Category Archives: Waccabuc NY

Used home sales rise .7% | Waccabuc Real Estate

Sales of previously owned houses in the United States rose 0.7 percent month-over-month to a seasonally adjusted annual rate of 5.39 million in September 2017 from a year low of 5.35 million in August, beating market expectations of a 1 percent fall. Still, ongoing supply shortages and recent hurricanes muted overall activity. Sales of single family houses increased 1.1 percent to 4.79 million after falling 2.1 percent in August, while those of condos fell 1.6 percent to 0.60 million, following a 1.7 percent decline. The median house price fell to $245,100 from $253,100 in August and the months’ worth of supply was steady at 4.2 percent. In addition, the number of houses available in the market rose to 1.90 million from 1.87 million in August. Existing Home Sales in the United States averaged 3912.19 Thousand from 1968 until 2017, reaching an all time high of 7250 Thousand in September of 2005 and a record low of 1370 Thousand in March of 1970.

United States Existing Home Sales
Calendar GMT Actual Previous Consensus TEForecast
2017-08-24 02:00 PM Existing Home Sales 5.44M 5.51M 5.57M 5.55M
2017-09-20 02:00 PM Existing Home Sales 5.35M 5.44M 5.46M 5.45M
2017-10-20 02:00 PM Existing Home Sales 5.39M 5.35M 5.30M 5.29M
2017-11-21 03:00 PM Existing Home Sales 5.39M 5.36M
2017-12-20 03:00 PM Existing Home Sales 5.42M

 

United States Housing Last Previous Highest Lowest Unit
Building Permits 1215.00 1272.00 2419.00 513.00 Thousand [+]
Housing Starts 1127.00 1183.00 2494.00 478.00 Thousand [+]
New Home Sales 560.00 580.00 1389.00 270.00 Thousand [+]
Pending Home Sales -2.60 -1.30 30.90 -24.30 percent [+]
Existing Home Sales 5390.00 5350.00 7250.00 1370.00 Thousand [+]
Construction Spending 0.50 -1.20 5.90 -4.80 percent [+]
Housing Index 0.20 0.10 1.20 -1.80 percent [+]
Nahb Housing Market Index 68.00 64.00 78.00 8.00 [+]
Mortgage Rate 4.14 4.16 10.56 3.47 percent [+]
Mortgage Applications 3.60 -2.10 49.10 -38.80 percent [+]
Home Ownership Rate 63.70 63.60 69.20 62.90 percent [+]
Case Shiller Home Price Index 201.99 200.53 206.52 100.00 Index Points [+]

 

United States Existing Home Sales

Existing Home Sales occurs when the mortgage is closed. Mortgage closing usually takes place 30-60 days after the sales contract is closed. . This page provides the latest reported value for – United States Existing Home Sales – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. United States Existing Home Sales – actual data, historical chart and calendar of releases – was last updated on October of 2017.

 

Actual Previous Highest Lowest Dates Unit Frequency
5390.00 5350.00 7250.00 1370.00 1968 – 2017 Thousand Monthly

 

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https://tradingeconomics.com/united-states/existing-home-sales

Amazon selling shipping container house | Waccabuc Real Estate


A MODS International shipping container house available for sale on Amazon

All photos via Amazon

From Amazon’s potential new headquarters to it’s latest lineup of smart home devices, the roughly $430 billion company is in the headlines and in our households. The Seattle e-commerce company sells almost everything—including, it seems, a shipping container house.

In an effort to recycle the thousands of surplus containers that sit on docks around the world, shipping containers have been used in urban farmsoff-the-grid getaways, and even as all-in-one pools. A fleet of new companies also use the 20- or 40-foot containers to create prefab tiny homes, all available to orderand delivered to your location.

Now, Wisconsin-based MODs International is selling their version on Amazon. The 320-square-foot house uses a new sea container as the structural shell—not a recycled one—and includes a rather plain bedroom, shower, toilet, sink, small kitchenette, appliances, and living area. Large double doors open to the outside, and extra windows were added to increase light.

The price for the home of your shipping container dreams on Amazon: $36,000. Of course, the unit isn’t sold from Amazon itself and is available from MODS as a third party seller under the “See all Buying Options” tab. It also costs $4,500 to ship the 7,500 pound structure to your location, so don’t expect your normal Prime discount.

