December 2, 2016

People Who Invested Have Been Left High And Dry

It’s Friday desk clearing time for this blogger. “The Woodlands mansion with the ‘biggest closet in the U.S.’ is just not selling. The home is back on the market. This time for much cheaper. Originally, homeowner Theresa Roemer listed the residence at $12.9 million. It’s now on the market for $7.95 million. That includes the house’s 3,000-square-foot, three-story closet that cost $500,000 to build. While the opulent closet, and the home attached, might seem like a project Roemer completed to live in for good, she says that it was never meant to be a forever-home. ‘This house was never meant to be a house that we would live in together. It was always meant to be a house to flip,’ Roemer previously told the Houston Chronicle. ‘I want to build another one and build a bigger closet.’”

“Vacation rentals are becoming a big problem in beach neighborhoods across Pinellas County. People are renting out their homes and sometimes the renters are throwing rowdy parties in quiet neighborhoods. Terry Hamilton-Wollin lives two doors down from a house that often rents to big crowds. ‘They’re partying all night long and my next door neighbors have a newborn baby. One night a group of renters even put a port-a-potty in the front lawn. This is a nice, waterfront, quiet community. It’s a disgrace. We fought like cats and dogs to keep our island small and peaceful and now that’s irrelevant.’”

“Yet, homeowners who rent their properties have the right to do so under state law. Mary Wilkerson, who owns several licensed vacation rentals but also rents out her Indian Rocks home says while she agrees with the need for screening renters and making sure you are courteous to the neighborhood, ‘people need a way to continue to pay their mortgage and insurance.’”

“Palm Springs approved a sweeping new set of rules regulating the vacation rentals industry that will limit the number of times a home can be rented in a year, impose increased fines for violations, and beef up enforcement. Residents like Ed Todeschini bought a home in Palm Springs, and told his real estate agent he didn’t want a home with vacation rentals around him. However, over time, that changed. ‘Now, out of eight houses that touch our property line, seven are vacation rentals,’ said Todeschini, who stressed he likes all of his neighbors. ‘But the system as it is, isn’t working.’”

“‘Please do not enact measures which would force a financial hardship on so many of us who are good, responsible owners contributing to the local economy in so many ways,’ wrote Susan Berger in a letter to the editor at The Desert Sun. Berger owns a home in Palm Springs which she rents out as a part-time vacation rental.”

“The oversupply of apartments in the Brisbane and Melbourne CBD is forcing property investors to resort to Airbnb as an alternative to longer term tenants. Gold Coast-based property investors Jason Agnew and his wife Louise have taken that course for a 59-square-metre one-bedroom unit in the heart of Brisbane CBD. The couple, who run their own wealth advisory company Lyfe Property, turned to Airbnb because they were worried about not being able to find a long-term tenant quickly enough. ‘We’ve looked into it seriously through two different agencies. It’s quite unreliable because of oversupply of units up here, so we thought we would give Airbnb a shot,’ Agnew told AFR Weekend.”

“Managing director Oliver Lee of Sydney-based Hostmybnb said three out of four inquiries were now from Brisbane investors who can’t find long-term tenants. Lee said one potential client had to lower rent from $480 to $350 for a two-bedroom apartment in Brisbane’s South Bank. He said investment apartments often sit empty for two or three months. ‘We actually didn’t want to go to Brisbane to tell you the truth, but we started getting hammered with inquiries from investors,’ Lee said. ‘It’s a uniquely Brisbane problem because there is an oversupply of apartments. And the reason why they contact us is because they can’t find any tenants.’”

“Knight Frank is the latest agency to cut staff on the prime London sales side because of the downturn. In an announcement yesterday afternoon the agency announced that two senior staff would ’seek new challenges within the wider residential property market.’ Meanwhile some at the firm said, off the record, that the two departures were part of a larger cut in central London negotiators and senior management because of the sales slump. ‘There are quite a few but we don’t know how many - it was coming and we know other agencies are doing the same,’ one prime central London Knight Frank senior figure told Estate Agent Today.”

“While the government may be hopeful of reviving the economy by lowering the lending cost, the middle class, majority of whom already bought a house, may not be happy with the idea of the property prices coming down in the wake of demonetisation. People, who have invested in property, have been left high and dry with the housing prices falling up to 30 per cent. Realty experts expect a further fall in property prices in the secondary market.”

“It’s a catch 22 situation for one Amit Verma you booked a house in Greater Noida four years ago and is yet to get a delivery. ‘Now I can’t sell it for the lack of buyers. But how long will I continue to pay EMIs for something whose market value has fallen,’ says Amit, a media professional.”

“As the Calgary real estate market continues to struggle through tough economic times, one segment that’s improving is the high-end market – homes valued at $1 million or more. The Calgary Real Estate Board says there has been a marginal improvement in sales so far this year, compared to the first 10 months of 2015. And a big reason for that, according to the Calgary Real Estate Board’s Anne-Marie Lurie, is a sharper drop in prices. ‘We’ve seen there’s been much more price adjustments occurring in that higher-price segment and that’s likely encouraged some of this improvement in sales activity,’ Lurie said.”

“Lurie said high-end homes are down, on average, six to eight per cent – meaning there are some deals for luxury homes out there. But savvy buyers can do even better, according to Curtis Atkinson, a realtor with ReMax. ‘Some areas in Calgary, for the luxury market, are down up to 25 per cent,’ Atkinson said.”

“During an interview on the FOX Business Network, John Allison, former CEO of BB&T, said he would like to ‘get rid of the Fed,’ and blamed the central banking system for playing a ‘major role’ in the housing crisis of the mid to late 2000s. ‘They created negative real interest rates for years that incented the housing bubble, along with the government agencies Freddie Mac and Fannie Mae. So they started a fire; you can debate whether they put it out or not,’ Allison said.”

“‘I think the simple thing to do is go to some kind of rule like the Taylor rule, where they can’t just arbitrarily create money that creates bubbles and then try to fix it by holding rates too low. Yes, free markets are going to have ups and downs, but nothing like what I think monetary policy creates through the Fed,’ he said.”