September 8, 2018

The Buyers Have The Whip Hand

A report from Global News in Canada. “North American developer Grosvenor Americas is looking to score big with its luxury penthouse in downtown Calgary. Grosvenor’s Rob Duteau doesn’t think the $2.459 million price tag will deter buyers — at least not the right buyer. Still, 2018 has been a tough year for Calgary’s housing market, with both sales and prices down in August. Grosvenor started the project back when oil was at about $100 a barrel, so turning back wasn’t an option.”

From CJME in Canada. “One Regina realtor attributes the reason for home sales hitting a 10-year low point in August to over-pricing in a tough market. Craig Adams with Remax Crown Real Estate said it definitely is a tough market for sellers because there is a lot of inventory and house prices have dropped substantially in the last few years. ‘Some sellers are still thinking that prices are back where they were four to five years ago and that’s just not the case. So if you’re still trying to get what you thought you could get four or five years ago, that’s not going to happen,’ Adams said.”

“‘What they paid for it a few years ago is not what they’re going to be able to get right now,’ Adams said. ‘They have to come to the realization that they might lose money on their home and not recoup what they have paid for it. If they come to that realization that it is what it is then they’ll be fine and they’ll be able to sell it. But if they try to recoup what they have paid for it in the last few years that could be the challenge for them for sure.’”

“There are also still a lot of new builds available on the market, particularly for condos.”

From Prince Albert Now in Canada. “It appears as though the bottom of the Prince Albert housing market slump has yet to be found. Last month a mere 30 homes sold according to the Saskatoon Region Association of Realtors (SRAR). That represents a 17 per cent drop compared to August last year when 36 transactions happened. The latest figures may be good news for buyers but show that the housing slump isn’t showing any signs of slowing.”

“July’s figures showed just 25 properties changed hands, which was 50 per cent worse than the same month in 2017. ‘Although August numbers are down year over year, the decline was not as dramatic as the decline in July sales,’ said SRAR CEO Jason Yochim.”

From Medicine Hat News in Canada. “Topping headlines this week is a move by city administrators to pull the trigger on council’s wish to sell excess land to bolster land department profits and private development. Another of the properties is the lot beside the Moose ball diamonds that was surprisingly the subject of a $900,000 conditional sale last year.”

“The buyer walked away reportedly due to the high costs of bringing utility upgrades to the site, so officials are suggesting a price drop to $564,000 for about four acres. That alone should raise the eyebrows of land department critics who argue private landholders are constantly being undercut.”

From Domain News in Australia. “The cooling property market is biting into one of Sydney’s favourite pastimes, the Saturday street auction. Under pressure sellers are increasingly taking their sales behind closed doors to achieve a sale. More than 30,000 properties were put up for sale last month and the amount of time they are on the market is increasing.”

“New figures show more than 20 per cent of properties were withdrawn from auction in some areas, as clearance rate consistently hover around the 50 per cent. Last month the number of Sydney properties on the market was up almost 22 per cent year on year, according to Domain Group data, with the north west and upper north shore volumes up more than 30 per cent.”

“Economist Stephen Koukoulas, from Market Economics, said the market was a ’stand-off between buyers and sellers.’ ‘The buyers have the whip hand … they’re the ones controlling things,’ he said. ‘The next six to 12 months will certainly be very tough for sellers, they have to adjust their expected sale price lower.’”

“Sellers are getting the message. Price discounting in Sydney is at its highest levels in more than five years and the city’s median house price has recorded its biggest annual drop since the GFC. ‘It’s not good … unless you’re a buyer and prices still have further to run,’ Mr Koukoulas said, predicting prices would fall another 5 per cent in the next 12 months.”

From The Guardian on Australia. “Five years ago banks were ‘falling over each other’ to give out loans says the Sydney-based IT executive Karl Sice, who bought his first investment property 15 years ago. He currently has six properties in his portfolio across Sydney, Melbourne, and northern Queensland. But after roughly six years of uninterrupted, breakneck growth, Australia’s housing prices are falling, and the noises from the lenders have changed. The difference between now and five years ago, Sice says, is like ‘chalk and cheese.’”

“Across Australia, prices have fallen for 11 months in a row. And while it may not be a crash, it seems set to be a long slide. This week, Capital Economics predicted the coming fall would be the ‘longest and deepest’ housing slump in Australia’s modern history.”

The Courier Mail in Australia. “A shock new broker survey has revealed one in four homeowners given home loans last year would fail new bank tests if they applied today. Everything from Netflix habits, to your online spending spree, and even how many times you chose to use the tollway rather than take the long way around are going under credit microscope. ‘Banks are reviewing an applicant’s actual expenses, rather than using the traditional household expenditure measure method’ this year according to the latest HashChing broker survey.”

