November 6, 2016

Sellers So Eager To Lure Buyers They Cut Prices

A report from Okotoks Online in Canada. “The current economical forecast has made its mark on the number of new residential lots purchased in Okotoks. Permit and Assessment Manager for the Town Rob Mueller says when comparing 2016’s numbers to all of 2015 it’s quite the substantial drop. ‘We’re seeing about a 40 percent reduction in residential housing starts for the same time period as last year.’”

“CIR Realtor Brett Murrell says on the other hand Okotoks is not any different than other communities as all markets are slow at the moment. Murrell adds that though residential housing starts are down it’s still a buyers market. ‘We are definitely a buyers market right now. Anything over 4 months of inventory is a buyers market and we are sitting at 6 months of inventory so we are a buyers market which is a great time to be buying. Prices are dropping, inventories are up so there is way more houses and prices have definitely come down.’”

The West Australian. “Perth’s tanking jobs market is the biggest weight on property prices across the city, according to a report. NAB’s quarterly review of the national property market, derived from industry insiders, investors and property developers, also suggests the Perth CBD unit market will be the toughest in the coming year. Full-time employment in WA has fallen for a record 21 consecutive months with the unemployment rate now at 6.3 per cent. The jobless rate is more than 10 per cent in some areas of Perth.”

“According to NAB’s research, the soft jobs market is flowing into the property sector. ‘Property professionals on average continue to identify employment security as the biggest constraint on buyers of existing property in Australia,’ it said.”

“Access to credit, which can be tied to the wages or job prospects of those looking to buy, are also major issues. Investors may continue to struggle, with the bank forecasting rents to fall by 1.6 per cent next year and another one per cent in 2018. Recent inflation figures showed rents falling at their fastest rate on record. Foreign buyers have helped to push up prices elsewhere. In Perth, foreigners have increased their market share to 6.6 per cent from 3.9 per cent, a development NAB believes suggests ‘they are seeing greater value as prices fall.’”

From Bloomberg on China. “The push by China’s policy makers to rein in property bubbles looks to be getting traction, according to early indicators from the nation’s biggest cities. Beijing home sales volume plunged 41 percent year-on-year last month while Shanghai’s slumped 18 percent, China Real Estate Information Corp. data show, after new purchase restrictions and tightened mortgage lending. Transactions fell 50 percent in smaller cities.”

“Rising costs amid higher down-payment requirements forced some buyers to walk away from deals. Rinko Zhang, a 30-year-old magazine editor, found out first hand. Zhang listed her 45-square-meter one-bedroom south Beijing apartment Sept. 20 after finding a two-bedroom unit closer to work. Interest was strong, she raised the price, and a buyer agreed to an Oct. 5 signing. But they stood her up, and her agent said the buyer couldn’t afford the new higher down payment. Now she says interest in her unit has dried up.”

“In the Jiangtai Road neighborhood in northeast Beijing, realtor Ma Ping, 30, sees sellers so eager to lure buyers that they cut prices 100,000 yuan ($15,000). Transactions in the area have plunged more than two-thirds in a month, he said.”

“Still, other sellers are waiting for the tide to turn. Jeffrey Wang, a 36-year-old technology entrepreneur, hiked the price of his northwest Beijing home by 2,000 yuan per square meter. Realtors pestered him daily to cut the price after new rules took effect. He didn’t listen. ‘I’m not in a rush,’ Wang said. ‘I think Beijing’s property prices will continue going up once the government starts loosening restrictions again.’”

The Daily Trust in Nigeria. “In the last one year, Nigerians have battled with the ripple effect of recession. The one thing that has comforted many of them - especially those in the FCT - is that they can now live in accommodations of their dreams or something close to it. With many houses lying unoccupied and wasting away, landlords are forced to reduce the cost of rent.”

