A weekend topic starting with Realtor.com. “You hear these terms thrown around all the time: Second home, investment property, vacation home, rental property. But is there any real difference among them? And does it even matter what you call it? ‘Never forget that an investment property is all about the Benjamins,’ says Lamar Brabham, CEO of financial services firm Noel Taylor Agency. ‘The entire point is to turn a profit. No emotions, no affection.’”
From Domain News in Australia. “Many people have quickly shrugged off doubts about the property market, and are more confident in buying real estate than they were pre-pandemic, the national survey found. Finder’s international insights manager Graham Cooke said leading economists were even more positive about the economy and housing market than the public. All of the 40-plus economists Finder surveyed in December believed Australia would stay out of a recession in 2021. ‘It’s very positive for the housing market,’ Mr Cooke said. ‘All the lights are shining at the same time.’”
“Rich Harvey, buyer’s agent, cautioned vendors and buyers of ‘economic wobbles’ in 2021. ‘Some commentators are suggesting there will be large volumes of mortgage defaults, but the evidence is very scant,’ Mr Harvey said. ‘My advice to buyers is not to rush, but don’t delay it either.’”
“For home-owners thinking about moving, he cautioned against waiting in the hope of snaring a cheaper property. ‘As long as you’re not selling and then waiting to buy, thinking that the market is going to fall,’ he said.”
From Blog TO in Canada. “Toronto saw fewer tourists, immigrants and international students, which in part caused condo supply to increase and rent and purchase prices to fall pretty drastically. Buyers who had gotten into the market for investment purposes quickly tried to get out amid the financially unstable year, bringing tons of smaller units especially — the type favoured for Airbnbs — onto the market for cheaper than usual. ‘Thank the investors for jamming up the cost of living in Toronto, and the rest of the world. I hope the real estate market collapses and you all lose your retirement savings,’ — The Cocktail.”
“RBC Senior Economist Robert Hogue: buyers ‘were out in full force looking for bargains’ with a glut of units available in the $500,000s — the lowest they may be for some time. The current buyer demand is absorbing standing inventory in the condo market. It gives a signal that in a month or two we’ll have the condo price up and multiple offers to start!!”
From Boston Magazine in Massachusetts. “For the first time in a long time, rents were going down. Way down. By the end of 2020, rents had plummeted 17 percent. The city continues to slowly shed renters every month. ‘The rate at which renters are leaving is still going up,’ says analyst Neil Gerstein. ‘Less people coming in, and more and more people leaving, is what we see on our end.’”
“‘I could see [rents] getting a little lower, but not too much lower, because where else are you going to go?’ says Boston area real estate agent and landlord Dana Bull.”
Fro Bisnow Washington DC. “JBG Smithv is continuing to scoop up properties in Arlington. The REIT acquired The Inn of Rosslyn, the Williamsburg Apartments and the Fern Gardens apartment property from the Green family, ARLnow first reported. The Green family sold the hotels because of the financial strain the coronavirus pandemic has put on the properties, Katherine Green told ARLnow, saying they were ‘hemorrhaging money.’”
The San Francisco Business Times in California. “On Jan. 31, 2020, at the Business Times’ Mayors’ Economic Forecast breakfast, I stated Covid-19 was one of the biggest risks the overall economy and the San Francisco economy faced. The economic reopening that began in the summer has now been reversed. Restaurants, gyms, personal services and other activities have been shuttered again.”
“San Francisco has experienced a 10% job loss since the pandemic began concentrated in those depressed industries. Also the work from home phenomena has dramatically reduced demand for office and apartment space in San Francisco. Many individuals have moved to lower cost cities or suburban locations or even back with their parents. As of early December, only 12% of San Francisco offices are occupied. There is over 8 million square feet of sublet space available and rents may fall 20% to 25% over the next year.”
“The rental apartment market is in a similar state of free fall. BART ridership has fallen 87% (as of late November) and hotel occupancy is a low 25%. Tourist and convention activity in San Francisco has all but stopped and 25% of all restaurants in San Francisco may permanently close. The homeless population has spread throughout the city and crime has risen dramatically, with burglaries and car thefts up 46% and 33%, respectively year-over-year. The city budget outlook for San Francisco is bleak.”
From Chain Store Age on New York. “It’s a tenant’s market in Manhattan. The Real Estate Board of New York’s biannual report found that asking retail rents per square foot during the fall of 2020 declined in all 17 of the corridors it tracks in Manhattan, dropping by as much as 25% in the year-ago period. The report called the decreases ‘historic’ and noted that eight areas experienced their lowest price per square foot averages in at least a decade. The areas included such traditional retail hot spots as SoHo and the upper part of Fifth Avenue and Madison Avenue.”
“‘While asking rents dropped significantly, taking rents are reported to be much lower, with some brokers citing average differences between asking and taking rents around 20%,’ the report stated. ‘Increases in retail availabilities and feedback from both tenant and retail brokers indicate that we are in a tenant’s market.’”
“The average asking rents declined 13% year-over-year to $784 per square foot on Madison Avenue, from 57th to 72th Streets. Downtown, on Houston Street and Broome Street, the average asking rent plummeted 25% year-over-year, to $367 per square foot. It was down 62% from the area’s peak in spring 2018. Eleven corridors have witnessed an increase in available retail space ranging from 6% to 67% since fall 2019, reflecting a substantial slowdown in Manhattan retail transaction volume.”
From The Real Deal on New York. “A condo at Extell’s One57 sold for $16.75 million — more than 50 percent below its previous purchase price, marking a record resale loss at the Billionaires’ Row tower. The three-bedroom unit on the 58th floor originally sold in 2014 to an LLC, One 57 Realty, for $34 million. In March, it was listed with Corcoran for $24.8 million, according to StreetEasy. That was already a good deal lower than the 2014 sale price. It went into contract in December at $22.25 million.”
“The sale closed earlier this week at the reduced price. It’s the biggest loss on a resale within the luxury building. ‘Unfortunately, this was an estate sale and they decided to just dump it,’ said Extell chairman Gary Barnett.”
“One57 was the first luxury condo to rise along what would eventually become known as Billionaires’ Row, and racked up dozens of high-priced deals — including the first $100 million sale, for a penthouse purchased by Michael Dell in 2014 — in the years after it launched sales. But a softening luxury market and the coronavirus have hit the building hard, along with other high-end Manhattan condos.”
“Earlier this year, Chinese conglomerate HNA sold three condos within the tower, taking a loss on all three properties.”