More in our series of how real estate markets are faring around the world. I chose this report because of the realtor quote that the market is ‘in a bit of a slump’, resulting from a 15% shift in demand? Markets could be that sensitive!
Our market doesn’t seem to be having any price declines or ‘slump’, but our NSDCC inventory priced above $1,400,000 is up 26% year-over-year, like mentioned below.
PALM SPRINGS, Calif. — Canadians are no longer flocking to California’s sunny Coachella Valley to buy homes since their currency has weakened, and many are putting properties they own up for sale, real estate experts said.
The move coincides with a decline in the Canadian dollar since oil prices have plummeted, the Desert Sun newspaper reported on Saturday.
After the U.S. housing market crashed in 2007, the Canadian dollar achieved parity with the U.S. dollar, prompting many Canadians to swoop up properties in the region.
Even as the U.S. economy recovered, Canadians still made up at least 15 per cent of homebuyers in California’s Coachella Valley, said David Emerson, a local real estate agent.
Now, home prices have fallen in the region, and the number of homes for sale has jumped. Inventory rose by about 25 per cent over the last year, according to the California Desert Association of Realtors.
“Our Canadian buyers are not buying,” Kelly Trembley, a realtor with Bennion Deville Homes, told the newspaper. “This was the perfect storm for the desert, and that’s why our real estate right now is in a bit of a slump.”
Brian and Linda Pahl — who live in Vancouver — bought a three-bedroom home in La Quinta more than two years ago for $450,000. Now the couple hopes to sell it for $725,000.
If the Canadian dollar strengthens down the road, however, Brian Pahl said he hasn’t ruled out another purchase.
“With the Canadian dollar being as low as it is, it pays to sell the home and pay the capital gains (tax),” he said. “We can buy again in two years.”
Shanghai’s local government is working to fend off a housing bubble in a city where prices jumped almost 21% last month from a year before.
Officials on Friday announced measures to cool down the market that among the hottest in the country, second only to Shenzhen, the southern tech-focused city where prices rose a bubbly 57% year-over-year in February.
The new rules require buyers of second homes to pay 50% to 70% of the price of the home as down payment—the old requirement was merely 40%—to get a mortgage. Non-residents will have a harder time buying Shanghai property: those who don’t have local residence permits will have to wait five years after moving to the city before they can buy, increased from two years previously.
Shanghai is but one of the big Chinese cities to experience a housing reawakening. The sharp price increases in China’s biggest and wealthiest cities are a partial consequence of China’s stock market bust last summer. Middle and upper-class Chinese are looking for a place to invest, and without buoyant equities, it’s back to the traditional choice of real estate.
China’s smaller cities, meanwhile, are saddled with excess inventory and prices there fell by the low single-digit percentages year-over-year in February.
“We expect the government to announce more supportive policies targeted at lower-tier cities, and take actions to control prices in top-tier cities,” Goldman Sachs analysts in Hong Kong wrote last week.
The two-speed real estate market is paralleling China’s broader economy, where there’s a contrast between fast growing consumer-oriented businesses and struggling state-owned companies.
In real estate, now, the fast speed shouldn’t mean new apartments selling out in a single morning, as was happening. At least the government hopes not.
The new guy named Jeremy wandered into the discussion about short-sale fraud the other day, and found that long-time readers here don’t take kindly to scams – and scammers. But we’ve seen how short-sale fraud has run unabated, and that it has practically become a badge of honor among realtors. Nobody in the industry is motivated to stop it either.
Here are a few examples:
At the top of the last article, Jeremy’s friends were filing notices that mortgages were paid off when they weren’t, which is outright fraud. But the second half of the article mentioned the typical example of short-sale fraud, where a straw buyer purchases the property at a below-market price, and then spoons it to a waiting buyer who pays retail. The banks who got shorted on the first sale might have caught the fraud with better appraisals, or if they just had a strict policy. I’ll never forget the one case where the perpetrator caught wind of his own story here on the blog and left a his comment. He said they included in their contract to flip the house immediately to the shorted bank. They then flipped their short-sale buy on the SAME DAY to a retail buyer for a $100,000+ profit. If the banks have knowledge and turn their head, then it’s on them.
A short-sale that’s fully furnished. The seller makes the furniture sale mandatory so he can squeeze some cash out of the deal – he sells the ‘furniture’ to the buyer for $50,000 to $100,000 outside of escrow, in exchange to agreeing to a low-ish sales price for the house. Usually these are cash sales only.
Listing agent twists seller’s arm to take his buyer, rather than one of the two higher cash offers. I turned this one into VP of Fraud at the Bank of America, who said that because the lower price was still within their acceptable range, he’d let it go.
There were the investors who approached naive listing agents and insisted on negotiating their own deal with the bank. If they could get the price approved low enough to flip immediately, they’d complete the purchase.
