A report from the Australian Financial Review. “Dixon Advisory’s ailing US property fund has told investors it is writing down the value of its assets by up to 30 per cent, blaming a weak New York real estate market, development losses and a recent reversal of favourable currency moves. The US Masters Residential Property Fund, or URF, made the disclosure before it completed its six-month property appraisal process, triggering a near 25 per cent plunge in the unit price of the ASX-listed trust.”
“It cited general weakness in New York City housing conditions for a 6 to 8 per cent write-down of its properties over the period. The 30 per cent write-down comes as the URF’s new management is in the middle of a sell-down plan aimed at cutting the fund’s high debt levels and addressing the widening discount between the unit price and the net asset value.”
“The URF’s Monday update said there were several reasons for the weakness in New York area real estate, including lower levels of homeowner demand and an increase in supply of stock on the market from a period of high construction. Increases in the so-called ‘mansion tax,’ changes to rent regulation and tax changes also hit the market, forcing write-downs. Median sales prices of homes in New Jersey family homes fell by 8.7 per cent over six months while volumes were up 29 per cent, the statement said.”
“The value of its property assets was reduced by 6 to 8 per cent, but decline in the NAV, at between 13 and 18 per cent, is greater due to the debt gearing of the fund. Another contributor to the write-down was expected losses on four of the five outstanding development projects. This was after management determined it would ‘revalue these assets to reflect current market conditions.”
From Patch New York. “Luxury markets north of New York City, all distinctive and unique, ended the year on a mixed note, according to the Houlihan Lawrence Luxury Market Report. In Westchester, Putnam and Dutchess counties, buyers showed a value-driven mentality at the high end and a conservative attitude towards real estate, company officials said. The ultra-luxury segment of the market, $5 million and higher, was level with 2018, but a sharp drop in selling prices made 2019 look very different from 2018. Most ultra-luxury sales took one or more price reduction and sold on average 26 percent off the original list price.”
“‘The new decade ushers in an election year which is likely to impact luxury sales in the second half as buyers wait to see what the next four years will bring,’ said Anthony Cutugno, Senior Vice President and Director of Private Brokerage for Houlihan Lawrence. ‘For sellers who are truly motivated to sell, now is the time to take an objective look at pricing and presentation, adjust as needed, and enter the spring market with a too-good-to-resist offering.’”
“Sellers who listen to the market arrive at a realistic value that closes the gap between list price and selling price. Sellers may take a loss but their need to move on is stronger than their desire to achieve an unattainable number.”
From Greenwich Time in Connecticut. “According to a Greenwich market report put out by Houlihan Lawrence, home prices dipped in 2019 because ‘value oriented buyers cautiously waited for market sensitive pricing before negotiating deals.’ ‘Overpricing a home dramatically bloats the selling timeline as one or more price reductions take time to attract buyers,’ the report stated. ‘On average it took more than 230 days to sell a home in town last year.’”
“Mark Pruner, a town resident and Realtor at Berkshire Hathaway Home Services, has been a longtime observer of the local real estate market. ‘While lots of people want to get into Greenwich for under $1 million, and we traditionally have a seller’s market, in 2019 we saw fewer sales, down 35 sales, and more inventory, up 21 listings at the year’s end, under $1 million,’ Pruner said. ‘So while it’s still a seller’s market it was the weakest we have seen at that end of the market. So it’s a better time for buyers.’”
The Denver Post in Colorado. “From 2015-18, the time a home spent on the multiple listing service in metro Denver averaged a consistently short 26 days. But last year, that average jumped to 31 days, according to the Denver Metro Association of Realtors. And as the year came to a close, nearly 45% of the homes that sold had to make a price cut, lengthening their time on the market to an average of 70 days, versus only 15 days for those that priced correctly.”
“Effectively, if buyers liked a home’s price, it sold in about two weeks. If they didn’t, a seller could count on two months of agonized waiting. Chalk that up to buyers flexing some newfound market muscles. Buyers are struggling with affordability and ‘want more for less’ and sellers will need to ‘do more to get top dollar,’ Jill Schafer, chairwoman of the DMAR Market Trends Committee told a crowd of Realtors.”
A press release on California. “There is one thing to be sure about in the real estate market. The market is going to change back and forth between buyers and sellers markets. This is true no matter what location in the U.S. you live in. Real estate agents in Thousand Oaks California, the Wire Team, have seen this change recently within the past year. This means more homes are sitting on the market stagnant than in previous times. For a seller, this can be a difficult and trying time.”
“A buyers market means those looking to move into the area have a larger selection of homes to choose from and can be much more selective in their home buying process. This also means that the chances of buying a home at a lower price is equally good. ‘If there is someone needing to move, they are willing to do almost anything to get the home sold. It is rare, but some will take a loss to do it,’ continued Wire.”