Past Tense About The Great Disturbance
It’s Friday desk clearing time for this blogger. “Local realtors, at least the ones that talk to the Denver Metro Association of Realtor’s Market Trends Committee Chairman Steve Danyliw, agree: The housing market is turning. ‘Over the last two months, I’ve personally spoken to dozens of realtors and asked them a simple question: ‘Is the housing market turning?’ Danyliw wrote in DMAR’s September report. ‘Over 95 percent responded with a quick YES. One responded, ‘The feeding frenzy has lessened.’”
“Amazon has been blamed or praised — depending on your perspective — for Seattle’s historic real estate boom. But now that the company plans to open a second, ‘equal’ headquarters somewhere else, what does that mean for Seattle’s housing prices, rents and development boom? ‘Everyone has looked at Amazon as the harbinger’ of the city’s record growth, said developer Jake McKinstry. ‘People have really banked on that.’ He said he’s concerned about a potential luxury-apartment bubble; those units require a constant influx of well-paid newcomers to fill them.”
“The number of homes sold on Kauai increased 27 percent compared to July 2016, according to Title Guaranty’s residential sales report. ‘The market is strongest in price ranges where there’s the most demand,’ said Ron Margolis, broker at KW Kauai. ‘In an area like Kalihiwai Ridge, where six homes maybe sell a year and there’s currently 17 homes for sale, that means there’s a lot of inventory.’”
“The city of Dayton will head back to the drawing board after its solicitation to redevelop vacant lots in the Wright Dunbar Village area received zero responses. Home values in Wright Dunbar have risen more than in most Dayton neighborhoods, and the city sometime soon will get another crack at finding a developer for the vacant properties, said Dayton City Commissioner Jeff Mims Jr., who moved into the area several years ago. ‘There’s no reason for us to panic, because clearly, the value of the area continues to grow,’ Mims said.”
“Along a one-block stretch on Mt. Prospect Avenue, the unkept corners of homes hang loose. Windows are boarded up with crumbling plywood. Abandoned and vacant homes are a headache for cities across the country and not just in urban centers like Newark. ‘It’s hard for the city to track down who really owns this. They’re owned by these banks or mortgage entities,’ said North Ward Councilman Anibal Ramos.”
“The average sales price of a New York City apartment fell in the four weeks leading up to August 1, in addition to the number of sales. According to CityRealty’s Monthly Market Report, which analyzes sales and trends in Manhattan, apartment sales dropped 21 percent, from 1,207 to 948 units sold. The average apartment price also dropped, this time by 9 percent from $2.3 million to $2.1 million.”
“The average sale price of new developments was $3.9 million in the month of August. The average price per square foot came out to $2,074, which was an 8 percent drop from July. Year-over-year, this calculated to an 18 percent drop. There was a decrease in development sales, from 156 recorded in the previous month to 106 for August. The difference between new and non-new development prices was $314, a plummet from last years $785 difference.”
“Over a third of UK homes on the market have had their asking prices slashed by nearly £25,000 on average, according to new research. House sellers are starting to cut bigger chunks off their original asking prices. In London, some 36 per cent properties for sale have had their asking price reduced, with an average discount of £53,457. ‘On the whole, the heaviest discounts in recent times have been in central London where the market started to slow around two years ago,’ Lawrence Hall, a spokesperson for Zoopla, told the Sun Online.”
“Those hoping for a property market slump next year to allow them to ‘get into the market’ need to be careful what they wish for. Some may be offering little prayers to the god of the real estate sector, Mammon, that the slowdown in Sydney house prices in last week’s CoreLogic survey will spread and become a full-scale rout. The Reserve Bank, which helped inflate that debt bubble, is now virtually sidelined. It can’t cut interest rates for fear of blowing the bubble bigger, and can’t raise them for fear of bringing the whole house of cards tumbling down.”
“In that context, wishing for a house price crash is like dreaming of economic hara-kiri. Not only would plummeting house prices ravage consumer confidence and consumption spending, but they would hurt hundreds of thousands of small businesses who unofficially use their home mortgages as a backdoor way to finance their businesses.”
“Brian Kavanagh was on his way home when he got a call at 9.45pm on September 13th, 2007. The banking executive, who had set up UK lender Northern Rock’s Irish deposits gathering business eight years’ earlier, was told by his boss in Newcastle that the company was applying for emergency funding and that the BBC was about to break the story on the News at Ten. ‘I was surprised, because there was no sense of panic at all,’ recalls Kavanagh.”
“‘I came into the office just before 6am the morning after the news and I didn’t see anyone at that stage. But others coming in at about 7am said that people were already starting to queue,’ said Kavanagh. ‘Customers were visibly upset. They genuinely thought that their life savings were gone.’”
“‘I remember being at a conference on housing finance in Oxford in September, two days before Northern Rock collapsed. The place was full of economists who were quite expert on British housing and, while there was some discussion about the prospect of a meltdown, they were breezy about it and were largely saying the situation was very much under control,’ said economist Patrick Honohan. ‘I remember asking rhetorically at the post-conference reception what if a big bank went down. Such a possibility did not seem to be much on people’s radar then.’”
“Honohan, who would become the Central Bank’s governor in 2009, said the period between the Northern Rock run and the implosion of the US investment bank Bear Stearns the following March was similar to the eight-month ‘phoney war’ period from the start of the second World War where very little happened.”
“‘There was a widespread view at that time among many of the world’s financial policy experts that the worst was already over,’ said Honohan. ‘I went to a couple of conferences on the crisis in London around that period, particularly one in early March 2008, where speaker after speaker was talking more or less in the past tense about the great disturbance and how lessons had been learned.’”
“Financial regulations have been tightened considerably in the past year and politicians, in Ireland and abroad, insist lessons have been learned. But Kavanagh, who now works in the anti-money laundering sector, says this will be tested when the next cyclical economic downturn occurs. ‘You’ve got a production of The Great Gatsby running [in the Gate Theatre in Dublin] at the moment, reminding us of the roaring 1920s in America before the Great Depression. Do we ever really learn the lessons?’”
