A report from the Oregonian. “The Regional Multiple Listing Service’s January 2022 market action reports show that median sale prices, while still high, have dropped from 2021 peaks everywhere in the region except Clark County in southwest Washington. The average asking prices in the Portland area have also appeared to have crested. Home shoppers eager to buy will hold price growth above its longterm average this year, predicts Matthew Gardner chief economist for Windermere Real Estate, but ‘the rampant pace of price growth that markets across the country experienced in 2021 was never going to continue forever.’”
The Real Deal on New York. “Help! An ex-Beatle needs somebody to … advise him on real estate. Paul McCartney and his wife recently sold their penthouse co-op unit at 1045 Fifth Avenue for $8.5 million, the Wall Street Journal reported. The sale price is barely half of the $15.5 million the couple bought it for in 2015.”
From Mansion Global on New York. “One Seaport was one of a handful of condo skyscrapers conceived in the mid 2010s, when the Manhattan condo market was booming. They were designed to bring a taste of Billionaires’ Row to lower Manhattan. Supertall and slimline, they were bold and architecturally significant with prices to rival those uptown. Nearly a decade later, many of these plans were dropped or stalled, thanks in large part to a subsequent decline in the New York luxury market and, in some cases, construction difficulties and developer infighting. Here’s a look at some of the projects that remain in limbo.”
“To walk past 125 Greenwich Street these days, one might be forgiven for thinking that the building is complete. Look a little closer and it is clear that the shiny glass facade of the 912-foot-tall skyscraper hides an empty, unfinished shell of an interior. ‘[The construction] took a little bit longer than we expected and we sort of missed the window,’ said Michael J. Campbell, chief executive of Carlton Group. The sales push wasn’t successful. In July 2019, United Overseas Bank filed to foreclose against the developers alleging that they had breached the terms of the deal and owed roughly $200 million in unpaid loans. Fortress Investment Group has since purchased the debt and inherited the right to the foreclosure suit. A spokesman for Fortress declined to comment.”
“Mr. Campbell said he and his partners expect all their collective equity to be wiped out in a foreclosure. Meanwhile, the building sits empty. ‘It just needs a new parent,’ Mr. Campbell said.”
From Heavy. “Another reality star is getting her own HGTV series. Kim Wolfe will star in the upcoming new series, ‘Why the Heck Did I Buy This House?’ It is set to premiere on Wednesday, March 30, 2022. According to a press release, the San Antonio-based designer ‘will come to the rescue of homeowners who have major buyer’s remorse.”
The San Francisco Chronicle in California. “San Francisco was particularly vulnerable when everything shut down in March 2020. Our biggest industry was tourism. We were riding a tech boom. Everybody wanted to live here, we were told. All that’s changed, and maybe forever. All those big glass towers. Even the venerable skyscrapers along Montgomery Street. Almost empty.”
From The Sun. “From half-built stadiums and crumbling skyscrapers to eerie abandoned theme parks, China is littered with decaying buildings and half-finished projects.Thousands of constructions schemes have screeched to a halt as its feared the country’s property boom is about to collapse. For years, property firms in China have been given free reign to borrow obscene amounts of cash from the banks in the race to build bigger and better. Chilling pictures show the abandoned and sometimes half finished structures which have been left to rot as companies go belly up.”
“Michael Pettis, professor of finance at Peking University, said everyone in China, including developers, had ‘made the same bet’ on exponentially rising property prices. ‘The problem of course is if property prices ever stop rising, because everyone has made the same bet everyone’s balance sheet starts unravelling at the same time, and it immediately becomes a systemic problem. That is what has happened in China.’”
“Dr Marco Metzler from Deutsche Marktscreening Agentur warned the collapse of the company could spark the crash of the world financial market. He told the Express: ‘This is the first domino of the collapse of the market. It will be even worse than the 2008 financial crash. The market is bigger than what the US was.’”
The Globe and Mail in Canada. “New census data released last week has shone a brighter light on the question of whether the high price of housing is simply the result of a lack of housing supply. ‘If you don’t diagnose the problem correctly, you end up with the wrong solution. The census data provide concrete evidence that the insufficient supply argument is incorrect, and has been overhyped, including this week with the release of the report from the Ontario Housing Affordability Task Force,’ says Steve Pomeroy, an urban planner who has 38 years of housing research behind him. ‘I believe that demand factors are the larger culprit – the combination of strong income growth and very low interest rates substantially improve borrowing capacity and are augmented by accumulated equity in current homes. And three-quarters of buyers are existing owners.’”
From Better Dwelling. “The call is coming from inside the House. Canadian real estate is significantly overvalued, according to the government’s own research. The report concludes real estate prices grew far more than income and credit. By their calculations, some markets are now over 50% overvalued with many more just under that. Language is also worth diving into a little further. The PBO uses the term ‘above affordable levels’ instead of ‘overvalued.’ It’s an IMF model, and the term overvalued is an objective and non-political term, so that’s what we use.”
“The PBO is non-partisan but still plays politics like other government agencies. Canada measures the same data points as other countries, but often softens the language. This results in Canada having unique and industry-friendly lingo that’s inconsistent with more direct international terms.”
“For example, Canada doesn’t have ‘vacant’ homes but homes ‘not occupied by a usual resident.’ Foreign buyers are a myth, but non-resident purchasers of housing exist. Money launderers are probably now referred to as global liability reduction money managers. We stick to the international and objective terms used by the agency. Sorry, eh.”