A report from the Phoenix Business Journal in Arizona. “Some of the hottest areas of the Valley for recent land deals are in the northwest and southwest areas, along with the Mesa-Gilbert market and Pinal County, said Jim Daniel, president of RL Brown Housing Reports. While he’s always on the lookout for land opportunities, Dea McDonald senior vice president for Brookfield Properties Development, said he likes to be on the peripheral edge, rather than leapfrogging out in the vast openness of areas, mostly because of water and wastewater challenges in Pinal County. ‘We use the term, ‘drive to qualify,’ he said.”
From Mansion Global. “An 88-acre spread with a Georgian Colonial brick mansion in West Chesterfield, New Hampshire, is headed to auction, without a reserve price. The 15,707-square-foot, three-story home has been owned by the same family since it was built in 1991 and has never been listed for sale. As for an expected final sale price, ‘usually I do have a guess, but this has never been listed so we don’t have any numbers to go on,’ said Trayor Lesnock, president of Miami-based Platinum Luxury Auction. ‘We had to put it into the MLS with an arbitrary number’ ($5.995 million) in order to get it listed on sites like Realtor.com and Zillow.”
From KRON 4 in California. “If it seems like for-sale signs outside of East Bay properties are lasting longer than usual, it’s not your imagination but does that mean home prices are trending toward a buyers market? Real estate experts are beginning to notice that the recently red hot East Bay home market is beginning to show signs of cooling off, with homes lingering on the market. ‘Two of my recent listings have been sitting on the market for over 30 days,’ Sandi Porter, realtor, said.”
“She says a primary reason homes sales are slowing down, buyer burnout. ‘They’re taking a break. For many buyers, it’s football season. Sunday, I had an open house. I’m like where’s all my buyers? They were watching the 49ers game and the Raiders game. The serious buyer is going to go out there regardless of the weather, regardless of who is playing because they really want to buy a house,’ Porter said.”
“‘As the autumn goes on there will be more options to choose from. They’ll have a little bit more bargaining power. A little more balance between buyers and sellers. Definitely not a buyers market!’ Zillow Senior Economist Jeff Tucker said.”
The Orlando Sentinel in Florida. “The median home price in metro Orlando dropped from August to September, the first decrease since a run-up that began in October 2020. Inventory rose for a fifth straight month, coming off its record low in April, another sign that the extremely hot Orlando housing market may be cooling. Sales dropped in September by 5.25% compared with August, and homes spent 8% longer on the market on average before selling after 27 days. The longer a home stays on the market, the more likely the seller will drop the price.”
“‘With the median price slightly dropping and inventory continuing to trend upward, we’re seeing signs of things leveling off after months of this market being on fire,’ said Natalie Arrowsmith, president of the Realtors’ group. ‘The market is still heavily in favor of sellers, but is showing some signs of returning to become more balanced.’”
The Real Deal on New York. “SL Green Realty has gained control of Ashkenazy Acquisition’s 690 Madison Avenue for what appears to be a discount. The major Manhattan landlord paid transfer taxes on about $74 million, just under 65 percent of what Ashkenazy paid for the property in 2015, according to property records. SL Green in September held a UCC foreclosure auction of an Ashkenazy entity that owns the five-story building at East 62nd Street.”
“SL Green was a sponsor of a mezzanine loan for the Ashkenazy entity, with an outstanding balance of about $3.85 million. The mixed-use, 7,850-square-foot building also had a $72 million senior mortgage issued by Bank of China, according to property records. In other words, SL Green gained control of the building by paying a few million dollars more than Ashkenazy’s senior mortgage, even though it cost the New York-based real estate investment firm $115.2 million to buy the building in 2015.”
The Globe and Mail in Canada. “A decade ago, Calgary’s future seemed to be rising at the corner of 6th Avenue and Centre Street. In 2012, the Bow, a $1-billion skyscraper designed by London architects opened its doors. This is where barber David Ghandour set up shop in 2013, on the second floor of the 57-storey building. ‘It looked like it was going to be a gold mine,’ says Mr. Ghandour, 62, as he locks up his Denim & Smith Barbershop for the day. ‘I’ve got a small shop, but it was full, and I was thinking about adding another station. Business was definitely good.’”
“But then the layoffs started. Calgary has a disproportionate amount of office space for a city of 1.3 million; the downtown contains about 44 million square feet of it, double the amount per capita of Toronto’s city centre. Those offices are now seeing unprecedented vacancy rates. In physical terms, this means large buildings that are half-empty or even completely dark. Should roughly 12 million square feet of vacant buildings be repurposed? Mothballed? Or even, in some cases, torn down?”
“Downtown property assessments have dropped by $16-billion, or about 60 per cent, since 2015.”
The South China Morning Post. “Sunny Peninsula, a seaside development in Guangzhou, Guangdong province, southern China, was supposed to house 5,000 families in dozens of towers spread across an area the size of 30 football pitches. Many of the buyers were white-collar workers benefiting from the fastest urbanisation in human history. But the project now looks more like the set of a disaster movie. Half-finished residential blocks stand empty and abandoned. Untouched for months in the humid summer weather, piles of steel bars and beams are accumulating coatings of rust.”
“China Evergrande Group, until recently the world’s largest property developer, owns dozens of stalled sites such as Sunny Peninsula across China. Buckling under more than US$300 billion in liabilities, the company is close to collapse, leaving 1.5 million buyers waiting for finished homes. The global financial markets are bracing for potential aftershocks.”
“The stress is not only being felt in bankers’ offices: homebuyers recently surrounded a government office in Guangzhou to demand construction be restarted on their flats, and unconfirmed videos circulating on social media depict similar protests in other cities. Furious retail investors who helped fund Evergrande’s expansion have turned up at the company’s Shenzhen headquarters to complain about delayed repayments on wealth management products it sold.”
“When the 2008-09 global financial crisis cut demand for Chinese exports, the central government responded with a massive stimulus package that made borrowing easy. Land prices soared, in both coastal megacities and previously sleepy regional centres, and developing housing became a near-certain bet. The key to success was scale, achieved by borrowing with land as collateral. The bigger a developer became, the more it could borrow, and at lower interest rates, a cycle that could continue as long as property prices kept rising.”
“The results have been dramatic in the booming coastal cities that previously powered China’s property market. A broker in Shenzhen, who asked to be identified only by his surname, Li, says that inquiries from prospective buyers are down a third from a year ago. ‘The transaction volume looks pretty ugly,’ he says ‘and the only homes sold were either due to the sellers urgently needing cash or worries that prices will drop further.’”
“In past Chinese housing slumps, this might be the moment when Beijing would step in to put a floor under the market, encouraging banks to lend to push up prices and boost revenue for property developers. But for now, policymakers seem willing to inflict economic pain to alter expectations that real estate prices will always rise.”
“Many homeowners have got used to policymakers protecting their investments. ‘If prices fall, that means the economy is in a downturn, and that’ll put huge pressure on the local government,’ says Jenny Wu, a financial worker in Shenzhen who bought a flat last year. ‘So it’s impossible that home prices would drop in Tier 1 cities.’ (‘Tier 1’ being shorthand for the mega-cities of Beijing, Guangzhou, Shanghai and Shenzhen.)”
“Those who put their savings into Evergrande projects such as Sunny Peninsula are hoping their own slice of moderate prosperity has a place in Beijing’s vision of a tamed property market. Last month a group of angry buyers gathered at the site. ‘We don’t care about price cuts,’ said one, who asked to be identified by his surname, Cheng. ‘Our one and only demand is that Evergrande can deliver the project.’”