The Funny Money Is In Shorter Supply
It’s Friday desk clearing time for this blogger. “Lin-Lin Tsou-Otani is a real estate agent with DeLeon Realty. It’s Saturday morning, and our housing search starts in Cupertino, in a van filled with about 10 other people. The van seats are full – so Tsou-Otani stands in front, guiding buyers on a tour conducted half in Chinese, and half in English. ‘Raise your hand if you think the housing market is going crazy,’ she says. The crowd chuckles.”
“And these investments are paying off. Three years ago, the average home price in Palo Alto was $1.2 million. Now it’s around $2.5 million. ‘If you bought three years ago,’ says DeLeon International Outreach Director Kim Heng, ‘you’d be a millionaire now, sitting on a pile of gold.’”
“San Francisco condominium prices fell last month and home sales lagged as the frenzied market cooled off. New condo prices fell 3 percent and resales slipped by 2 percent as the number of sales declined by nearly 20 percent between August and September, according to the Mark Co., a condo marketing firm. Paragon Real Estate Group also tracked a slight decline in median condo and home prices due to seasonal changes, dropping 4.5 percent to $1.155 million.”
“Glenn Kelman, CEO of Redfin, said he was already seeing homes get fewer offers because many Bay Area residents ‘pay for houses with stock, so that willingness to bid $300,000 over asking is being limited by the stock market.’ Condo prices slipped by 10 percent last month, according to Redfin. ‘The funny money that people have had to pay for houses is in shorter supply,’ Kelman said.”
“Irina Kim Sang, broker associate for Coldwell Banker Miami Beach who said her specialty is Russian-speaking luxury buyers interested in residential and commercial real estate, said she received more inquiries from new-to-market prospective homeowners before the ruble’s decline in value. ‘I continue to receive inquires from Russians wanting to rent but am seeing less interest from those who started looking when the ruble decreased considerably,’ she said. ‘These first-time homebuyers in South Florida decided not to move forward, with the main reason being they make their money in rubles and would have doubly high carry costs for a second home.’”
“Canadian homebuyers are retreating from metro Phoenix. The number of Valley houses purchased by people north of the U.S. border has fallen by half during the past year. And a growing number of Canadians who bought houses in the region during the past five years are getting out of the market. ‘Canadians are now doing more selling than buying in the Valley now,’ Arizona State University housing analyst Mike Orr said.”
“Canadians helped start metro Phoenix’s housing market recovery when they began finding foreclosure deals and buying in late 2009. Then most other buyers weren’t in the market. ‘Canadians aren’t feeling as wealthy as they did a few years ago,’ Orr said.”
“About 80 people have gathered in Barfoot & Thompson’s downtown auction room for the company’s regular Wednesday fire sale. The room is a mix of ethnicities and prospective buyers, from seasoned investors to nervous first-timers. Latest sales figures for some firms have seen the rate of properties selling on the day falling to as low as 20-30 per cent from recent highs of up to 90 per cent. It comes on the back of skyrocketing prices and new rules targeting property investors, designed to take the heat out of Auckland’s overcooked housing market.”
“With no other bidders on the sun-drenched ‘casa’, the action stalls. by lunchtime the auctioneer has a 50 per cent success rate; of the 24 properties offered for sale, 12 sold outright, seven were passed in and five others attracted no bids. The afternoon session goes a similar way, with 14 of 26 properties selling under the hammer, seven passed in and the others drawing no bids.”
“Chennai’s developers are now resorting to perhaps their last option: heavy discounts. CNBC-TV18’s Jude Sannith reports that the city’s well-known player Doshi Housing recently stunned competitors by launching a project at 25 percent below prevailing market rates. ‘There was an apprehension in people’s minds that ‘If I delay my purchase, I would get a better price’. So, we tackled that by offering an investment protection guarantee,’ says Doshi Housing director Mehul Doshi. ‘What we said is: ‘This is the lowest price you can get, and if there is anybody who launches a product which is lower than this price tomorrow, we will refund the difference to you.’”
“South Korea’s brisk property market has been a bright spot in an economy that has struggled for much of this year. Now, an oversupply of new homes and tougher lending rules may signal an end to the boom. ‘Regions where there’s been a surge in new apartment sales in recent years may experience problems like a price correction,’ said Kim Kyu Jung, a real estate analyst at NH Investment & Securities Co.”
