November 23, 2014

Bits Bucket for November 23, 2014

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November 22, 2014

Six Months Ago Buyers Were Being Unrealistic

It’s Friday desk clearing time for this blogger. “Through the first 10 months of the year, sales in the Triangle are up 2 percent compared with the same period in 2013. While prices have inched up over the past year, the increases haven’t been substantial enough to entice a larger number of sellers to put their homes up for sale. The average sales price of the homes that sold in October was about $250,000, up 1 percent from a year ago. ‘There’s been a lot of people staying in houses because their values haven’t recovered from 2008 enough,’ said Ed Willer, an agent with Berkshire Hathaway HomeServices York Simpson Underwood Realty in Raleigh. ‘The economy overall is just not back yet.’”

“Many would-be buyers in the Triangle also continue to assume that it is a buyer’s market, and are demanding concessions from sellers that many are no longer willing to provide. ‘I think we’ve still got some buyers that are struggling to understand that they’re not 100 percent in control of what goes on, what a seller’s going to do for them,’ said John Wood, a Re/Max United agent in Cary. ‘They just get cast aside,’ Willer said of those folks.”

“On Saturday, during a luxury real-estate auction in Park City, a rich buyer from Texas got a steal — paying $7.7 million for a home that was previously listed for $13.25 million. The couple attended the auction but declined to be interviewed except to say, ‘We still love Park City, but it’s time to move on.’”

“Their home had been on the market for about 18 months and the couple decided that an absolute auction — where the highest bidder wins and there is no minimum price that must be paid — was a way to sell the property quickly. Daniel DeCaro said his company is planning a fourth auction in about three weeks for a newly constructed home in St. George. ‘These homes have been on the market and the owners want them sold and are willing to give a discount,’ he said.”

“Michael Ripson wants to pay your mortgage for a year. You just have to buy a new home at the Scottsdale home builder’s new subdivision in Surprise before Christmas. Ripson and is offering mortgage payments for a year to as many as 19 home buyers at his Sonoran Acres development. Homes there start at $265,000 and can run up to $400,000 with add-ons. Ripson said the hope is to get hesitant home buyers off the fence about purchases. He said home builders are wrestling being able to convert prospective home buyers into customers.”

“‘Those conversion rates are at historically low levels,’ Ripson said.”

“Whatever you say about the property market I’m glad I’m not selling. There wasn’t even a bid at two recent home auctions that I know of even though clearance rates are supposed to be high. Dump or not, that’s not like any property boom I can remember. Mind you, it was different six months ago when the heat was on and buyers were being, er, unrealistic.”

“The annual growth in home values in October was 13.1 per cent in Sydney and 8.9 per cent in Melbourne, according to RP Data. What am I saying, isn’t that pretty strong? Oh wait, six months ago it was 17.3 per cent for Sydney and 14.6 per cent for Melbourne. Everywhere else prices fell last month, except in Brisbane where they were virtually stagnant. So while mortgage rates are at an all time low, high property prices and falling real incomes are beginning to bite. In fact the Reserve Bank points out that ‘an increasing share of owner occupiers is opting for interest – only loans to increase repayment flexibility.’”

“It’s just as well it’s been keeping that to itself because they’ll be struggling once rates start rising and they won’t have paid off any of the mortgage.”

“Home prices in most Chinese cities continued to drop in October despite easing restrictions, official data showed. Chief analyst at real estate agent Centaline Property, Zhang Dawei, said the price decline resulted in losses for home buyers, especially those who purchased houses in 2013. ‘The Chinese property market has bid farewell to the past golden decade,’ he said. ‘Home prices are unlikely to rebound due to huge inventories and new projects.’”

“Billions of dollars from opaque sources in China may be flowing into Myanmar each year, causing excessive volatility in areas such as the local real estate market, according to experts. Flows have increased recently as Chinese political and business leaders respond to efforts to curb corruption, causing many to look abroad to store their ill-gotten money. These capital flows are distorting markets through the region, and, to some extent, the world, said Sean Turnell, associate professor of economics at Australia’s Macquarie University.”

