October 20, 2017

Shackled Purchasers Are Second-Guessing Their Rabid Decisions

It’s Friday desk clearing time for this blogger. “Sergio Pino is going ’super micro’ at Midtown Doral. In a bid to attract local buyers, the Miami developer is including smaller units in phase two of his mixed-use Doral development. At Midtown Doral, more than 90 percent of buyers so far have been Venezuelan. Now, due to political and economic instability, the developer is modifying his plans. In addition to no longer buying new units, Venezuelans are also having trouble closing the units that they bought. ‘That market is dead,’ Pino said.”

“Dalian Wanda Group Co. plans to proceed with a $1.2 billion luxury condominium and hotel complex in Beverly Hills, California, after its development partner, Athens Group, said it exited the project early. Questions about investments by Beijing-based Wanda have arisen as China has cracked down on overseas acquisitions. The company, which was among the most aggressive buyers of foreign assets until recently, has sold real estate and entertainment assets in China amid government concerns about excess debt.”

“Houses and condos for sale in the District sold quickly in September, but the number of sales fell sharply, and prices also retreated from levels from a year ago. Monthly data from Long & Foster Real Estate Inc. shows overall closed sales in the District were down 16 percent from September 2016. The median price of what sold was $504,000, down 6 percent from a year ago. ‘Buyers today, of whom millennials make up the largest generational group, lack the appetite for home remodeling that previous generations showed,’ Long & Foster said. ‘Even at a discount, a fixer upper will likely take longer to sell.’”

“It hasn’t escaped San Angelo residents’ attention that the city’s housing market has been ailing the past couple of years. They just might not have known how weak it was. During the boom earlier this decade, the price of housing climbed precipitously in the area, but since the industry’s downturn San Angelo has experienced job losses and little growth in income, said Ben Ayers, a senior economist for Nationwide. Several other Texas cities with a significant number of jobs wrapped up in the oil and gas industry also ranked in the bottom 10 MSAs for housing health: Dallas, Fort Worth, Waco and Victoria.”

“San Angelo Association of Realtors President Tom Maurer said right before the boom took off, there were over 500 houses for sale in the area each month. That is ideal for a market, he said, because it gives buyers plenty of choices. Quickly, that number fell to 100-150 houses for sale. Sellers ‘could name their prices and people would buy them because they needed them,’ he said. Sometimes that meant houses sold for more than asking price. The number of houses on the market is back up to about 413, and they are staying on the market for an average of 70 days. He said he now considers it a ‘buyer’s market.’”

“The owner of the burnt-out building on Culvert Street has submitted plans to demolish the building, hopefully by the end of the month, a Glens Falls city official said. Owner Mike Stevens said previously he plans to build six two-bedroom townhouses at the property, which he bought in February for $1. Heather Whalen, who is listed as one of the property’s owners, appeared before the council to say she was fine with the building being razed. ‘It’s been in foreclosure for seven years. Demolish it. I want nothing with it,’ she said.”

“Dear Urban Diplomat: We recently sold our 100-year-old house for nearly triple what we paid eight years ago. The buyers visited twice and waived the home inspection, but two weeks after closing, they complained about ‘major issues,’ including a dirty oven and washing machine. They sent us an invoice for some cleaning work, saying we should be able to pay up given we got such a windfall from the sale. Should we tell them to get lost? —Sell It Like It Is, Upper Beaches.”

“A: What you have here is the world’s pettiest case of buyers’ remorse. It’s not surprising that, in such an overheated market, mortgage-shackled purchasers are second-guessing their rabid real estate decisions. Lucky for you, their ‘major issues’ are not your problem: unless the sale contract explicitly ­stipulated that every inch of the place had to be squeaky clean when they moved in, you have no legal obligation to cover this kind of work. Feel free to tell them—in language either polite or profane, depending on your disposition—that you won’t be honouring their ­unsolicited invoices.”

“At least once a week, Geoff Barnett from Century 21 real estate hears the same story. A home-buyer with pre-approved finance and an accepted bid fails to secure the house because their bank won’t sign off on the money. Mr Barnett reckons there’s a pretty simple explanation: amid stagnating or even falling prices in part of Auckland, banks are tightening up their lending.”

“‘Somebody that’s got a $120,000 deposit gets pre-approved for a $500,000 mortage; they go out and find a property to buy around the $600,000 mark; they go back to their lender, who’s pre-approved them, and then they get turned down. They get told, ‘well, actually we don’t value it to where you do. We think that we’ll loan you $480,000′.”

“Some Australian home owners looking to refinance their mortgage to reduce debt have discovered they are ’stuck’ with their current loan due to stricter rules enforced by the banking regulator. Tic:Toc Homeloans chief executive Anthony Baum said there was a ‘reasonable chunk’ of borrowers not meeting new serviceability standards when they apply to refinance their mortgage. The one-year-old fintech, which offers online loan approval for its customers in 22 minutes and provides finance through second-tier partner Bendigo and Adelaide Bank, write 55 per cent of its business in refinanced mortgages.”

“‘We see a lot of customers that don’t understand why they don’t pass serviceability tests when things are unchanged from when they were granted the loan previously,’ Mr Baum said. Either they weren’t assessed properly in the first place or serviceability-related macro measures have meant they are not able to benefit from competition in the marketplace. They’re disadvantaged customers.’”

“Cooling in Sydney’s housing market has sparked desperate discounts across the city with some frustrated homeowners knocking as much as $550,000 off their asking prices in a bid to get the properties sold. In the southern suburbs, across to the inner west and Western Sydney and even in the exclusive Harbour-side enclaves of the east, owner expectations are tumbling. Panic purchasing is at last grinding to a halt which means vendors are being forced to dial down expectations.”

“The deepest cuts are being felt in up-market areas where optimism has been pushed to unrealistic levels by the unprecedented boom in prices that occurred over 2013 to 2016. Listings data revealed the biggest bargains to be had are in Vaucluse where on average, prices are being slashed by 27 per cent. Real Estate Institute of NSW president John Cunningham said optimistic vendors had simply failed to read the changes in the market. ‘There’s no more boom but some agents are telling sellers they can still expect boom prices so they’re waiting for miraculous buyers to appear and pay premium prices when they aren’t there anymore,’ Mr Cunningham said.”

“House prices are lower in real terms than they were in 2007 in more than half of England and Wales, according to analysis for BBC News. Those who wish to sell can find themselves with a home worth less than they paid for it, particularly in northern England. Lee Percival paid £112,995 for his home on a newly built estate in 2007. The estate has never been finished due to the financial crash and his home has dropped in value by about £30,000. ‘I regret buying it at the time we did, my wife loves it here, but I just feel - well we have made a loss haven’t we? Yes, I feel trapped.’”

“In parts of Bradford values have crashed by up to 50% in real terms and one of those who have found themselves with a house worth less than it cost is Isaac Stott. The charity worker bought his home in 2007 and paid £86,500 for it. ‘Everything was going really well it looked like a good investment but within nine months the property value dropped to around £35 to 40,000.’ He said the market has improved but his three-bedroom home is on the market for £76,500 - £10,000 less than he paid. ‘It is frustrating to see how much it has dropped and how much it is worth.’”

“For Neil Potter it is a different problem. He rents a three-bedroom house in Halberton in Devon because he says it is still far too expensive for him to buy. Values have fallen in Halberton, by more than 40% in a decade, the largest drop in the South West; but that brings little comfort for Mr Potter. ‘We’ve been here 12 months - we rented in Tiverton before. That was a four-bed and to buy that, it was about £260,000. The three-bed we’re renting in Halberton is worth around £330,000 - silly money.’”