All photos via Amazon
All photos via Amazon
All photos via Amazon
All photos via Amazon

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https://www.curbed.com/2017/10/5/16432426/shipping-container-house-amazon-for-sale?utm_medium=email&utm_campaign=Curbed%20Dotcom%2010062017&utm_content=Curbed%20Dotcom%2010062017+CID_8e143a874c7f0365bd8ea5684e714d36&utm_source=cm_email&utm_term=Shipping%20container%20house%20now%20available%20on%20Amazon%20for%2036K

Beautiful floor to ceiling windows | Waccabuc Real Estate

When it comes to creating an indoor/outdoor feeling in your home, a set of floor-to-ceiling windows is the key ingredient to success. Along with being a visual connector to your surroundings, they bring in boatloads of natural light while providing a streamlined backdrop for your interiors. Take a look at our favorite homes of this week that feature expansive floor-to-ceiling windows.

Seclusion

Location: Melbourne, Victoria, Australia

From Caroline Wallis: “The challenge, predictably, was preserving the unique facade while both increasing the amount of natural light and adding modern amenities. After collaborating with the client to understand and meet their long-term needs, the remodel successfully bridges the old and the new. Details like reused doors, original skirting boards, and bricks maintain the visual integrity of the original home, while a sleek new kitchen and concrete backyard unfold behind the original facade.”

Photo by Shannon McGrath. Architect: Robson Rak Architects. Landscape Designer: Weller Landscapes. Interior Designer: Made by Cohen.

Brooklyn Brownstone

Location: Brooklyn, New York

From the architect: “Located on a tree-lined street in Bedford Stuyvesant, Brooklyn, this late-1800s, three-story brownstone had been held within a family for decades-and fell into disrepair and in desperate need of renovation. Windows had decayed, leaving large gaping holes to the elements beyond. The previous ad-hoc renovations in the 1980s and ’90s carved up the kitchen and bathrooms, creating awkward circulation and dated finishes. This gut renovation aimed to sensitively restore historical details, while introducing contemporary architectural elements and finishes.”

 Photo courtesy of Sonya Lee Architect llc.

1st Avenue Residence

Location: Montreal, Quebec, Canada

From Leibal: “1st Avenue Residence is a minimalist house located in Montreal, Canada, and was designed by Microclimat. As you step through the door, your eye is drawn to the back of the home, where the kitchen and living spaces extend outside, thanks to impressive windows that frame the backyard. A kitchen counter naturally flows onto the terrace, visually and concretely uniting the two spaces. Cantilevered overhangs in white parging shelter the counter from the elements throughout the seasons and offer a signature look to the back of the building.”

 Photo courtesy of Microclimat and Leibal. Architect: Microclimat.

Rudolph House

Location: Cambridge, Massachusetts

From the architect: “Our work included the redesign of the exterior walls and glazing to include a new wall of 10-foot-high, triple-paneled sliding doors and windows on the main facade. These doors open the home to the adjacent courtyard and provide excellent natural ventilation. The roof and the other three exterior walls, which are largely below grade, received insulation in excess of what code requires. All new energy-efficient heating and cooling equipment, including heat-recovery ventilation, was installed to bring the home up to modern standards. The result was a much greater energy efficiency and thermal comfort for the family.”

 Photo: Tony Luong. Architect: Ruhl Walker Architects.

 

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zillow.com

Mortgage applications fall | Waccabuc Real Estate

Mortgage applications in the United States fell 9.7 percent in the week ending September 15th, 2017, after rising 9.9 percent in the previous period. It is the sharpest decline in mortgage applications since July of 2016, data from the Mortgage Bankers Association showed. Applications to purchase a home slumped 10.8 percent and refinance applications dropped 8.5 percent. The average fixed 30-year mortgage rate edged up by 1bps to 4.04 percent. Mortgage Applications in the United States averaged 0.48 percent from 2007 until 2017, reaching an all time high of 49.10 percent in January of 2015 and a record low of -38.80 percent in January of 2009.

United States MBA Mortgage Applications

 

 

 

Calendar GMT Actual Previous Consensus TEForecast
2017-09-06 11:00 AM MBA Mortgage Applications 3.3% -2.3 0.50%
2017-09-13 11:00 AM MBA Mortgage Applications 9.9% 3.3% 0.48%
2017-09-20 11:00 AM MBA Mortgage Applications -9.7% 9.9% 0.43%
2017-09-27 11:00 AM MBA Mortgage Applications 0.45%
2017-10-04 11:00 AM MBA Mortgage Applications 0.46%
2017-10-11 11:00 AM MBA Mortgage Applications 0.46%

 

