The Catalyst For Overdue Price Reductions
It’s Friday desk clearing time for this blogger. “Khaki is turning the Moore County real estate market red-hot right now. Buyers who can tap into the home-loan program offered by the U.S. Department of Veterans Affairs are fueling a construction and buying binge the likes of which have never been seen. What is happening in this area is right on trend with what is going on nationally. Last year, the VA loan program guaranteed 707,107 home mortgages — setting a new all-time high — representing a 12 percent uptick from the previous year. Significantly, last year’s volume was nearly double the number of home mortgages the agency handled five years ago, and is nearly four times the volume from a decade ago. VA loans are so attractive that many military families end up owning multiple homes, said Angie Medlin, a mortgage specialist with New Penn Financial. ‘I’ve always done a lot of VA loans but I have seen an explosion in Moore,’ said Medlinl.”
“‘The VA offers the best rate out there. If you qualify for it, you can’t beat it,’ Medlin said. ‘In essence, they are encouraging them to purchase instead of rent. It is a great way to acquire property and they can purchase a home as an investment.’”
“Four consecutive years of rising home prices in Anchorage came to an end in 2016 as a weakened economy caused prices to stall out, according to the Multiple Listing Service. And what does the small decline in prices say about the market as a whole? ‘Certainly a decline of only a quarter-percent is not in itself any proof of a real estate calamity. But it very well could signal the beginning of a trend that promises better shopping opportunities in 2017 and beyond,’ said Niel Thomas, a realtor who provided the MLS data to Alaska Dispatch News.”
“Developer Mark Hunt’s $35 million acquisition of two downtown Aspen buildings has collapsed. Some tenants at the building once poised for demolition previously expressed concerns about the project at public hearings. One of them, Frank Heger, who has owned the Aspen Goldsmith jewelry and watch store for more than two decades, said he was relieved the transaction didn’t materialize. ‘If people keep tearing down these buildings and building new ones, at today’s costs of labor, who’s going to rent these places?’ he said. ‘You’re talking about $300 a square foot. Maybe if you’re selling reefer or heroin you can make it, but if you’re selling regular stuff, you won’t be able to make money.’”
“A coal mine in Grande Cache is bankrupt, delivering another setback to the town northwest of Edmonton that once relied heavily on the steelmaking coal producer as its economic engine. ‘We’ve seen some people move out of the community; housing prices have declined,’ said town councillor Yvonne Rempel, adding she expects the total value of real estate is sliding, putting a major dent in the town’s budget. ‘We also have some businesses closing.’”
“Home values in the Bayswater district fell 14 percent in the 12 months through January, the biggest drop in central London’s best neighborhoods, as sellers cut their asking prices in the wake of the Brexit vote. Values dropped by an average of 6.7 percent across the capital’s best districts as successive sales-tax increases damped demand, Knight Frank LLP said in a report. The Chelsea neighborhood saw a price drop of 13.3 percent, the second most among the districts Knight Frank defines as prime central London. Kensington was next with a drop of 11.9 percent.”
“More owners are accepting the need for discount to make up for the higher transaction costs that buyers face, narrowing the gap with what purchasers are willing to pay, Tom Bill, head of London residential research at Knight Frank, wrote in the report. ‘In some instances the EU referendum was the catalyst for overdue price reductions.’”
“While tenants in some parts of New Zealand scramble for housing, Christchurch is a tenant’s market, local property managers say. Ray White Shelleys Property Management director Shelley Scott said she had to teach several property owners about realistic weekly rents over the last year. Scott, a landlord herself, said there was an over-saturation of fully-furnished properties in particular. ‘In some cases I have had to reduce a couple of my furnished ones by $100 a week, which is quite a lot.’”
“The Central Bank yesterday said it remains vigilant over a possible creation of a construction bubble due to the runaway credit growth. Total private credit extended had reached an all-time high in 2016 exceeding Rs.750 billion. ‘The biggest, in terms of sectoral distribution of credit, is construction. That is something we’re looking into whether there’s a possibility of a bubble. We’re studying that very carefully,’ Central Bank Governor Dr. Indrajit Coomaraswamy said.”
“The real estate sector experts too have recently said that there is a real estate bubble in Colombo, which would remain until the apartment trend subsides and have blamed the government for warping prices by selling land in Colombo for high prices to foreign developers. There are some concerns that luxury apartments are not being sold, creating a glut in the market.”
“If solitude and silence are part of high living, then some Sentosa Cove residents are getting more than they bargained for. When The Sunday Times visited the Cove, many units of the private estates there were dark. At The Residences at W, a 228-unit development completed about five years ago, an online search shows 209 units are up for rent. Sentosa Cove had a poor 2016 - 15 out of the 21 resale transactions last year ended up in the red, with the 15 transactions making an average loss of $1.35 million, according to data from property portal SRX.”
“A unit at Sentosa Cove condo Turquoise went for $3.8 million last year. The seller had bought it at $7.16 million in 2007. Another apartment at Seascape was resold at $6.35 million last October. That owner had paid $11 million in 2011.”
“Mastering the art of riding a camel through the Gobi Desert while presenting a television show wasn’t exactly something Grace Brown imagined she would do in her lifetime. ‘My friends thought (moving to Mongolia) was crazy, but I’ve convinced a few to visit,’ the freelance video journalist said. Housing, though, is expensive. Brown said two-bedroom apartments with western-style finishes in downtown Ulaanbaatar were generally about $US2000 a month to rent, but supply far outstrips demand. ‘There are many luxury apartment blocks standing empty or half finished, while affordable apartments remain scant; you could say there’s a property bubble here.’”
“Beijing’s focus on deflating China’s asset bubbles and eliminating financial risks is hurting one of its key growth drivers, the property sector, analysts said. Property attracts nearly one fifth of China’s fixed-asset investment and directly contributed to 6.5 per cent of last year’s gross domestic product, and is seen as one of the key drivers of last year’s economic stabilisation. However, it could also become a victim of the central bank’s 10 basis-point increase in interbank money rates on Friday.”
“‘Mortgage rates face the risk of a large increase,’ Jiang Chao, the chief macro analyst at Shanghai-based Haitong Securities, wrote in a research report. ‘It, together with purchase restrictions in tier 1 and tier 2 cities, may lead to a continuous fall in property sales and a winter [for the] property market.’”
“Price chops in the city’s ultra-luxury market are showing no signs of slowing down. In total, 15 properties in the over-$10 million market saw a discount of more than 5 percent in the period between Jan. 31 and Feb 6, according to StreetEasy. The biggest reduction was at One Madison Park where a two-floor condominium had its asking price slashed by a whopping $5.5 million, or 17 percent.”
“151 East 58th Street, 47A: The owner of this One Beacon Court condo is Scott Kurnit. But if this recent discount is anything to go by, he may be keeping this 3,000-square-foot home. Kurnit put the pad up for sale last November with a $13.9 million asking price. Last week, $2 million, or 14 percent, was lopped off the asking price. The Vornado Realty Trust-developed building is also home to another notable price reduction. Billionaire hedge funder Steven Cohen has been trying to find a buyer for his apartment there since 2013. Its asking price has been dropped from $115 million down to $72 million over the years.”
