A report from the Coeur d’Alene Press in Idaho. “Kristen Johnson, Coeur d’Alene Association of Realtors president said there aren’t as many competitive offers on homes as there were earlier this year, so the market is seeing some price reductions. It’s important to price accordingly, based on comparable properties, to avoid making price adjustments or watching a home sit on the market for an extended period, Johnson said. ‘Most homebuyers have seen dozens of properties and can recognize one that’s overpriced,’ Johnson said.”
The Los Angeles Times. “Southern California home prices were essentially flat in August from the previous month, as the market cools slightly from its torrid pace earlier this year. ‘Where maybe we’d see 10 to 15 offers [before], now we see two to five,’ said Jennifer Eckert, a Los Angeles real estate agent.”
“Real estate agents say some home buyers have called it quits after engaging in bidding wars they never could win. And many analysts predicted home price gains would moderate soon, because incomes can’t support continued price appreciation at the 20% levels seen earlier this year.”
From People on California. “Jeff Lewis has relisted his L.A. home with a price cut of $500,000 in an effort to sell it before he expands his family. ‘So I reduced my house half a million dollars so I can get out of here,’ the Bravo star said during the episode. ‘I talked to [realtor] Matt Altman about it. I’m not going to sit here and hang on to a little bit of money when I really need to get it moving.’”
The Epoch Times. “Pacaso offers ‘the modern way to buy and own a second home.’ After identifying a home to purchase, Pacaso sets up an LLC to acquire the property, then sells eight equal shares of it to interested buyers. Each share ranges from $250,000 to $1,000,000 and above, plus monthly service fees. ‘We believe they’re nothing more than a glorified timeshare. If I were a real estate agent, I would tell people this is a terrible investment,’ said Sonoma homeowner Nancy Gardner. ‘They’re paying a huge amount of money for an eighth share of a home, and you don’t even know who else will be living there.’”
The Evening Standard. “It is taking longer to sell a home in London than anywhere else in the UK, as the capital’s housing market stays ‘sluggish.’ There are early signs that the supply-demand imbalance maybe settling across the UK. The number of new listings in the first two weeks of September, on average across the country, was 14 per cent higher than the last two weeks of August. ‘As we enter the busy autumn period, there are early signs of more properties coming to market, which may help to slowly rebuild buyer choice,’ says Tim Bannister of Rightmove.”
The Sydney Morning Herald. “Over the past nearly two decades, I have spilt considerable newspaper ink arguing Australia’s housing market is not in a ‘bubble.’ Bubbles, as I’ve said, must – by definition – go ‘pop.’ And our housing market just hasn’t. Nor is it likely to. Our Reserve Bank is also tasked with financial system stability, but it’s not particularly worried either. Nor is it at all interested in lifting interest rates to stop runaway home values.”
“‘Some analysts have suggested we might lift the cash rate to cool the property market,’ Governor Philip Lowe observed last week. ‘I want to be clear that this is not on our agenda.’ But Lowe’s reluctance to intervene on home values runs much deeper than he appears prepared to publicly admit. It’s not just that he doesn’t want to sacrifice jobs in the service of cheaper housing. Our central bank doesn’t actually want home values to fall at all – not right now, anyway.”
“The truth is, Australia’s property market is less likely to go ‘bang’ than it is to exert a slowly building stranglehold over all of our lives. Like the proverbial frog in the slow boiling pot, we all of us need to stop to consider the following question: what are we giving up, as a society, by letting home values inflate so high? Those dollars we now must spend simply putting a roof over our heads – to what other ends could they be put?”
“Could they have been invested into starting a business, or furthering our education? Might we have enjoyed spending them on enjoyable experiences or products? Could we just have worked a little less? We need to pause and ask ourselves: what is the ‘opportunity cost’ of our obsession with housing? Because it’s getting bigger by the day.”
From Bloomberg. “The families behind Hong Kong’s four top property giants saw $6.7 billion wiped off the value of their assets on Monday as investors headed for the exit, fearful that Beijing will order housing price controls.”