United States Housing Last Previous Highest Lowest Unit
Building Permits 1300.00 1230.00 2419.00 513.00 Thousand [+]
Housing Starts 1180.00 1190.00 2494.00 478.00 Thousand [+]
New Home Sales 571.00 630.00 1389.00 270.00 Thousand [+]
Pending Home Sales -1.30 0.30 30.90 -24.30 percent [+]
Existing Home Sales 5440.00 5510.00 7250.00 1370.00 Thousand [+]
Construction Spending -0.60 -1.40 5.90 -4.80 percent [+]
Housing Index 0.10 0.30 1.20 -1.80 percent [+]
Nahb Housing Market Index 64.00 67.00 78.00 8.00 [+]
Mortgage Rate 4.04 4.03 10.56 3.47 percent [+]
Mortgage Applications -9.70 9.90 49.10 -38.80 percent [+]
Home Ownership Rate 63.70 63.60 69.20 62.90 percent [+]
Case Shiller Home Price Index 200.54 199.05 206.52 100.00 Index Points

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https://tradingeconomics.com/united-states/mortgage-applications

Consumers remain too optimistic when estimating home value | Waccabuc Real Estate

Homeowners continue to overestimate their home values, however the gap continues to narrow, according to the latest National Home Price Perception Index from Quicken Loans.

The index, which compares homeowners estimates and the appraised home values, showed appraised home values came in 1.35% lower than homeowner estimates in August. This gap is smaller than July’s gap of 1.55%.

This closing gap is due, in part, by the increase in appraised values which ticked up 0.19% in August. This is up 2.64% from August of last year.

“As the sun sets on the summer, some of the intense competition for housing also winds down,” said Bill Banfield, Quicken Loans executive vice president of capital markets. “It’s important to focus on the annual numbers with the HVI. While there can be some monthly variations in the data, especially as seasons start to change, the annual numbers show healthy growth across the country.”

The chart below shows despite the narrowing gap over the past few months, homeowners have been overestimating their home values since the beginning of 2015.

Click to Enlarge

HPPI

(Source: Quicken Loans)

Homeowner perception varied widely from one region to the next, as appraisal values ranged from 3% higher than homeowner estimates in the West to 3% lower in the Midwest and Northeast.

The chart below shows the index in varies metros across the U.S.

Click to Enlarge

HPPI

(Source: Quicken Loans)

“One of the biggest lessons from the HPPI, is highlighting how regionalized real estate is,” Banfield said. “Homeowners who have a better understanding of their local housing market can make more informed decisions about their home. After all, their house is not just where they live, but one of their bigger assets.”

 

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https://www.housingwire.com/articles/41281-consumers-remain-too-optimistic-when-estimating-home-value?eid=311691494&bid=1863956

Westchester Parks this weekend | Westchester Real Estate

WESTCHESTER COUNTY, NY — Looking for something to do for the weekend? Here’s a list of events at Westchester’s public parks.

Friday, June 16
Playland Park, Playland Parkway, Rye – (914) 813-7010
$15 Friday Nights – 5 p.m. – 10 p.m.
All rides $15 from 5 p.m. to closing. Parking fee applies.

Croton Point Nature Center, Croton Point Avenue, Croton-on-Hudson – (914) 862-5297
Riverlovers Pot Luck Supper – 6 p.m. – 8:30 p.m.
Sign up to help out at the Clearwater Festival. Info at Riverlovers.org.

Muscoot Farm, Route 100, Somers – (914) 864-7282
Muscoot Movies – 8:30 p.m. – 10 p.m.
Enjoy a late night movie in the historic barn. Title to be announced.

Saturday, June 17
Edith G. Read Wildlife Sanctuary, Playland Parkway, Rye – (914) 967-8720
Volunteer Corps Work Day – 10 a.m. – 2 p.m.
Invasive plant removal, trail maintenance, beach clean-up and more.

Trailside Nature Museum at Ward Pound Ridge Reservation, Routes 35 and 121 South, Cross River – (914) 864-7322
Orienteering for Kids – 1 p.m.
Children ages 10 to 12 can learn how to find their way through guided waypoints along the trail. Registration required.

Cranberry Lake Preserve, Old Orchard Street, North White Plains – (914) 428-1005
Orienteering Scavenger Hunt – 1 p.m. – 2:30 p.m.
Find hidden flags at the preserve by using only a map and compass.

Marshlands Conservancy, Route 1 (Boston Post Road), Rye – (914) 835-4466
Volunteer Work Project: Removing Tidal Debris from the Salt Marsh – 1 p.m. – 3 p.m.
Bring work gloves; hand tools provided. Great for any type of service credit hours.

