It’s Friday desk clearing time for this blogger. “‘We’ve been seeing outflow from Manhattan into Connecticut, and it has been crazy,’ said Cliff Smith, managing partner with The Agency in New Canaan, Connecticut. ‘Frankly, everyone is overpaying now, but it’s a personal decision.’”
“But it may be worthwhile to bid above asking price if you plan to keep the home for many years, as the odds are good that its value will appreciate over a long period of time. ‘Prices are always increasing,’ said Manuel Grosskopf, developer of The Ritz-Carlton Residences in Sunny Isles Beach. ‘If it’s something you like in your price range, you should immediately act on it, because based on the last 20 years, eventually the property is going to be worth more.’”
“South Korea’s Meritz Securities Co. is at high risk of incurring losses from its $350 million lending on a luxury condominium tower in Manhattan, New York, after its developer has been several months behind on interest payments on the loan. In February 2020, Meritz provided a $350 million loan to the developer of The Centrale, collateralized on the unsold units of the 63-story residential tower in Midtown East of Manhattan. The tower consists of 124 condo residences and retail space on the lower level. At the time of the investment, most of the condo units were unsold.”
“But the global pandemic and US property tax changes have put a dent in the US high-end residency market, despite the price of The Centrale condos being halved from up to $4 million per unit. In the worst-case scenario, Meritz’s losses from the lending could amount to several hundreds of million dollars, according to the sources. ‘We tended to believe large buildings involving a global real estate company or a famous developer, or located in Manhattan, New York or Las Vegas were safe assets. But that tendency led to poor investments,’ said one of the sources.”
“A palatial penthouse once bought with dirty money by a crooked Venezuelan mogul, who then sold it to a Qatari royal, is back on the market. And it should come as no surprise that it’s selling at a loss — asking $8.49 million, when the royal bought it for $8.6 million in 2018.”
“Tiffany Konyen is a student at the California Institute of Integral Studies in the anthropology and social change department, where she’s researching debt and indebtedness. She separately helps oversee the Bay Area Debt Collective chapter. She believes half-measures aren’t going to fly for large swaths of the population that have grown accustomed to finally saving money during the pandemic due to the moratoriums.”
“‘People have started using that money in other ways,’ she says, ‘so what’s going to happen to them? Is there going to be a whole other wave of foreclosures?’”
“The Foreclosure Prevention and Mortgage Relief Program is a grant for families in danger of losing their home, or owners of rental units who are behind their payments in LA County. ‘You don’t have to be ashamed to ask for help, we are here to help you. Typically, families of color have fewer resources to avoid losing their homes and property. This program will be a lifesaver for many on the verge of losing their home,’ said Rafael Carbajal, Director of the Los Angeles County Department of Business and Consumer Services.”
“Home prices are running up so fast in some parts of Canada that valuations set by appraisers are not keeping pace, putting some buyers and mortgage lenders in a bind. The gulf between current and past prices can be wide. Bob Clarke, a broker at Clarke Muskoka Realty who deals in luxury homes and cottages north of Toronto, recently estimated one property would fetch more than $2-million. Another agent suggested a $3.5-million price tag. The home sold for $3.3-million, Mr. Clarke said.”
“When he called his appraiser and asked, ‘Am I crazy?’ he learned that the appraiser had declined to evaluate the property, telling the seller the valuation and selling price ‘won’t even start with the same first number. It won’t be close.’”
“Vancouver real estate agent Alex Yao said he is starting to see some signs of ‘buyer fatigue’ now compared to the first quarter of the year when ‘things were selling at prices we couldn’t even calculate’ as some houses sold for hundreds of thousands of dollars over their asking price. Yao heard one case about sellers who “got a really great offer.” In the end, he said, the deal fell through because the banks couldn’t appraise the home at such a high price. ‘It’s not just a matter of ‘we’ll pay $100,000 over the asking price.’ The banks have to calculate a value because they are representing the lenders,’ he said.”
“Meanwhile, the Angus Reid poll has found 40 per cent of Canadians hope housing prices will continue rising, while 39 per cent hope for a fall. The rocketing market is prompting investors and economists to talk about what can temper the frenzy. When it comes to bigger picture attitudes, ‘people are happy for things to stay level. They generally don’t want to see huge price increases. Separately, people who are homeowners and plan all their lives to own their home and use it as part of their retirement don’t want radical intervention that is going to wreck 30 years of planning.’”
“Campaigners fear plans for new homes in Archway will be abandoned amid concerns about the changing nature of the housing market in London. It is said the population in the capital has decreased by 10 per cent. Kate Calvert from the Better Archway Forum said: ‘There is an oversupply of small flats which are not selling or at least not at the prices that people were expecting. This really doesn’t look like a good idea, particularly as you can build all the social housing units for half the cost. They are hoping that the London housing market is going to hold up and it really is not clear that it is going to.’”
“Regionally, Walvis Bay continues to bear the brunt of rental contractions, recorded at -42.2% y/y followed by Oshakati (-30.9 y/y), Ondangwa (26.8% y/y), Rundu (-20.2%), Swakopmund (-16.7% y/y), Okahandja (-5.8% y/y) and Windhoek (-2.1% y/y). The deteriorating demand for higher-priced properties means that landlords are seemingly left with little choice but to curb their expectations when setting their asking price. Many short-term and leisure rental properties moved onto the long-term rental market in 2020, after a sharp decline in tourism activity potentially due to Covid-19 induced travel restrictions.”
“‘This exit of tenants from the rental market means an additional oversupply of rental properties to the already overstocked pool, thereby exerting further downward pressure on the rental prices,’ explained Frans Uusiku, FNB Market Research Manager.”
“The increasing speculation in the real estate market is causing concerns about a possible bubble. Land prices in many places have risen by an average of 10 percent in the last two months, though in some places they have even doubled or tripled, according to the Vietnam Association of Realtors (VAR). NEU analysts said the credit growth helped enterprises survive the pandemic, rather than expand. ‘Skyrocketing stock and land prices in 2020 were signs of a market bubble. The ratio of money supply growth to GDP growth was nearly 200 percent. It means more money was entering the system than the real economy could absorb.’”
“Landlords in financial strife across Melbourne are rushing to sell their investments as new rental laws that require minimum standards for properties come into effect. Stockdale & Leggo Victoria CEO Charlotte Pascoe said there had already been a rush of landlords from the outer-eastern suburbs looking to sell up over the past few days. ‘Our Langwarrin office has received 20 requests from landlords wanting to sell,’ Ms Pascoe said. ‘It’s just diabolical, it’s huge.’”
“Some landlords had struggled throughout COVID-19 without being able to collect rent or insurance for loss of rental and were now faced with spending extra to fix up their properties. ‘Many of them are in really tough situations, and people think because they are landlords they have a fancy car and lots of cash when they could be 100 per cent reliant on their rents to pay the mortgage,’ Ms Pascoe said. ‘They’re living hand to mouth.’”