The Housing Bubble

It’s Friday desk clearing time for this blogger. “Realtor.com named Las Vegas the number one real estate market in the country for 2018. Home prices are rising, but does that mean we’re heading toward another housing bubble? Realtors like Tim Kelly Kiernan believe the market tends to go up and down they’re optimistic we’ve already seen the worst of it. ‘I don’t think what happened in 2008 will ever happen again a lot of that had to do with the mortgages and poorly written mortgages. I don’t think the bubble will happen ever again in our lifetime I don’t see it happening,’ he said.”

“Home buyers are finding new opportunities in neighborhoods across the Nashville region. ‘There’s a wave of home building and another wave coming in mid- to late summer,’ said Todd Reynolds, vice president for Goodall Homes, which is developing more than a half-dozen new neighborhoods. ‘There’s still so much demand,’ said Reynolds.”

“In suburban Hermitage, Ole South is launching the new Heritage Hills subdivision. Prices range from the low $200,000s to the $300,000s, well below the average price of new homes in Davidson County, said Ole South Vice President Trey Lewis. Qualified buyers can participate in the Tennessee Housing Development Agency’s Great Choice program, which provides down payment and closing cost assistance. Buyers can also qualify for down payments of only $1,000 with certain lenders, said Lewis.”

“Although home prices in the area have been going up for quite some time, Brian Talley, owner of Regent Property Group in Westlake, said that the recent peak is more a reflection of growth for the entire Austin metropolitan area rather than something unique to Lake Travis-Westlake. Talley said he had seen some softening on the higher end of the market over the past two years but did not expect the area trend to reverse any time soon. The number of homes sold has decreased each month since June. The median price of homes sold has also decreased since June, and the number of days homes spent on the market increased in the past six months.”

“Talley said he is bullish on the area being able to at least maintain the status quo. ‘As long as we avoid a national or global [economic]catastrophe,’ he said.”

“The fourth quarter was the best time for luxury-home sales in Greenwich last year. It also had the biggest discounts in almost a decade for the tony Connecticut town. High-end homes that changed hands in the quarter had their prices cut by an average of 13.5 percent, the most since the last three months of 2008, when the housing market all but froze in the months after Lehman Brothers Holdings Inc. filed the largest bankruptcy in U.S. history, according to Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.”

“The discounts, in a market that’s still bloated with lavish homes, helped clear some of the backlog. ‘Sellers were unrealistic in their pricing and were chasing the market,’ said Scott Durkin, president of Douglas Elliman ‘The real sellers, who wanted to sell, have negotiated down from their asking price.’”

“A lender has filed foreclosure proceedings on two rental properties owned by a Vancouver family renowned as problem landlords. The buildings are owned by companies controlled by members of the Sahota family. The foreclosures also indicate potential financial strain in the Sahota family’s property empire, which was built over the past four decades by family members and includes apartments as well as single-room occupancy hotels in the city’s Downtown Eastside. ‘The mortgage is in default and a foreclosure proceeding has been commenced,’ the notice to tenants for the East 5th Ave. property says.”

“The UK’s biggest estate agent blamed ‘jittery buyers and unhappy sellers’ for a pre-Christmas slump in the property market which triggered a shock profit warning today. Countrywide saw its shares tumble as the City stampeded out of the stock. Chief executive Alison Platt said: ‘The ability to get sellers over the line continues to be a real challenge. We would see deals that collapse at the last minute. You have always got the fundamental issue that sellers don’t feel great about accepting price reductions.’”

“Housing prices in Sweden dropped by 7 percent in the past three months compared to the same period last year, with the capital city, Stockholm, experiencing the sharpest drop, according to new figures from Svensk Maklarstatistik. ‘In the Stockholm region, the decline in apartment prices has been going on for a few months and now Malmo and Gothenburg have followed. In the villa market, too, prices are dropping,’ Per-Arne Sandgren of Svensk Maklarstatistik told Swedish Television.”

“Existing as well as new tenants are successfully negotiating hefty discounts from landlords as house rents rates continue to drop sharply in Dubai and Sharjah, real estate agents and residents told Gulf News. ‘It’s a customer’s market now. The rents have gone down between 20 to 30 per cent in some areas and that has given people an opportunity to either negotiate with their landlords or look for other options,’ said Imran Khateeb, sales manager at Mak Homes Real Estate.”

“The growth of real estate has been fuelled by infrastructural developments that have opened up new areas, especially around Nairobi. This has led to a glut of both commercial and residential space, leaving investors stuck with projects. Yet despite this glut, more residential and commercial buildings keep coming up all around the country. Developers in the major urban areas, and especially in Nairobi, are at a loss as to what to do with property for which there are no takers.”

“Apartment prices have been falling so rapidly across Sydney’s residential construction hot spots that units are losing more in value each week than their owners earn in wages. Exclusive data obtained by the Daily Telegraph revealed the biggest falls were recorded in the Sydney Olympic Park precinct and parts of the inner west and Parramatta. Median unit values in these regions dropped by up to $145,000 over the past year, a rate of $2788 for each week and the equivalent of the average lawyer’s base income.”

“Realestate.com.au chief economist Nerida Conisbee said the price falls were inevitable. ‘Parramatta in particular has been getting a lot of new units, but there is only so much you can keep building until there’s an oversupply and prices start decreasing,’ Ms Conisbee said.”

“A while back when I read our esteemed editor complaining about getting a $4,800 property tax bill to go with his downtown Boonville commercial acre assessed at $431,000. I remember when $431,000 was a mighty impressive sum of money in little old Anderson Valley. The editor also mentions how, back in 1970, a fella could’ve bought all of downtown Boonville for less than 400 grand and I believe he got that right, too.”

“Since Anderson Valley exists inside an upper-tier real estate bubble fueled by enormous amounts of in-coming, long-term speculator money riding long lines of credit, new buyers get to buy all of the property’s appreciation. The longer the seller has owned his piece of the bubble, the more generous the gift from the taxpayers, and the more the new owners, and taxpayers, and tenants, get swindled. Since today zero-sum money-love is being proclaimed as not just the American Way but God’s Way, too, it’s as if Jesus sold Real Estate parcels up where the streets are paved with gold.”

“Market Values ain’t human values, and you can’t eat paper money, drink pennies or squeeze yourself down inside a safe deposit box. Being ‘land rich’ or a ‘property owner’ doesn’t mean you’re making money. It means you’ve got a roof, a yard out back and you’re hoping to have some liquidity left when you sell it to go someplace else, including the hereafter if you’ve got kids and/or grandkids. If ‘home ownership’ really equaled democracy, commonwealth and prosperity, there wouldn’t be any poverty in this country, much less millions of idle or misused workers and their ill-fed, ill-served children sharing the good life in the slums.”