Saturday and Sunday, June 17 and 18
Lasdon Park, Arboretum and Veterans Memorial, Route 35, Somers – (914) 864-7268
Opening of the New Lasdon Conservatory: “The Rainforest: Tropical Treasures” – 10 a.m. – 4 p.m.
Grand opening of the new conservatory with tours, entertainment, face painting, food for sale and more. Admission: $10 adults, $5 children. Info at LasdonPark.org.

Croton Point Park, Croton Point Avenue, Croton-on-Hudson – (914) 864-5290
Clearwater Festival – 11 a.m. – 8:45 p.m.
Music and environment festival. Tickets at Clearwaterfestival.org.

Muscoot Farm, Route 100, Somers – (914) 864-7282
Art Show – Noon – 4 p.m.
Works by local artist Hope Friedland on view in the Main House Gallery on weekends through June 25.

Sunday, June 18
Muscoot Farm, Route 100, Somers – (914) 864-7282
Farmers Market – 9:30 a.m. – 2:30 p.m.
More than 20 vendors offer fresh produce and local food products every Sunday through October. Vendors at muscootfarm.org.
-and-
Big Equipment Day – 1 p.m. – 3 p.m.
See the equipment that is used to get some of the biggest jobs done at the farm.

Bronx River Parkway, White Plains to Yonkers – (914) 995-4050
Bicycle Sundays – 10 a.m. – 2 p.m. (Weather permitting)
Parkway closes to vehicular traffic for the exclusive use of cyclists, walkers, joggers and those with strollers, from the Westchester County Center to Scarsdale Road, a 13.5-mile loop. Parking at the County Center. Also 6/25.

Ridge Road Park, 287 Ridge Road, Hartsdale – (914) 946-8133
Portuguese-American Heritage Festival – (914) Noon – 7 p.m.
Music and dance, arts and crafts and food vendors.

Playland Park, Playland Parkway, Rye – (914) 813-7010
Father’s Day at Playland – Noon –10 p.m.
Dads ride free, families pay $15 for unlimited rides all day.

More info at parks.westchestergov.com.

New York real estate showing symptoms of distress | Waccabuc Real Estate

For Hans Futterman, it was a dream defaulted. 

The developer assembled a vacant plot of land — formerly a Shell gas station and a parking lot — at Frederick Douglass Boulevard and West 122nd Street in Harlem over roughly four years, from 2011 to 2015. He then secured approvals to construct a 12-story, 127-unit residential building on the site, which offers 205,000 buildable square feet.

But in June of last year, Futterman, who declined to comment for this story, defaulted on a $36 million loan from RWN Real Estate Partners, and five months later his development firm filed for Chapter 11 bankruptcy protection. The bankruptcy auction is now set for June 21, and sources said the site could sell for as much as $70 million — about $44 million more than Futterman paid for the stretch of land over the years.

A source said Futterman pumped “his life savings” into the project — and that he is still holding out hope to develop it himself.

“This is the reality of the market today,” said Cushman & Wakefield’s Bob Knakal, who is handling the bankruptcy auction with colleague Adam Spies. “Transactions are not going the way owners want.”

Indeed, the first signs of distress have emerged in several pockets of New York City’s commercial real estate market in recent months. Retail vacancies, declining hotel revenues and foreclosures on Park Avenue are among a flurry of indications that the market is inching closer to the brink of financial trouble.    

“There’s a lot more stress in the system than most people probably realize,” said Iron Hound Management’s Robert Verrone, who added that his mortgage brokerage is handling more workouts nationally than ever before. 

The influx of troubled loans is a product of the 2007 lending boom, and $90 billion in commercial mortgage backed-securities backed by properties across the country are set to mature this year. Sean Barrie of Trepp, which tracks CMBS, noted that the massive batch of loans was “underwritten pretty liberally,” and now, many of those sponsors may face difficulty refinancing their over-leveraged assets.

Attorney Ray Hannigan, of Herrick Feinstein, who specializes in foreclosures and workouts, said the tri-state area is already seeing a substantial influx of those maturity defaults.

“It’s a long time coming,” he said. “The market needs to work through this latest cycle and weed out the good and the bad.” 

