It Can Become A Self-Fulfilling Prophecy
It’s Friday desk clearing time for this blogger. “The online real estate site Trulia ranks Sarasota in the top ten hottest real estate markets of 2017. USF Sarasota-Manatee economics instructor Dr. Michael Snipes says Florida’s quick bounce back is due to the constant influx of new home buyers. The key he says is to maintain that flow of new residents. ‘There’s some concern that we might be building too quickly. That supply might be outpacing demand and so a lot of that is trying to predict that a lot of that immigration is going to still be coming from other states,’ Snipes said.”
“According to the Williamson County Association of Realtors latest report, in May 2017, 57.7 percent of homes sold were under $300,000. According to the Real Estate Center at Texas A&M, the median home price in Williamson County in 2011 was $172,000 dollars, now its $280,000. Jack Stapleton has been a realtor in Central Texas for 15 years. He said they have more inventory of new builder homes listed over the $350,000 price mark. ‘We’re saturated with that inventory,’ said Stapleton.”
“In the current real estate market, bidding wars are less common, there are fewer all-cash deals, units are languishing longer on the market and sellers are chopping prices a bit more than a year ago, experts say. In Manhattan, homes sold, on average, for about 6 percent less than their last advertised price, according to Douglas Elliman. Sellers can no longer pin their hopes on ‘aspirational’ pricing and wait for that ‘one buyer’ to overpay, according to Frederick Peters, of Warburg Realty. ‘Buyers are as price conscious as I have ever seen them,’ Peters said.”
“Following the Toronto Real Estate Board’s latest data dump, one real estate analyst says we are probably witnessing the housing bubble burst. John Pasalis, president at Realosophy Realty, said a herd mentality had investors eager to buy earlier in the year. ‘For most of 2016 and leading up to the first quarter of 2017, there was a lot of speculation in the market. A lot investors coming in – domestic primarily, just buying up properties because they felt prices were going to go up forever,’ Pasalis said, noting this type of behaviour isn’t good for the market. ‘In April and May, the market kind of turned on a dime. So we had fewer buyers and way more listings.’”
“There will be no tears shed for the Shard and its failure to find buyers for its £30m apartments. Instead, ‘Shard-enfreude’ will be the dominant feeling among priced-out home-buyers, excluded from the residential towers which now litter the capital’s skyline, and whose luxury penthouses lie empty. The sharp slowdown in London – and outright declines in its ‘prime’ boroughs – is evident to any buyer.”
“The cost of housing is still high in Norway, but brokers report another decline in prices for the month of June that’s been described as ‘dramatic.’ Prices fell the most in Oslo, where they’ve been highest and where supply has jumped while demand has fallen because of tougher financing requirements. Erik Bruce, chief analyst at Norway’s second-largest bank Nordea noted that the latest price decline will likely reinforce the cooling trend. ‘When folks begin to expect price declines, it can become a self-fulfilling prophecy,’ he told NTB. ‘Buyers get more demanding and many want to sell before buying anything new.’”
“Monitoring and supervising programs of the Ministry of Housing led to stagnation in the real estate sector in the Makkah region and a drop in the rental rate of apartments by about 30 percent compared to previous years. A lot of ‘apartments for rent’ signs are hanging on buildings in the holy capital as owners and investors have lost their confidence in real estate offices to rent their units. ‘Many investors in the real estate market, especially the owners of the condominiums and villas construction and marketing companies, are in a state of anxiety. Some of them are threatened with imprisonment and some of whom have already been jailed, because they have received bank financing and built a lot previously,’ said Nasser Al-Zahrani, a real estate developer.”
“Despite the serious drop in buyer interest, realtors seem to be living in a fool’s paradise where they expect sales to happen despite unaffordable prices. The latest figures for the Mumbai Metropolitan Region (MMR) show that unsold inventory is building up relentlessly, with property consultancy Liases Foras estimating total inventory at around Rs 2,50,000 crore, with another 1,00,000 homes finding no takers in 2016-17.”
“The inventory of unsold units is rising faster than sales, and inventory levels will take five years to clear at current sales trends. Anyone with a smattering of common sense would conclude that steep discounts are vital to get the inventories down, but the real estate industry apparently thinks it can wait out the downturn in demand. It is probably indulging in a fantasy.”
“There is a glut of about 80,000 bumiputra properties statewide and the government hopes to engage developers to find ways to overcome this. The properties, worth tens of millions of ringgit, comprises condominiums, apartments, shop lots, industrial lots and luxury houses. State Housing and Local Government Committee chairman Datuk Md Jais Sarday said he would be having a discussion with the Real Estate and Housing Developers Association (Rehda) soon. ‘I have been told that developers are facing a lot of constraints, including cash flow as a result of holding on to the bumi units for long periods.’”
“Auckland is leading the country into house price stagnation. But while a fall in prices will be good news to those waiting for their chance to buy, the past four years of rises have significantly changed the market. So let’s ask, who are the winners and losers at this stage? ‘Capital gains are weaker, a flattening market is generating capital losses for some as they paid too much when purchasing, and access to credit has been reined in not just by the Reserve Bank’s loan-to-value restrictions but bank tightening in credit more generally,’ said BNZ chief economist Tony Alexander. ‘In addition there is now an over-supply of developable land in Auckland and some panic-selling of subdividable properties no longer of any immediate use to potential developers is possible if not probable in investor-dominated locations.’”
