A Murky Monopoly Game
The Missoulian reports from Montana. “In recent years, Missoula real estate broker Rebecca Donnelly had gotten in the habit of bringing a book to open houses. The dreary residential housing market meant visitors were few and far between. This year, Donnelly hasn’t done much reading. On top of that, the last three offers Donnelly has submitted for houses ended up in competitive offer situations. ‘I don’t bother with the book anymore, I have 10-13 groups through on average (at each open house),’ said Donnelly.”
“Donnelly said sellers are realizing that the market isn’t going to bounce back quickly. The incentive of getting more on the other end has prompted some to list. ‘You may take a loss … but chances are, they will get a lot more house than what they already have at a cheaper price, so it’s really not a loss,’ Donnelly said.”
The Idaho Statesman. “New-home permits in Boise, Meridian and Eagle have doubled in the first quarter this year compared with the same period last year, and more buyers are seeking houses in the $400,000 range, said Bobbie Schultz, president of the Building Contractors Association of Southwest Idaho and owner of Jordan Homes in Eagle. ‘It shows that people are buying those less expensive houses and bumping people up as well,’ she said.”
“Buyers are turning to new homes because of the persistent shortage of existing homes for sale and because of good deals on new construction, said Kit Fitzgerald, president of the Ada County Association of Realtors. Marc Lebowitz, executive officer of the Ada County Association of Realtors said people are speculating about the effect bank-owned houses could have on recovery if they were put up for sale. But he said the increased level of demand and the rock-bottom inventory suggest the market can handle them.”
“The lack of supply means that multiple buyers are putting bids on homes. ‘It’s who can get it first,’ Fitzgerald said.”
“Because of demand, prices are now going up, and builders aren’t offering concessions or discounts as they have in the past few years, Fitzgerald said. ‘Everything in every price category has gone up,’ she said. ‘Anything $150,000 and less is just flying off the shelf.’”
StateImpact Idaho. “Lynne Smith pushes open the door of the home she’ll move into in just a couple of weeks. It’s brand new. ‘This is it!’ she says. ‘It’s just nice to come in and look around and say, ‘Oh, this is going to be my house!’”
“It was low interest rates and depressed home prices that drew Smith into the market. She thought she’d buy a foreclosure, and snap up a good deal. Instead, the search was a slog. She saw a lot of homes that had been damaged, or neglected. For the better places, competition was fierce. ‘The things that are really nice and in good, clean shape that people actually took care of, they’re gone in like a day,’ she says. ‘We would call the listing agent, and they would say, ‘Oh yeah, we have multiple offers,’ or, ‘We just got that offer sealed up 15 minutes ago.’ So – you really have to move quickly.’”
“Idaho Business Review reports the number of bank-owned homes for sale in southwest Idaho dropped almost 20 percent from February through the end of March. ‘This fact is worth mentioning since foreclosure sales are still occurring, and the vast majority of properties are going back to the lender, but there haven’t been that many REO sales to account for the decline,’ Idaho Data Providers President Charlie Nate said in the report. ‘This is evidence that lenders are holding REOs off the market and probably renting them for a while to help keep the market stable.’”
The Juneau Empire in Alaska. “Assessment data the city has collected and calculated has found that in 2011, housing sale prices in Juneau reached an all time high. In 2008 the median value for single-family homes was $318,000. That number dropped and hovered just above $308,000 for three years, and in 2012 the median value has risen to $332,000. City Finance Director Craig Duncan said the four year trend is a 9.6 percent increase, with an average increase over those years of 2.4 percent per year.”
“‘If you just compare ‘11 to ‘12, it looks like it went up 11 percent,’ Duncan said. ‘But then you would be forgetting it went down for several years.’”
McCleans on British Columbia. “While warnings about a Canadian housing bubble and rising household debt keep piling up, the government of British Columbia appears intent on fuelling the fire. This spring, first-time homebuyers can get a cash-back bonus of up to $10,000 for a newly built home. This ‘tax relief,’ which aims to also ‘assist the residential construction industry,’ will last until 2013. Government stimulus seems like the last thing Vancouver’s market (the priciest in the country) needs.”
