brought others from his home town in the western province of Sichuan to work on the apartments.”
“With China’s economy growing at its slowest in 25 years, more workers face Fan’s predicament and labour unrest is on the rise, a concern for Beijing as it seeks to avoid social unrest even as financial pressures build. According to Geoffrey Crothall of the Hong Kong-based group China Labour Bulletin, which tracks worker issues, there was a spike in protests in the last quarter of 2015. Its data show that in December and January, there were 774 labour strikes across China, from 529 in the previous two months, most of them over wage arrears.”
“At a printing factory in the western city of Chongqing, a Reuters reporter was present when a local official visited last week to make sure the boss paid his workers before the Year of the Monkey begins. The official declined to speak with Reuters, although the boss later said it was an attempt to prevent unrest. ‘That’s (unrest) what the government is most fearful of,’ said the factory owner, who did not want to be named.”
“The nation’s only listed broker’s housing price index for the fourth quarter of last year was down 4.1 percent from the same period in 2014, led by corrections in the greater Taipei area — which had seen prices rise to the extent most people could not afford to buy a property, the report said. ‘The pace of the retreat is actually more than 10 percent in Taipei, if price levels are compared with mid-2014, and challenges the popularly held belief that houses in central locations hold prices more than those in suburban and outlying areas,’ said Sinyi researcher Tseng Chin-der.”
“Perth’s surging housing supply last year added eight more properties for every one buyer, according to the Real Estate Institute of WA. ‘Overall sales to listing ratios have gone from one property being sold for every 19 listed in November 2014 to one sold for every 27 listed in November 2015,’ REIWA president Hayden Groves told the forum. ‘In theory that means buyers have eight more property options to consider when they buy.’”
“Daniel Kavishe, manager of market research at FNB Namibia, said that the volume and value index retreated on the eve of the fourth quarter 2015 as the housing market eased across the country. He added that the deeds office recorded a 40% drop in transactions year-on-year due to a slowdown in purchases in the northern and central towns. These transactions, combined with developments at the coast, pulled the median house price down to N$694 000, Kavishe said. ‘Taking a look at the last five years, we realise that Namibia’s housing market has changed considerably. Volume growth has increased by 30,5% while prices have grown by an estimated 87,8% across the board,’ he said.”
“In Windhoek those struggling to pay bonds are from Khomasdal and Katutura areas but are ironically office-based workers or semi-professionals, he said. ‘The interest rate environment in Namibia is bound to change drastically over the course of 2016 and that will not bode favourably with the already indebted consumer. Irrespective of inflation and general economic slowdown expectations for 2016, consumers will face headwinds on the back on the rise in the cost of servicing their debt. So save where possible and curb unnecessary spending,’ he said.”
“Aberdeen, a city whose prosperity was recently measured in the number of Bentleys leaving car showrooms and million pound homes in estate agents windows, now finds itself holding out the begging bowl. Once among the wealthiest cities per capita in Europe, it is relying on the sort of state handouts that would make a banker blush.”
“Stories abound of struggling businesses, from restaurants and hotels, to the bookies and even the discount stores. The 70% fall in the oil price over 18 months has ripped a massive hole in the economy and few cities as self-dependent as Aberdeen could expect to bear the downturn without substantial casualties. But just how tough has life become?”
“According to the shop workers, restaurateurs and property people, the city is now in a state of meltdown as thousands are laid off and even those left in a job have stopped spending. There is no doubting these horror stories, but there is a danger of over-doing the tales of woe.”
“One report this weekend gave an example of a ‘former high roller’ turning up at a food bank in a Porsche clutching a welfare reform grant from the local authority. Seriously? If the story is true, this guy had the temerity to drive to a food bank in a Porsche and expect a carrier bag of free groceries? Mmm… I’d like to have a word with him and find out how he could afford a Porsche - even if he does have to hand it back - but doesn’t have enough money in the bank from his high-earning days to feed himself and his family.”
