It’s Friday desk clearing time for this blogger. “Softening luxury markets throughout major U.S. metros have pushed average sales prices down for top-priced homes from the turbulent highs of a few years ago, leaving many luxury homeowners—from New York City to Los Angeles to Miami—sitting on their hands while their listing’s ‘days on market’ ticks painfully up. Managing sellers’ expectations can be a delicate dance, realtors say, especially coming off years of ‘fast and furious’ price escalations in condo markets, said Moira Holley, co-founder at Realogics Sotheby’s International Realty based in Seattle.”
“In downtown Seattle, the condo market was so hot in mid-2016 that buyers camped outside overnight to be first in line to purchase new units. By contrast, the average sales price for all homes in the top 5% of the market declined 14.4%, to roughly $2.2 million, in the second quarter of 2019 compared to the same period in 2018. ‘Sellers remember those high highs and then as a market starts to shift, the prices soften,’ Ms. Holley said. ‘Our job as realtors in the luxury market is to help them come to terms with the market that we’re in and what the value of selling (in this current market) truly is.’”
“In Manhattan, where some 65% of owner-occupied housing stock consists of co-ops, the question of whether to rent a luxury unit often comes down to what city regulations and co-op boards will allow, said Lisa K. Lippman, a broker with Brown Harris Stevens. While the ultra-luxury sales market (properties typically $10 million and up) is soft, it hasn’t come to a grinding halt, Ms. Lippman said. ‘Things are selling; it’s just all about pricing—meaning you may not get the price you want,’she said.”
“There are signs that the market is stabilizing after years of prices in overdrive fueled by strong demand and tight supply. Redfin’s Delince Louis said he is seeing more inventory on the market this time of year than he has in the past five autumns. Some properties are also taking longer to sell and are going for less than asking, he said.”
“‘We’re seeing a lot of price reductions already. Generally speaking, I’m seeing price reductions as high as 5 percent,’ Louis said. ‘In South Boston this week we had eight listings that went through a price reduction. … Buyers have said: ‘That’s enough. We’re not going to be emotional about transactions. We’re going to be looking at other areas like Dorchester, Roxbury, Jamaica Plain. We’ll take our time.’”
“‘Right now, I have three listings in South Boston which traditionally would’ve been gone by now,’ he said. ‘There are 125 condos on the market today, average days on market is 98 days, which, given this time of year, to me, that’s a little more inventory that I’m comfortable with. My only concern in the spring is, if these units don’t move now, will we have an influx of properties.’”
“The world’s biggest shale patch is now officially a drag on jobs creation in the Lone Star state. Housing is also starting to take a hit there, the Dallas Fed said. In October, the region’s median home price fell 2.6% from August to $301,045. Monthly home sales fell 3.6% from September.”
“Postmedia’s David Carrigg produced a couple of catchy stories last week about prices of some detached homes falling sharply in Metro Vancouver. In less than three years, one west-side owner lost $800,000 on a home that sold for $2.4 million. No doubt the owner felt that was a ‘hard landing.’”
“While a ‘soft landing’ is a real thing in the world of aviation, Punwasi suggests it can seem like ‘gibberish’ in housing. ‘The concept implies that irrational markets will act rational if the government tells them to,’ said analyst Stephen Punwasi, who notes Ontario politicians have failed to resolve any of Toronto’s affordability problems.”
“A sharp decline in the number of landlords entering the buy-to-let sector in Aberdeen has been blamed on a glut of rental properties. ‘There is a glut of both houses to buy, particularly in the £250,000 and below bracket, and also to rent. This means that landlords are having to be more competitive and rents are reducing,’ said George Hepburne Scott, director of development for Savills in Edinburgh.”
“Right now discounts are offered at all ends of the market, by builders large and small, and savings range from tens of thousands of pounds to hundreds of thousands. After a reassessment, prices at Galliard Homes’ Orchard Wharf, have been dropped, with one-bedroom flats reduced from £499,000 to £460,000, and two-bedroom flats down from £699,000 to £665,000. In Bayswater W2, Chestertons has just cut the price of a luxurious three-bedroom flat in Porchester Road from £2.5 million to £2.25 million — a saving of a cool £250,000.”
“Singer Daniel O’Donnell spoke of how he got talked into buying property during the Celtic Tiger, but lost out badly in the economic collapse. ‘We bought a luxury apartment in Dublin and a few other places as the advice we got at the time was, you couldn’t put your money into anything safer than bricks and mortar. We bought at the height but now this stuff isn’t worth anything like the price we paid for it.’”
“Adel Divine Court was supposed to be a manifestation of the Indian Dream — a posh, gated high-rise complex of about 1,000 apartments in the New Delhi suburb of Faridabad. Instead, the development has become a nightmare. Eight years after the residences were put up for sale, the project remains uncompleted, with some buyers demanding refunds while others fight to have the construction finished.”
“This is not an isolated case. Stalled construction has become a problem of epidemic proportions in India’s urban property markets. Well over half a million housing units are in limbo as builders run low on cash and bad debts ripple through the country’s financial sector.”
“Ashoka Mody, a visiting professor at Princeton University, last week warned that the current slowdown is ‘not a short-term disruption.’ On the contrary, Mody said, ‘a financial bubble that began inflating nearly three decades ago is finally fizzling out.’”
“The number of unsold private homes in Singapore is increasing and with more launches coming up, the Monetary Authority of Singapore (MAS) has warned that a potential oversupply of unsold units could put pressure on the property market. Mr Chia Ngiang Hong, president of the Real Estate Developers’ Association of Singapore, had previously warned that an estimated 43,000 units would be launched for sale in the near future. With only about 4,200 units sold in the first half of this year, he estimated that it would take four or five years for the market to absorb this excess supply of units.”
“If prices get lower, the central bank’s message to homebuyers is still one of caution: ‘Prospective buyers should be mindful of their ability to service long-term mortgage obligations and be cautious on taking new commitments to debt-financed property and other large purchases.’”
“Speculators such as local financier Pollyanna Chu and Shimao Properties chairman Hui Wing Mao, who acquired 75 percent of The Center, a 73-storey office building on Queen’s Road Central from Li Ka-shing’s CK Asset Holdings for HK$40.2 billion ($5.2 billion) in October 2017, may be caught in a bind. After having financed their acquisition of the Center with bonds yielding as much as 15.25 percent, some members of the Center consortium are paying dearly for their market optimism. Not a single sale of a unit in the Center has been recorded since Hong Kong’s protests began in June.”
“The three-storey penthouse atop the Stamford Residences tower at The Rocks is about to offer a glimpse into the ever-changing fortunes of Sydney’s high-end market when it returns to the market for $15 million in coming weeks. It was bought by one of China’s richest men, Richard Qiangdong Liu, for his bride-to-be with the angelic smile, Zetian Zhang, six months before they married in Sydney in 2015.”
“Zhang is not the only high-profile buyer from China who has lost money on their prestige Sydney home. Shipping tycoon Shannian Huang had bought the penthouse atop The Residence tower overlooking Hyde Park in 2013 for $17 million when it was new. It was returned to the market last year with a $26 million price tag that was revised to $21 million this year and sold last weekend for $14.5 million.”