“Tina Mak, a broker with Coldwell Banker in Vancouver, knows of at least two condo projects that sold out in a matter of hours earlier this year with prices starting well above $500,000. Mak expects a buying boom. Her phone has been ringing off the hook with clients interested in the rebate.”
The Vancouver Courier in British Columbia. “According to last week’s Real Estate Weekly survey, 46 per cent of Lower Mainlanders think now (spring 2012) is a good time to buy a home mainly due to low interest rates. On the supply side, 56 per cent think it’s a good time to sell, mainly due to high prices. But what do they think in China?”
“Now more than ever, Chinese eyes gaze east to places like British Columbia, which has no restrictions on foreign ownership. But anecdotal evidence abounds. Empty homes, bought and mothballed for future sale, decrease housing stock, increase demand and up prices. According to the Real Estate Board of Greater Vancouver, last year the average price of a detached home in Metro Vancouver rose 11.2 per cent to $887,000. On the West Side, the average home price rose 20.7 per cent to $1.99 million.”
“Trafalgar, they used to call it. A patch of urban plain between West 16th Avenue and King Edward in Arbutus Ridge on Vancouver’s West Side. Prime real estate in a beautiful city. And ground zero of the investor invasion. It’s no longer a community, it’s a commodity. A pocket of land bought and tilled by speculators. Down went the old stucco bungalows, once the neighbourhood’s signature home, up went dozens of ‘developer specials’—two and three-storey monstrosities that often sit empty, windows shuttered, for months. Sometimes years.”
“Colin grew up in the neighbourhood, at Trafalgar elementary and Prince of Wales secondary. He remembers streets bustling with life. Kids on bikes. Barbecues and burning leaves. Now a 38-year-old investment adviser, he lives in a rented bungalow not far from his childhood home. While the street names remain the same, the neighbourhood is unrecognizable.”
“Colin, not his real name, wishes to remain anonymous, fearing backlash and smears. If you dare note the ethnicity intrinsic to foreign real estate investment in Vancouver, you court charges of bigotry from industry benefactors. Last Friday, Colin took me on a Trafalgar tour. Street after street with many vacant homes. He pointed as we walked. ‘That’s empty. That one. That one. The whole side of this street almost.’”
“In Trafalgar, bilingual ‘For Sale’ signs in English and Mandarin dot front lawns. During our afternoon stroll, we happened upon a grey, two-storey with white-trimmed peaks. The front door was wide open. A young Asian man appeared in the foyer. ‘Yes?’ ‘Is this an open house?’ ‘No,’ he said, in limited English. ‘We show to private buyers.’ ‘How much? What’s the price?’ ‘Three point eight nine million.’”
“That’s typical of Trafalgar and other sections of Arbutus Ridge, probably the most overpriced neighbourhood in the city. It’s a market within a market with baffling trends. According to Colin, several Trafalgar homes seem to exist solely for ’sale’ yet never get occupied. ‘These three places in a row,’ he says, near West 21st and Yew. ‘No one’s ever lived there but [For Sale] signs go up for a few weeks then go away for few weeks. It just doesn’t make any sense.’”
“It’s a murky Monopoly game. Where do the interests of your global industry and our city diverge? How deep doth thy zeal for globalization run? No, they want this conversation to go away. Shut it up before folks get wise. If you’re troubled by dead neighbourhoods shuttered by foreign investment, you’re a racist dog stuck in 1923. Get back to your rented bungalow. You’ll be hearing from us soon.”
Anyone knows how this will end?
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“That’s typical of Trafalgar and other sections of Arbutus Ridge, probably the most overpriced neighbourhood in the city. It’s a market within a market with baffling trends. According to Colin, several Trafalgar homes seem to exist solely for ’sale’ yet never get occupied. ‘These three places in a row,’ he says, near West 21st and Yew. ‘No one’s ever lived there but [For Sale] signs go up for a few weeks then go away for few weeks. It just doesn’t make any sense.’”
Sure it does. Chinese money laundering …
Soon to morph into a Chinese real estate investing bloodbath…
Right. Reminds me of the panic over the Japanese buying up Rockefeller Center in the late 1980s, only to sell it at a massive loss years later.
