August 4, 2018

The Red-Hot Market Is Showing Signs Of Cooling

A report from the Tallahassee Democrat in Florida. “Whether you call them mansions, estate homes, or high-end homes, the Tallahassee real estate market leads the way when it comes to an oversupply of luxury homes for sale. Right now, there are 57 homes priced at $750,000 and up on the market. That may not seem like much, but when you take into consideration the average time on the market is 145 days (compared to just 57 days on the market for a median-priced home in a neighborhood like Killearn Lakes), you’ll quickly realize high end homes are slow to sell in Tallahassee.”

“There are really only two reasons why a home won’t sell. Either the home hasn’t been properly marketed using an aggressive, multi-channel approach…or the home is overpriced. If you are thinking of selling a luxury home in Tallahassee, you had better not take it lightly. While parts of the market have recovered, with a high inventory of estate homes still available and many houses sitting on the market for more than 100 days, selling a house for $600,000+ takes more than a sign in the yard and an open house.”

The Courier-Times North Carolina. “Residential real estate inventory remains limited in the county and it is still a seller’s market, although there are more houses for sale now than there were six months ago. That is the take of Gay Poindexter, a real estate agent with Re/Max Pointer Realty. At present there are 27 active homes for sale in Timberlake but 11 of those are just starting construction so the number of houses that are ready to move into now is only 16. Fourteen of those houses are priced under $250,000 and 13 are over $250,000.”

“In Hurdle Mills, the inventory has increased from seven to 13 in the last six months. ‘I think we are still busy,’ Poindexter said. ‘I think if sellers are coming down now, they were overpriced to begin with.’”

The Denver Channel in Colorado. “The red-hot housing market in the Denver metro area is showing signs of cooling, according to the August Denver Metro Real Estate Market Trends Report. The report released Friday shows both average and median prices have dropped from June, and buyer activity has slowed amid higher inventory, which the report assesses may be attributed to the historic increases in Denver home prices.”

“‘Can a cooling market be considered positive? To most sellers, no, but honestly, they have experienced unprecedented equity growth over the past several years. It’s time to share the love and keep home buying an option in the Denver Metro area,’ said Denver REALTOR Chairman Steve Danyliw.”

The Buffalo News in New York. “Banks have opened foreclosure proceedings against more than 600 Erie County homeowners since the start of the year, prompting the Erie County Clerk’s Office to create a new Zombie Foreclosure Task Force. Two-thirds of the 617 new foreclosures are in Buffalo, Lackawanna and the first-ring suburbs. ‘We are in crisis, and these numbers prove we need to address this crisis,’ County Clerk Michael P. Kearns said Thursday.”

“One-third of the new foreclosures proceedings happened in Buffalo, where the process began for 206 homes in the first half of this year, said Kate Lockhart, foreclosure data manager with the Western New York Law Center. But about as many foreclosures, 200, started in the first-ring suburbs, including 72 in Cheektowaga and 46 in the Town of Tonawanda, according to a study released by the center. ‘This is not just an urban issue,’ she said.”

“Zombie homes are houses that banks have begun to foreclose on but haven’t completed the process for long periods of time, resulting in vacant, untended properties that become community eyesores and neighborhood burdens.”

The Northern Nevada Business Review. “All across the state cities are struggling through a housing crisis. The Tahoe area is not immune to the problem as housing prices continue to rise and local businesses struggle to find employees capable of surviving on the wage provided to them. A 2016 Tahoe Truckee Housing Needs Assessment reported that 65 percent of homes in the area are vacant, mainly used for vacation homes, and that 58.6 percent of the local employees commute into town.”

“It also reported that the median home price in 2015 was $538,000 and estimated the maximum home price considered as ‘affordable’ to a four-person lower income household is $235,000. With the average household income in North Lake Tahoe at $67,000, buying a home is not a feasible option for many.”

From My Northwest in Washington. “Lisa bought her Seattle home in 2011, in a neighborhood generally considered to be among the city’s most well-to-do. After deciding to sell the property this year, she and her agent spent three months getting the home in perfect market condition. But 10 days after the for-sale sign went up outside, Lisa started to notice troubling occurrences — hoses spread across the yard that were turned on, and a man sitting in her driveway one evening who told, not only Lisa but also her neighbors, that he was the new property owner. Lisa said that the man, who was a complete stranger, did not look like the sort of person who would be buying a house like hers.”

“‘This is a multi-million-dollar property, and you don’t want to make judgments based on someone’s appearance, but you can tell something is off,’ Lisa told KIRO Radio’s Dori Monson.”

