Buyers Are Well-Aware They Have The Upper Hand
A report from the Australian Financial Review. “Just like the party room at Parliament House on Friday, you can cut the auction tension over the weekend with a knife. The Australian Financial Review went on a roadtrip to the western Sydney suburbs of Guildford, Merrylands, Lidcombe and Wentworth Point and saw agents and sellers herding in buyers like cattle, bringing down the hammer in less time you can say ‘house prices.’ On the flipside, agents with no bidders were quick to downplay their dismal situation with auction accomplishments of a bygone time. While many agents said cool conditions were just a winter lull, Corelogic said winter auctions were about 20 per cent lower than last year, ‘highlighting a substantial weakening in vendor confidence driven by the softer housing market conditions.’”
“That was clear to see at the sale of a two-bedroom unit at 16 Baywater Drive in the apartment city of Wentworth Point, west of Sydney. It has been on the market for nearly a year and its asking price has fallen about 12 per cent in that time. Public records show it had an asking price of $730,000 last October, and on Saturday it passed in at $645,000 from one registered bidder against a new asking price of $675,000.”
“At two other auctions - a three-bedroom unrenovated home at James Street in Guildford and a four-bedroom two-level penthouse at the newly completed apartment project of ‘The Skypoint’ at John Street, Lidcombe - the Financial Review was the only attendee at the auctions. The agent marketing The Skypoint penthouse said its asking price was $1.2 million, a steal for 320 square metres of space and six parking spaces and he was right. At $1.2 million, that would be a significant low of $3750 a square metre, unlike the rest of inner city’s $12,000 to $15,000 a square metre.”
“Looking at the latest sale data on the unit, the developer just sold it for $1.265 million in June to an investor. When asked why the investor wanted to sell it if it was such a steal, the agent said it was best to ask the owner but it was likely they ‘needed the capital.’”
“On Frampton Street in Lidcombe however, a rundown home sold for $1 million. Its value lies in its 595sq m of landholding. Buyers are well-aware they have the upper hand when a neighbour was overheard telling a buyer, ‘that’s not expensive, a while ago, something with that much land sold for $1.4 million.’ ‘Wow, we are really in a buyer’s market,’ the buyer said.”
“In Melbourne, buyer’s agent Morrell and Koren’s Emma Bloom said agents were moving to a ‘less transparent’ private treaty sale process to ‘protect values’ of homes. ‘There are now either no bidders, or one bidder,’ she said.”
“The passed-in auction of 52b Lansell Road, Toorak is a sign of the times after its sister property next door 52a sold in June, she says. Another sale that went against vendor expectations was the $6.25 million sale of 23 Airlie Street in South Yarra. It once had an asking price of $8.5 million, she adds.”
From Domain News. “NAB economists have downgraded their property price forecasts and say sentiment toward property has dropped to a two-year low. The move comes three weeks after rival bank ANZ cut its own property price forecasts. Chief economist Alan Oster nodded to ongoing concerns of regulatory tightening and shifting market dynamics. ‘Overall confidence levels fell to a new survey low, driven down mainly by NSW and Victoria where capital city house prices declined,’ according to Mr Oster.”
“Meanwhile, ANZ also offered a sombre view on residential property prices on Thursday, with the results of its own sentiment survey showing nationwide falls. ‘The survey results support our view that house prices are set for a sustained decline,’ ANZ head of Australian economics David Plank wrote.”
‘At $1.2 million, that would be a significant low of $3750 a square metre, unlike the rest of inner city’s $12,000 to $15,000 a square metre’
Oh dear…
The auction references confused me because I usually only see foreclosures go to auction. After doing some research it appears that about 30% of properties around Sydney were sold through auction last year. This seems very inefficient to me. Is this just done in bubble times? In a slow market, this seems like suicide. I always learn something new on this site.
On another note, Denver hit a recent inventory high this morning of 2,485 units for sale. It was down as low as 1,400 last year. A city this size should be at around 5k or more homes for sale, but we are definitely moving in the right direction rather quickly.