The bad can be found across the five boroughs. In Brooklyn and Staten Island, scheduled foreclosure auctions are making a comeback. There were 90 foreclosure auctions in Brooklyn in March, a 125 percent year-over-year increase. Staten Island — where the real estate market has been less active — had 32 in the same month, a 10 percent increase from the previous year, according to California-based research firm ATTOM Data Solutions data provided to The Real Deal.

ATTOM data also showed that there was a 327 percent increase in New York City multifamily and retail sales to third-party investors in foreclosure auctions in 2017’s first quarter, year-over year. Similarly, the number of bank-owned commercial properties rose 8 percent year-over-year.

No one is suggesting that distress is widespread — yet. More than 25 lawyers, economists, lenders and brokers who spoke to TRD for this story were confident that although a decline is around the corner, it won’t be as severe as it was 2007 or 2008 — when, as attorney Wallace Schwartz of the national law firm Kasowitz put it, “everything fell off the table.”

“Distress is a very macro word,” said Ayush Kapahi of capital advisory firm HKS Capital Partners. “There’s something churning. I don’t know if the word ‘distress’ will apply, or if it will just be a market reset.… There are so many variables that go into a storm.”

To get a better idea of the extent of the trouble in the market, TRD took a temperature check of all the commercial real estate asset classes across the city.

Retail anxieties

When real estate developer Billy Macklowe proclaimed, “I think retail is fucked, plain and simple,” in late April, he was echoing a sentiment widely shared among industry insiders: Of all commercial real estate asset classes, retail is showing the clearest signs of distress.

“Retail is a disaster in New York City,” one source said on the condition of anonymity. While part of that situation is due to the continual rise of online retailers, “another part of it is people are too greedy,” the source added in reference to landlords seeking steep rents.

Indeed, brick-and-mortar stores across the country are collapsing due to high overhead, weak sales and mounting debt, and major U.S. retailers including American Apparel and Aeropostale, among many others, have filed for bankruptcy.

Some retailers are making real estate moves to stay afloat amid falling sales. Department store Lord & Taylor is considering adding a residential tower on top of its flagship at 424 Fifth Avenue and Neiman Marcus recently met with Related Companies about a potential merger — a deal that Related chair Stephen Ross later said would not happen.

No major retail landlords in the city have defaulted on their loans because of the waning market, but many are seeing increased vacancies. Last year, availability rates on Fifth Avenue between 42nd and 49th streets hit a high of 31 percent, Cushman data show. All in all, eight of Manhattan’s 11 major retail neighborhoods saw availability rates grow between 0.6 and 8.2 percent, according to the commercial brokerage.

“Look anywhere in the city and you see unusually high vacancy,” said real estate attorney Joshua Stein. To be sure, there is more leasing activity taking place on less-glamorous stretches like Ninth Avenue (see related story).

Most recently, Ralph Lauren announced it would be closing its 39,000 square-foot flagship store at the Coca-Cola
Company’s 711 Fifth Avenue. The retailer will continue to pay a whopping $70,000 per day in rent as part of the lease, which expires in 2029, if it can’t get out of the arrangement.

And as leasing volume slows, landlords are wooing new tenants by offering  concessions, including cheaper rents, build-outs and more flexible deal terms.

If any major retail landlord is approaching trouble, it could be Thor Equities’ TRData LogoTINY Joseph Sitt (see related story), whose portfolio has retail vacancies, including nearly 27,000 square feet of vacancies at 530 Fifth, which the firm co-owns with General Growth Properties.

And Sitt certainly isn’t alone.

Jack Terzi’s JTRE Holdings, for example, has reportedly been in contract for nearly a year to pay about $140 million for a vacant six-story retail building at 23 Wall Street. Sources said that over that time, Terzi has had difficulty locking in financing and securing a flagship tenant, though Uniqlo is among the prospective retailers that have negotiated for space there.

Of the $7.53 billion in 200 CMBS notes backed by retail properties in New York City, five, totaling $77 million, are with a special servicer, according to Trepp.

“Retail dynamics and challenges are certainly not unique to New York,” said Sam Chandan, an economist and associate dean at New York University’s Schack Institute of Real Estate. “New York has a very unique retail footprint by virtue of it being a dense tourist market and one where most retail is ground floor or street-facing. There will be some difficult adjustments.”

Hotel oversupply 

The hotel industry is also facing an uphill battle to absorb oversupply in the city and combat online home-sharing marketplace Airbnb.  

“The industry’s struggle is really playing out in the room rates, which have declined and are expected to continue to do so,” said Peter Muoio, chief economist and head of research at online real estate marketplace Ten-X. 