We’ve had lots of foreign investors buying high-end condos in NYC as well. The good news is they are mostly buying in new buildings.
The empty buildings pay taxes, but do not have residents who require public services. Many get tax abatements, but when the abatements expire their taxes will soar. I say build more of them, as many as people want to buy. Eventually, those units will be for sale or rent.
What city do you live in? You think the few thousand condos sold in NYC annually sit vacant? The buildings selling the fastest in recent years are in Brooklyn with 25 year tax abatements. Theyre bought to be occupied. Maybe some condos are ghost towns in NYC. Not all.
BTW I heard from a reliable source that the Japanese didn’t do nearly as badly in their Rockefeller Center investment as is common folklore. I do know for a fact that public shareholders in a Rock Center mortgage REIT underwritten by Goldman Sachs got royally screwed. They were cashed out at a low ball price (loss) and institutional investors reaped all the foreclosure profit.
Check out the ones in Long island city Hunters point with a view of Manhattan….dark at night….
They should have had tax abatement for any condo that was built for under $250K with 90% of any resale profits in the first 5 years going into the condo associations fund. Talk about people who will actually live there.
The buildings selling the fastest in recent years are in Brooklyn with 25 year tax abatements. Theyre bought to be occupied. Maybe some condos are ghost towns in NYC. Not all.
This stuff is hilarious. It must be different in Eye-Da-Ho. Stuff is “flying off the shelf”? “There is no inventory”?
Just how much $$$ is NAR paying these media outlets to write this tripe?
I just did a search on Realtor.com. Boise, ID has 1133 properties for sale, Avg DOM: 141. Population is 200K,with a 7.9% unemployment rate. Things are not flying anywhere. They must have loaded up the Salmon River with Kool-aid.
“Donnelly said sellers are realizing that the market isn’t going to bounce back quickly. The incentive of getting more on the other end has prompted some to list.”
In other words, after waiting for six years for 2006 prices to come back, sellers are finally realizing they won’t and are throwing in the towel. The consolation for sellers who are not underwater and downsizing to a smaller living space is that they don’t have to spend as much for the new place as they would have had to back in 2006.
For those who used the magic of the home equity ATM machine to spend every dime of home equity wealth gains they had accumulated by 2006, it’s not too late to pray for winning the mortgage principal reduction lottery.
In other words, after waiting for six years for 2006 prices to come back, sellers are finally realizing they won’t and are throwing in the towel.
Does that mean that we’re finally emerging from the denial phase? If so, we’d better duck so we don’t get struck by a flying towel.
“In 2008 the median value for single-family homes was $318,000. That number dropped and hovered just above $308,000 for three years, and in 2012 the median value has risen to $332,000.”
‘Juneau prices in Alaska are now higher than in Southern California? This is going to end well…
Southern California home prices hit 6-month high
The Associated Press
Posted: 04/17/2012 10:01:06 AM PDT
Updated: 04/17/2012 01:07:46 PM PDT
SAN DIEGO—Sales of high-end homes lifted prices to a six-month high in Southern California in March, as the region’s housing market remained in a gradual recovery, a research firm said Tuesday.
There were 19,953 new and existing homes and condos sold in a six-county region, up 2.8 percent from a year earlier, DataQuick said, marking the third-straight annual increase and the seventh in eight months.
The median price was $280,000, down 0.2 percent from the same time last year and matching the highest level since September.
…
Prices in Alaska are absolutely stupid. It used to be you could stake your claim for free land. Now there are parcels in the hundreds of thousands for an acre.
“Now more than ever, Chinese eyes gaze east to places like British Columbia, which has no restrictions on foreign ownership. But anecdotal evidence abounds. Empty homes, bought and mothballed for future sale, decrease housing stock, increase demand and up prices.”
Got Vancouver shadow inventory?
“Down went the old stucco bungalows, once the neighbourhood’s signature home, up went dozens of ‘developer specials’—two and three-storey monstrosities that often sit empty, windows shuttered, for months. Sometimes years.”