These auctions are the national pass-time. It’s just been a couple months since reports came out of low or zero attendance. It does take a while to figure out their lingo cuz they don’t speak English.
For instance:
Aug 29, 2016
Hundreds of properties are being passed in at auction as capital city residential listings spike up for spring and buyers become a little more cautious.
A pass-in occurs when the top bid falls short of the vendor’s expectations. The property is then passed in to the highest bidder, and agent-managed negotiations ensue.
https://www.domain.com.au/news/buying-a-house-at-auction-what-to-do-when-it-passes-in-20160826-gr29wi/
Thanks. I was wondering if there was a “reserve price” to use an English term. So I guess the seller has a price they will accept, if it isn’t hit, they invite the highest bidder in to negotiate a deal. If no deal is reached, it stays on the market.
One thing about Sydney. They’ll talk about a 1, 2 or 3 million dollar shack. And if you go look at the photo, it’ll look like some 1950’s house in anywhere USA. Toronto is similar but nowhere near as insane. A fancy airbox - bam, $6 million or more.
When asked why the investor wanted to sell it if it was such a steal, the agent said it was best to ask the owner but it was likely they ‘needed the capital.’”
Another term seems to be cropping up more often of late: “Liquidity crunch.”
Looks like the train to Schlongville better add more boxcars for all the knife catchers that are going to be joining that unhappy caravan.
“”Another term seems to be cropping up more often of late: ‘Liquidity crunch’.”
Ah, yes, another favorite term of mine. Ranks right up there with “adjustable rates”.
The Suck ‘em In stage has reached its conclusion, the Gotcha! Stage is quickly moving in go take its place, and now the fun begins.
😁
liquidity crunch???? OR HELP my bills are more then my income ive tightened my belt i wear used clothes i cant afford my car, and there is no bus close to my home which i might lose, my job is too far to walk, even paying Uber is a struggle, they cut OT at work, i need a woman with a job who will like a working man, and ok with going to the dollar menu at boogker Kingg for a date…….id cook but never learned how, and the bank just raise my adjustable mortgage…..guess im uh foooked
“In Melbourne, buyer’s agent Morrell and Koren’s Emma Bloom said agents were moving to a ‘less transparent’ private treaty sale process to ‘protect values’ of homes. ‘There are now either no bidders, or one bidder,’ she said.”
In the age of the Internet, those “private treaty sales” won’t be private for very long as these transactions are a matter of record. Not to mention, the wails and lamentations of the sellers, and their neighbors who see the new comps, are going to reverberate off an indifferent cosmos, while heartrending FB sob stories will soon be a staple in the business section of every Australian newspaper and periodical.
But nice try, used house salespeople.
Zillow is already doing something similar here. So easy to spot fix and flips now, just from the sales history.
As ususal, the financial media touts and shills are touting a mythical Spring revival to lure in the knife catchers. Remember all the “green shoots” assurances of 2006/2007?
https://www.afr.com/real-estate/high-prices-to-drive-spring-rural-property-market-listings-20180823-h14e8b
I thought the term “green shoots” first appeared in 2009 or 2010.
Everything is topped out - housing, stocks, equipment, vehicles, etc. I guess the best thing to do is sit in cash while adding to it, and wait.
File this under “nobody saw it coming.”
https://www.zerohedge.com/news/2018-08-26/bis-warns-perfect-storm-global-economy
“Additionally, higher tariffs could (actually, just say would) drive up U.S. inflation and force the Fed to raise rates, driving up the dollar and hurting both U.S. exporters and emerging market economies in the process, Carstens said.”
If the dollar is driven up higher, and emerging market economies are hurt in the process, then that tells me that at some point in the future, emerging market equities will be available at fire-sale prices.
As the dollar reverts to the mean, that will add a tailwind to the returns.
“I guess the best thing to do is sit in cash while adding to it, and wait.”