“One manifestation of this is felt in the rising Myanmar real estate market, but this experience is mirrored in many countries, including Australia – where hot Chinese money is creating a very serious real estate ‘bubble’ in Sydney, he said. ‘The volumes are so large, the problem so acute. In all of it we have to ascribe blame too where it is primarily due – China,’ he said. ‘China is exporting its instability, its corruption, its lack of faith in its own institutions,’ he added.”

“Canada ended its millionaire migrant programme in June. The Federal Investor Immigrant Programme was designed to attract high net-worth migrants to settle in Canada, and opened the doors for thousands of wealthy Chinese investors over the past two decades. David Lesperance, a barrister and solicitor at Lesperance Associates, has been working with international investors from China for many years. He said that immigration authorities are reviewing applications retrospectively and have already cancelled approximately 2,000 citizenships. Lesperance also warns that the Canadian Revenue Agency is aggressively reviewing the tax status of foreign nationals, and is looking to freeze and repossess locally held assets.”

“‘I am already receiving calls from people who are not only having their citizenship challenged but are also getting audit notices from CRA. It is easy to see this trend accelerating as all the incentives are there for the government to ramp it up. Once news of this becomes more commonplace, you will see a mad rush to the exits to dump those easily collected Canadian assets,’ he said. ‘Given the time it takes for the market to fully realise that this crackdown has already begun and is accelerating, I would anticipate the fire sale to take place within the next few years.’”

“Professor Arturo Bris, who heads the World Competitiveness Centre at Swiss business school IMD, told a Singapore forum the world had become so flush with money that people were paying ‘crazy’ prices for real estate and stocks. He highlighted five ‘risk factors’: access to cheaper oil and gas; the real estate bubble; a parallel stock exchange bubble; Chinese lending; and a tendency for leading corporations to accrue huge sums on their balance sheets.”

“Professor Bris said the amount of money on some companies’ balance sheets was comparable to the value of entire countries, calculated by applying a typical sales multiple to the country’s GDP and subtracting national debt. By that measure, Citigroup had enough ready cash to acquire 51 per cent of Italy, which Professor Bris valued at $US840 billion ($977bn). Apple could buy a maj­ority stake in Israel and Cisco could purchase Portugal, he said. ‘A bank that employs maybe 30,000 people could buy a country with 50 million — it shows the magnitude of the problem.’”

“These levels of cash would send economies into meltdown if they were suddenly released into the markets. Similarly, China could destroy the American economy by suddenly selling off US bonds. Professor Bris said Chinese lending was the biggest risk factor of all, with ‘humungous’ sums concentrated in a few poorly governed banks. ‘The next Lehman Brother will be Lim Ma Brothers.’”

“This fall, federal regulators made a controversial decision to back down from tough new underwriting standards for mortgages. Some affordable-housing advocates, allied with parts of the corporate housing industry, had successfully argued that the proposed standards would make it too hard for people to qualify, thereby reducing homeownership and hurting the housing market.”

“All of this ignores a crucial fact: Much, and at times most, of what happens in the mortgage market doesn’t have anything to do with homeownership. A sizable percentage of mortgages — including most of the risky ones that were made in the run-up to the financial crisis — are not used to buy a home. They’re used to refinance an existing mortgage. One of the most abjectly false narratives about the financial crisis is that risky mortgages proliferated so that people who couldn’t afford homes could nonetheless buy them.”

“According to a joint HUD-Treasury report published in 2000, by 1999, a staggering 82 percent of subprime mortgages were refinancings, and in nearly 60 percent of those cases, the borrower pulled out cash, adding to his debt burden. The report noted that ‘relatively few subprime mortgages are used to purchase a house.’”

“The problem, of course, is that the conflation of homeownership and consumer credit is so convenient for the powers that be. It allows lenders to cloak themselves in the American-as-apple-pie mantle of homeownership, thereby making it less likely that anyone will crack down on their practices. It allows members of Congress, many of whom depend on the financial industry for campaign contributions, to pretend that something that’s bad for us is actually a good thing for which we should be grateful.”

