December 1, 2017

Now That It’s More Normal, People Have More Fear

It’s Friday desk clearing time for this blogger. “Realtors are expecting overall home sales in Idaho to expand by 3 to 5 percent in 2018. The housing market is growing, and Ross Farr, a mortgage lender at Zions Bank, says the shortage of houses compared to the demand for them is expected to continue in 2018. If you are thinking about buying, in this market climate, do not wait for prices to drop because they won’t anytime soon. Buy when you can. ‘This pervasive concern that this is a new bubble and that we’re heading for another collapse — I did mortgages through that collapse. I know that fear is justified, however, this time, credit quality is so much higher. I don’t think people who are waiting for prices to come down, I don’t think they’re going to see it. I think they’re going to regret it,’ Farr said.”

“This year’s headlines maintained the fever pitch: ‘Nashville ranked nation’s hottest single-family housing market,’ ‘Nashville’s housing market ranked No. 1,’ ‘Should you invest in Nashville’s red-hot housing market?’ The region’s soaring values — up more than 34 percent over four years — are causing many to wonder: Is Nashville’s housing market in a bubble that’s about to burst?”

“A few signs are feeding their anxiety. During recent months, some Nashville neighborhoods have seen a distinct slowdown. Sales prices have dropped, the time it takes to sell a home has climbed, and the number of homes sold has slipped, compared to the same months in 2016. Hardest hit have been expensive neighborhoods and those in the urban core flooded with new infill development. ‘A lot of people got used to that rate of growth and now that it’s more normal, people have more fear,’ said Robby Stone, an agent with Village Real Estate.”

“Stone’s company has been trying to sell a new house in East Nashville for more than a year. His client, Aerial Development Group, tore down a tiny $165,000 house and built a four-bedroom house will all the latest design trends. Village Real Estate listed it for $649,000. The house hasn’t moved. Now the home is listed at $599,900, and Stone continues to show it on Sunday afternoons. ‘I have people ask me every week if that house has sold,’ he said. ‘I can’t wait for the day that I can say ‘yes.’”

“Sarasota belongs on the list of places with millionaire homeowners, and the high-end housing market here is on a hot streak. At the peak of the luxury market pricing potential buyers will find some price cuts. One of the listings of Saunders Realtor Kim Ogilvie rests on a scenic spot on Casey Key with panoramic views of both the Gulf of Mexico and Blackburn Bay. The asking price now has fallen almost a $1 million — to a shade under $8 million. ‘The key is pricing,’ Ogilvie said.”

“David Lowy, the son of the founder of retail giant, Westfield Corporation, is the owner of the opulent One57 pad that came on the market on Monday, asking $27 million. Even if it sells for its full ask, the apartment will still be a loss for Lowy, who picked it up for $28 million in 2015, according to the Wall Street Journal.”

“Toronto developer Brad Lamb has cancelled plans to build a major downtown Edmonton condo project. The 37-storey Jasper House Condominiums On The Park was supposed to start construction by fall, but a statement from the Lamb Development Corp. said it couldn’t meet critical dates in the purchase and sale agreements. ‘The unfortunate economic circumstances that unfolded in Alberta over the last three years negatively affected our sales projections,’ the company said.”

“Jagbeer Singh, a private security guard, whiles away his time at the entrance of a ghost town in outer Delhi’s Bawana — rows of abandoned apartment buildings constructed for 3,680 poor families currently living in slums tucked in the crevices of the national capital. ‘I don’t know for whom these houses were built, but I do not mind guarding them as long I get paid (a monthly salary of Rs 10,000),’ says Singh, pointing towards a road overrun by wild grass which leads to the desolate four-storey tower blocks with broken windowpanes and plaster chipping off the walls.”

“A body representing real estate agents and negotiators has urged for a more nuanced view on the status of the property market, amid reports that there is an overhang on the supply side of the market. ‘When the data comes out from the National Property Information Centre (Napic) that there will be an overhang of, let’s say, 40 percent, a lot of people who see the data don’t really dissect where the data comes from. Some (of the data) are from areas where you shouldn’t be building homes. When you put homes there and can’t sell it, then it gets added (to the figures) and will show that there is an overhang,’ said Malaysian Institute of Estate Agents president Eric Lim.”

“Recent falls in Sydney prices could continue for months to come as the market finally slams into reverse gear, housing experts claim. Data showed home prices slid down for a third straight month over November, with the market having peaked in July. Four years of ballooning values have been pricked by a combination of tighter bank lending policies, a crackdown on overseas investors, stagnant wage growth and a flood of properties coming onto the market in spring. Where once Sydney sellers could name their price, now agents report they face a battle to attract prospective buyers to open inspections.”

“Elders Real Estate’s Peter Salisbury said would-be buyers were dropping out of contention for many of the homes currently up for sale. ‘Last year we were getting at least 15 people coming to open-for-inspections. Now you’re lucky if there’s three,’ he said. ‘There are a lot more buyers putting in low-ball offers. That was something you wouldn’t bother doing before.’”

“Ray White Rural Miles sales consultant, David Sweetapple said it was in December 2013 when the housing market fell overnight due to resource companies pulling their staff from the communities into camps. Mr Sweetapple does not blame the companies for their action but said the decision crippled the town of Miles. ‘Since then we went up to 45 per cent vacancy and property values dropped by 80 per cent,’ he said.”

“First National Real Estate Chinchilla Principal Rebecca Gurski said the the housing prices during the CSG boom were unsustainable and once the construction had finished, a mass exodus occurred affecting everyone. ‘It affected investors, home owners plus the pricing going down affecting everybody,’ she said.”

“Karina and Juan Santillan bought their home, a single-story bungalow in West Covina, 20 miles east of Los Angeles, for $152,000 in 1999. In retrospect, refinancing their home was a bad idea. But the Santillan family never thought that it would lead them to foreclosure, or that they’d spend years bouncing among hotels and living in their car. The parents never thought it would force three of their four children to leave the schools they’d been attending and take classes online, or require them to postpone college and their careers for years. They did not know they would still be recovering financially today, in 2017.”

“A few years after they bought their home, the Santillans say, people started knocking on their door selling financial products. It was easy money, the Santillans were told. Borrow against your house, it’s sure to gain value. Santillans refinanced their home in 2003. Records show they took out an additional mortgage in 2004, but Karina says she has no recollection of taking out a second mortgage. They refinanced again in 2004. They used the money to remodel their home, which they figured would give it more value. As housing prices in the region soared, they refinanced one more time, in 2005, borrowing $396,000 from New Century Financial Corp., which would itself file for bankruptcy two years later. At the time, their house worth less than $300,000, according to Zillow.”

“The payments would have been high even if both Karina and Juan had been working full-time. But Karina’s work selling insurance dried up as the housing bubble burst in 2007. Then the ink manufacturing company where Juan worked cut everyone’s pay 10 percent. They first fell behind on payments beginning in 2007, and received an eviction notice in early 2009. To keep their home, they would have had to pay $447,431. They moved out of their home on June 29, 2009. While America prides itself on being a place where people can climb up the economic ladder, it’s also a place where people can fall fast, and far. ‘We just can’t forget, that in any given moment, things can change,’ Karina told me.”