Or perhaps cash out that home equity while it still exists.
Remember, it’s your equity you’ll be cashing out. I see no reason why you should have go give it back.
Not exactly Mr. Banker advice,more like realtor advice.
The Nasdaq is at a record level just today, and the Dow is around 2 percent below its all time high, with growth over 4 percent, I am not so sure I would be calling the top in the stock market. BTW, this is with TSLA nose diving
TSLA went from 305 to 322, so I wouldn’t call that nose diving. Although it did drop precipitously after last earnings call once Musk sent his infamous tweet going private (e.g. funding secure), but it seems like he has walked that back. It remains to be seen what penalties, lawsuits, etc. the SEC and investors will ensue as collateral damage. It was a stupid, hasty tweet. But given that Musk and Trump are friends, I think he will be spared. It’s just the way things are these days.
In any event, I think Tesla stock is overvalued/unjustified given where they are. But I think their product is far superior to anything on the market. I drove a Tesla and now I will never buy a gas car again.
I was talking about today’s action. However since it’s all time high is around $390, I think it would be true for the longer term. Yes TEsla has amazing technology. However NASA had amazing solar technology in the 1960s. The question is always about affordability. I am not seeing the $35000 car. At that price a significant number of people are willing to trade off the ability to refuel quickly for performance and green virtue signaling. At above $50000, it is a more a toy for the 1 percent.
Mere toy
All the electric cars seem to be designed for midgets.
At above $50000, it is a more a toy for the 1 percent.
Maybe the Teslas that are above $100k. At $50k, it is well within the range of the top 10%. Kelly Blue Book says that average price for a new car transaction in 2018 was $36k. I save at least $1500 a year driving a Tesla over gas, so at $50k it is more economical to buy a Tesla than a new Honda Accord or a Toyota Camry. Plus, it’s fast, good looking, and has autopilot.
I like to see how you save $1500 a year. I am getting over 45 miles a gallon with the Chevy Cruz I drove off the lot for around $15,700 that did include about $2000 in GM card incentives. At Costco in Albuquerque regular is around $2.40 a gallon. You do have to pay for electricity. Ignoring the price differential and the money I make on the money saved, how do you save $1500 in operating expenses compared to me? That $36000 vehicle is either a truck or a SUV, a model 3 is just a high end small car. It is not going to do well hauling 1000 pounds of cement or a FLDS family.
I really think most people need to have another vehicle if the have a model 3 unless they are single and do not drive too many miles per week. Thus it is the toy car.
You got a good deal on a Chevy Cruze if that is the price you paid. But that car is not a direct competitor to a Tesla, as you should know. A more realistic competitor would be Audi A4, Mercedes C class, Lexus IS, or BMW 3 series.
In any event, the Chevy Cruze goes all the way up to $26k+ for options. The TruCar market price is showing a nationwide average of $18k for again what would be a very bare-bones model.
Tesla Model 3
Assumptions:
15k miles driven per year
$0.05 / KwH (Dixie Power)
75 kWh battery (Tesla model 3 long range)
315 range per 75kWh
Therefore,
$3.75 to drive 315 miles (75 kWh*.05/kWh)
$3.75/315 miles = $X/15,000 miles
$178 fuel cost per year for Tesla
2010 Honda Civic averages 34 mpg
Gas prices in St. George currently are $3.15/gallon
15,000 miles / 34 mpg * $3.15 per/gallon = $1389 fuel cost for Honda Civic
$1389 - $178 = $1211 total fuel savings
I also am adding some extra for no oil changes and almost any other maintenance that you have with an internal combustion engine. Maintenance costs are far less on EVs than ICE cars.
Denver, CO (speer) Housing Prices Crater 15% YOY On Plunging Consumer Confidence In Housing
https://www.zillow.com/speer-denver-co/home-values/
*Select price from dropdown menu on first chart
If anybody’s ever bored, read the reviews of online banks when it comes to cashing in a CD. “Hard to get your money back out” is a recurring theme. Seems best to stick to places which have a nearby bricks and mortar location so you can go in and actually get your money back.
