Daily Archives: July 3, 2012

Polish Real Estate Market In Decline | Bedford Corners NY Real Estate

Warsaw, Poland July 3 , 2012 – The Polish residential real estate market is in a slow decline as people have expended their savings, credit has dried up, and the incentive program for young people in Poland to buy has expired.

Those selling the smaller apartments report that there are very few buyers. The buyer is that there are, are cash buyers and quite often foreign. Owners of larger apartments , which owners paid 15,000 zloty per square meter and more, are having trouble renting their apartments and there are no buyers. Those who bought with 110% financing as prices were rising now find themselves underwater.

 

 

Despite the declining prices, there are still a large number of projects under construction in Warsaw. But people who have been considering buying into these new projects are having some second thoughts.

There is a growing sensation that the end of the euro 2012 football championships may mark the end of the booming Polish economy. The money spent in building stadiums, roads and upgrading infrastructure created jobs that will now disappear.

There is no doubt that there are many more roads in the queue to be built. But the future of funding for these roads is really a question.

How much of an impact this real estate slow down is having on the rest of the rate economy is not known.

Are You A Lasuszek?

But perhaps when one considers that one of the major wholesalers of home appliances has reported sales declines of up to 50% and more, the slow down is definitely having an effect.

This wholesaler says that he has never seen anything like this before and is very concerned as to what would have will happen after Euro 2012.

His fears seem to reflect the general feeling of the Polish population as they cut back on their vacation plans. See Vacation Cutbacks

Real estate transaction volumes picked up markedly in major Chinese cities | Waccabuc Real Estate

Towards the end of May, we have noted that the government has given up on rebalancing the economy and started reflating the economy, real estate market included.  Although the central government as well as the central bank have repeatedly denied that they have given up, the reality is that they have, especially at the local government level.

So transaction volumes in the real estate market have picked up, particularly in the past few weeks, while prices have apparently stopped falling according to Soufun

The chart from Deutsche Bank below shows the weekly transaction volumes for 39 of major cities have picked up very markedly in the past few weeks as local governments “fine-tune” real estate market curbs, and people started buying properties on the back of lower prices.

Source: Deutsche Bank, Soufun

Despite this seemingly positive development, we remain fundamentally very pessimistic about the Chinese real estate sector owing to massive over-building.  If the massive supply in the pipeline are allowed to be completed in the coming years, the excess housing units will become a big problem for the market.  We suspect that the current measures in reflating the real estate market could at most buy a little breathing space for cash strapped real estate developers as they struggle to service their debts

Manhattan First-Time Apartment Buyers Grab Deals in Slow Market | Cross River NY Real Estate

Manhattan home sales were dominated by studios and one-bedroom apartments in the second quarter as rising rents and low mortgage rates pushed first-time buyers into an otherwise stagnant market.

Purchases of condominiums and co-ops totaled 2,647 in the three months through June, little changed from a year earlier, according to a report today by New York appraiser Miller Samuel Inc. and brokerage Prudential Douglas Elliman Real Estate. The median price declined 2.5 percent to $829,000.

Studios and one-bedroom apartments accounted for 53 percent of all deals, the second-highest share since the last three months of 2009, when first-time purchasers qualified for a federal tax credit of as much as $8,000, said Jonathan Miller, president of Miller Samuel. The smaller units, favored by entry- level buyers, accounted for 49 percent of all transactions a year earlier.

“The ones that can qualify are clearly buying,” Miller said. “They’re looking at rent versus buy and in more and more cases, the math starts to work.”

The share of two-bedroom apartments, which reflects the so- called trade-up market, declined to 32 percent from 38 percent in the second quarter of 2011. Tight lending standards for jumbo borrowers, combined with home prices still 19 percent below their 2008 peak, are making it harder for homeowners to sell their properties and upgrade to larger ones, Miller said.

“With rates this low and prices off peak, we should be having a housing boom right now, and we are clearly not,” he said.

StreetEasy Report

Among pending sales — contracts signed but not completed in the second quarter — one-bedroom deals climbed 29 percent from a year earlier, according to property-listings service StreetEasy.com, which also released a report on the Manhattan market today.

The largest number of pending deals were in the $500,000 to $1 million range, according to StreetEasy.

“Rents are just so high right now that for a lot of people it doesn’t make sense” to continue leasing, said Sofia Song, vice president of research at StreetEasy. “A lot of people are saying, ‘You know what? For this amount of money I can probably buy something.’”

In the first quarter, the median monthly rent for Manhattan apartments jumped 7.1 percent from a year earlier to $3,100, or $37,200 annually, according to Miller Samuel and Prudential. Rents are now within about 5 percent of the $3,265 peak reached at the end of 2006.