Why did they tear down the old stucco?
I know a little about the Vancouver area market (although mostly the suburbs), and what’s typical there is to rip down the old house and put in something that covers the entire lot, trees be darned. For a long time, pink stucco was very fashionable, and of course there are all sorts of feng shui considerations. Some relatives fixed up their old house for sale in the Vancouver suburbs, only to have the new owners tear it down and put in a 10K square foot home/compound that filled the whole lot.
If those were Craftsman bungalows, then they destroyed a whole lot more chi than they gained.
My understanding is that in Canadian lingo, bungalow just means a one-story house. It’s not so much an architectural style as in the US, but of course some of those bungalows were probably what we would call bungalows.
Confusing, eh?
If Vancouver suburb houses look anything like Toronto suburb houses, they’re fugly.
Who are all the rich PNW people buying the 10k square foot monstrosities on the postage stamp lots?
Chinese and the occasional South Asian, I believe.
That comment about a neighborhood becoming a commodity rather than a community is dead on. I’ve seen it happen where I live. Houses and condos were being bought, sold and built with no serious intention that people actually live in them — just like a commodities investor does not expect to take delivery of bushels of corn or barrels of oil. I think the social effects of the bubble were at least as pernicious as the economic effects.
hat comment about a neighborhood becoming a commodity rather than a community is dead on. I’ve seen it happen where I live.
It’s happened in this nabe too.
And now we’re being targeted by another round of real estate in-VEST-ors who see big bucks in owning and renting houses. Good luck with that one.
Unfortunately, it’s us neighbors who will bear the brunt of their mistakes. Not just the house-wrecking tenants but the running down of what used to be pretty solid housing stock.
“Houses and condos were being bought, sold and built with no serious intention that people actually live in them…”
It seems like such a waste, especially given the PTBs’ ongoing concerns about a lack of affordable housing…
More from that article:
“[T]he neighbourhood rests in quiet. Too quiet. You soon notice you’re alone among rows of big-box homes, all peaks and eaves, with ornamental hedges stirring in the wind. It’s like a giant film set for a Hollywood blockbuster about a deadly strain of bacteria. Only the goldfish survived.”
Chinese eyes gaze east to places like British Columbia, which has no restrictions on foreign ownership. But anecdotal evidence abounds
Is there any locale in the US with such restrictions? I think not.
Methinks that Vancouver probably has become some sort of status symbol for mainland Chinese noveau rich. Plus I believe that it’s easier to get (buy) a greencard in Canada than in the US.
Canada has a point system instead of a lottery. I don’t remember how bringing a lot of money into the country factors into the point system, but it must be some part of it. Age, education, ability to speak English and French, and a few others are also included.
One of my in-laws just obtained the Canadian equivalent of a green card and didn’t have to wait very long for it either. I don’t know anything about the process, but she is single and relatively young, has a graduate degree, and is fluent in English and French.
I live in the heart of Vancouver. They’re not bringing money into Vancouver. They keep it in China. The only thing that comes to Vancouver is the 3-5 million for the house, the wife and kids. Then some of them apply for welfare because the husband, the factory and the business are all in China and they are, presto-magico, single moms needing welfare. Money in China is well hidden from our IRS.
The rates of “child poverty” in areas where there are no houses under 2 million are skyrocketing. Canadians are mules. We just go along with whatever. We get called racist and university professors of Asian descent tell us we’d never talk race if this were Americans coming and buying property and seeing neighbourhoods change radically.
I guess he’s never studied Canadian history or seen the extent of anti-Americanism in Canada or our protectionism vis a vis the US.
“This spring, first-time homebuyers can get a cash-back bonus of up to $10,000 for a newly built home. This ‘tax relief,’ which aims to also ‘assist the residential construction industry,’ will last until 2013.”
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All this stupid act did was raise prices on new homes in British Columbia by up to $10,000.00.
They are making every mistake in the book. And have you heard there is no subprime house lending in Canada?
‘Home Capital Group Inc. said it’s capturing mortgage business from Canadian lenders including Toronto-Dominion Bank and Canadian Imperial Bank of Commerce that are retreating from the $200-billion non-prime market amid signs of a housing downturn.’
