Tag Archives: Cross River Luxury Real Estate

China’s housing market is looking ugly | Cross River NY Real Estate

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China’s surging property market might finally have hit the skids.

Sales have “showed a sharp decline” (paywall) in January, compared to Dec. 2013, according to China Confidential, a Financial Times research outfit, even when controlling for softness due to the Chinese New Year holiday. Official data show prices still high in December (the last month for which data were available), but those will likely be dragged down in the coming months.

A big blow to global markets

Housing investment is a big engine of China’s economy. And though slower growth could help end China’s dangerous reliance on credit-backed investment, an abrupt slowdown will freak out global markets and throttle commodity prices.

 

Devastating for China’s financial system

Property-sector loans accounted for one-third of total loans last year, equaling $380 billion. A slowdown would mean that real estate developers, many of whom borrow through shadow finance channels, would struggle to pay back retail investors who effectively loaned to them via wealth management products (more on those here). A lot of that investment has flowed one way or another through China’s shadow banking system, the unregulated credit that allows banks to shunt loans to dodgy borrowers.

But the threat to China’s financial system is much broader than that. Untold billions in corporate borrowing are supported by property used as collateral. There’s a cottage industry of auditors willing to appraise unoccupied or under-development property at whatever value is deemed necessary to get a bank manager to extend a loan. (In many cases, the borrower will turn around and lend to another business at a higher interest rate.) The fact that prices keep going up means there’s nothing challenging those face-value assumptions. A slump in prices would put a big dent in the value of that collateral.

http://qz.com/174029/chinas-housing-market-is-looking-ugly-which-is-scary-for-its-financial-system/#174029/chinas-housing-market-is-looking-ugly-which-is-scary-for-its-financial-system/

London housing market showing ‘bubble-like’ conditions | Cross River Real Estate

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London’s housing market is beginning to show “bubble-like conditions” as overseas investors bid up prices and buyers take on more debt to purchase properties, according to a report today by the EY Item Club.

Homeowners are now borrowing as much relative to their income to purchase real estate in the UK capital as they were before the financial crisis, the London-based economic forecaster sponsored by EY, formerly Ernst and Young, said.

The average London home will cost about £600,000 by 2018, it estimates. It is around £404,000 now, according to the land registry. Prices across most of the UK “remain well below their pre-crisis peaks and there seems little danger of a bubble,” Andrew Goodwin, senior economic adviser to the EY Item Club, said in the report.

“But London, which is suffering from a combination of strong demand and a lack of supply, is increasingly giving us cause for concern.”

Surging London home prices, buoyed by demand from overseas investors and government initiatives to aid buyers, have prompted economists, analysts and politicians to warn of unsustainable gains. Asia has been a particularly strong source of demand for the best London properties, EY Item Club said, citing brokers.

Investors from countries such as China and Singapore are taking advantage of the pound’s depreciation since the financial crisis to buy London homes.

 

http://www.irishtimes.com/business/economy/london-housing-market-showing-bubble-like-conditions-1.1677825

Bay Area home prices are taking a breather | Cross River Real Estate

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The Bay Area’s roaring housing market appears to be quieting down to more of an inside voice.

In November, home prices in the region increased by about 1.3 percent — a gain, but not nearly as strong as the city’s 23.2 percent year-over-year leap, according to the SP/Case-Shiller Home Price Indices, which tracks home prices across the country.

Nationwide, home prices in November fell by 0.1 percent, but showed 13.8 percent growth during the previous year. San Francisco remains in the country’s top 10, but experts expect the market to return to lower home price appreciation levels.

“Individual markets are showing signs of slowing down, which is helping to set up a mixed bag this year for buyers and sellers,” said Stan Humphries, chief economist with Zillow, a real estate information company. “Buyers can expect more inventory and less investor competition, while sellers used to seeing huge price gains month after month may feel some whiplash as that slows down.”

A slowdown maybe be good news for prospective buyers, but another major concern is rising interest rates, which can curb rising prices since they increase the cost of owning home.

 

http://www.bizjournals.com/sanfrancisco/blog/real-estate/2014/01/bay-area-home-prices-slow-down-november.html

Drop in New Home Sales | Cross River Real Estate

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Monthly data out this morning show sales of new homes fell 7 percent in December, to an annualized rate of 414,000, which was below the estimates of all 75 economists surveyed by Bloomberg News. Sales are up 35 percent since the bottom of the market in 2011, but as Calculated Risk notes, they are still basically at or below the levels seen during the bottom of every previous recession. New homes sales are just one piece of the market. And as Trulia’s Jed Kolko points out on Twitter (TWTR), they’re a historically small piece right now.

