What We Are Experiencing Is A Return To Sanity
It’s Friday desk clearing time for this blogger. “ESG Kullen just closed on a bulk condo deal in Delray Beach, and plans to immediately renovate and sell them off individually. The real estate firm paid $7.5 million for 93 units at the 275-unit Murano at Delray Beach, according to Mark Meland, an attorney who represented the firm. The seller was USO Norge Murano LLC, an affiliate of Norwegian investment firm Obligo. The deal at 15005 Michelangelo Boulevard comes out to about $81,000 a unit. Records show the Obligo affiliate sold the units at a loss. It paid $8.8 million for the units in 2009.”
“There is a rule of thumb among real estate agents that if a property is priced fairly, it should sell in about a month and within 5% of the asking price. A median-priced home in Los Angeles County does indeed sell at or above the asking price within an average of 30 days. Luxury homes, on the other hand, usually go through a multitude of price drops, lingering on the market for months, sometimes even years.”
“One Pacific Palisades home that closed in October originally hit the market in March. The initial price is now scrubbed from MLS records, but after a recorded price change to $7.49 million in April, and a subsequent drop to $6.99 million in July, the home eventually sold for $4.2 million. So unlike the middle of the market, where it behooves buyers to act as quickly as possible, luxury buyers are better served by waiting to see just how low the price will go.”
“Everything about the house looked appealing on the outside. It’s in north Dallas, its mid-century modern and recently renovated. It was perfect for first-time homeowners Mari Caroline and Scott Beckwith, or so they thought when they purchased it in February 2017. Just before Christmas, the Beckwith’s sued Ebby Halliday and Jan and Roger McElroy. Mrs. McElroy is a realtor for Ebby and also co-owns the contracting company that flipped the house with her husband, Roger.”
“The Beckwiths claim the McElroys and Ebby lied in the Seller’s Disclosure when, among other things, they promised new plastic pipes. The lawsuit also states that there is no evidence the city permitted any of the work. ‘We feel lied to, we feel cheated,’ said Scott, 25. The Beckwiths are now expecting their first born in April in their first house which requires repairs that might exceed the home’s value.”
“Toronto’s luxury-home sector was hit hard by the market downturn in the second half of 2017 as sales of high-end detached houses slumped and the condominium sector slowed its torrid pace of growth. A new Sotheby’s report on the luxury market shows sales of homes worth more than $1-million in the Greater Toronto Area fell by 56 per cent in the second half of 2017 compared with the booming first half of the year and by 33 per cent compared to the second half of 2016.”
“Vancouver’s market was most volatile for homes priced at more than $4-million, where sales fell 33 per cent in 2017, which Sotheby’s Canada CEO Brad Henderson said was in part owing to an unwillingness on the part of sellers to lower their prices to make a sale. ‘In Vancouver, what we have seen is that there’s a fairly strong disconnect between what buyers are willing to pay and what sellers are willing to offer,’ he said. ‘That’s creating a little more gridlock because the sellers are not in a position where they have to sell, so if they’re not able to get the price they think their home is worth they retreat from the market.’”
“In London there remains a real concern that the super-rich are taking their money out of London property, but the prices remain too high for many to pick them up. So could the bubble soon burst in London? Richard Werth, CEO, Troy Homes told Express that London has enjoyed far greater price increases than the rest of the country, it now needs to ‘adjust from this euphoria.’”
“The biggest mistake real estate investors often make is ignoring the supply side. That’s the view of Harvard Professor Edward Glaeser, who’s touring Scandinavia as a speaker. Glaeser’s visit to the region comes as both Norway and Sweden are seeing steep declines in housing prices after record low interest rates and surging prices sparked a building boom. ‘By far the largest mistake that at least American real estate investors have made over the last 230 years is to pay too much attention to demand relative to supply,’ Glaeser said in an interview in Oslo. ‘Over and over again they ignore the ability of unfettered supply to set prices.’”
“Amid plots of unsold, multi-million dollar reclaimed land, on what was 30 years ago an uncontrolled garbage mountain rising from the sea, Downtown Beirut now features more completed buildings than cranes. Amid seemingly insatiable demand, a profusion of amateur developers entered the market, inflating the availability of housing in Lebanon. The legacy of the boom years today is an overabundance of luxury residences in the downtown area, often with a price tag over a million dollars. Ramco Real Estate Advisors estimates that there are now 3,600 unsold apartments in the BCD alone. The excess supply has forced property owners to reduce their margins and offer discounts of 20 to 40 percent in order to move their inventory.”
“Israel’s finance minister, waging a fierce battle against apartment speculators, in an attempt to bring down housing prices, sought to impose a tax on those who own three or more apartments. The law crashed before it even took off. How, then, is it that the law’s objective was achieved? It now appears that the party is coming to an end. The numbers coming in from the field show that apartment prices all over the country — and even in Yerushalayim, where prices had skyrocketed — are dropping considerably, or at least leveling off. On the other hand, the supply of new unsold apartments is increasing, and the builders’ sales offices are no longer crowded with eager young couples or other would-be buyers.”
“With upwards of 20,000 new residential apartment units expected to arrive on the Dubai skyline in the new year, supply and demand pressures will push rents even lower, suggests statistical analysis by seasoned property consultancy firms. ‘I think rates are going to keep declining over the next year at least. What we are experiencing is a return to sanity,’ said Jesse Downs, managing director of Phidar Advisory.”
“Knight Frank India, said for the first time in this decade, Mumbai witnessed a decline in quoted prices. ‘The weighted average prices were down 5% YoY in 2017,’ it said. ‘For the first time in this decade, the Mumbai market has experienced a drop in residential prices. Unlike the conventional narrative, developers cut down prices to offload their unsold inventory,’ said Dr. Samantak Das, chief economist.”
“House prices dropped on Auckland’s Waiheke Island last year for the first time in six years, says Waiheke Real Estate manager and salesperson Paul Brisbane. In November, the median house price on Waiheke was $885,000, while in Auckland the median was $880,000, he said. Waiheke’s median house price peaked at $1,037,500 in June 2017 and has been falling every month since, Brisbane said. ‘A lot of investors have been pulling out of the market,’ Brisbane said.”
“Homebuyers have been scoring some killers deals as Sydney’s cooling housing market encourages struggling sellers to accept low ball price offers. CoreLogic data showed vendors have been selling their homes for nearly a third below their original listed prices in pockets of Sydney’s south and inner west over the past year. House hunters got the biggest discounts in the suburb of Sutherland, where sellers dropped their original listed prices by an average of 30.1 per cent before selling. The typical price adjustment was roughly $350,000.”
“Realestate.com.au chief economist Nerida Conisbee said sellers were also under pressure because investors, who made up nearly half the pool of Sydney buyers last year, were struggling to get mortgages. ‘Investors are really struggling,’ she said. ‘That means there are a lot less buyers around.’”