‘Canada’s banks have been exercising more caution on higher-risk mortgages after Bank of Canada governor Mark Carney warned that record household debt remains the biggest domestic risk to the economy. Carney signalled the potential for interest rate increases that would cool off a housing market that has seen prices almost triple in some Canadian cities over the past decade.’
Read more: http://www.vancouversun.com/business/mortgages/banks+flee+prime+market/6502052/story.html#ixzz1syaxY35u
“They are making every mistake in the book.”
And then some. At least we didn’t have safety deposit box condos.
All this stupid act did was raise prices on new homes in British Columbia by up to $10,000.00.
Perhaps that’s the goal.
“New-home permits in Boise, Meridian and Eagle have doubled in the first quarter this year compared with the same period last year, and more buyers are seeking houses in the $400,000 range, said Bobbie Schultz, president of the Building Contractors Association of Southwest Idaho and owner of Jordan Homes in Eagle.”
The Boise area unemployment number is still around 8% and the median household income is only $50,000. The Boise area has also experience a lot of corporate headquarter job loses and reductions.
- Either the builders are incorrectly predicting market demand and building the wrong product/price point;
- Someone is lying;
- A lot of people in Boise are going to be in foreclosure down the road again;
- Or all the above.
I vote for “all of the above.”
I vote for “all of the above” too, with special emphasis on “the builders are incorrectly predicting market demand.”
Remember all the building in Florida for the masses that were going to move down there? Then they found out that more people actually moved out than in during the bubble. And that everyone wants to retire to Florida? Research showed that 9 out of 10 want to retire close to their family (what a revelation).
High housing prices cause people to flee areas in droves.
Pretty soon, Oil City is going to be overpriced and out of inventory, and the nice areas are going to be rife with vacant Asian- and Canadian-owned rental homes.
The same thing is happening in the Phoenix metro market. The short supply of quality used houses for sale has the builders sprinting to open up new lots and revive abandoned developed lots from yesteryear.
Went out cruising some model homes just for kicks, they are already pricing these at $25 to $50 per square foot higher than the average for a used house. Was funny to hear the “not making any more land” and low interest rate…blah blah…cash investors…blah blah spin.
I also asked about scorpion infestation, got some strange looks most of the time. I guess they have to disclose that information because several of the communities said they had seen scorpions even in the models…not good. If you don’t know, bark scorpions can be in a much higher concentration in urban developments with water features and big green belts then you would ever find in the natural desert…Once they get inside the walls of the home and in the block fence walls, you are finished and will never get rid of them. Most people, even native Arizonans do not know this.
The only positive to buying new out here would be the improved standard energy saving features like radiant barriers, dual pane windows, improved insulation and such. I have heard it makes quite the difference on you monthly bill. You would also avoid the pitfalls of buying a 20+ year old tile and stucco home that has an estimated economic life of 25 years. I may look at some more seriously when all the suckers have cleared out…maybe this winter, but I am still fine throwing away rent money.
Thanks for the info about the bark scorpions. All the more reason to follow xeriscape principles in your landscaping.
Great Phoenix update Nick. Thank you.
This alone is enough to keep me from even VISTING the West.
The west isn’t that bad for bugs and stuff. I rarely see a mosquito. I’ve only seen one snake in Flagstaff (it was non-venomous), and I’ve hiked around a lot. The drier climate keeps the populations down, I think.
The last time I was in Virginia I got eaten alive by mosquito’s. But have you ever had chiggers (or red bugs as some call them)? Once in Texas I sat down by a pond and woke up with over 50 on each leg, and dozens more in places you don’t want to know about. Central and south Texas are pretty buggy. I’ve seen tiger mosquito’s. You wouldn’t think a mosquito could be so big that you could see the white stripes, but they have em. I also put my head down on a pillow one night and a scorpion bit my neck. I once stepped on a copperhead snake in Jack County that then bit my foot. Four hours in the emergency room for that one. But the worst was the sting ray that stung me in the Gulf of Mexico. I never had Vicodin before or since, but I took six of those babies with some tequila that night.