“On Monday evening, Lisa walked onto her property to find the house broken into, tents set up across the yard, and a closet created out of the patio. ‘I screamed bloody murder the second I walked into my home because I didn’t know if somebody else was in the house,’ she said. Luckily, neighbors immediately heard Lisa’s screams and ran to her aid. They called police and fixed the part of the door that had been broken.”

“‘It was a terrifying situation — I’m a single woman … I’m terrified to go back to my own home,’ Lisa described.”

“A police officer arrived at the scene and located the two squatters. However, when he called for backup, he did not receive the help he needed. Because of sheer numbers, the single police officer was not able to confront and arrest the two squatters. She was told the next night that there were only three officers on-duty throughout Ballard, Queen Anne, and Magnolia. Less than three hours later, the squatters were back on the property. This time the police officer brought backup, but did not find the men. In the day-and-a-half since then, the squatters have been back multiple times.”

“Lisa has thankfully been living in an apartment in a different neighborhood while the house is being sold, but she lives in terror now every time she drives back to her own house. She said that with the response she has gotten so far from law enforcement, she honestly does not know what will happen next.”

“‘A single woman trying to sell my largest, greatest asset, and this is what’s going on — after putting literally blood, sweat, and tears into this property,’ Lisa said. ‘I am scared for my physical safety.’”

You Can’t Always Say, ‘It Will Be Worth More’

A report from the Georgia Straight in Canada. “Local real-estate agents are finding it much tougher to generate income through commissions. That’s because July’s residential sales fell to their lowest level in that month since 2000 in the Real Estate Board of Greater Vancouver’s territory. It extends from Whistler to the Lower Mainland. There were 2,070 residential property sales in the REBGV last month, down 30.1 percent from the same month in 2017. Sales last month were off 14.6 percent from June. West Side of Vancouver detached homes saw biggest price drop in any category and location over the last year. They’re down 8.4 percent, compared to an 8.3 percent drop for detached homes in West Vancouver over the same period.”

The Tri-City News. “Just like the ground, real estate sales in the Tri-Cities are drying up this summer. According to statistics released by the Greater Vancouver Real Estate Board, in May, June and July the Coquitlam house market saw the number of sales drop 49.3% from 363 in the summer of ’17 to 184 this year, townhouse sales go down 44% (166 to 93) and condos 40.8% (419 to 248). In Port Moody, house sales decreased 43.5% (69 to 39), condos 41.4% (128-75) and townhouses 34.2% (73 to 48).”

“The last three months of PoCo house sales were down 40.4% (178 to 106) compared to the same three months in 2017. The last month was particularly precipitous in PoCo with it going from 47 sales in June to 22 in July, a drop of 53.2%. Three-month townhouse sales dipped 40.5% from 11 to 66 and condos 29.3% (174 to 123).”

The Vancouver Sun. “Following the bombshell report detailing how Vancouver-area casinos became hubs of international money laundering, the second phase of B.C.’s battle against dirty money is expected to target real estate. And while the real estate sector largely drives B.C.’s economy, many members of the industry appear to have significant work to do on this front. According to data obtained by Postmedia News, Canada’s financial intelligence watchdog found ’significant’ and ‘very significant’ deficiencies in the anti-money laundering controls at 88 per cent of real estate entities they examined in B.C. over the last two years.”

“Money laundering has been a hot topic in B.C., especially this summer. In late June, former RCMP deputy commissioner Peter German delivered his damning report into how Lower Mainland casinos operated for years, he said, as ‘laundromats for the proceeds of organized crime.’ The following week, B.C. Attorney General David Eby said the next phase of German’s work will focus on monetary transactions linked to the housing market. German, The Canadian Press reported, ‘predicts the second phase will be a ‘larger beast to tackle,’ because he says real estate drives the economy in B.C., while gaming has had less of an overall impact.”

“A large beast indeed. Real estate is vital to the economy of Vancouver and B.C. The real estate and construction industries combine to represent more than a quarter of British Columbia’s gross domestic product, according to Statistics Canada, representing a bigger portion of B.C.’s economy than the oil and gas sector accounts for in Alberta.”

From Next Shark. “A theatrical poster of ‘Crazy Rich Asians’ in Vancouver, Canada was vandalized with racist comments ahead of the movie’s opening this month. Twitter user @jojocake found the poster installed in a bus shelter in an ‘affluent neighborhood.’ ‘A bus shelter with this poster in an affluent neighbourhood in Vancouver was vandalized with racist comments. Extremely upsetting.’”

