August 21, 2018

All My Hard-Earned Savings Are Down The Drain!

A report from the Australian Financial Review. “One of the first victims of collapsed Chinese residential agent Ausin said she would not buy real estate in Australia again after her experience with the company, which promised to navigate complex Chinese capital transfers in order for her to buy a house and land package in south-west Melbourne. Sales agency Ausin Group’s offices in China collapsed leaving behind missing deposits and failed settlements of houses and apartments in Australia.”

“Ausin’s China business, which is a separate entity to Ausin Australia, has allegedly misappropriated ‘tens [of] millions of dollars’ of settlement and deposit monies for new homes acquired across 15 projects in Sydney, Melbourne and Brisbane. A buyer from Wuhan, one of the biggest cities in China, told The Australian Financial Review she bought a house and land package at a south-west Melbourne estate at the start of the year for just over $600,000 after taking a ‘free real estate tour’ with Ausin to see houses in Melbourne. She was unwilling to reveal the name of the developer and requested anonymity.”

“‘The reason for giving the money to Ausin is the difficult capital transfer from China to Australia… so Ausin helped us send the money to the developer,’ she said. Along with referring buyers for a commission, the collapse last week has revealed the Ausin offices in China have also become ‘conduits’ through which Chinese buyers send their money to Australia, circumventing restrictions placed by Beijing on capital transfers out of China.”

“‘I am very angry … all my hard-earned savings and wages are down the drain. My only option now is to try and force the liquidation of Ausin [China] assets to see if i can recover my funds,’ she said. ‘I am sceptical about investing overseas now. Even if the location and developer are great, I am still concerned that there are ‘black holes’ with the middle person or agent who can run away with the money.’”




An End To Automatically Asking For More Cash

A report from the Press Democrat in California. “The wind has shifted this summer in Sonoma County’s housing market, with slower sales, rising inventory and an end to sellers automatically asking for more cash than their neighbors received for comparable homes. July home sales fell to their lowest level for the month in nine years, according to The Press Democrat’s monthly housing report compiled by Pacific Union International senior vice president Rick Laws. Sales for the past three months have declined 8 percent from the same period a year earlier. ‘It’s going to be a very weak summer,’ said Mike Kelly, an agent with Keller Williams Realty in Santa Rosa.”

“‘People are still buying houses, but there’s not the frenzy anymore,’ said Tom Kemper, manager of the Coldwell Banker office on Bicentennial Avenue in Santa Rosa.”

“Starting in May, sales slowed, even as the median price for a time kept rising. That rise in the median price could be due to increasing home values but also to a shift in the type of homes that sell. The spring median increase does appear partly tied to a jump in sales of more expensive homes in May and June. July’s drop in the median price similarly seems due partly to a decline in such sales. For example, the number of homes selling for $1 million or more declined to 69 last month from 100 in June.”

“Kelly, the longtime host of KSRO’s weekly real estate show, suggested buyers for years frequently bid against one another in order to purchase homes. Many still seem to think they need to offer the sellers’ listing prices when a lesser offer might prove acceptable. ‘Guess what?’ Kelly said of the market. ‘It’s shifted. It’s cooled off.’

“The slowing isn’t limited to Sonoma County. The California Association of Realtors last week reported that July was the third straight month of declining sales statewide when calculated on a seasonally adjusted annual basis. The association characterized the ’softening of the market’ as more a shift than a major correction.”

“Local brokers, nonetheless, cautioned against overstating the changes. They acknowledged some sellers have cut prices to sell homes, but said attractive, well-priced properties still draw multiple offers. Also, they said the amount of available homes for sale remains relatively limited by historic standards. Even so, more sellers are rethinking their expectations. ‘You’re not going to get $30,000 more than you would have last year,’ said Lori Sacco, managing broker for Vanguard Properties in Sebastopol.”

“Several suggested buyers are catching their breath and don’t feel the same urgency to make an offer. ‘They’re not afraid to look twice,’ said Pam Bradford, a broker associate with Praxis Realty in Santa Rosa. If buyers earlier this year would have held off making a quick offer on a property, she said, ‘you would have missed it.’”

From Houston Culturemap in Texas. “Houston, it looks like we might have a foreclosure problem. This summer, the Houston area has posted alarming year-over-year jumps in the number of homes starting to go through foreclosure, according to ATTOM Data Solutions. The Houston area saw a 76 percent spike in what’s known as foreclosure starts this July compared with last July, the ATTOM report says. This followed two months of double-digit increases in the Houston area compared with last year: 62 percent in June and 153 percent in May. A foreclosure start represents the first public notice of a foreclosure proceeding.”

“‘The increase in foreclosure starts was somewhat expected in Houston and some parts of Florida — particularly Jacksonville — given the hurricane-induced flooding there last year,’ says Daren Blomquist, senior vice president of ATTOM, a provider of real estate data. ‘But the widespread upward trend in foreclosure starts across a geographically diverse set of markets this summer indicates there is more to this trend than just natural disasters driving increased distress, although that is an interesting and important piece to all this.’”