“Grace Adesewo, 36, with her husband, are expecting the arrival of their first baby. They were living in a two-bedroom apartment, Abuja. The space was too small to accommodate a new baby. In May, 2015 the couple began house-hunting. Although the couple had saved N2.5million which was the going rate for a three bedroom flat in the part of Garki they wanted. But in the end they paid N1.5million for a three-bedroom bungalow with two-room boys quarters and an ample parking space for no less than five cars, in Prince & Princess Estate, Abuja, in January 2016.”

“The house had been vacant for almost a year when the rent was fixed at N2.5million. Over time, the rent reduced as a result of low patronage. The Adesewos’ ability to bargain with the landlord and their willingness to pay for two years’ rent in advance, worked in their favour. She teased: ‘There was no way we were letting the house go because the apartment was beyond our expectation and we didn’t have to worry about accommodation for another two years. We can even rent out the boys quarters and use the money to offset our debt.’”

“The story was no different for Osita Anosike, 33, who moved from Gwarinpa to Abuja, in September, 2016. Anosike, who a manager in a departmental store in Abuja, said: The bachelor who didn’t mind forfeiting two months’ rent in his old apartment, said: ‘When he told me the location and that it was going for N400, 000, I jumped at it and immediately paid. Not only is it closer to my workplace, the rent is the same as my old place.’”

“Ejike Charles, who has been an agent for 10 years specialising in clients who want accommodation in Maitama or Wuse areas, explained how the recession has affected the cost of accommodation as well as landed property. He said: ‘Before a Wuse 2 or Maitama self-contain apartment cost between N500, 000 and N600, 000. Two-bedroom flat was N1.5million. But many of them were empty.’”

“Charles said: ‘Some landlords, who don’t want to leave their property empty throughout the year, have reduced the rates because they also understand the situation of the country. Presently, one can get a two-bedroom flat for N1million, three bedrooms for about N1.8million to N2million, while a self-contained can also go for N350, 000 or N400,000 depending on how new the property is,’ he said.”

“Despite the rent crash, Charles said there were several empty houses in the metropolis as the recession still made it impossible for tenants to pay the rent.”

Sellers Adjust To The Cool Down

A report from the Independent Record in Montana. “Everyone has noticed the surge of new construction in Missoula recently, but what’s surprising is it looks like that growth is only accelerating. ‘We’ve got quite a few of those big homes being built right now,’ said Walt Willey, president of Vanguard Gold Management. ‘We’ve got a spec home worth over $1 million under construction right over there. There’s a lot of activity and a lot of homes going up.’”

“Kevin Kivela of Spire Inspections said he has had to put customers on a seven- to 10-day waiting list. ‘A lot of people don’t pay to have their home inspected if it’s new construction, but it depends on what their comfort level is,’ he said. ‘Just because it’s new doesn’t mean there isn’t human error. I had a client that didn’t get a home inspection on a new home, but after three months of living there they noticed a foul odor coming from the crawl space. The plumbing for the shower had not been hooked up to the main drain system, so all that water went into the crawl space for three months. Sometimes things get missed, even in new homes.’”

“Kivela estimated there are a dozen licensed home inspectors in Missoula, and all of them are busy. ‘I don’t know where all these people are coming from,’ he said. ‘The housing inventory is still low. All these homes are going under contract the day of listing and they all have multiple offers.’”

The Denver Post in Colorado. “October temperatures might have run on the mild side, but a big drop in sales and listings cast a chill on metro Denver’s housing market, according to the Denver Metro Association of Realtors. Buyers closed on 4,294 homes and condos last month, a decline of 17.5 percent from September and 11.4 percent fewer sales than in October 2015. Sellers listed 4,874 homes last month. About three in 10 sellers had to drop their list price to get an acceptable offer, although that level was similar to the price drops measured the past two Octobers, according to the report.”

“‘Price reductions are being seen across the board as sellers adjust to the cool down,’ Steve Danyliw, incoming chairman of the DMAR Market Trends Committee, said in the report.”

