Daily Archives: July 9, 2013

Second quarter market trends defy suggestions of housing bubble | Waccabuc Real Estate

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The average price of a home in Canada increased between 1.2 per cent and 2.7 per cent in the second quarter of 2013, according to the Royal LePage House Price Survey and Market Survey Forecast, released today.

 

According to the survey, markets across the country continue to post gains. In the second quarter, standard two-storey homes and detached bungalows both showed a year-over-year average price increase of 2.7 per cent to $419,614 and $386,547, respectively. Average prices for standard condominiums showed a more modest increase during the same period, rising 1.2 per cent to $248,750. Royal LePage forecasts that house prices will see modest gains throughout the remainder of 2013, projecting a 3.0 per cent increase for the full year when compared to 2012.

 

Dialogue concerning the direction of Canada’s housing market has remained front and centre in recent months. Changes to Canada’s mortgage lending rules in mid-2012 coupled with concerns about consumer debt levels, housing affordability in cities like Toronto and Vancouver and continued international economic uncertainty have prompted a number of analysts to forecast large downward price adjustments.

 

“As we have stated consistently since the current market downturn began late in the second quarter of 2012, this is a normal cyclical correction which brings fewer home sales and softer prices. Those hoping their predictions of a bursting bubble and cataclysmic drops in home values will come true are out of luck again,” said Phil Soper, president and chief executive of Royal LePage. “Price appreciation in most markets across the country has been well below the long-term average for Canada and will remain so through to the end of the year. We expect to see the number of homes trading hands to begin to rise slightly on a year-over-year basis in the second half of 2013, with price softness continuing until mid-2014, at which point we’ll see an emergence from the current cycle.”

 

Recent signals from major financial institutions in the United States and Canada also point to a turn in the tide. In recent weeks, two of Canada’s largest home-loan lenders, Royal Bank of Canada and TD Bank Group, raised their mortgage rates. At the same time, the U.S. Federal Reserve recently hinted that it may start winding up monetary stimulus later this year, should economic improvements continue.

 

“With the economy on both sides of the border performing better in recent months, a move off the record-low interest rates that we’ve experienced over the past few years is likely on the horizon,” explained Soper. “Paradoxically, we expect the first increases in interest rates to be constructive for the housing market. Rising rates would be driven by a strengthening economy, reduced unemployment and improving consumer confidence. Much of the dampening effect that would come with a transition towards higher rates has already been ‘priced in’ to both consumer attitudes and financial institutions’ current lending policies.”

 

As of late, the condominium sector has moved to the forefront of discussions concerning the health of Canada’s real estate market with fears of oversupply in major centres like Toronto. Yet, condominium prices remained flat or posted year-over-year gains in nearly all Canadian cities in the second quarter, with a couple of exceptions in British Columbia. While condominium prices in Vancouver saw a 3.3 per cent decrease when compared to the same period in 2012, signs of an early recovery are evident across the Lower Mainland of British Columbia.

 

Read more here: http://www.heraldonline.com/2013/07/09/5006219/second-quarter-market-trends-defy.html#storylink=cpy

 

TORONTO, July 9, 2013: Second quarter market trends defy suggestions of housing bubble | PRNewswire | Rock Hill Herald Online.

Residential real estate market heating up | Katonah Real Estate

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Are you thinking about jumping into the real-estate market, but don’t exactly know what the temperature of the market is right now?

While commercial properties are lagging in value and the ability to rent them, this home, located at 110 Mountain Ave. in Pompton Plains section of Pequannock, listed for $519,000 but sold for $525,000.
While commercial properties are lagging in value and the ability to rent them, this home, located at 110 Mountain Ave. in Pompton Plains section of Pequannock, listed for $519,000 but sold for $525,000.

Those at the Pompton Plains Weichert Realtors office have been gauging the temperature of both the commercial and the residential real-estate market.

“The commercial real-estate market in our service area of Morris and Passaic counties is not recovering at the rate of the residential real-estate market,” explained Aileen Williamson, SRES and Relocation Certified broker/manager of the Pompton Plains Weichert Realtors office.

“Commercial space for sale and for rent is moving at a slow pace. Days on market is an average of 242 days. Price per square foot must be very competitive and ‘location’ is key in order to secure an ‘intent to purchase’ or an ‘intent to lease’ in a short amount of time,” said Williamson.

She continued, “Our office area of expertise includes Pequannock (Pompton Plains), Lincoln Park, Riverdale, Pompton Lakes, Wayne, Wanaque (Haskell), Ringwood, Bloomingdale, lower West Milford, Butler, Kinnelon, and Jefferson. Our service area currently contains approximately $22 million of available commercial property, of which we are seeing a two-year supply.”

But on the flipside, the residential market tells a different story, according to Williamson.

“In all but two towns (of the office’s service area of expertise), we are in varying degrees of a seller’s market, in residential real estate sales: meaning the absorption rate is under five months’ supply. We are seeing our listings receiving multiple offers, which are resulting in full asking price or higher in some cases. Inventory is low and the still very attractive interest rates are starting to rise, which is driving more buyers into the market at this time,” said Williamson.

“The residential real estate market is ‘hot’!” said Williamson. “Buyers realize that now is the time. Savvy buyers realize the need to offer asking price with a willingness to pay over asking price in areas of a ‘seller’s market.’”

Williamson added, “Although prices are edging up, the price of homes in our area can still be considered discounted. Savvy sellers that could not sell in the downturned market are listing their homes slightly below FMV (Fair Market Value) and reaping the rewards of top dollar and over asking sales prices. These closings are just beginning to drive up appraised values in our market area. Appraised value has been a huge concern over the past seven years; this is improving.”