“Aside from Houston, Austin was the only Texas market listed in the report as having notched three months in a row of significant year-over-year increases in foreclosure starts: 65 percent in May 2018 compared with May 2017, 44 percent in June, and 29 percent in July. Michael Weaster, a foreclosure specialist with Berkshire Hathaway HomeServices Anderson Properties in Bellaire, says he hasn’t detected a rise in foreclosure activity in the Houston area. Weaster suspects most of the homes in the Houston area that recently have gone into foreclosure have been sold through government-run foreclosure auctions rather than through real estate agents.”

“Data from the Houston Association of Realtors (HAR) backs up Weaster’s observation. The group tallied 159 local foreclosure sales in the region’s Multiple Listing Service (MLS) in July 2017, compared with 105 in July 2018. That’s a drop of 34 percent. HAR spokesman David Mendel says his association ‘is not seeing a spike in foreclosures at all. That means that many of these transactions are happening outside of MLS.’”




A Gradual Loosening Naturally Results In Higher Foreclosures

A report from The Real Deal. “New home foreclosure filings nationwide inched up in July, signaling the first year-over-year rise after three consecutive years of decreases. The report from Attom Data Solutions is an indication the U.S. housing market may be nearing the end of the cycle, and that home prices will begun to fall, experts say. In L.A., foreclosures jumped 20 percent last month to 1,190; and in Miami they rose 29 percent to 1,119. In both cities, home foreclosures increase for the third consecutive month.”

“A total of 96 out of 219 metropolitan areas analyzed in the report, or 44 percent, posted year-over-year increases in foreclosure starts in July. Daren Blomquist with Attom Data Solutions said ‘the widespread trend reflects a gradual loosening of lending over the past few years.’ That loosening, he added, ‘is naturally resulting in higher foreclosure numbers across a diverse set of housing markets.’”

“Houston, Detroit, Indianapolis and Jacksonville, Florida, saw the biggest rise in foreclosure filings. In those cities, foreclosure starts all increased more than 70 percent.”

The Orlando Sentinel in Florida. “Foreclosures on Metro Orlando homes are up 23 percent from July 2017, according to a real estate data analyst, though the numbers are still well below the peak of the recession, and local sales agents say there’s not much impact in the market yet. Last month’s 773 foreclosures included 376 starts – up 41 percent from July 2017, the third straight month foreclosure starts were on the rise.”

“‘It’s very small compared to the kind of numbers we had before,’ said Barbara Hampden, a Realtor with Re/Max 200 in Winter Park. ‘A 23 percent uptick seems like a lot, but … if it continues for another [three months], then maybe I’d say things are getting away from us.’”

“Among the possible reasons for the rise could be pent-up cases from a foreclosure moratorium imposed after Hurricane Irma, said Attom senior vice president Daren Blomquist. But other factors also exist. ‘Most of this increase is likely lenders catching up from the foreclosure moratorium, but we are also seeing similar trends in some other markets that did not have hurricane-induced foreclosure moratoriums,’ said Blomquist, ‘indicating there may be more widespread distress seeping back into the housing market.’”

“For bargain-seeking home shoppers wondering if the foreclosures will create buying opportunities, Hampden said that’s unlikely. ‘Just because a property goes into foreclosure doesn’t mean the value has gone down – it’s just that the owner can’t make the payments,’ she said. ‘The value may still be above water,’ or more than the owner owes on the home.”

“And it often takes an all-cash purchase to secure a foreclosure or a short sale amid heavy competition for values. ‘Otherwise you can be left standing on the sidelines with offers going nowhere,’ Hampden said.”

From Fox 4 Now in Florida. “Stunning new numbers released Tuesday morning show a huge increase in the number of foreclosures in Southwest Florida. Attom Data Solutions says the number of home owners who have started the foreclosure process in Cape Coral and Fort Myers, has gone up 59% since last July. The year over year number from June, was an increase of 64%.”

“The report says for the first time in 3 years, foreclosures are up nationwide and some of the biggest increases are in Southwest Florida. According to Trulia, more than 300 homes in the Cape and more than 400 homes in Fort Myers have started the foreclosure process. Attom says the government has loosened some Obama era lending standards for banks leading more people to take risks with their home loans, causing the spike in foreclosures.”

From Attom Data Solutions. “Twenty-one states posted a year-over-year increase in foreclosure starts in July, including Florida (up 35 percent); California (up 3 percent); Texas (up 7 percent); Illinois (up 7 percent); and Ohio (up 2 percent). Metro areas posting year-over-year increases in foreclosure starts in July included Los Angeles, California (up 20 percent); Houston, Texas (up 76 percent); Philadelphia, Pennsylvania (up 10 percent); Miami, Florida (up 29 percent); and San Francisco, California (up 10 percent).”

“‘The increase in foreclosure starts is not just a one-month anomaly in many local markets given that July represented the third consecutive month with a year-over-year increase in 33 metro areas, including Los Angeles, Miami, Houston, Detroit, San Diego and Austin,’ said Daren Blomquist, senior vice president with ATTOM Data Solutions. ‘Gradually loosening lending standards over the past few years have introduced a modicum of risk back into the housing market, and that additional risk is resulting in rising foreclosure starts in a diverse set of markets across the country.’”