The McAlester New-Capital in Oklahoma. “Real estate reports indicate a slight bump in year-to-date residential sales in southeast Oklahoma has not matched the near 96 percent increase of new listings in the area. Data from the Greater Tulsa Association of Realtors show that while 57 more houses have been sold thus far in 2016 as compared to this time last year, there are 1,280 more homes listed for sale in the same time frame. Data reflected markets in Haskell, Latimer, LeFlore, McIntosh, Pittsburg and Pushmataha counties.”

“‘(The) oil field pulled out,’ Century 21 Realtor Shirley Donaldson said. ‘They’ve laid off (people) and all those houses have come up for sale. Our biggest problem is all these jobs are gone.’”

“Donaldson said she’s seen sellers struggle to sell their homes because of the flood of new listings. However, the average days on market to sale dropped more than 41 percent compared to this time last year. Homes spent an average of 102 days on market before selling. ‘You’ve got to price them right on the money or just under it,’ Donaldson said. ‘We need jobs. J-O-B-S is the answer.’”

The Press of Atlantic City in New Jersey. “If you’ve been notified, or even just worried, that you could lose your home to foreclosure, experts say parts of your home can actually help you fight that fate. That could be useful knowledge in South Jersey, even if recent statistics show that Atlantic County lost its unwelcome status as the foreclosure capital of the U.S. in the third quarter of 2016. Start with the mailbox. Atlantic County Sheriff Frank Balles’ office prints dozens of sheriff’s-sale listings every Monday in this newspaper. He knows some owners’ initial reaction to getting the first notice of foreclosure is to put it aside, or even throw it away.”

“‘The worst thing you can do is not open that letter from the bank,’ Balles warned recently in Atlantic City, at a foreclosure-prevention seminar hosted by the New Jersey Housing Mortgage Finance Agency.”

“When Alejandra and Jose Perez realized their Galloway Township condo was in danger, the parents of three first tried to fight on their own. They worked at Showboat and Trump Plaza, two of five Atlantic City casinos to close since 2014. But even before they lost their jobs for good — Jose after 23 years at the Plaza — their hours were cut so much that they couldn’t keep up with the bills.”

“Alejandra asked the mortgage company to modify their loan, but they were rejected because of that low income. Still, at the end of that process, she stumbled onto help in the form of the state’s Homekeeper program. They had to go through a HUD housing counselor to qualify, but ended up getting $50,000 in mortgage help from Homekeeper. When that ran out after two years, they still didn’t have full-time jobs in Atlantic County’s struggling economy. NJHMFA suggested they try again for a loan modification, and put them in touch with another counseling agency.”

“Their monthly payment was cut from $1,100 to $800, and ’so far we’re making it, we’re up to date,’ she adds. ‘I’d tell (struggling owners) first of all to never give up. The worst thing you can do is do nothing. Look for options, look for information. … And don’t wait until the last minute. It worked out for us, so it might work out for other people too.’”

“She also recommends a HUD-certified counselor such as Clarifi, where Stephanie Bittner is outreach director. Bittner can also suggest parts of the home owners can use to stay in their homes. She recommends a ‘crisis budget … They should make sure they’re reducing their electric bills. After the mortgage, utility bills are a major expense,’ Bittner says. ‘If they’re upside down by maybe $200 a month, it’s going to be a lot better than if they’re upside down by $500 a month. … They have to ask, ‘Can I reduce the cable bill? Can I cut back on food?’”

“Local utilities can also suggest ways to cut bills. At NJHMFA’s foreclosure session, an Atlantic City Electric representative handed out charts detailing the cost of leaving dozens of common items plugged in full-time. ‘Go through and unplug your devices. … And don’t leave your phone charger plugged in,’ Maria Waldman advised. She also gave a quick trick of adding an already dry towel to each load of laundry in the dryer. ‘You may get a little lint,’ she said, ‘but it will cut down on your drying time by five or 10 minutes.’”