If you’re ever in the Gulf wading around, shuffle your feet!
“But the worst was the sting ray that stung me in the Gulf of Mexico.”
We’re lucky to have you around. You probably know the story of the Crocodile Hunter’s sad demise.
Yeah, Phoenix metro and the west in general has been a great place to live, it took 20 years to see my first scorpion and I’ve lived in all corners of the metro area, hiked, golfed, etc. I never thought my first experience would be in a tract home community, but I just happened to rent a home adjacent to a fake rock river and green belt. All of the homes up the street on my side had them, nobody else saw a one.
They infest pockets of homes for various reasons, they like a good combination of water, shade and food. There is a reason why scorpions are listed on the residential disclosure form right next to Termites. The funny thing is, when you ask a realtor about them, you will inevitably hear them say “we live in the desert, you have to expect scorpions”…total BS, if you do regular pest control and xeriscape your yard, you should not have problem.
“Central and south Texas are pretty buggy”
“I’ve seen tiger mosquito’s”
I lived in Houston in the 70’s and 80’s, I remember those mosquitoes, pretty gnarly. I also remember the hissing spiders and the cow killer ants…the copperheads as well. I think that is why I am slowly becoming an avid indoors-man
Just looked up bark scorpion. I can’t imagine a whole wall full of those things.
Hi all,
Had to comment about Vancouver.
has all the details.
It’s dead. The stuff we saw published about Vancouver is true to 2-3 months ago. Now it’s dead. Our daycare lady is trying to sell desperately in Richmond, land of Rich-man mentality. Nothing, in months.
The Bubble is still strong in Toronto. Garth from the Greater Fool, our cult leader
A question for our American friends, please: Vancouver Or Saratoga FL? Assuming same job and salary. In your opinion, which one is a better place to live (leave? LOL)?
Thanks and Regards
arit
Vancouver
Those are the only two choices? Yikes.
+1 ditto. But I guess that’s where the jobs are. I’d have to vote for Sarasota and a couple guard dogs.
Thanks for your replies.
Sarasota Florida vs Vancouver, yes these are the two options at the moment.
The Sarasota option is on the map but not secured yet, just doing my homework, and you people are very knowledgeable.
What’s with the guard dogs? Are you serious? Is it unsafe there? Not family oriented?
Cheers
Sarasota has several personalities. If you go to the newer parts of town east of I-75, you’ll see a typical suburban wasteland. If you drive around Longboat Key, you’ll see trophy homes. There is a local aristocracy (read a copy of Sarasota Magazine and you’ll see what I mean), and there are some nice older neighborhoods.
Be aware that the culture of Sarasota is heavily influenced by the midwestern U.S., seeing as how the area has long been a favored retirement destination for individuals from that part of the country. There are other areas of this state that are influenced by New York City, Alabama, Disney, or Cuba, if that makes a difference for you.
I have been to Vancouver. Even though our state is no longer cheap to live in, if it’s a question of money, you’ll still get more for it in Florida. It used to be that Sarasota drew a lot of super-wealthy retirees, but I get the distinct feeling that many of those people are now opting for Naples.
I take it that six months of high heat and humidity are not a problem for you. No one should move here before seeing, and feeling, what August is like. While a couple degrees cooler, I actually think September is worse, because it feels like the air no longer is circulating.
Thank you snake charmer. I will try to get an online copy of the Sarasota Magazine indeed.
Regards
arit
If you look at the current issue, this is in it:
http://www.sarasotamagazine.com/Articles/Current-Issue/The-Next-Hot-Neighborhoods.aspx
I can’t speak to the accuracy of the account, so you’ll have to visit for yourself. No one ever publishes an article on neighborhoods that were predicted to become hot but ultimately remained sketchy or dilapidated.
“Had to comment about Vancouver.
It’s dead. The stuff we saw published about Vancouver is true to 2-3 months ago.”
Not surprised. I know some people trying to sell a $2 million (Canadian) home in the Vancouver suburbs, and there’s been a drop-off in the Chinese buying frenzy. I believe they have had showings, but the Chinese are suddenly a bit more particular.
…for now.