A Lot Of Buyer Remorse Going On
It’s Friday desk clearing time for this blogger. “Prices are out of range for at least 205,000 households in Denver. Memories of the housing market crash of 2008 are still on the minds of real estate agents, officials and homeowners. Most avoid using the word ‘bubble,’ but rising home values and readily-available mortgage loans are nonetheless raising some eyebrows. Still, Robert Smith, Lakewood’s economic development director isn’t worried about a collapse. ‘All markets will rise and fall,’ Smith said. ‘It is tempting to look back a decade ago, then view the current rising housing market and fear a bursting bubble will not be far behind.’”
“Castle Rock Realtor Sandi Zimmerman agrees that the area is in the seventh year of a cycle, but after 38 years in the real estate business, she’s not as confident in the outcome. ‘This is my third time of seeing this,’ she said, ‘I wish I had a crystal ball… I don’t know how much longer this is going to last.’ An annual uptick in permits for new homes, easy availability of loans and the cyclical nature of the real estate business give caution to her optimism. ‘Normally, about the end of seven years you’re seeing that it’s going to stop or plateau or start to come back down,’ she said. ‘What goes up must come down.’”
“West Bremerton has long been a bastion of affordable housing in Kitsap. The county’s largest city remains its cheapest housing market. But even in Bremerton, costs are shooting up. ‘We expected this would happen,’ Kitsap Association of Realtors CEO Mike Eliason said. ‘The prolonged effect of low inventory and high demand eventually spreads.’ Other brokers speculated the market had finally burned through a ’shadow inventory’ of short sales and bank-owned properties that dragged down the median price.”
“The gulf between the amount of affordable housing in Redmond and Prineville and the number of people who could potentially use it is greater than any other city in Central Oregon. And Madras, which is home to 9 percent of the households that make 60 percent or less of the city’s AMI, has 11 percent of Central Oregon’s affordable housing units. ‘Relative to the need, Madras is overbuilt in affordable units,’ said Laura Cooper, vice chair of the Housing Works Board of Commissioners.”
“The Chicago real estate market is continuing with the yo-yo theme in February after January hit a 10 year high in home sales. Once again I need to point out that the single family home inventory picture varies widely depending upon neighborhood and price point with a bit of a glut at the upper end - and it’s getting worse.”
“Talk about supply side economics! Wilbur Ross, the newly-minted U.S. Secretary of Commerce who made his fortune investing in distressed assets, looks to be selling his luxury apartment at a loss. The billionaire investor is asking $16.5 million for his Midtown penthouse — less than the $18 million he paid for the luxurious duplex in 2007, and several million dollars below the $21 million he sought when he tried to sell the apartment back in 2015.”
“Collier County is showing signs of a slowdown in the new home market after seeing a frenzy of residential construction, especially at the higher end. The latest report by Metrostudy shows an excess of new homes sitting vacant in the county. At the south end of the county, half of the total new-home inventory can be classified as finished and vacant. The other half is either under construction or on display as models.”
“More competition could translate into more builder incentives — and lower prices, making it even more of a buyer’s market. ‘The bubble is already there for new homes. It’s already out there. Pricing is not going to go up a whole lot,’ said David Cobb, Metrostudy’s regional director in South Florida.”
“New Orleans metropolitan area home prices surged in the suburbs and slowed in the city center during the last half of 2016, according to a report. ‘We do have a lot of buyer remorse going on,’ said Wade Ragas of Real Property Associates, who authored the report. ‘People who bought in the most high-demand neighborhoods in 2015 paid top of the market, and huge price gains couldn’t be sustained, he said. But buyers might have expected their values to continue going up at 10 percent a year.’”
“A planned $30 million, six-storey apartment complex set to be Nelson’s ‘biggest and most expensive’ has been withdrawn from the market because of low pre-sales. Developer Bernard Downey said last year that unless 70 per cent of apartments were sold before April, construction would be pushed back. On Tuesday he said he would review the entire design after being ‘quite a ways off’ the sales goal. Downey said the prices were to blame for the low buyer uptake. ‘I can say that I wasn’t surprised … there was always that suspicion in my mind that this was perhaps too pricey for the Nelson market.’”
“Donald has building designs in Auckland and Wellington, but it was his Mission Bay design that captured Downey’s eye for the Nelson build. ‘To build in the mid-range sector was quite crowded with all these buildings coming online. I thought it would be better to go to the top-end of the market … quality always sells,’ he said then.”
“A special survey by ‘Globes’ of the 30 leading luxury deals in 2016 found that the measures imposed on investors by Finance Minister Moshe Kahlon had their effect. ‘The fall in housing prices is beginning with the drop in prices we are already seeing for luxury housing, because that’s where it begins,’ Minister of Construction and Housing Yoav Galant said.”
“According to Yigal Zemach, CEO of Berggruen Residential, ‘Just before the measures became effective in mid-2015, we closed huge deals in the project, and after they went into effect, we saw clearly that the type of customer had changed. Those looking to make a quick profit by buying and selling after occupancy no longer came.’”
“Westpac chief Brian Hartzer says China’s clampdown on moving money out of its economy is taking a toll on inner-city apartment markets in Melbourne, Sydney and Brisbane. There are signs that a glut of lower-quality apartments built for Chinese buyers is forming as they ran into trouble settling their off-the-plan purchases, Mr Hartzer says.”
“‘There has been a significant ramp up in construction and a big chunk of that has probably been targeting overseas buyers whose desire for the nature of the property is not necessarily of the quality that locals will want,’ he said. ‘As a consequence, particularly of the crackdown in China of outflows of capital, what we are seeing in a number of those developments is the foreign buyers who put the money down to buy the apartment are now having trouble settling. That is potentially creating a glut of supply, which may or may not be what the local buyers want to buy.’”
“It was important to drill down into the details in individual property markets, he said, adding that Westpac remained relaxed about lending to a high-quality development targeting local buyers in Melbourne’s Docklands. ‘You can go half a dozen blocks away and find another apartment building with a very small footprint targeting overseas buyers who don’t plan to live there and it is in trouble,’ he said.”
