A report from the Pahrump Valley Times in Nevada. “Home prices were on the rise in Southern Nevada, including in Pahrump, in March. ‘The pandemic has contributed to the supply shortage due in part to homeowners being out of work, and therefore unable to upgrade even if they wanted to unless they could pay cash,’ added LVR President Aldo Martinez.”
“The number of ‘so-called’ distressed sales remains historically low despite the economic downturn coinciding with the ongoing COVID-19 pandemic, LVR said in its release. Martinez explained, ‘these low numbers are skewed by the number of homeowners who have filed for mortgage forbearance,’ adding that ‘economists suggest many of these homeowners may have difficulty coming out of forbearance and expect foreclosure numbers to rise above pre-pandemic rates.’”
From Finger Lakes 1 in New York. “More than a year after Gov. Andrew Cuomo’s first executive order during the pandemic related to evictions- the Finger Lakes Landlord Association says local landlords need help. Deb Hall of the Finger Lakes Landlord Association, says that landlords and tenants remain at an impasse. ‘There are some landlords in the region who are reporting over $50,000 in past due rents,’ she added. ‘That is unsustainable to any small business, let alone one that has been forced to provide services without compensation or due process for more than a year.’”
From Bisnow South Florida. “Is this a stretch of sustainable growth or the boom side of another wild boom-and-bust cycle? Peter Zalewski, principal of Brickell Ventures and Condo Vultures, offered some words of caution. Developers of One Thousand Museum, a luxury project in downtown Miami that was designed by Zaha Hadid and has some high-profile owners, have not been able to sell all the units even after five years. They recently refinanced the remaining units with a condo inventory loan to narrowly escape foreclosure.”
“‘You’ve got to wonder: How strong is the market for luxury?’ Zalewski said. ‘Even if David Beckham lives there? How strong is the market if you can’t sell a building in five years?’”
The New York Post on California. “Dwayne Wade and Gabrielle Union have found a buyer for their Sherman Oaks home, almost three months after they slashed the price, The Post has learned. The five-bedroom, nine-bathroom estate was initially listed for $6.2 million right before the coronavirus pandemic hit on March 6, 2020. But with a year having passed by and no luck on getting any offers, the pair were forced to cut the price by half a million, to $5.7 million.”
“As of April 3 the home is now pending a sale. It’s a loss for the duo, who purchased the 8,650-square-foot home for $5.995 million in May 2018, only a few months after construction was completed.”
The Seattle Times in Washington. “The biggest rent drops across Seattle have been in the most expensive apartments, according to CoStar. Among Class A apartments in the Seattle area, which includes most new construction, nearly a third of properties offered concessions like a month of free rent during the early months of the pandemic, more than double the rate a year earlier, according to a July report from HUD. Nearly half of Zillow rental listings in the Seattle area were offering promotions last month.”
“For the condo rentals the company manages, interest is starting to return for two-bedroom spaces but is still low for smaller units, said Cory Brewer, vice president of residential operations at Windermere Property Management / Lori Gill & Associates. ‘If it’s a small unit in downtown, Belltown, Capitol Hill, it’s been very difficult to find someone who wants to lease that.’”
From CBC News. “Canada’s housing market is indeed flush with cash at the moment, with the national average selling price hitting an all-time high of $678,091 in February. That’s up more than 25 per cent from the same month last year, pre-pandemic. Paul Martin, president of the Rideau St Lawrence Real Estate Board that covers Perth, Ont., says ‘the market just took off,’ last year. ‘We’ve seen our property prices jump close to 50 per cent in the area,’ he said.”
“Back in B.C., the frenzy is so great that some people are resorting to buying without ever setting foot in their new homes. That’s what happened to Ean Jackson and his wife Sibylle Tinsel. They recently sold their home in Vancouver and were looking to downsize somewhere farther afield. The couple settled on the tiny community of Powell River, B.C., about 100 kilometres up the coast.”
“Though they are excited for this new chapter, it ‘all feels very awkward,’ Jackson said. ‘It feels really strange. And we look at each other at dinner time just about every night and say, ‘Did we do the right thing? … Did we get ripped off? Or is this going to work out?’”
