It’s Friday desk clearing time for this blogger. “Four Bay Area cities got ranked among the weakest real estate markets in the nation. Some experts say this cooling of the market is all part of a normal stabilization period that will keep the housing bubble from suffering a big burst down the line. ‘As the housing market cools down, sellers have to lower the prices in order to attract buyers and close the deal,’ says analyst Shane Lee. ‘In San Francisco, listings saw a median price drop of -5.63 percent, which translates to around $100k.’”
“The wave of tech initial public offerings fizzled. Developers are having to cut home prices — unheard-of a year ago. A full-floor apartment in San Francisco’s poshest neighborhood of Pacific Heights was listed at $21.6 million. But more than a year later and after a $5 million price cut, it is still on the market. A $10.8 million home listing in the town of Portola Valley, Calif., was slashed to $5.7 million. The median sale price for a nearby home in San Jose, Calif., has dropped 10 percent in a year to just under $1 million, according to Zillow.”
“For now, most people are waking up to find they are still on Earth. This is good news for those in San Francisco who mostly viewed the tech exuberance as bad news: housing rights activists, first-time home buyers, and renters. ‘We are excited by any resetting of Bay Area rents that bring them down from their artificially inflated high,’ said Fred Sherburn-Zimmer, the executive director of Housing Rights Committee. ‘Eventually all bubbles burst.’”
“Since the record-breaking peak of the market in 2015, New York City’s investment sales sector has been slumping — a trend that continued through most of this year. Chinese investors, for example, invested some $3.8B in the first half of this year into U.S. real estate per CBRE, a 95% drop from their annual spending over the previous five years. RFR Holding Co. bought the Chrysler Building back in March for $150M, an enormous loss for The Abu Dhabi Investment Council, which paid $800M for a 90% stake in the Chrysler Building from Tishman Speyer in 2008.”
“The owners of 47 units in the All Seasons condo-hotel in Miami Beach are part of a joint Chapter 11 reorganization case. The affiliated debtors filed for bankruptcy in U.S. Bankruptcy Court in Miami. According to the filing, the debtors intended to purchase every unit in the All Seasons and either redevelop the property or sell the building in bulk to a developer. The debtors also owe two years of property taxes.”
“If Scottsdale were to be Beverly Hills, the Town of Paradise Valley would be its Bel Air. ‘As far as a buyers or seller’s market, it really depends on what you have to sell,’ said Dub Dellis, chief operating officer at Walt Danley Realty. ‘There is a stronger demand for new or newly remodeled homes. But it is a mistake sitting in a home built in 1992 to think that the value of that home is appreciating.’”
“Sweden’s central bank on Thursday raised interest rates, pulling its benchmark rate out of negative territory for the first time in five years. In a tacit reference to Sweden’s housing crisis, the bank warned that ‘assets may become overvalued, risk may be incorrectly priced and the indebtedness of various agents may increase in an unsustainable manner.’”
“If you are a tenant or are looking to rent an appartment in Switzerland, you may be in luck. Due to an ongoing construction of new apartment buildings and the higher number of existing vacancies, housing experts predict that rents will decrease in the coming months. Between 5,000 and 8,000 apartments will be empty throughout the country in 2020, around 3,000 more than last year. ‘We assume that rents will continue to decline regionally in the coming year,’ said Claudio Saputelli, real estate expert at UBS.”
“The sales of luxury homes in Hong Kong plunged to a three-year low in the first 11 months of 2019, with fewer local and mainland Chinese buyers willing to commit to big-ticket purchases since June. To step up sales and avoid being hit by the imminent introduction of the vacancy tax, developers are offering long completion dates and discounts.”
“St Vincent de Paul Society‘s executive manager Andrew York said he’d never seen it so bad. Mr York told WAtoday Vinnies had seen a significant increase in the number of small businesses owners needing emergency relief. ‘We’ve got small businesses and franchisees, they’re actually remortgaging their houses to keep the businesses afloat,’ Mr York said.”
“The Cabinet Makers Association of WA confirmed the sector was hurting with 20 shops across the metro area closing in the past year. ‘The share of the pie is less and so everybody is fighting for that smaller amount,’ said association vice president Ugo De Laurentis, who has been in the industry for 30 years. ‘The outcome of [the drop in construction starts] is that prices have dropped but our labour rates and material rates have not dropped so essentially the margins have been reduced.’”
“The sale of the Capital Pointe lot can proceed after a judicial ruling on Wednesday. The land was posted for sale in April of this year with an asking price of $8.5 million. The price was then slashed to $2 million earlier this year. A FAAN Mortgage document published Nov. 22 indicates that if the $2.2 million figure is approved, there won’t be enough of a profit from the sale to pay back everyone who was an investor in the project.”
“Real estate purchasers are being cautioned not to overinvest during construction as their investment will not determine the value of the property in the future. ‘Property must be treated as an investment at all times and, therefore, we need to consistently assess the value of it after we invest in it, so that we don’t spend more than is necessary. There is nothing wrong with building out a dream. However, the dream should not cost more than the reality, which is its worth!’ said Earl Samuels, chief development financing officer at The Jamaica National Group.”
“Craig Lazzara, managing director for S&P Dow Jones Indices, and Geoffrey Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, said the notion that a home should be an investment vehicle with a big payoff is a relic of the 20th century. ‘We looked upon housing as an investment,’ Hewings said. ‘It’s going to keep appreciating, and at some point I’ll be a very rich person when I liquidate’ by selling the house. ‘That got us into trouble in the (housing) bust.’”
“Lazzara said his parents were part of the mid-20th-century wave of homebuyers. They bought a house in Maryland in the 1950s, when interest rates and prices were low, and ‘the thing that made the most money in their entire life was that house’ when they sold it after a few decades. That period was an exception and not the rule, Lazzara suggested. Since the housing bust of the 2000s, he said, ‘that irrational part of the exuberance about housing has disappeared.’”