Revenue per available room fell to $163 during the first three months of this year — its lowest level of the current cycle and a 2.3 percent drop year-over-year, according to a recent report from hotel-and-data analytics firm STR. 

Transactions are also down, as New York City saw $2 billion in hotel deals in 2016, a sizable drop from $4.8 billion the prior year, according to STR. The 2015 figure, it should be noted, included the blockbuster $1.95 billion sale of the Waldorf Astoria to Anbang Insurance Group. Many of the 2016 deals were for “upper midscale” or “upscale” properties, unlike 2015 when most hotels that sold were “luxury” or “upper upscale,” according to the data firm’s report.

Sources said that so far, hotel owners have been able to largely escape trouble with a “big paydown” through a recapitalization or a sale, but the few hotels that were sold in the last two years have done so at a loss. Thor has been in contract since the fall to purchase PGIM Real Estate’s five-star James New York hotel in Soho for $70 million — a $13 million drop from the property’s previous sale price of $83.4 million in 2013.

While some hotels are simply depreciating in value, at least one is facing foreclosure. The four-star, boutique Mansfield Hotel at 12 West 44th  Street in Midtown has been hemorrhaging cash for more than a year as the owner, Ark Partners, has struggled to sell for $65 million.

Court records show Wells Fargo, the trustee on the hotel’s $20 million loan, is working through foreclosure proceedings with the developers.

A wide range of Manhattan hotels are on the market, though very few have been able to find a buyer quickly. The properties on the hunt include the Park Lane Hotel, the Quin, the Standard High Line and Hotel Wales.

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https://therealdeal.com/issues_articles/distressed-out/?utm_source=The+Real+Deal+E-Lerts&utm_campaign=ddb3f210e9-New_York_Weekend_Update_10.18.2015&utm_medium=email&utm_term=0_6e806bb87a-ddb3f210e9-385733629

Mortgage rates fall again | Waccabuc Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed mortgage rate dropping for the fourth consecutive week and hitting its lowest level in nearly seven months.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.89 percent with an average 0.5 point for the week ending June 8, 2017, down from last week when it averaged 3.94 percent. A year ago at this time, the 30-year FRM averaged 3.60 percent.
  • 15-year FRM this week averaged 3.16 percent with an average 0.5 point, down from last week when it averaged 3.19 percent. A year ago at this time, the 15-year FRM averaged 2.87 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.11 percent this week with an average 0.5 point, the same as last week. A year ago at this time, the 5-year ARM averaged 2.82 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“The 10-year Treasury yield fell 3 basis points this week. The 30-year mortgage rate moved in tandem with Treasury yields, falling 5 basis points to 3.89 percent. Mixed economic data and increasing uncertainty are continuing to push rates to the lowest levels in nearly seven months.”

Canada Must Deflate Its Housing Bubble | Waccabuc Real Estate

Canada’s housing market offers a case study in a contentious economic issue: If a central bank sees a bubble forming, should it act to deflate it? In this instance, the answer should be a resounding yes.

A combination of foreign money, local speculation and abundant credit has driven Canadian house prices to levels that even government officials recognize cannot be sustained. In the Toronto area, for example, they were up 32 percent from a year earlier in April. David Rosenberg, an economist at Canadian investment firm Gluskin Sheff, notes that it would take a decline of more than 40 percent to restore the historical relationship between prices and household income.

Granted, the bubble bears little resemblance to the U.S. subprime boom that triggered the global financial crisis. Although one specialized lender, Home Capital Group, has had issues with fraudulent mortgage applications, regulation has largely kept out high-risk products. Homeowners haven’t been withdrawing a lot of equity, and can’t legally walk away from their debts like many Americans can. Banks aren’t sitting on the kinds of structured products that destroyed balance sheets in the U.S. Nearly all mortgage securities and a large portion of loans are guaranteed by the government.

That said, the situation presents clear risks. As buyers stretch to afford homes, household debt has risen to 167 percent of disposable income — the highest among the Group of Seven industrialized nations. This is a serious vulnerability, and a big part of the rationale behind Canadian banks’ recent ratings downgrade. The more indebted people are, the more sensitive their spending becomes to changes in prices and interest rates, potentially allowing an otherwise small shock to result in a deep recession.

What to do? Administrative efforts to curb lending and tax foreign buyers have helped but haven’t solved the problem. That’s largely because extremely low interest rates are still giving people a big incentive to borrow. The Bank of Canada has held its target rate at 1 percent or lower since 2009, and at 0.5 percent since 2015, when it eased to counteract the effect of falling oil prices. That’s a very stimulative stance in a country where the neutral rate is estimated to be about 3 percent or higher. One can’t help but see a parallel with the low U.S. rates and the housing bubble of the early 2000s.