“‘Hard to get your money back out’ is a recurring theme.”
“You can get much farther with a kind word and a gun than you can with a kwind word alone.” - Al Capone
August 19, 2018
The Australian Financial Review. “All eyes have been on Sydney where the softness has been most apparent as investors are forced from the market by curbs on lending. Sydney prices have dropped 5.4 per cent for the year. SQM Research’s Louis Christopher said auction volumes are beginning to pick from the winter lows and clearance rates so far haven’t deteriorated further, in Sydney and at a national level.”
“‘The pick-up for the spring selling season is now upon us. The market is going to be very much tested,’ he said. ‘We’ll know from this whether we’re going to experience a deep crash or whether it’s going to be an orderly downturn that will last a period of time but won’t be anything at panic levels.’”
“Anecdotally, sellers are showing more signs of capitulating and a willingness to meet where the market is now at, according to Mr Christopher. ‘I’ve been hearing this more and more from sellers: ‘I just want to get out. I’ve been holding too long, I want out.’”
http://thehousingbubbleblog.com/?p=10556
“… as investors are forced from the market by curbs on lending.”
Given how well this has worked in Sidney, why not try it in the U.S. as a means to restore affordable housing prices?
There’s no need to use a gun to persuade your customers to sign one of your dotted line specials. An ink pen is sufficient.
Woody Guthrie once wrote, “Some men rob you with a six gun, some with a fountain pen.”
Portland, OR Housing Prices Crater 11% YOY As Housing Inventory In Urban Areas Reaches Record High
https://www.zillow.com/portland-or-97239/home-values/
*Select price from dropdown menu on first chart
‘a rundown home sold for $1 million. Its value lies in its 595sq m of landholding. Buyers are well-aware they have the upper hand when a neighbour was overheard telling a buyer, ‘that’s not expensive, a while ago, something with that much land sold for $1.4 million.’ ‘Wow, we are really in a buyer’s market,’ the buyer said’
And the REIC/media is insisting prices are only down 4 or 5%.
‘NAB economists have downgraded their property price forecasts and say sentiment toward property has dropped to a two-year low. The move comes three weeks after rival bank ANZ cut its own property price forecasts’
This is because prices have already fallen way past their previous forecasts. Actually probably past their new lower forecast.
Ben Jones, you nay-saying so-and-so. That chipper young analyst on CNBC just assured me that EVERYTHING IS AWESOME - BUY MORE STAWKS! Surely if the outlook was as bleak as you say it is, all those hard-boiled investigative reporters out there would’ve sniffed out something fishy by now and we’d see banner headlines in the WaPo, NYT, WSJ, Newsweek, etc. as well as on all the network channels warning of an ongoing housing bubble crash. Because these intrepid corporate media news outlets have a sincere interest in keeping their viewers and readers informed of what’s coming down the pike.
/sarc
You really can’t possibly lose buying U.S. stocks this cycle. Even though the Fed claims to be normalizing, nobody believes that they will follow through on announced plans. Prices will keep going up as a result. Why not enjoy the party while the punch lasts!
August was supposed to be a miserable month for stocks, but so far gains have punished bears
By Mark DeCambre
Published: Aug 26, 2018 2:10 p.m. ET
…
suck the shorts in with some bad news then have the algos and buyback desks force them out. lmao The shit show continues.
595 sq m is, what, 7000 sq ft lot, a little less than 0.2 of an acre. I don’t know Sydney, but that’s less than most suburbs in the US.
‘Police in riot gear stormed an apartment in southern China on Friday where about 40 student activists and others supporting factory workers seeking to form a labour union were staying, according to activists who said they received a video of the raid as it was taking place.’