So what would be a good investment for someone trying to get into the market and trying to make a possible profit?

– See more at: http://www.northjersey.com/realestate/214564271_Residential_real_estate_market_heating_up.html#sthash.YeCBg9KH.dpuf

 

Residential real estate market heating up – NorthJersey.com.

Indians bought $ 3.5 billion US realty in year ending March 2013 | Armonk Real Estate

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Indian buyers accounted for nearly $ 3.5 billion of the $ 68.5 billion that foreigners spent on purchasing homes in the United States during the 12 months ending March 31, according to the National Association of Realtors.

 

Although the falling rupee appears to have dampened some enthusiasm for foreign properties, buyers from India once again made the Top Five foreign customers who have historically accounted for a bulk of realty purchases in the United States. Canada, China, Mexico are the top three countries buying into the United States, followed by India and the United Kingdom.

 

In the latest NAR survey, these five countries accounted for approximately 53 per cent of the reported international transactions. Buyers from 68 countries across the world purchased homes in the US, where it is relatively easy for foreign buyers to purchase homes.

 

While Indian buying peaked in 2009 when they accounted for 9 per cent of all foreign purchases, Chinese, who accounted for only 5 per cent that year, have surged ahead to buy 18 per cent of all realty sold to foreigners during the year ending March 2013. At a median price of $425,000, the Chinese are also buying more expensive homes than other foreign buyers, who spent a median of nearly $276,000 on US homes.

 

The median price of homes bought by Indians was $ 300,000 (about Rs 1.8 crores at current value, but closer to Rs 1.5 crores in 2012 when the rupee was around 50 to the dollar). It was lower than the median price of Chinese homes but higher than what Britons ($ 250,000), Canadians ($ 183,000) and Mexicans ($ 156,250) paid for their homes. The median price of homes bought by Americans is only around $ 220,000, attesting to the wealthy Chinese and Indian footprints in the U.S market.

 

According to the NAR report, international non-resident clients are likely to be substantially wealthier than the median domestic buyer, and are usually looking for a trophy property abroad after having met essential living needs in their home country.

 

The survey shows that among the reported destination states for buyers from India, the top states were California, Tennessee, Connecticut, and New Jersey. According to information from realtor.com, as of March 2013, the five markets of greatest interest to potential Indian buyers are Los Angeles, Orlando, Chicago, Dallas, and Houston. Indian buyers include those on temporary guest worker visas such as H1-B, but exclude Indian-Americans or American citizens of Indian origin.

 

Based on data from the survey, the bulk of properties purchased by Indian buyers were in the suburban area. Approximately 90 per cent of reported purchases were detached single-family properties and 7 per cent were commercial properties. Approximately 21 per cent of the reported purchases were all-cash.

 

According to the NAR, international purchasers typically buy detached single-family homes, which they intend to use for primary residence and for longer than six months. International students enrolled in US colleges and universities (usually funded by wealthy parents), recent guest workers and potential immigrants intending to settle down in the U.S, and professional and managerial employees of businesses and institutions who are in the US on a temporary but extended visit may plan on using the property year round for primary residence.

 

Since non-resident foreigners are limited to 6-month stays in the US, such international buyers generally expect to use the property for vacation/rental purposes and as an investment, the NAR report says. About 42 per cent of reported international transactions were intended for primary residences.

 

Indians bought $ 3.5 billion US realty in year ending March 2013 – The Economic Times.

Chinese Buyers Flood U.S. Housing Market | Pound Ridge Real Estate

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Flush with cash, Chinese homebuyers are flooding into the U.S. housing market, and paying top dollar.

“The Chinese came out really huge in the past year,” said Jonathan Miller of Miller Samuel, a New York-based appraiser. Chinese buyers accounted for 18 percent of the $68.2 billion that foreigners spent on homes during the 12 months ended March 31, according to the National Association of Realtors.

At a median price of $425,000, the Chinese are also buying more expensive homes than otherforeign buyers, who spent a median of nearly $276,000 on U.S. homes. And nearly 70 percent of those pricey Chinese deals were made in all cash.

Nowhere is the influx of Chinese homebuyers felt more strongly than in California, where more than half of the homes sold to foreign buyers went to Chinese nationals.

Sally Forster Jones, an agent with Coldwell Banker International in Los Angeles, said Chinese are snapping up many of the trophy properties on the city’s Westside. She estimates that she’s sold about 10 multimillion dollar homes to Chinese nationals over the past 12 months.

“The uptick in sales to Chinese buyers started several years ago but it has increased dramatically lately,” she said.

Most of her Chinese clients are wealthy industrialists or real estate tycoons, many of whom spend less than half the year in the States.

“Some have children going to school in Los Angeles and use the homes as residences for them and [as a place] to stay at when they visit their kids,” said Jones.

China’s gross domestic product has grown by high single-digit, sometimes double-digit rates for the past 10 years, producing a lot of cash for the country’s top business people who view U.S. real estate as a safe and stable investment.

Rick Turley supervises real estate offices for Coldwell Banker in eight counties in and around San Francisco, including Silicon Valley. Many of his Chinese clients work in technology.

“The current hot spots are Palo Alto, Menlo Park and Cupertino, near Apple headquarters,” he said.

Most purchase the homes to raise their family and they pay special attention to the local school systems. Turley also has Chinese clients who buy homes for their kids. Last year, a family from Shanghai bought a condo for their daughter who was attending Stanford. The daughter has since graduated and now works at Google, he said.

 

Chinese Buyers Flood U.S. Housing Market | AOL Real Estate.