“Perth house prices are falling, rents are dropping and sales turnover decreasing, and there is little sign of an imminent turnaround, property experts have warned. CoreLogic RP Data research shows there are almost as many properties on the market in Perth as there are in Sydney, despite the latter having more than twice the population. Craig Kelson, of Kelson Real Estate in East Victoria Park, said in his 20 years in real estate, he hadn’t seen as many properties on the market now.”
“‘The gap between what properties are being advertised at and what they sell at is growing,’ Mr Kelson said. ‘Agents were still trying to be upbeat a few months ago, but now they just can’t see how the market is going to turn around.’”
“Prospective homeowners in Sydney have been heartened in the wake of more positive price outlook for Australian property, with news that a piss-stained cardboard box in Sydney sold for as little as $530,000. Piss-stained cardboard boxes, which sold for no less than $580,000 in June, have experienced a rapid drop in price which has both property speculators and regular mum and dad investors talking about the possibility of a more accessible housing market.”
“New homebuyer Fiona Wilkins, 25, was overjoyed at the news. ‘Only three months ago I thought that a urine-dampened cardboard box slowly melting in the rain on a suburban street corner would be well out of my reach,’ she said. ‘But now I’m heartened by the possibility that I may only need to enter a lifetime of debt in order to feebly shelter myself in a foul-smelling abode.’”
“Newly incumbent Treasurer Scott Morrison urged caution at the looming end of the housing bubble. ‘We need to keep consumer confidence up – certainly for new home-buyers the prospect of a Westpac interest rate adjustment looks positive,’ he said. ‘And as a Sydneysider I’m quite pleased that a mouldy piss-box has seen such eminently reasonable price adjustments. To young people I say this: now is the time. Embrace home ownership, like your parents did. Enter the piss-stained cardboard box market.’”
“Adam Wells, 27, has been actively seeking a first home for several years. ‘As recently as June, I thought the prospect of owning a mouldy old box seeped with the acrid stench of piss was only for baby boomers. Now I see a ray of light. Home ownership is within my reach.’”
“And these investments are paying off. Three years ago, the average home price in Palo Alto was $1.2 million. Now it’s around $2.5 million. ‘If you bought three years ago,’ says DeLeon International Outreach Director Kim Heng, ‘you’d be a millionaire now, sitting on a pile of gold.’”
Palo Alto home prices more than doubled in three years, just like the Chinese stock market…right before the Great Crash of 2015
Yes that seems perfectly normal. It looks like we are back on crazy town with unlimited prices and at worst a soft landing once again. How can this go wrong and how are the powers that be going to try to prop it back up when all the tools have been used? I guess we could always go negative rates and pay people to borrow money.
And don’t bother telling them that a crash is imminent, you’ll be laughed out the door.
Heck, the denial is still strong in Denver. They won’t admit the party is over until nothing sells.
In Denver’s case, not much is selling and prices are falling. See for yourself.
http://www.movoto.com/denver-co/market-trends/
there was an article saying denv was tank city since labor day
u were in UK
Ten years ago these realtor-led bus and van tours were filled with eager American real estate speculators, largely from California. Is there anything that’s changed, other than the fact that now the eager speculators are from mainland China?
I’d be surprised if PA homes doubled (if you look home by home), but if they did, it must be a local phenomenon, because they haven’t come close to doubling over the past 4 years in neighboring cities.
And the Chinese stock market went more than that, far faster.
for the children
“Chinese people really care about their children’s education, and education environment, and the Bay area has the best,” Heng says. “ The best weather, great culture and great schools.”
“‘If you bought three years ago,’ says DeLeon International Outreach Director Kim Heng, ‘you’d be a millionaire now, sitting on a pile of gold.’””
If you can find a buyer
Cupertino, CA Housing Demand Falls YoY; Every Year Since 2009
http://files.zillowstatic.com/research/public/City/City_Turnover_AllHomes.csv
“New homebuyer Fiona Wilkins, 25, was overjoyed at the news. ‘Only three months ago I thought that a urine-dampened cardboard box slowly melting in the rain on a suburban street corner would be well out of my reach,’ she said. ‘But now I’m heartened by the possibility that I may only need to enter a lifetime of debt in order to feebly shelter myself in a foul-smelling abode.’”
You have to admire someone who is so grateful for the opportunity to become an Ownership Society member at whatever personal and financial costs are necessary.
Thanks for the Friday morning satire!
What satire?
It’s from New Zealand’s Comedy Central. Of course real satire isn’t funny unless it is actually true.
‘The greater downtown Miami condo market is showing clear signs that demand may not be enough to prop up prices. Sales price momentum of condos has finally come to a halt in the greater downtown Miami area, with September median price per-square-foot sales of condos going down from $387 to $383 and average sale prices per square foot edging up slightly to $405 from $398 based on data from the Miami Realtors MLS.’