Bits Bucket for November 22, 2014

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November 21, 2014

Bits Bucket for November 21, 2014

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November 20, 2014

The Dreaded Talk About Price Drops

The South Florida Daily Business Review. “The deeds only tell half the story—if that—when it comes to showing who’s behind some of South Florida’s biggest real estate deals. Analysts says institutional investors are the dynamos fueling most of the region’s big-money transactions. ‘In the markets where these entities are buying, it’s not uncommon to see them purchase hundreds of properties over a given quarter,’ said Daren Blomquist, VP of RealtyTrac. ‘In the markets where we see these institutional investors heavily involved, we typically see acceleration in home-price appreciation. On the flip side, when they start slowing down their purchases, home-price appreciation also slows. That’s the concern on the residential side—that they’re driving up prices beyond what your typical home buyer can afford.’”

“Analysts say institutional buyers also are bullishly snapping up residential product, including even small assets like three-bedroom starter homes priced around $150,000 and built after 1990. Their aggressive acquisitions come as discounted foreclosures dwindle and entry-level buyers face an inventory crunch. ‘Hedge fund owners are parking money in residential real estate,’ said Attorney Joe Hernandez, a partner at Weiss Serota Helfman Cole Bierman & Popok and chair of the firm’s real estate practice. ‘It’s great that people are spending a lot of money down here, but does that improve the fundamentals.’”

The Washington Post. “Double-digit gains in home prices prevalent in 2013 have slowed to single-digit appreciation, benefiting buyers who were losing homes to higher bidders. All these factors point to what should be a strong housing market in the Washington area. So, why are so many real estate agents here bellyaching that the market has come to a screeching halt? ‘All the marketing in the world is not getting us offers,’ said Valerie Blake, an associate broker with Keller Williams Capital Properties.”

“The tide has turned and agents are frantically devising new game plans, for their clients and themselves. We have had the dreaded talk about price drops and incurring costs on improvements that would increase the appeal of the home. We have re-examined our own budgets and our ability to launch new marketing strategies. We are desperately trying to dissect the new mindset of the market and craft new marketing strategies for these changing times.”

The State in South Carolina. “Home sales took a nosedive in October, dropping 42 percent in Columbia from the same month a year ago. The question now for Columbia is whether the October slowdown was just a blip, or an indication of new troubles ahead for the local market. ‘I’m a little taken aback by the 42 percent,’ said Doug Bridges, a longtime real estate agent in Columbia. ‘That’s pretty severe.’”

From Chicago Business in Illinois. “After flying high in the first half of the year, the downtown apartment market has lost some altitude in the second. All the exuberance has fueled a development boom that will test the market over the next few years. Appraisal Research projects that developers will complete 3,119 apartments downtown in 2015 and 6,400 in 2016, both records for downtown Chicago. ‘The question is what’s going to happen in 2016,’ said Appraisal Research Vice President Ron DeVries. ‘Clearly, there’s going to be an imbalance there.’”

The Phoenix Business Journal in Arizona. “Phoenix area housing starts were down by more than one-third in October compared to a year earlier. RL Brown Housing Reports also found that year-to-date housing permits are down 17 percent compared to the first 10 months of 2013. There are also still plenty of existing homes for sale — and rent — in the aftermath of the slowdown and post-recession investors buys. ‘Everyone involved in new housing here in Phoenix is well aware of the dramatic price gap between the median new home price and the median resale price in the marketplace,’ RL Brown researchers write in their monthly newsletter.”

The McClatchy Washington Bureau. “The new head of the Federal Housing Finance Agency has failed to help homeowners who owe more than their house is worth to get partial loan forgiveness, Sen. Elizabeth Warren charged Wednesday. ‘You’ve been in office for nearly a year now, and you haven’t helped a single family, not even one’ through principal reduction, Warren told a surprised Mel Watt at a hearing before the Senate Banking Committee.”

“Republicans peppered Watt with a number of regulatory concerns, and worries about a forthcoming plan that will make it easier to get a government-backed loan with a down payment of just 3 percent. ‘I’m troubled that you would reduce borrowing equity after the problems we’ve seen’ in the run-up to the housing crisis, said Idaho Sen. Mike Crapo, the committee’s top Republican.”