 

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https://www.bloomberg.com/view/articles/2017-05-23/what-canada-should-do-about-its-housing-bubble

Expats living in Cotacachi Ecuador | Waccabuc Real Estate

Cotacachi, in the Imbabura province, is getting the lion’s share of expat attention these days. Many, especially those of retirement age, are finding their way here to enjoy the perfect weather, beautiful scenery, low cost of living, and especially the tranquil, slow-paced small-town lifestyle.

Like Otavalo and many other villages in this part of Ecuador, Cotacachi (population: about 8,000) is an artisan town. Just 20 minutes northwest of Otavalo, Cotacachi is Ecuador’s famous “leather” town. Artisan shops line the main street and you can buy any type of leather item, from shoes, boots and jackets to coin purses, bags, and suitcases…even upholstered furniture. Prices for all these items are 50% to 75% less than you would pay in the U.S.

Cotacachi has always enjoyed a reputation as a clean, peaceful village, and its plazas are kept neat and tidy. At night the artisan shops close up and only a few restaurants and small mom-and-pop shops are open. On the corners, you may find families congregating around a hot grill, where ears of corn are roasting along with pork and chicken kabobs. The cool, crisp air smells faintly of wood smoke, roasting corn, and eucalyptus. Eucalyptus trees grow abundantly wild, as do palm trees.

Cotacachi has become one of Ecuador’s most active expat communities in recent years, as many foreigners have chosen to locate here—and they enjoy a great lifestyle in Cotacachi. It’s a small, mostly indigenous town with a strong sense of community.

Largely dependent on agriculture, it is the sort of town many of us remember from our childhoods. Fresh raw milk can be bought from local farms, along with eggs laid by free-range chickens. Children still help with the family businesses after school and are well-mannered.

In the quaint downtown, you’ll find a couple of barbers, a small health clinic, and a pavilion for the town band. Ethnic restaurants and cozy cafés make welcoming spots to catch up with friends or just sit and watch life unfold in the Ecuadorian highlands.

Though Cotacachi has a slow and relaxed pace there are constant events and activities to take part in. Every month at least one parade or festival takes place. There are live music events, dances, and even horse processions to be watched and photographed. Seed exchanges, food fairs, and leather expos are all annual events too.

Of course it’s always nice to explore other areas too and there are plenty of great day-trips to choose from. Within two hours you could be at Chachimbiro Hot Springs relaxing in the thermal springs, or enjoying a mud bath at the spa. Lake Cuicocha is just a 15-minute taxi ride from town where you can marvel at the deep blue volcanic crater lake. If you’re up for some physical activity you can take a four-hour hike around the rim, or if you prefer to relax, take the boat tour around the islands in the center of the lake.

The famed market town of Otavalo is nearby, where you can explore the streets filled with craft items, food, and even animals for sale. Ibarra is a larger city just 45 minutes away with shopping malls, dining options, and large parks and plazas to enjoy.

When the sun sets in Cotacachi, the artisan shops close up and only a few restaurants and small mom-and-pop shops are open. That’s all you need, really. After a day of sunshine in the 8,000-foot-elevation, mountain climate, night-time is for sleeping.

Retire in Cotacachi, Ecuador

Retire in CotacachiCotacachi is becoming something of an expat magnet. Estimates are that about 100 expats live full-time in Cotacachi now. It’s a diverse group—not all American. There are Israelis, Cubans, Brits, and more among them, who get together regularly to discuss topics of interest or just to celebrate life. This makes retirement in Cotacachi enjoyable. The expats here are outgoing and relaxed, since there’s not much to worry about. No traffic, no temperature swings, no pesky insects, and certainly no money problems.

The town is also scenic. Two of the most majestic cordilleras of the Andes flank either side of the small village of Cotacachi. And several of Ecuador’s most famous volcanoes can be seen from just about anywhere in town, including Volcan Cotacachi to the west and Imbabura to the east. On a clear day, you can see Volcan Pichincha to the south.

If you want to enjoy good weather, clean air, great scenery, and a rich indigenous culture, but still be within two hours of the international airport in Quito, then retirement in Cotacachi could fit the bill.