Price Cut

The average rate for a 30-year fixed home loan was 3.66 percent, the lowest in records dating to 1971, Freddie Mac said on June 28. The rate was less than 4 percent for the entire second quarter, according to the McLean, Virginia-based mortgage financier.

For Ed Garry, a year made all the difference in selling his one-bedroom apartment in the Upper East Side’s Yorkville section. He put the unit on the market in April 2011 with an asking price of $695,000 and withdrew it seven months later when he got no takers. In January, he tried again, cutting the price to $649,000.

This time, Garry, 42, a Wall Street bank consultant, got five offers for the 930-square-foot (86-square-meter) property on East 80th Street. He sold it in May for $621,000, according to StreetEasy.

“The mood seemed to be a little bit better than it has in the last couple of years,” said Garry’s sales broker, James Ferrando of Prudential Douglas Elliman. “The buyer mentality, they’re eager to get out there and look and purchase.”

‘No-Brainer’

Garry, who bought the apartment in 2004 for $500,000, was able to upgrade to a two-bedroom unit in Harlem, where the median price of a condo is almost a third of what it is on the Upper East Side, according to brokerage Corcoran Group. His $890,968 deal was completed last month, New York City property records show.

Low interest rates and tax abatements that encourage Harlem home purchases made buying the bigger apartment “a no- brainer,” he said.

“The combination of the two is what made it feasible in the short term, and, in the long term, I think it’s going to be a big investment,” Garry said.

Other reports issued today on the Manhattan apartment market showed mixed results for sales and values in the second quarter. Corcoran Group said purchases of condos and co-ops totaled 3,650, the second-highest quarterly sales figure in two years. The median price climbed 1 percent to $850,000.

Estimated Closings

StreetEasy said the median price climbed 2.4 percent to $840,000, while completed deals climbed 24 percent to 4,430. The figure is an estimate that includes transfers recorded with the the New York City Department of Finance by June 30, as well transactions that were completed in June and are expected to be recorded later, according to StreetEasy.

Brown Harris Stevens and its sister brokerage, Halstead Property LLC, both reported a median price of $850,000, up 2 percent from the second quarter of 2011.

“People stopped worrying about the end of the world and started focusing on the fundamentals,” said Gregory Heym, chief economist at Terra Holdings LLC, which owns the two firms. “There’s not a lot of supply. It’s not an investors’ market like some parts of Florida. People buy to live here.”

The inventory of apartments available to purchase declined 14 percent in the second quarter from a year earlier to 6,981 units, according to Miller Samuel and Prudential. About 376 new listings came to market each week in the period, about 4.8 percent fewer than in the second quarter of 2011, StreetEasy said.

Purchases of luxury apartments, defined as the top 10 percent of all sales by price, totaled 265 deals, unchanged from a year earlier, Miller Samuel and Prudential said. The median price of those transactions fell 10 percent to $4.08 million.

 

Manhattan Real Estate Market Holds Strong During Spring | Chappaqua Real Estate

StreetEasy reports show Manhattan sales prices are holding strong as inventory continues to decrease in the second quarter. NY1’s Real Estate reporter Jill Urban filed the following report.

Another quarter has come to a close and now it is time to get a look at just where the Manhattan market stands after a busy spring season. The report released by StreetEasy shows the market is holding strong.

“Overall we had a really strong spring selling season. The numbers are showing that median prices have gone up, closing activity has gone up and inventory continues to decline,” says Sofia Song, vice president of research at StreetEasy.

The report finds the median sales price for a home in Manhattan is now at $840,000. That’s up almost 2.5 percent. While it doesn’t sound like much, it is significant because it is the fourth month in a row where prices have risen.

“Condo re-sales had the highest gains this quarter, with a 13.6-percent increase in price since last year. Similarly, new developments had a 2.1-percent increase in median closing price. The only sector that had a slight decrease was co-op re-sales and they had 2.6 [percent] in median closing price,” Song says.

That could be credited to the difficulty in financing for a co-op and the larger down payments.

While overall prices are up, inventory continues to decline.

“This quarter we saw a 6-percent decrease compared to a year ago and what’s really significant is that inventory has been declining for the past five consecutive quarters. And so what we are seeing is that time on market for properties has definitely dropped. We also saw a 20-percent decrease in the number of price cuts for listings,” Song says.

Most market data reflects what sold and closed in the last quarter but to understand the real time market activity, you need to look at the number of contracts signed.

“We had a 21-percent increase in contract activity since last year and then a 28-percent increase from last quarter,” Song says. “And this just goes to show that this was a really strong spring selling season.”

Contracts signed jumped in all size categories, but one- and two-bedrooms saw the most activity. The homes currently in contract will likely close next quarter, providing an even fuller picture of how strong the spring season was in just a few months.