“Congress is divided over the future of housing finance. Asked about whether he’ll offer a way forward, Watt said it is up to his former colleagues in Congress to make that call. ‘I’ve left that role behind,’ he said. ‘I don’t have an independent opinion now, because anytime I express myself now people take it as the FHFA opinion.’ The problem must be dealt with, he offered, noting there’s ‘$5 trillion of outstanding obligations that somebody has to deal with, and that is the current (sum) of housing finance business, not in the future.’”

The Columbian in Washington. “David Capolarello bought his home in 2008 for $290,000. At the time, housing prices were near their peak following a stratospheric climb that was fueled by easy money and low or no-down payment deals. Homeownership was on the rise, and some thought the good days would keep on rolling. Since then, the assessed value has plummeted tens of thousands of dollars, and despite some recent gains, today it’s still about $50,000 short of what Capolarello paid.”

“Capolarello’s story is the story of Clark County’s housing market over the past decade. The Columbian found in its analysis median sales prices are still 10 percent to 43 percent lower than pre-recession levels. ‘I would’ve liked the choice of the opportunity to sell,’ he said. ‘The main impact for me is it’s solidified the fact that I’m not going to sell. If it had risen quite steeply after I bought it, I might have been tempted to sell it, because I could make a profit.’”

Bits Bucket for November 20, 2014

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November 19, 2014

We May Have Reached An Affordability Tolerance

The Marin Independent Journal reports from California. “The median price of a single-family home in Marin jumped 9 percent in October, to $977,000 compared with a year ago, while sales edged up 2 percent, according to CoreLogic DataQuick. Condominium sales were down 3 percent, with 62 condos selling compared with 64 in October 2013. The median condo price fell 6 percent, to $462,000. ‘We may have reached an affordability tolerance level for condos,’ said Jill Hill of Coldwell Banker. She was suggesting that condo prices may have gone up so high, the first-time and other low-end buyers who turn to this alternative may no longer be able to afford them. It’s (condos) getting out of the reach of first-time buyers in terms of affordability,’ Hill said.”

“Connie Irwin, a Pacific Union agent, said the market slowed more than usual this summer. ‘I have felt in the last few years, people have started listing their properties earlier to get ahead of the curve,’ said Pickrel. ‘Another trend is that people want houses to be turnkey. People who are buying are young and they work really hard to afford these houses and they don’t have time to fix them up.’”

US News and World Report. “The statistics tell us there aren’t as many young homeowners as there used to be. Thirty-six percent of American homeowners are 35 and younger, the lowest on record since 1982, when the census’s Housing Vacancy Survey began tracking homeownership by age. If you graduated from college and flocked to a big city with a high cost of living, like New York City or Los Angeles, your location may be holding you back from purchasing a house. ‘I’m in my late 20s and haven’t bought, partly because I live in the San Francisco Bay Area,’ says Chad Reid, a director of communications for a marketing firm in Oakland, California. ‘I’m not sure I know anyone under 40 who owns here.’”

The Mercury News. “Real estate agents said they’re seeing the market soften as the holiday season nears. ‘It’s been steadily cooling since the summer,’ said Redfin agent Mia Simon, who covers a pricey part of Silicon Valley, from Redwood City to Los Altos. ‘Homes that were getting 15 to 20 offers in the spring are getting three to five, and some aren’t getting any offers at all.’”

“‘We get less offers and less interest,’ said Abby Wentworth of Redfin, who covers the East Bay communities that front the bay. Although there’s more to chose from, some buyers are deciding to keep renting or stay in the place they already own, she said.”

The Sacramento Business Journal. “Speakers at the North State Building Industry Association’s 2015 forecast event offered generally positive predictions — but also said the past year is a good lesson about being too positive. A resurgence of homebuying in 2013 led many in the industry to think 2014 would be better yet. Instead, said residential housing consultant Greg Paquin of The Gregory Group, new-home sales appears if they’ll be virtually flat compared to last year. ‘What’s really obvious at this point in time is supply is outstripping demand,’ Paquin said.”