Lifestyle in Cotacachi, Ecuador

Lifestyle In CotacachiCotacachi is a fabulous place to improve your health. The moderate climate with little variation throughout the year means that nearly every fruit and vegetable can be grown within a hundred miles. Not only is healthy produce readily available, but it’s also very affordable. With avocados priced at 3 for a dollar, organic leaf lettuce at 25 cents, and 6 plump carrots for 50 cents there is no monetary reason not to eat right.

In addition, the small size of the town makes it perfect for walking. Instead of jumping in your car to run to the grocery store, pay bills, or meet a friend for lunch you can easily accomplish it all with your own two feet. Many folks find that they lose weight without even trying after being in Cotacachi for only a few months. The healthy food choices and extra walking each day help shed excess pounds.

For a small town there are few things lacking. Residents can take advantage of spas, fitness centers, and basic medical needs all within a few blocks of each other. They can also participate in art classes, hiking groups, dance lessons, live musical events, yoga, foreign films, and science courses.

If you’re a social person, Cotacachi is the place for you. There are plenty of other expats to get to know, but the locals are friendly and welcoming too. It’s tough to spend much time in this town without quickly and easily making friends.

Real Estate in Cotacachi, Ecuador

Real Estate in CotacachiThis influx of foreigners has caused something of a building boom in Cotacachi in recent years, and if you come to look for real estate, you’ll be spoiled for choice. Older homes and apartments in need of renovation can be had for the price of a good used car.

Recognizing the trend of foreign baby boomers looking for an unspoiled and inexpensive retirement destination, local builders offer appealing homes and condos with features like large modern kitchens, elegant bathrooms, fireplaces, and more.

Rentals go for as little as $150 a month for a modern, three-bedroom apartment while furnished units with all utilities included go for $600.

Cost of Living in Cotacachi, Ecuador

Cost of Living in CotacachiThe cost of living is low in Ecuador, but especially so in smaller towns like Cotacachi. If you’re living on a budget or just looking to save money, this is a great place to do so.

Sunday is market day, when the villagers bring their wares to sell. Everything from fruits and vegetables to ground spices, woven baskets, and rope made of woven plastic shopping bags—recycling at its best. And then there are the roses…you pay $2 for one dozen, long-stemmed roses that are so fresh they last nearly three weeks.

On Saturdays head to Otavalo—to the largest open-air indigenous market in South America. If you’re a good negotiator, you can buy scarves, woolen socks, and hats for $2 each, or pretty wool and alpaca sweaters for $8 ($4 for kids’ sizes). The 30-minute bus ride from Cotacachi to Otavalo costs 35 cents; a taxi costs $5.

You can hire a maid to clean your condo for $10, and gardeners or landscapers charge around $4 per hour. Furnishing that same condo can be fun and inexpensive as well. There are master carpenters right in town that will build furniture to your specs for 50% to 75% of U.S. costs. Artistic paintings, colorful weavings, and wooden carvings are all easily found in the area and are priced at or below half of what you would pay back home.

Unless you must have imported food items or expensive cuts of meat you’ll save on your grocery bill here. Five dollars at the farmers’ market will get you an extra-large grocery bag filled to the brim with good healthy produce. Bananas, pineapples, mangos, avocados, tomatoes, leafy greens, and dozens of varieties of potatoes are just a few things you’ll find for sale. Whole chickens range from $5 to $8 depending on the size while fresh free-range eggs cost around $1.30 per dozen.

Many restaurants in town serve a menu del dia that consists of a beverage, soup, salad, main course, and dessert. How much? $2.50 each. It’s almost cheaper to eat out than to cook at home.

There are several good doctors in Cotacachi who typically charge $10 for an office visit. An eye exam costs $5 while a dental cleaning and exam will run around $20.

With the lack of severe temperature fluxes you’ll find that heating and air conditioning aren’t necessary, saving you plenty of money. Average electric costs for a household run between $15 and $20 per month. Monthly bills for water and propane gas usually come in at around $5 each. A package of cable TV, internet, and landline phone service can be had for around $100 per month.

Many folks live without a vehicle which eliminates fuel, maintenance, and insurance expenses. Bus fare usually averages around $1 per hour of travel time, and taxis are cheap too, charging $5 to nearby Otavalo (20 minute drive) and $12 to Ibarra (40 minute drive).

Depending upon the lifestyle you want a couple can easily live on $1,200 to $1,800 per month here. Of course frequent dining at high-end restaurants and traveling will require more income, but can still be done for far less than what it would cost in many other parts of the world. Don’t forget to factor in extra funds for trips back home, initial moving and visa costs, and for routine medical care.

 

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