Both short sale and REO investors engage in ‘reverse staging’ to make a property appear in worse condition than it is, including the removal of kitchen-cabinet doors, garbage left lying around the home, and sometimes old fish hidden behind refrigerators to create pungent scents. Sometimes BPOs include false property stigmas such as high crime rates, or claim the home was a meth lab that would need to be entirely gutted.
Parents buying their child’s over-encumbered house as a short-sale. A favorite among realtors themselves.
Thankfully most of these are in the rear-view mirror!
More lightweight coverage of the local real estate market – have you noticed how reporters don’t dig around much? The headline bait is embarrassing too – homes aren’t disappearing, they are just more expensive.
Stunning new numbers confirm what first-time home seekers already know: It’s getting dramatically more difficult to find an affordable first home in San Diego County.
A new study by Trulia says the supply of starter homes has plummeted 80 percent over the last four years — to fewer than 1,000 homes for sale.
Starter homes, according to the real estate tracker, are in the lower third of prices. In the county, that means a median $327,400 for a home. San Diego renters are feeling the pinch. Johny Thornton, a North Park resident, just got his rent raised by $75 a month.
“You pretty much just have to bite the bullet,” he said.
Thornton could try to buy a home, but it’s getting more complicated in the county, where demand far exceeds new home construction.
Trulia says most of the starter homes are in areas like downtown, El Cajon, Oceanside, Encanto and Spring Valley.
Over the years, neighbors accused Danny Fitzgerald of leasing his Hollywood Hills homes for loud parties. He said they had nothing better to do and suggested they “go to Palmdale where they belong.”
Then Fitzgerald had a brush with royalty.
This week he filed a lawsuit against a Saudi prince he accused of partying so hard — with drugs and strippers — that it caused more than $80,000 in property damage to one of his homes. Including other problems, such as not being able to lease the home out while it was being repaired, damages totaled more than $300,000, according to the complaint.
“It was horrible,” Fitzgerald said. “The guy just took full abuse of my home.”
Fitzgerald said his homes were only a source of trouble from 2012 to 2014, when he said a realtor had control over two of them and rented them out to everyone. He said there hadn’t been any problems since then — until the prince showed up.
“The only mistake I’ve made in the last two and a half years was this prince rental,” Fitzgerald said. “Here I am putting my reputation back together and then he just destroys it in one month.”
Fitzgerald said the trouble began after Saudi Prince Aziz al Saud leased one of his homes. He said the prince had one of his workers sign the lease agreement on Weidlake Drive in August. Fitzgerald said he and the prince had agreed that he would have only one party.
But throughout the one-month lease, according to the lawsuit filed in Los Angeles County Superior Court on Monday, the prince ransacked the home, threw all-night parties and caused near daily disturbances to the neighborhood.
Then there was the graduation party.
“It sounds innocent, a graduation party,” Fitzgerald said. “Doesn’t it?”
There were supposed to be no more than 150 guests at the Aug. 16 party, he said. They were there to celebrate the prince’s graduation from Pepperdine University, the complaint states.
Instead, according to the complaint, more than 800 people showed up, with guests doing drugs, including smoking marijuana, and strippers dancing on kitchen countertops.
Fitzgerald said there was damage to furniture and walls and that hardwood floors buckled because of spilled drinks. His invoice for the damage totaled $86,379. In the complaint, Fitzgerald alleges that the defendants — who include two of the prince’s employees — have not paid for any damages.
“Incredibly, after this August 16 party, Prince Aziz continued to have nightly parties until the early mornings and continued to leave piles of trash on the street,” the complaint read. “Guests of the Prince were seen urinating on Plaintiff’s neighbors’ properties.”
Palo Alto is seeking housing solutions for residents who are not among the Silicon Valley region’s super-rich, but who also earn more than the threshold to qualify for affordable housing programs.
The city council has voted to study a housing plan that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.
The plan would focus on building smaller, downtown units for people who live near transit and don’t own cars, along with mixed-use retail and residential developments.
“Prices have just gone through the roof, making it unaffordable for middle-class people, your firefighters, your teachers, and, frankly, some of your doctors,” Palo Alto Vice Mayor Greg Scharff said.
Scharff worries that losing middle-class workers will hurt the city. “What the council is proposing is that we work together to fund and subsidize, what is basically middle-class housing; which, traditionally, has not been subsidized,” Scharff said.
Bean can hardly believe it.
“We have people struggling to make it at a quarter-million dollars a year,” Bean said. “That’s a terrible thing.”
I like to compare the counts of active and pending listings to help determine the overall ‘health’ of the marketplace, and a 2:1 ratio always seemed to be ‘normal’, roughly. Le’s compare the comparisons!
These are the counts from February 1, 2016:
Median LP of ACT
Seven weeks later, and well into the selling season, there has been notable improvement! Those in bold have had a surge of new pendings, and overall there are 57% more pendings today than seven weeks ago:
Median LP of ACT
If it weren’t for Rancho Santa Fe being a stick in the mud (median LP hasn’t budged either), we could say the entire NSDCC market is on fire.
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