The Press Enterprise. “For all the talk of housing shortages, watch for stealth companies that bought distressed property at rock-bottom prices to put their holdings back on the marketplace in 2015. One sign of heightened activity is at our doorstep. Mana Investments Inc., a Carlsbad firm that picked up more than 2,700 lots in various stages of development in California in the downturn, revealed plans recently to sell some of its land holdings.”

“In Riverside County alone, Mana is offering 1,480 lots in Indian Palms and Fiesta de Vida of Indio with values expected to exceed $520 million at build-out. ‘We’ve spent the last two years in investment mode, and now we’re rolling into harvest mode,’ said Mana managing partner Orville Power.”

The Atlantic. “Janeen Milhorn and her husband bought their four-bedroom ranch-style house on a quiet street in this Stockton, California suburb in 2004. Then the recession hit, and building stopped. There were overgrown weeds, beer bottles, shopping carts. Discarded children’s toys and car seats and plastic bags. People from all over town would come to get rid of their old mattresses or party at night. There are hundreds of zombie subdivisions like this one scattered across the country. They’re one of the most visible reminders of the housing boom and bust, planned and paved in the heady days where it seemed that everybody wanted a home in the suburbs, and could afford it, too.”

“‘It’s kind of horrible,’ Milhorn said, standing in her front yard, staring out onto the abandoned development next door, as a man on a motorcycle gunned his engine, speeding in noisy circles around the empty streets.”

Bits Bucket for November 19, 2014

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November 18, 2014

To Absorb The Supply, Prices Will Have To Weaken

Stuff reports from New Zealand. “Auckland’s galloping property market is already outrunning the latest rates valuations, released frenzied anticipation. Loan Market mortgage adviser Bruce Patten said he had already seen a property assessed by a valuer as worth $715,000, when its new council valuation was $620,000 – a difference of $95,000. Another property had a new capital valuation of $590,000 and had a new CV (capital valuation) of $530,000. ‘Because they were actually done six to eight months ago, they can get way off kilter. At the higher end it’s hit and miss. We say do not think that the capital valuation is the value of your house, the value of your house is what someone is prepared to pay for it.’”

“Recent sales figures supplied by Ray White and Loan Market showed a Massey home selling for 22 per cent more that the latest CV. On the other hand, a Westmere house sold for 21 per cent less than it new CV of $1,480,000.”

Bloomberg on the UK. “Ruth Marchand said her six-bedroom house in the leafy south London village of Dulwich would have sold within six weeks if she’d offered it earlier this year. Instead, she’s still waiting for the first bid two months after the property went on the market. ‘Nothing is selling now,’ said Marchand, who said she doesn’t expect a deal before Christmas. ‘Any comparable houses in the area are still on the market.’”

“Owners who offered properties for sale in the most- expensive districts earlier this year are having to cut prices as more homes come onto the market at lower values, Countrywide Plc, the U.K.’s largest real estate agency, said Oct. 30. ‘The supply and demand dynamic that had proved such a boost during 2013 has largely gone into reverse’ in London, RICS said Nov. 13.”

CBC News in Canada. “What was a booming real estate market has flattened out and turned to a buyer’s market. The planned condos for the old Newfoundland Telephone building in downtown St. John’s are now instead being listed as an executive rental project. ‘We’ve come through an aggressive growth cycle over the past five years,’ said Chris Janes, the senior market analyst with the Canadian Mortgage and Housing Corporation. ‘It’s not sustainable for the market to continue at that level and so that’s where we appear to be now … more in the downward slope, I guess, of that cycle for lack of a better term.’”

“On the condominium side of things, new condo after new condo is sitting empty and unsold. Janes has a word to describe the condo market: ‘oversupplied.’ ‘There are a fair number of completed new units in particular that are for sale and have been sitting on the market now in excess of six to 12 months, and the majority of these units would be targeted to the higher end of the market, or what we would call the executive level,’ said Janes.”

The Malaysian Star. “The property market in Singapore, described by a developer ‘to be in a (state) of slumber’ and by a Singaporean analyst that it ‘could get worse,’ may pose a challenge to some Malaysian developers. A report by Maybank Kim Eng forecasts ‘up to a 15 per cent decline in home prices from mid-2014 to end of 2015′ while property consultants say prices in some locations have already dropped by as much as 30 per cent from their launching price. A Bloomberg repor says home prices on Sentosa had fallen by about 40 per cent since 2012, compared with a 28 per cent drop in 2008, the year when Lehman Brothers fell, precipitating the global financial crisis.”