‘The video footage, which was shared with Reuters, showed police armed with shields and helmets bursting into the activists’ accommodation and scuffling with the occupants. The footage appeared to show an apartment where the students were staying in Huizhou, near the southern city of Shenzhen, that had been previously visited by Reuters. The video could not be independently verified.’
‘It was not immediately clear what happened to the activists. Calls to police in the area and five activists who had been staying at the apartment went unanswered. Labour activists in other parts of the country who are following the case and had been in touch with various activists on the scene said they were unable to contact them.’
‘The raid is the latest step by the Chinese authorities to clamp down on a growing labour movement in the southern province of Guangdong that started brewing last month when workers at a welding machinery company, Jasic International, were fired when they tried to create a union.’
‘The authorities have flown many of the young activists’ parents to Guangdong and put them up in hotels to undergo “training sessions” about how to raise their children, according to interviews with several students.’
‘Authorities lectured the parents on text messages to send to their children. They also arranged to have parents show up at various places where their children were, including the apartment and shopping areas where protests have been staged, they said.’
‘The universities gave a range of explanations to students about why it was unsafe for them to go to Guangdong including an approaching typhoon and the risk of being recruited into a pyramid scheme, several students said.’
‘The protests have spread to Beijing where, on Wednesday and Thursday, a group of 20 students, activists and two worker representatives from Jasic submitted petition letters at the headquarters of the All-China Federations of Trade Unions and the All-China Women’s Federation.’
China targeting “rumors” (truth-telling) and religion (rejection of the corrupt, evil status quo and consequent breakdown of morality in society). The desperate actions of a failing corrupt regime that fears a rise in social unrest from its disaffected citizens.
https://www.reuters.com/article/us-china-corruption/china-targets-rumors-religion-in-updated-party-rules-idUSKCN1LC0AQ
So what exactly should a communist government do to control collectivist uprisings?
“So what exactly should a communist government do to control collectivist uprisings?”
Oh, the irony. Can’t let those workers organize into unions!
Try not to get overly bullish in your Bitcoin outlooks!
What I love about the bull forecasts is that they all say it will eventually surpass $50,000. None of them acknowledge it may drop to $0, never to come back.
Crater.
Bitcoin Opinion August 26, 2018 16:42
Bitcoin Price Could Fall to $3,000, Says One of Crypto’s Most Bullish VCs
https://www.ccn.com/bitcoin-price-could-fall-to-3000-says-one-of-cryptos-most-bullish-vcs/
“In Pompliano’s view, a review of available data suggests a number of unpleasant outcomes, notably that the price of bitcoin is more likely to hit $3,000 in the short term than anywhere near $10,000, which means that there is still a price decline of roughly 50% ahead.”
“a review of available data” … bahahahahaha … and what sort of data might that be?
“Concluding, Pompliano reiterated that he still beleives bitcoin will hit $50,000, albeit in 2022 or 2023. His advice to investors is to buckle up and prepare for the worst while doing their own research in the interim.”
“… doing their own research …” bahahaha … by doing what? Reviewing “available data”, perhaps?
Bahahahahahahahahahahahahahahahahahahahahahahahahahahaha.
“There are so many real estate scammers everywhere it makes me sick. They’re on Facebook, YouTube, mainstream TV, and hosting LIVE events near you this weekend!!!”
Agreed! See it on IG all the time, pitbull and Shack and then those two donkeys Tarek and his wife. Pulling very rabbit out of the hat they can before the opportunities end
August numbers are going to be interesting, especially if they show a marked deterioration in previous bubble markets such as London, Vancouver, and Hong Kong.
https://www.scmp.com/property/international/article/2161480/uk-mortgage-lending-falls-july-rate-rise-and-brexit-worries
Mortgage lending in Britain dropped last month before the Bank of England raised interest rates above the level set since the financial crisis, banking industry figures showed.
The industry body UK Finance said the number of mortgages approved for new house purchases dropped by 4.3 per cent in July to 39,584 compared with the same month a year ago. City economists had forecast around 40,700, suggesting a renewed slowdown in the housing market.