The Housing Bubble

A report from the Globe and Mail in Canada. “Buyers’ fear of being left out is waning as real estate sales in the Vancouver region decline to a six-year low while prices for various housing types weaken during a summer slump. The Real Estate Board of Greater Vancouver saw 1,929 residential sales in August, down 36.6 per cent from the same month in 2017. It marks the lowest number of sales for August since 2012, with total transactions down 25.2 per cent compared with the 10-year average for the month.”

“‘The fear-of-missing-out mentality is much weaker. Buyers are being patient and not being rushed into purchases,’ said Josh Gordon, assistant professor at Simon Fraser University’s School of Public Policy. ‘Speculative expectations, where people think that prices will continuously increase at strong rates, have been taken out of the market for now.’”

“Steve Saretsky, a real estate agent who also writes a housing newsletter, said the trend of fewer detached houses being flipped could soon spill over to result in less speculation for presale condos in Canada’s most expensive housing market.”

“Mr. Saretsky notes that the price for detached houses sold within the City of Vancouver averaged $2,493,952 in August, down 19 per cent from the record high of $3,080,907 in April, 2016 – four months before the introduction of the foreign-buyers tax in the Vancouver area.”

The Daily Mail on Australia. “Housing prices in Australia’s top cities have been steadily falling for months now, and it appears there is no end in sight. Multi million dollar properties in a handful of Sydney’s most affluent neighbourhoods are experiencing the fastest price falls in the nation, falling twice as fast as less well wealthy suburbs. Overall property value in these suburbs is sliding at a rate of eight per cent annually, in comparison to the average of four per cent in properties in lower socio-economic areas, an analysis by investment bank Morgan Stanley shows.”

“A property in Point Piper, the home of Australia’s most former prime minister, could be falling by upwards of $1.2 million a year, or $23,000 a week, when looking at the suburb’s median house price of $15 million.”

From Domain News in Australia. “The cranes filling Sydney’s skyline should be enough to prompt investors to consider selling up and tapping out of the city’s cooling property market, according to a leading economist. With a ‘huge increase’ in supply set to come onto the market at a time of tightening bank-lending standards, sensible investors should be weighing up their options, according to AMP Capital chief economist and head of investment strategy Shane Oliver.”

“‘If I was an investor … I’d be tempted to get out,’ Dr Oliver told Domain. ‘Particularly if there are cranes all over the place.’”

“But other experts disagree, urging people to hold on to their properties in the falling market, or even snap up more. ‘Every percentage drop makes the market more affordable,’ said Property Buyer chief executive Rich Harvey.”

“While Dr Oliver is wary of encouraging people to sell, he thinks investors could be better off cashing-out of the Sydney market, which he expects will continue to fall up to 2020. ‘We’ve now come back about 5.5 per cent, which is really just a flick off the top,’ he said. ‘A better time to sell would have been a year ago, but I think there is still more to come.’”

A report from Hamptons Magazine in New York. “For the final issue of this Hamptons season, we gathered a group of panelists to discuss what trends they’re seeing, and what Hamptons homeowners, buyers and residents will be seeing over the seasons to come. Where is the market based on current performance?”

“Broker Dana Trotter: ‘There is quite a lot of inventory. We’re seeing price reductions daily. There may be a little bit of a correction where sellers are becoming more realistic. The high end is where we’re seeing a lot more inventory, and a lot of my buyers are mostly either downsizing or upsizing, so they’re not in a huge rush.’”

The Washington Post. “Although many homeowners and sellers in the Washington area in recent years have reveled in price appreciation and quick sales, buyers have been less celebratory about the hot housing market. A new analysis by Zillow offers a glimmer of hope for buyers in the D.C. area and in about half of the largest metro areas around the country.”

“The more compelling indicator of a potential shift in the market is that about 14 percent of listings across the country had a price cut in June. Between January and June, the share of listings with a price cut increased 1.2 percentage points, the highest January-to-June increase ever reported, according to Zillow.”

“In the Washington area, 15.4 percent of listings had a price cut in June 2018, down slightly compared to 16 percent in June 2017 but up from 13.9 percent in January. The typical price reduction was 2.5 percent in June 2018.”

“Price cuts are most prevalent in high-cost housing markets and on higher-priced listings. However, the market with the highest share of listings with price cuts was Tampa where 22.2 percent of listings had a price cut, followed by San Diego at 20 percent.”

The Denver Post in Colorado. “Apartment rent increases in metro Denver continued to moderate in August, and the chances are strong that desperate landlords may cut more deals in the months ahead, according to two new rent surveys. The median rent for a one-bedroom unit in Denver listed on apartment search engine Abodo fell 2.1 percent to $1,509 the past month, while the rent for two-bedroom units fell 2.64 percent to $1,880″

“‘Apartment vacancies are creeping up and with the huge amount of new developments and apartment starts in Denver, developers are offering concessions in the local market,’ said Sam Radbil, a spokesman for the company.”

“So many units are hitting the market that more developers and property managers are offering price breaks and free months of rent to fill vacant units, he said. Also, with the peak moving season over, leasing managers know the competition will become more intense for the smaller number of tenants out there.”

“‘This isn’t just a trend seen in Denver. All across the country concessions are being made as vacancy rates rise. We expect to see a continued slide in price into the fall season,’ Radbil said.”

“Apartment rents declined even more month-over-month in Aurora and Lakewood, two of the metro’s more affordable suburbs, as well as in Littleton and Glendale.”

The Real Deal on Florida. “More than two years after her death, Zaha Hadid’s condo at the W South Beach just sold for $5.75 million. The late architect’s three-bedroom, four-bathroom corner unit at 2201 Collins Avenue was placed on the market in May 2016 at $10 million following her death. The asking price on what had been three separate units was reduced to $6.5 million in November 2016.”

From Parade on California. “In her six decades-long career, Cher proved she still has what it takes at 72-years-old. Now, the first serious home she created after her divorce from Sonny Bono, which she designed and built in Beverly Hills on four acres in 1980, is on the market with the newly listed price of $68 million: $17 million below its original ask, according to TopTenRealEstateDeals.”