“Analyst Ng Wee Siang from Maybank Kim Eng says in an Oct 27 report that the ‘property market is not a pretty sight.’ His prognosis is based on three factors - vacancy rates for non-landed private homes, excluding executive condominiums, have risen to 8.3 per cent, their highest in eight years. ‘Secondly, current seemingly high rental yield spreads could reverse when interest rates start to rise in 2015.’ A massive supply of new homes - 63,000, of which 6,038 are unsold - could tip the balance in 2015 as household formation tapers off. ‘To absorb the supply, property prices and rentals will have to weaken, a consensus view,’ he says.”

Mortgage Business in Australia. “According to S&P managing director and chief economist, Asia Pacific, Paul Gruenwlad, the weakening Chinese property sector is a significant risk for Australia if China’s government fails to adjust policy settings to keep the bottom from falling out of the market. Mr Gruenwald said that during a recent visit to the world’s second largest economy the local expectation was that property prices only go one way. ‘As economists and analysts we should all get very nervous when the expectation is that prices are only going to go up,’ he said.”

“The risk is the intersection of China’s shadow banking or non-bank credit boom going into the interest rate sensitive sectors like housing, Mr Gruenwald said, adding that the market has already started to turn. ‘We now have prices falling in 69 of the 70 cities that report in China,’ he said. ‘Everything is softening now in China and the question is: can the government adjust the knobs and keep the thing going or are we in for something more serious?’”

The Epoch Times on China. “Beijing’s indifference to the international anti-tax evasion campaign forms a sharp contrast to its highly propagandized effort to hunt down runaway officials. For Chinese, however, hunting corrupt officials and recovering taxes are two very different things from an ethical perspective. The former targets corrupt officials who fled the country with illegally obtained assets, while the latter involves all wealthy Chinese who have transferred their wealth abroad.”

“The International Consortium of Investigative Journalists revealed that nearly 22,000 offshore clients with addresses in mainland China and Hong Kong hold companies in tax havens. Among them are relatives of the ‘red nobility,’ the wealthy, and Chinese congress members, according to the report. ‘By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000,’ the report stated. Compared to the 800 billion yuan that corrupt Chinese officials took abroad, the $1-4 trillion is a much larger amount. Furthermore, quite a large portion of the $1-4 trillion was obtained illegally.”

“The United States, Canada, and Australia are the defecting officials’ top choices since these traditional immigration targets provide good living conditions and high-quality education. It is said that ‘corrupt official neighborhoods’ and ‘corrupt official offspring villages’ can be found in these countries.”

The Hurriyet Daily in Turkey. “The price of new houses in Turkey increased by 7.3 percent in October compared with the same month of the previous year, according to the Reidin-GYODER New House Price index, which was released on Nov. 14. Around 13,611 real estates were sold to foreign buyers in the first nine months of the year, an increase from 12,181 the year before. But high-end properties were not popular this year.”

“Nizameddin Asa, president of Istanbul’s Real Estate Association, said that there is now no activity in the market for high-end real estate. ‘There are too many construction projects for luxury houses, but buyers are limited for such projects due to high prices. The unit cost in a luxury project in Istanbul starts at $10,000 per square meter (10.76 square feet). You can see from how many commercials are on television for these luxury projects, that they cannot sell,’ Asa added.”

Bits Bucket for November 18, 2014

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November 17, 2014

A Stark Reminder That Not All Investments Pay Off

Real Estate Weekly reports on New York. “As late as a year ago, most real estate experts scoffed at the notion that New York’s luxury condo market is heading for a bubble. But in the past months, opinion has shifted noticeably as more and more new luxury towers are being announced. At a panel at last week’s NYC Real Estate Expo, most industry leaders agreed that luxury condo development is heading in the wrong direction. The most vocal critic was Ofer Yardeni, head of development firm Stonehenge. ‘Condo development is on life support,’ he told a packed audience at the Expo, adding that the much-touted luxury condo market on 57th Street ‘has just stopped.’”