“Ultimately Jackson says he knows the answer to that last question is yes because they love what the area has to offer, but he does feel for new young families trying to buy in at current levels. ‘You save up for three or four years, you get the price that you think, and then the house just got twice as expensive,’ he said. ‘I can’t see this lasting, though. It’s got to end sometime.’”
The Georgia Straight in Canada. “A realtor fears that the Canadian housing market is so overheated that it could burn the whole thing down. Adam Major, managing broker with Holywell Properties, says that what led to the U.S. housing crash in 2008 might be happening now in the country. Major believes that the government ‘probably should have done something already.’”
“The realtor recalled that one of the causes of the U.S. housing crash were ‘teaser’ or adjustable-rate mortgages. ‘In the U.S. in 2005 to 2006, somewhere between 30 percent to 40 percent of all mortgages sold were ‘teasers’, where the rates started out low, but went up after two years,’ he explained. Buyers then found out that after their rates went up, they could not afford the payments. With the value of their houses going down, they could not refinance their mortgages.”
“Here in Canada, many home buyers are currently getting mortgage rates at 1.5 percent and below. ‘We are now in a position where nearly 100 percent of the mortgages being sold in Canada could be ‘teaser’ rate mortgages,’ Major noted.”
“‘You hear all these buyers are coming from Hong Kong and that might be true. But is it enough to…keep inflating the housing prices here? I’m skeptical that it is.’ Major noted that there is a saying that goes, ‘never catch a falling knife.’ ‘If you can buy for less in six months’ time, you’ll wait six months,’ Major said. ‘So that’s the same way for Canadians and people coming from wherever else in the world: they’re going to wait to buy if prices start to go down.’”
From Good Returns in New Zealand. “Cashed up investors along with owner occupiers will now be the ones determining house prices, says Westpac economist Satish Ranchhod. ‘In the existing low interest rate environment, investors’ search for yield and capital gains on rental properties has underpinned rapid increases in house prices, but the Government’s plans to scrap mortgage interest deductibility against rental income is going to significantly reduce the prices investors are willing to pay for houses,’ says Ranchhod.”
“A rough calculation by Westpac’s economists indicates owner occupiers’ average willingness to pay is about 10% below existing prices. This suggests house prices could eventually fall by that much in the long term. While that will be a big drop, it will only bring prices back to where they were four months ago.”
“Alexander says investors have an established history of spitting the dummy whenever the Government makes changes which negatively affect them. Yet there is zero evidence of follow-through from earlier threats to quit the sector. ‘The thought of selling then having the cash sit in the bank will be a strong brake on the willingness of many to quit their housing asset this year and next.’ He says this time things could be a bit different given the lumping of the tax change on top of increased expenses related to Healthy Homes, ring-fencing of losses, and decreased ability by investors to manage their property.”
From Daily Mail Australia. “Fear of paying too much for a house is replacing that fear of missing out as property prices surge to ridiculous levels, new research shows. In just six months, Sydney’s median house prices has climbed by $129,400 as Australian home values soared at the fastest pace in 32 years. But in one beachside suburb of the nearby Central Coast, house prices surged by $575,000 or 68 per cent in one year.”
“With property price records being set in more than two-thirds of Australia’s housing sub markets, potential buyers are increasingly worried about being ripped off. Almost half, or 48 per cent of first-home buyers, cited paying too much as their biggest fear, a Finder survey of 1,028 property newcomers found. By comparison, only a third of respondents had a fear of being unable to service a mortgage.”
“A banking regulator crackdown in 2017 caused a two-year housing market downturn following more than five years of strong growth. With that in mind, 21 per cent of first-home buyers Finder surveyed were worried property prices would go down after they had bought their home. Canstar’s group executive of financial services Steve Mickenbecker said the Reserve Bank or the Australian Prudential Regulation Authority, the banking regulator, would have to act sooner to stop a potential house price bubble.”
“‘Pressure is going to start to build on the Reserve Bank and financial regulators to step in if we don’t see the property market start to slow in the next few months,’ he said.”