“A massive 41 per cent of brokers believed a quarter of those who secured mortgages last year would not pass tougher rules around living expenses now. ‘The reality is, it has become a lot harder to secure a new home loan or refinance an existing one. Banks are scrutinising everything, whether it’s how much borrowers are spending on tolls, Netflix, or ASOS,’ said Siobhan Hayden, HashChing’s chief operating officer. ‘This is because lenders are tightening their credit policies and shining an unprecedentedly harsh spotlight on applicants’ living expenses.’”

RSS feed


Comment by azdude
2018-09-08 18:18:41

1st step to recovery:

admit you are a debt slave

Comment by Professor 🐻
2018-09-09 05:26:39

Even those who studiously avoid becoming a debt slave fall victim through the need to compete with debt-funded spending power.

Comment by Mortgage Watch
2018-09-08 18:19:11

Coppell, TX Housing Prices Crater 9% YOY As Economy Accelerates On Plunging Prices

Comment by qt
2018-09-08 20:21:57

“Banks are scrutinising everything, whether it’s how much borrowers are spending on tolls, Netflix, or ASOS,’ said Siobhan Hayden, HashChing’s chief operating officer. ‘This is because lenders are tightening their credit policies and shining an unprecedentedly harsh spotlight on applicants’ living expenses.’”

This has nothing to do with expenses. When house prices went going up, the banks could care less if they can afford the house or not. Now no one wants to be the next Bear Sterns or Lehman Brothers.

Comment by OneAgainstMany
2018-09-08 21:46:25

The 15th of September approaches, the 10-year anniversary of the collapse of Lehman brothers.

Comment by azdude
2018-09-09 05:38:59

seems like it is all fixed since the FED created 4 trillion to bail out all the bankers. I’m sure they will do it again.

Comment by Apartment 401
2018-09-08 21:36:32

Realtors are liars.

Comment by Taxpayers
2018-09-09 05:02:57

Medicine that,now your talking HA territory.
Any observations from your hood?
22151 is
still perky

Comment by Mafia Blocks
2018-09-09 05:15:11

mornin’ Rip.

Vienna, VA Housing Prices Crater 15% YOY As Unemployment Ravages Fairfax County

Comment by Professor 🐻
2018-09-09 05:29:50

Ever-normalizing mortgage rates bold ill for the continued survival of Housing Bubble 2.0.

Mortgage rates tick up again as Fannie, Freddie start a second decade in limbo
By Andrea Riquier
Published: Sept 8, 2018 7:55 a.m. ET
The full-year average for the 30-year-fixed is still 4.45%, up from 3.99% in 2017

Comment by azdude
2018-09-09 06:44:22

if debt=money and after 10 years of adding trillions in debt and the FED creating 4 trillion in new money, how can u say inflation is 2%?

something isnt adding up here.

Comment by BubblevilleCA
2018-09-09 06:38:33

Old article but realivant for all realtors looking for a side hustle:

As the days become shorter and the leaves begin to fall, it means one thing for you as a real estate agent: you’re entering the slow season. (You’re entering bubble 2.0)

Comment by Boo Randy
2018-09-09 07:03:17

In this weekend’s Running of the Lemmings in Hong Kong, 72 knife catchers signed on the dotted line, suckered in by discounts of up to 20%. Meaning every “investor” who bought previously overpaid by at least 20%.

Sun Hung Kai Properties (SHKP) sold all 72 units in a third round of sales at its Cullinan West II development near Sham Shui Po on Sunday as buyers took advantage of lower prices and mortgage incentives in the city’s biggest weekend property sale in six months.

On Saturday, Nan Fung Development sold more than 90 per cent of a batch of 487 flats at its LP6 project in Tseung Kwan O.
SHKP’s latest batch of apartments, with sizes ranging from 270 to 1,509 square feet, were priced between HK$22,593 per square foot and HK$33,413 per square foot, after factoring in discounts of as much as 20 per cent.

Comment by Boo Randy
Comment by BubblevilleCA
2018-09-09 07:28:35

Glad to see this on MSM. Locally, other than down arrows on the mls, the NAR / CAR websites have not been supplying the numbers per normal schedule. I have data up to July (down in almost all CA RE). Nothing for August. Prior months data has previously been provided the first week of the following month. Could they be withholding this information? If so, why 🎢

Comment by Mafia Blocks
2018-09-09 07:33:15

NAR are much better at scrubbing data than reporting it. In fact they’re second to none.

Comment by BubblevilleCA
2018-09-09 08:17:47

Hey looky what I found. Guess they have a schedule! Now whether or not the data is accurate is a different story

(Comments wont nest below this level)
Comment by rms
2018-09-09 15:16:33

“Glad to see this on MSM.”

How did this story get past the editors at the SeattleTimes? Their advertisers will be on the phone Monday morning @0800.

Comment by Anonymous
2018-09-09 13:05:22


Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post