“Last month, Extell Development’s Gary Barnett told Crain’s New York Business that he believes the luxury market may be nearing a dip. ‘We’re not there yet, [but] I think we’re seeing the beginnings of a slowdown,’ Barnett said during a tour of a model apartment at One57, where a penthouse is reportedly in contract for $90 million. A full pipeline of development could create an over-supply of luxury homes that would cause the entire market to contract, the developer believes.”

The Boston Globe in Massachusetts. “A year ago, it seemed nothing could stop the Massachusetts housing market recovery. Flash forward to today: Sales are down, foreclosures are up, and buyers are walking away from pending deals. Construction of new housing is falling again. To top it off: Single-family home prices in September fell compared with the same month in 2013, the first such price decline in two years, according to the Warren Group.”

“With prices in many local markets rising quickly in previous years, some buyers have hit a price wall, drawing the line on spending extra for post-sale repairs, said Steve Hussey, a home inspector and licensed real estate broker in Boston. ‘They feel they’re already paying too much and just walk away from deals and then that property goes back on the market again,’ he said.”

The Press Democrat in California. “Sonoma County’s home sales continued to trend lower in October. The county’s median price last month declined 2.2 percent from September, to $485,000, but still remained 6 percent higher than a year ago. In recent months some sellers have encountered buyer resistance and eventually reduced their initial asking price, said Brian Connell, managing broker at the Santa Rosa Mission office of Coldwell Banker. ‘It’s because the property was priced too high in the first place,’ he said.”

“Only 6 percent of October sales involved financially distressed properties, compared to 48 percent three years ago. Even so, the county still has plenty of homeowners facing financial troubles and the threat of foreclosure, said Brenda Alarcon, an agent with Bradley Real Estate in Santa Rosa. ‘There still are people in distress,’ she said. ‘They’re just a few payments away from going under.’”

The Orlando Sentinel in Florida. “The good news on the foreclosure front for Metro Orlando during October was strong signs of recovery. The bad news: The region ranked second nationally for its foreclosure rate, a new report shows. Orlando real estate agent Matthew White, of Sloane Realty, said Orlando’s real estate market might have a slower comeback than that of coastal areas that have plenty of vacation rentals near the beaches. Vacation homes were the first thing that owners left behind during the recession but they became the target for buyers nationally after prices bottomed out. ‘If you’re in financial trouble, the first things I would let go is my second home,’ White said.”

Cronkite News in Arizona. “Wilson Gee, owner of the Ahwatukee Lakes course, let the course go fallow because the water bills were too high. Then he became embroiled in a years-long ongoing dispute with angry homeowners who’d paid premium lot prices to face the golf course. Gee wants to convert the dead golf course into homes, and the homeowners are threatening to sue him. Broken ball retrievers and trash litter the landscape, a stark reminder that not all investments pay off. Barbed wire fences ring the lakes.”

“Ben Holt, 74, has lived on the Ahwatukee Lakes golf course since 1998. He played there three times a week with 11 golfing buddies. Now the golf course is dead. ‘All these people paid a premium for these lots because they were on a golf course.’ Holt says. For now, Gee says he just wants to sell his dead golf course property. He’s sympathetic to the residents’ anger, but to him the golf industry isn’t viable anymore. ‘When you look at the business end, it’s very difficult. Sometimes we’re cutting our own throat just to survive, so everyone is dropping prices,’ Gee says.”

The Ottawa Citizen in Canada. “Ottawa’s condo market — until recently a glittering star in the housing industry’s sky — is tarnished these days. A glut of unsold inventory is the major cause, according to Canada Mortgage and Housing Corporation’s most recent housing outlook for Ottawa. Calling the slippage in condo sales a ‘notable drop,’ PMA Brethour Realty Group’s Patrick Meeds says reasons for the decline include slowing purchases by all-important first-time buyers who, faced with poorer job prospects, are being cautious. As well, investors are buying less. Meeds says they’ve bought a lot in previous years and may be both maxed out financially and scared off by still-increasing prices.”

Bits Bucket for November 17, 2014

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