‘We are officially in a buyer’s market, with 19 months of condo resale inventory available. In addition to the current resale inventory there are also thousands of new-construction condo units being delivered in the greater downtown Miami area in next few years, with a bulk of them being delivered in 2016 and 2017.’
‘However ominous the excess condo inventory appears, many — if not a majority — of the currently listed condos in the greater downtown Miami market are grossly overpriced as compared to today’s market values. A typical condo in the area sells for about 5% below the asking price. But the median current list price per square foot is 19.8% above today’s median sale price per square foot ($459 vs. $383).’
‘Sales of Miami condos have gone down 21% since last year, with 190 MLS sales in September 2014 and only 151 in 2015. The question is whether this is attributed to overpricing or a market set for a correction.’
“….. The question is whether this is attributed to overpricing or a market set for a correction.”
The two are not mutually exclusive. In fact, they are closely related!
‘I am currently in Hong Kong, and have just returned from a short trip into China proper. Something is very wrong in China. Their conversion into a quasi-capitalist, quasi-communist country has created consumer economy and a hugely higher standard of living for nearly everyone. It’s also created an obvious privileged class who can afford luxury apartments, BMWs, Mercedes, Buicks, and other high-priced vehicles, Armani clothes, Cartier watches, etc. But it has also created the ghost cities — whole cities, brand new, with massive highrise apartment complexes and shopping malls, all standing empty. What I discovered on my little jaunt was that a similar situation exists in the countryside, where it’s not so obvious, but apparently is ubiquitous.’
‘In every hamlet, village, and town, and too some extent in the smaller cities, too, there are dozens of new two, three, and four story, multiple-occupancy houses, constructed to the pre-finish stage, and then left standing unfinished and empty. No workers at all, and as near as I could tell, and no people in need of housing to fill them if they ever did finish them. The appear to be a massive socialist make-work scheme that didn’t work out as planned, but suggesting internal economic problems that they haven’t come up with a solution for.’
‘Loss severities on Spanish mortgage foreclosures have continued to rise even as the country’s residential property market gradually recovers, Fitch Ratings says in a new report. We think the distressed property market in Spain is unlikely to share in the benefits of the wider recovery any time soon. Average loss severities on repossessed properties sold in 1H15 were 61% of the loan balance at the time of repossession, according to our latest analysis, up from 53% last year. Average loss severities have grown steadily since the housing crash and are now double the level seen in 2009 and nearly 10 times that seen in 2007.’
‘The Spanish housing recovery is uneven. Prime urban properties are benefitting from economic and credit growth, but many poor quality residential units are still vacant and unsellable in peripheral, economically weak areas. This large overhang and constrained demand, and the physical deterioration of repossessed homes, will keep loss severities on such assets high in the medium term. The aggressive foreclosure strategies used by some creditors to clean up their balance sheets, and the legal and operationally complexities of repossession (especially of vacant properties), will also weigh on final sale values and recoveries. Legislative changes may also affect property values, particularly for vacant houses.’
‘As the President Mohammadu Buhari-led administration continues its crusade against fiscal indiscipline with unrelenting vigour in the nation’s public sector, Nigerian money bags, who have over the years been racing to Dubai as safe haven for property investments, are gradually weighing the risks of their adventures with many now lying low to escape the prying eyes of anti-graft crusaders.’
‘The group, according to the sales manager, has twenty-five years experience in property marketing with offices in Russia, Almaty, Saudi Arabia, Abuja and Lagos state. Already, the firm said, it is offering iconic hotels in Dubai Marina at a lunch price of $545,000 while its Jumerirah village property is selling for $350,000 with daily appreciation of over 10 percent.’
‘Its property investments, according to investigations, ranges from $300,000 to $450,000, rising up to $600,000 with a flexible payment plan, spread over twenty-four months.’
‘Reacting to the fresh interests in Dubai property markets by Nigerian investors, some experts noted with dismay that, in spite of the growing risks associated with global property markets, Nigerian investors are still scrambling for a slice of the cake amid Nigeria’s financial sector, being threatened by global financial and economic crises.’
‘A Lagos-based lawyer with special interest in real estate, Barrister Bobajo Omowole wondered why Nigerian investors should invest in foreign property without ascertaining the legal implications of such investments’
‘He cited the case of his friend, who bought property abroad, but could not meet-up with the payment schedule, forcing the government of the country to take over the property.’