From Reuters on China. “Some have been protesting at Evergrande offices, refusing to accept the company’s plan to provide payment with discounted apartments, offices, stores and parking units, which it began to implement on Saturday. ‘I bought from the property managers after seeing the ad in the elevator, as I trusted Evergrande for being a Fortune Global 500 company,’ said the owner of an Evergrande property in the conglomerate’s home province of Guangdong surnamed Du.”
“‘It’s immoral of Evergrande not to pay my hard-earned money back,’ said the investor, who had put 650,000 yuan ($100,533) into Evergrande wealth management products (WMPs) last year at an interest rate of more than 7%.”
“More than 80,000 people – including employees, their families and friends as well as owners of Evergrande properties – bought WMPs that raised more than 100 billion yuan in the past five years, said a sales manager of Evergrande Wealth, launched in 2016 as a peer-to-peer (P2) online lending platform that originally was used to fund its property projects. Some 40 billion yuan of the investments are outstanding, said the person, declining to be named as they were not authorized to speak with the media.”
“Other highly leveraged Chinese conglomerates including HNA Group, which declared bankruptcy early this year, and China Baoneng have used similar products. In a petition to various government bodies, a group of WMP investors in Guangdong accused Evergrande of inappropriately using money that should have gone to the issuers to fund its own projects, and not sufficiently disclosing the risks.”
“They also complained that they were misled by the stature of its chairman, Hui Ka-yan, noting that he was seated prominently during a 2019 celebration of the 70th anniversary of the founding of the People’s Republic of China. ‘The investors trusted Evergrande and bought Evergrande’s WMPs out of our love for and faith in the Party and government,’ they wrote.”
The Epoch Times. “China’s tech behemoths are handing months of profits to the regime in Beijing to demonstrate loyalty to the Communist Party. Popular actors have been erased from internet history with their devoted online fan groups disbanded. Young gamers now are allowed no more than three hours of playtime per week. Across Chinese classrooms, 147,000 newly minted inspectors have been deployed to oversee the national dissemination of the ideology of China’s top leader, Xi Jinping.”
“Be it e-commerce, entertainment, education, or gaming, few areas of Chinese society have been left unscathed amid Beijing’s torrent of regulatory activity in recent months. As authorities clamped down on the offending actors, stock markets tumbled with hundreds of billions wiped out, while companies and individuals have scrambled to assess the new rules, lest they tread on the regime’s toes.”
“A ‘profound revolution’ is underway in China, declares nationalist essayist Li Guangman, a former editor for an obscure state newspaper. In a recent commentary quickly promoted on prominent Chinese state media websites, he hailed the regime’s campaign as a ‘return to the original intent of the Chinese Communist Party (CCP) … and the essence of socialism,’ and offered up two potential targets: housing and medicare.”
“As with past measures, the Chinese regime has framed the series of actions as necessary for the public good. But the pace of the activity has been dizzying, with a thoroughness unseen in China’s recent memory. It looks like the ‘opening days’ of a cultural revolution, said June Teufel Dreyer, a political science professor at the University of Miami.”
“A pressing cash problem is also forcing Beijing to turn on the rich, according to Antonio Graceffo, an analyst of China’s economy and Epoch Times contributor who has spent more than two decades in Asia. Beijing’s costly strategy of shutting down cities and quarantining every positive case has disrupted travel and dented tourism, a once booming industry contributing to roughly a tenth of China’s economy in 2019.”
“Sales growth and factory output in August both hit a one-year low as authorities toughened social restrictions to curb surging virus outbreaks. China’s overall debt meanwhile grew to about 270 percent of its GDP in 2020, a jump by about 30 percent over one year. Monthly data from August showed that one in every seven young urban workers —those aged 16 to 24—have failed to find employment. The move against the private tutoring industry has put some $140 billion at stake and triggered waves of layoffs.”
“Such signs suggest ‘the brink of an economic crisis,’ Graceffo told The Epoch Times. ‘The money has to come from somewhere. I think that Xi Jinping is reaching for anything to make money.’”