More broadly, there are signs of “remarkable resilience” in the recovery, according to a Campbell/Inside Mortgage Finance HousingPulse Tracking Survey released last week. It found that nondistressed homes spent an average of 9.7 weeks on the market in December, or 20 percent less time than in December 2012. Also, homes are selling closer to their asking prices. In December, homes sold for 97.1 percent of their list prices, on average, up from 95.5 percent a year earlier.

 

http://www.businessweek.com/articles/2014-01-27/the-housing-recovery-continues-despite-a-drop-in-new-home-sales?campaign_id=yhoo

Home prices fall back slightly in November, soar from a year earlier | Cross River Real Estate

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Home prices in the nation’s largest cities declined slightly in November from  October, as the market showed signs of cooling during the slower fall season,  according to a closely watched index.

The S&P/Case-Shiller  index of 20 large U.S. metropolitan areas, released Tuesday, fell 0.1% from  October–the first decline since November 2012. But prices soared compared to a  year earlier, rising 13.7%.

David M. Blitzer, chairman of the index committee at S&P Dow Jones  Indices, called November a “good month for home prices,” noting strong  year-over-year price appreciation.

“Prices typically weaken as we move closer to the winter,” he said in a  statement.

Western metros continue to lead the recovery. Prices in Las Vegas rose 27.3%  compared to November 2012; San Francisco 23.2%; and Los Angeles 21.6%.

The Case-Shiller index, created by economists Karl E. Case and Robert J.  Shiller, is widely considered the most reliable read on home values.

The housing index compares the latest sales of detached houses with previous  sales, and accounts for factors such as remodeling that might affect a house’s  sale price over time.

Nine cities posted price gains from October. Los Angeles, Las Vegas, Phoenix,  Miami and Tampa,  Fla., have seen 12 or more straight monthly increases.

http://www.latimes.com/business/money/la-fi-mo-case-shiller-20140128,0,5908610.story#ixzz2rhqtcUVQ

New home sales fell 7% in December | Cross River Real Estate

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New home sales fell in December, falling 7% below November’s revised rate of 445,000 sales to a seasonally adjusted annual rate of 414,000 units, the Commerce Department reported Monday.

However, December statistics are still 4.5% above the December 2012 estimate of 396,000 units.

Additionally, the median sales price of new houses sold in December 2013 fell to $270,000, while the average sales price for the same month came in at $311,400.

The estimate of new houses up for sale at the end of December came in at 171,000, representing a 5-month inventory supply at the current sales rate.

Meanwhile, 428,000 new homes were sold in 2013, which is 16.4% above the 2012 figure of 368,000 units.

Despite the dampening numbers, Jeff Taylor, managing partner at Digital Risk, is still very bullish on new home sales going into 2014 since you still have historically low interest rates and you will get more for your money.

“I think last year the market got so hot nationally that a lot of investors bought a lot of these houses and started to put them on the market, but since they were not doing significant repairs to the houses, people took a step back from buying them,” Taylor said.

 

http://www.housingwire.com/articles/28729-new-home-sales-fell-7-in-december

Baby boomers key to robust real estate market | Cross River Real Estate

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“Build it and they will come.” That phrase had characterized Clark County’s real estate market for decades. But are we ready to build the housing that will meet the needs of those who help drive the local market: the baby boomers?

The year 2013 was a continuation of the momentum in home sales that started in 2012. Prices continued to modestly increase. With this stability in the market, many savvy but cautious buyers were ready to take the plunge.

This improvement in the housing market also created hope for many homeowners who had suffered substantial losses in value over the past several years and now found themselves in a more favorable position to sell.

The shift from a buyer’s market to a seller’s market came early in the year, when buyers very aggressively returned to the market. The listing inventory in certain price ranges was quickly depleted.

A seller’s market emerged, with multiple offers on some properties, especially in the lower price ranges — less than $200,000, and $200,000 to $250,000. Prompted by low interest rates and good values, buyers continued to pursue homeownership.

The next 12 months should be characterized by an increase in housing inventory. More homeowners will be reaching the point where their equity position is improved enough to no longer be “underwater.”  As those sellers enter the housing market, we should see inventories adequate to satisfy a thirsty supply of buyers.

Many baby boomers are homeowners who want to move from a large two-story into a single-level home in a quality, secure neighborhood with perhaps a smaller yard. They are not finding many choices in this category, particularly if they aren’t interested in paying more than $400,000 for the home. They want newer, quality construction — they don’t want to downgrade, they just want to downsize.

 

 

http://www.columbian.com/news/2014/jan/23/baby-boomers-key-to-robust-real-estate-market/