Given the country’s reputation for scams, Nigerians being lured abroad and fleeced is a poetic justice.
42,563 nearby properties found Miami, FL Real Estate and Homes for Sale
http://www.realtor.com/realestateandhomes-search/Miami_FL?ml=4
13,676 nearby properties found Miami, FL Price Reduced Homes for Sale
http://www.realtor.com/realestateandhomes-search/Miami_FL/show-price-reduced?ml=4
32% of all Miami sellers reduced their price at least once
‘The subject of whether Canada’s red-hot housing market is heading for a crash has been a hot topic of debate everywhere but the campaign trail. Canada’s political leaders have been largely quiet about whether they think the housing market is sustainable.’
‘Canada’s housing sector has been a bright spot in an economy hit hard by lower energy prices and a struggling manufacturing sector. The average price of a new home in Canada rose to $502,643 in the third quarter, according to the Royal LePage House Price Survey released Wednesday. That’s up 8 percent from the same period a year ago.’
‘But that growth may be unsustainable warn groups such as the International Monetary Fund and the Canada Mortgage and Housing Corp. Last month, a CMHC report said Toronto, Regina and Winnipeg were all at risk for a housing correction. Despite those warnings none of the political three major political party leaders are proposing measures to cool the housing market – or Canadian’s mounting mortgage debt.’
‘In an interview with BNN last month NDP Leader Tom Mulcair said historically low mortgage rates are fueling mortgage growth, but stopped short of saying whether a New Democrat government would further tighten the market. “Right now there is a serious danger. I think that (in) some cities the prices are too high,” Mulcair told BNN. “There could be a bubble created there, and we could be in for a terrible surprise.”
No surprises Tom, the Canadian taxpayer has your back.
‘As price growth slows in Sydney’s established housing market, the heat may also be coming out of the pricing of new land subdivisions with the latest HIA-CoreLogic RP Data Residential Land Report showing median lot prices unchanged at $350,000 over the June quarter.’
‘This was the first time since September last year that Sydney lot prices have not risen sharply from one quarter to the next – surges which have pushed up Sydney lot prices 18.6 per cent over the 12 months to June and created new million dollar median house price suburbs in the outer west.’
‘On Tuesday, Reserve Bank deputy governor Philip Lowe told a business conference the rate of price growth in Sydney appeared to have slowed a little t. He said this was not surprising because “when the supply of housing increases, the rate of house growth eventually responds”.
“I think we are on the cusp of seeing the supply response finally kick in, moderating price growth,” Mr Lowe said.’
‘Connecticut had one residential property with a foreclosure filing for every 1,321 homes in September, placing Connecticut 16th among all states. That was slightly better than the nation as a whole, with one in 1,231 homes, according to RealtyTrac.’
‘The improving foreclosure picture in the state does not mean Connecticut’s troubles are necessarily over. The percentage of loans in foreclosure that are tied to the years of the housing bubble is still high, meaning a shadow inventory of bad loans continues to linger over the state’s housing market.’
Good Morning Ben Jones:
I just read your response to me yesterday re: a video inventory and I get the problem you are wrestling with. An inventory of written material is very different that video material - I suspect the logistics of same is a bit more involved.
If ok with you would me asking about for some ideas help?
rj
Yes that would be helpful, thanks.
you could do a Nails Furgeson video where the screens are meaningless but the voice hypnotic
Let me check about - take some notes and see if the suggestions work for you - may take a couple of weeks to gather some info.
San Fernando, CA Housing Prices Crater 6% YoY
http://www.movoto.com/san-fernando-ca/market-trends/
^^^ hahahahaha
I have a friend that had his house on the market for months in San Fernando, CA (the city not the valley). He pulled it off the market two weeks ago after it never actually sold.
Every time he would text me about it, I channeled HA and told him to “Keep Slashin!’” He would counter with claims of “multiple bidders” and “offers over asking.” Yet, week after week after week it didn’t sell.
Me thinks he was telling stories.
That’s beautiful.
Pheonix attracts Canadians because of it’s winter warmth and dry heat to help them with arithitis. For the warmth it gets people from Western Canada, and a sprinkling of other Canadians for the dry heat.
Attendance is down because Western Canada is suffering from Oil Shock !
Us Easterners like Florida.
Zero money down is back in Las Vegas, courtesy of Lennar.
I can almost hear the realtors screaming: “There’s never been a better time to buy!!!”
Things never change…
http://www.zerohedge.com/news/2015-10-16/theyre-back-own-0-money-down
As for me, I sold my last bit of property in August and have become a happy renter.