“Lead actress Constance Wu had the words ’stupid chinx’ written on her face and ‘money laundering thiefs’ on her arm.”

“However, @jojocake believes that the offensive act may actually directed at Vancouver’s housing problem. ‘This doesn’t justify the act in any way, but I think the vandals’ motives have less to do with the movie and more with the Vancouver housing crisis and foreign investors. But they should be turning to the government for better regulation, certainly not an entire race of people.’”

From CTV News Vancouver. “A Langley, B.C. condominium complex was supposed to be home for dozens of pre-sale buyers, but instead, the development is sitting empty. Last year, the project went into court-ordered receivership, meaning a court-appointed individual was given responsibility over the property which serves as collateral for a loan. In court reports, the receiver for Murrayville said they’d found some of the units were pre-sold more than once – and as many as four times in some cases.”

“Future homebuyers considering a pre-sale property might be surprised to find out what’s in the fine print. They’re drawn in by glitzy showrooms that allow them to choose their unit and finishes, and many sign contracts without really understanding them. ‘People don’t read the last 10-15 pages. They just look at the first page, the price, how many parking spaces I get, is there GST on it? And that’s it,’ said real estate lawyer Kenneth Pazder.”

“If they did read the whole contract, they’d learn many things they thought were guaranteed – such as what floor the unit is on, the view, square footage and finishes – can actually be changed by the developer. For example, Pazder said, the kitchen might be in a different location, or the unit might be facing a different way. ‘But why people haven’t complained is because in the last 10 years or so, by the time your condo has closed, it’s gone up by $50,000 to $100,000, so I’m buying it anyway, regardless of what’s going on,’ he said. ‘But you can’t bank on that. You can’t always say, ‘It will be worth more by the time I close.’ So that’s another risk.’”

The Leader Post. “Another piece of Regina’s Economic Report Card showed a 17.8-per-cent drop in housing starts in the first half of this year compared to 2017. ‘I think the housing market is over built, but it’s not a structural problem,’ said David Froh, vice-president of Economic Development Regina (EDR), an arm of the City of Regina. ‘We’ve seen in our community a significant build-up in the housing and condo market, and with current absorption rates, it’s going to take a while to catch up.’”

“He said this is positive for homebuyers because it makes homes more affordable, but it might take longer to sell, and demand for construction services will be lower. Gord Archibald, CEO of the Association of Regina Realtors, said housing demand has been down, resulting in less building. ‘I think the builders are simply reacting to what they’re seeing take place in the marketplace. There’s less demand out there than what there had been, so they’re pulling back on the supply side,’ he said.”

“Right now, supply numbers are high. The listing service used by Regina Realtors has had around 1,700 listings on it the past couple of months, said Archibald. Comparatively, there was an average of around 500 listings five years ago. Home prices have dropped 6.1 per cent over the past 12 months alone, and sales have declined in the past couple of years too, he said. ‘There’s a direct correlation between economic growth, job growth and population growth, because all of those contribute to demand for housing, and of course those factors have been down in recent years,’ he said.”

The St. Albert Gazette. “Home-buyers looking for a new place to live are in luck. The market is currently drowning with more than 10,000 homes up for sale across the Edmonton metro area, which hasn’t happened since 2008. Darcy Torhjelm, chair of the Realtors Association of Edmonton, said the state of the economy is a key factor in current market conditions. ‘There’s a lot of questions out there in regards to the economy. What’s going to happen, we keep getting all these news flashes about tariffs and new problems. There needs to be a confidence in the economy.’”

“According to the latest report released by the association, in July the number of homes on the market increased by 12.62 per cent year over year, with 10,094 currently up for sale. It’s also taking longer for homes to be sold. Last month, the average house sat on the market for an average of 57 days before being snatched up. In response, homeowners have been slashing prices in order to get a sale. ‘There’s a lot of choice for buyers, which is good. A lot of buyers are still looking in the lower price categories, which I think is why you could be seeing more of the average price dropping,’ he explained.”

“Regardless of what’s happening in St. Albert, overall the market remains over-saturated across the region. To combat this, sellers need to make sure their houses are up to par before putting it on the market, Torhjelm said. When it comes to the future of the market, he doubts change will happen any time soon. Instead, sellers should consider whether right now is truly the time to put their home up for sale.”

“‘Sellers have really got to evaluate why they’re selling. If they’re just selling and they don’t have a plan moving forward, then that could be problematic,’ he stressed. ‘Right now, you’re not going to get your top dollar and it’s harder to find a buyer right now. Unless you really desperately have to sell, I think right now is the time to not be in that position.’”