March 24, 2017

Not All Houses Are Sold Immediately Regardless Of Price

It’s Friday desk clearing time for this blogger. “Mortgage giant Freddie Mac today announced a new program that will allow lenders to give mortgages to buyers without credit scores. While the program may remind some observers of housing bubble loans, Freddie Mac says the program is a ‘responsible’ way to enable unconventional buyers to purchase homes. ‘We’re committed to supporting responsible lending and improving access to credit for all borrowers, including first-time home buyers, low- and moderate-income buyers and underserved populations,’ said David Lowman, executive vice president of Freddie Mac’s Single-Family Business.”

“With the combined inventory of single-family homes and condos in Manatee and Sarasota reaching its highest point in nearly five years, it’s no surprise the two-county area bucked the national trend and saw a significant increase in sales last month. There were more than 8,500 properties on the market in February, the most in the two-county area since April 2012. ‘With more active listings on the market, buyers are able to take time to view and compare more properties, and are not under pressure to jump on the first property they see,’ RASM president Xena Vallone said. ‘We are seeing this translate into longer time on the market.’”

“The unprecedented growth in Long Island City is evident to anyone in western Queens with views of the rapidly changing skyline. A new real-estate market report released by the Long Island City Partnership shows the residential sector is exploding with nearly 9,000 new units slated to come on line in 2017, which would be the most in a single year in the neighborhood’s history and almost double the area’s existing inventory.”

“This will bring the total number of residential units built in Long Island City since 2006 to more than 20,000. The study shows 1,573 units are planned to come on line in 2018 with another 11,532 units planned for 2019 and beyond.”

“When Brandywine Realty Trust won a high-stakes bidding war in 2011 for one of the last substantial pieces of untouched land in Center City, it seemed as if the Philadelphia housing market could only work in its favor. Yet the Center City rental market is far more competitive than it was back when Brandywine set its plan in motion. When the project was announced in 2012, just 844 apartment units had been delivered in the five years prior, according to the Center City District. By the time 1919 Market opened for business, that number had nearly tripled in 2014 and 2015 alone.”

“With so much new supply and more to come in the near future, regional observers have begun to ask a big question: Can all these Philadelphia apartments actually be filled? ‘We’ve been offering concessions since we opened,’ said Lauren DeMezza, property manager at 1919 Market. ‘Of course, there will be some cooling off,’ said Paul Levy, CEO of the Center City District. ‘A lot of supply has come onto the market. … And if you are a lender of a builder coming late to the market, you may have some concerns.’”

“The Bay Area may be losing a bit of its luster. After years of being overrun by new residents drawn by a red-hot economy, the number of people moving out has begun to catch up with the number moving in, new census data show. In fact, in some parts of the Bay Area — including Santa Clara, San Mateo and Marin counties — already more people are leaving than arriving, according to the estimates. For Redwood City resident Lolly Mitchell, 29, the scales have tipped on the side of cost. ‘I moved up here because there was more work for my husband,’ said Mitchell, who came from Southern California. ‘We’ve been working hard to be financially secure here. But we don’t want to live paycheck to paycheck. We just don’t want to be at risk for the amount of money we’d have to pay’ for a new home.”

“The rapid growth of housing prices in the Norwegian capital may be about to end, Real Estate Norway Chief Executive Christian Dreyer told Reuters. ‘We have seen signs of a change in character in the housing market in Oslo, with fewer people showing up to see houses for sale, and also less people bidding,’ he said. ‘Houses are still being sold, but we are about to return to a more normal situation in which not all houses are sold immediately regardless of price.’”

“Lenders and developers are offering property investors lucrative incentives ranging from annual commission payments of $100,000, loan discounts of more than 100 basis points and cash incentives, a review of top deals reveals. Developers are also offering generous discounts and special offers.Independent research by valuation group Herron Todd White (Melbourne) has uncovered evidence of market manipulation by developers attending to maintain the market price. It typically arises where off the plan purchases cannot complete a deal and threaten to sell the apartment at a lower price, which would lower the average price for the block. In these cases, developers are known to buy back the property, which artificially inflates the price, its research involves.”

“Rcihard Houston, Fintrack’s chief executive, said demand for high rise central business district apartments had fallen by about 50 per cent in the past three months.”

“Recent government regulations have created ‘unprecedented levels of uncertainty’ for the high-end home market heading into the key spring buying season, Sotheby’s International Realty Canada said in a report. Sales of homes for over $1 million in Vancouver fell to 531 units in January and February of this year, down 45 per cent from a year ago, Sotheby’s said. The luxury segment of the Vancouver market — defined as homes worth over $4 million — was even more dramatically affected, plunging 68 per cent from a year ago to 43 units, according to the report.”

“Bounced cheques are increasing across Oman as residents facing pay freezes struggle to make ends meet. The economic downturn in Oman has led to lay-offs, delays in salary payments and a freeze on housing, flights allowances and expenses. ‘It is totally a tenants’ market now, with most buildings half empty and looking for tenants. Payments are coming late and cheques have started bouncing as people are finding it hard to sustain,’ Country Operations Manager of Eqarat, Salman Jalil said. ‘In every building there are one or two cases. Earlier there were no cases. Initially, we try to give them more time but if it happens regularly, we hand over it to our legal department,’ he said. Eqarat manages more than 1,000 units in Oman.”

“Economist Gan Li and his researchers at Chengdu’s Southwestern University of Finance and Economics are gearing up for their national survey of Chinese households. The now much anticipated project almost suffered a premature death in 2012 after it exposed how Chinese society had become one of the most unequal in the world. Gan has been on a mission to depoliticize statistics. ‘The problem is not just the gray areas,’ he says. ‘In China, lots of things are completely dark.’”

“Gan’s research on China’s housing sector has also made waves. He figures that 70 percent of total household wealth is made up of the value of apartments. About 50 million already-sold units sit empty, much more than some investment banks had estimated. (The government doesn’t release national data on empty apartments.) China has a vacancy rate of 18 percent, compared with 13 percent in the U.S., Gan says.”

“Although his data were at first contested by property developers, now they are more widely accepted. That’s one reason officials are reducing housing inventory. ‘With policymakers mainly in Beijing, a city with rising housing prices, they assumed that China needed more apartments,’ Gan says. ‘Now the policy has almost 180 degrees turned.’”