It’s Friday desk clearing time for this blogger. “The median price for a single family home in the nine-county region fell nearly 3 percent to $805,600 from the previous October, according to Zillow. The median price of a home in Santa Clara County continued a 10-month retreat, falling 5.9 percent to $1.08 million. Price cuts have become more common in some cities. Zillow data shows that in San Jose and San Francisco, more sellers were willing to cut their prices this year than last.”
“Zillow senior economist Cheryl Young said some parts of the Bay Area have hit an ‘affordability ceiling,’ and that the declining prices could be seen as a small market correction after years of soaring values. ‘We’re starting to see things slow down,’ Young said, ‘but that doesn’t mean it’s less expensive in some of these areas.’”
“Fracking Bust: The Sequel. At least, that’s how Greater Houston Partnership’s lead economist Patrick Jankowski sees Houston right now. With an over-saturated real estate market, an overbuilt industrial market and a bleak outlook for oil and gas, history may not be repeating itself, but it looks pretty close, Jankowski wrote. Typically, Houston can absorb one apartment unit for every six new jobs. But as of early November, 23,000 apartment units were under construction and another 28,000 were in the planning stages. That means Houston would have to create more than 300,000 jobs, or, the number of jobs the region created in the last six years.”
“Jankowski said builders may be reading the market wrong. Monthly government employment statistics, based on a limited survey, notoriously overestimate job growth at the regional level during times of expansion. ‘If you’re basing your decisions on what (the government) is reporting, and they’re over-reporting,’ Jankowski said, ‘you’re going to make some bad business decisions.’”
“A recent report from Central 1 Credit Union suggests a rebound in Metro Vancouver’s housing market is coming. However, at the moment there are property owners losing hundreds-of-thousands of dollars on their investments. This solid, 1953 home in Burnaby would have seemed like a good pick in May 2016 when the owners forked out $1.9 million for their stake in Metro. Then the former B.C. Liberal government introduced its foreign owner’s tax and things started going downhill from there, leading to late November 2019 when that same home was sold for $1.495 million. A loss of $405,000, plus realtor and legal costs.”
“Assessed on July 1, 2019, at $2.371 million, this older (1967) home sits on a 10,881-sq.-ft. lot and was bought on April 26, 2016, for $3.11 million. There’s a real theme here of people who bought in early 2016 and are now losing a lot of money. In this case, the loss is a whopping $1 million, as it sold recently for $2.1 million.”
“Berkeley’s half-year profit has fallen by almost a third as the number of homes sold by the upmarket London-focused housebuilder tumbled. Revenue slumped 43.7 per cent to £930.9 million as the number of homes sold fell to 1,389 from 2,027 a year earlier. The average selling price was down 13 per cent to £644,000, which Berkeley said reflected the ‘mix of properties sold.’”
“As anyone who has travelled beyond Germany’s major and university cities knows, in many municipalities, there are thousands of apartments that have remained unoccupied for years. Reiner Braun, Member of Emprica’s Executive Board, attributes this difference not just to population growth in big cities, but also to the fact that, ‘despite existing vacancies, upmarket properties are still being built in shrinking regions.’ In many cities, therefore, there are far more new apartments than necessary.”
“Values of prime residential real estate in Nairobi fell by 4.5 per cent in the nine months to September this year. Property values have been on a sustained decline since 2016, with Knight Frank attributing the drop to oversupply and distressed liquidity during the period under review. ‘If the price softening is sustained into the last quarter of the year and going forward, it will be a pointer to a market correction that comes after a long streak of house prices increases,’ said KBA.”
“Aveng, the loss-making JSE listed construction firm, yesterday plummeted to 1 cent a share after losing 50 percent on the JSE yesterday. The fall is the latest blow for the company and signals that investors have lost hope of a revival of the ailing construction sector amid South Africa’s constrained economy. ‘The government is saying that we do not care about the construction sector. This is a sad outlook for the entire sector, because companies are falling over one by one,’ said economist Ian Cruickshanks, adding that non-payment by state-owned enterprises (SOEs) were problematic.”
“More than a year ago, future of the real estate market in India was believed to be promising. Real estate was believed to be a golden investment. Basically the real estate market is in a slump. The massive burden of heavily delayed and terminally stuck housing projects has hit the confidence of investors/ home buyers. Currently, under-construction properties are depreciating assets and prices are yet to sink to their ‘lowest best’. Further, price correction is almost inevitable.To conclude, let’s be straight way own the fact that real estate sector is in a vicious cycle of the overall slowdown.”
“You’ll build and they’ll come? Well, don’t bet on it. That’s what Singapore’s authorities seem to be telling property developers, who are flooding the market with new homes. The builders themselves are getting nervous about the glut. But everyone — the prospective homeowner, the seller and the government — is actually lucky. A minor bubble got pricked in time, with exorbitant duties now charged on most purchases to discourage speculation. These hit overseas buyers and foreign-born permanent residents, whom many Singaporeans feel were pricing them out of the market, especially hard.”
“As planners had feared, all those bulldozed older buildings are now making way for gleaming new condominiums. The catch is, there are few buyers. The oversupply of unsold new homes is thus an engineered solution. If the city hadn’t punctured the en-bloc mania in time, home prices would by now have started to run away.”
“According to the Australian Performance of Construction Index (PCI), construction activity fell for the 15th consecutive month in November. The rate of decline in house building and new house orders eased up slightly. But the downturn in new apartment orders accelerated, and engineering activity fell off a cliff. A whole suite of problems facing Australia’s off-the-plan sector that further delay the impact of rising property prices on construction activity – and on the economy more broadly.”
“Angie Zigomanis, director of research at Charter Keck Cramer, said demand from investors had dropped because of changes to foreign investment rules and issues of oversupply in some suburbs. And he said prospective buyers had been put off by the series of high-profile evacuations and building defect scares. ‘A lot of these things are conspiring to keep off-the-plan purchases out on market, and so the apartment industry won’t resolve itself as quickly as the house market will,’ Mr Zigomanis told The New Daily. ‘And because units are an investor-centric market, you’ll probably need the investor sentiment to turn around a lot more.’”