Is Economy Doing Well?

[timd354]

Coming to the Bay Area ...

Despite industry assurances that the hottest housing markets in Canada, particularly Vancouver, will always remain hot, and that it is physically impossible for prices to decline in this miracle economy, Canadians are now becoming aware that those assurances have just been another load of industry hype. And a larger share of them are starting to grapple with a new reality – a reality in an over-leveraged, inflated housing market where prices have come to rest on the edge of a cliff.

 

[timd354]

The Vancouver market increases in the past few years was driven in large part by purchases from offshore foreign buyers (mainly from China). They just enacted a new law that imposes a draconian 15% transfer tax on foreign buyers that just went into effect...that is the reason for the sharp downturn in Vancouver real property values. https://www.theguardian.com/world/2016/aug/02/vancouver-real-estate-foreign-house-buyers-tax
https://www.theguardian.com/world/2016/aug/02/vancouver-real-estate-foreign-house-buyers-tax

 

[Randolph Kinney]

Home Prices in the Bay Area Push Builders, Buyers to More Distant Suburbs

New developments are sprouting up well beyond San Francisco and Silicon Valley; growth extends as far as Sacramento

By contrast, the number of new residential developments in coastal San Francisco and San Mateo counties fell by 48% over the past year, while San Jose, which includes Silicon Valley, fell by 59%, according to the data.

People are moving out of the bay area where it is cheaper.

The trend is more pronounced in the Bay Area than in other parts of the country because of the extreme price pressures over the last few years.

But there are signs that demand for higher-end homes is slowing: Median sales prices for new single-family homes in San Francisco fell in both May and June, though prices were down from a record high of $1.5 million in April, according to data from CoreLogic.

 

[normando]

Besides scarcity of land to build, government is making costs to build high. One city raises it's new home cost at $3.48/sf for new development then adjacent city did same thing. Not much affordable housing being built. Lots of high end apts like studios renting near $3,000. When economy is good, governments raise cost to build. Cheaper to build further out in boonie areas where no one really wants to commute.

 

[Big ole Boy]

Human society is a fiat numbed android belly - hunger is gone.

Every aspect of human market participants is hollowed out.

 

[Randolph Kinney]

Vancouver Home Sales Crash 23% In One Month As Prices Tumble

Arguing that the tax would halt the influx of hot Chinese money into Vancouver - which many have claimed is the reason for Vancouver's stratospheric housing prices - Liu said that "this is a big country with a small population. It needs immigration to grow the economy." The implication was that absent a hospitable housing market where Chinese hot money launderers can park their cash, it is Canada that would suffer.

Whether or not the conflicted Chinese consul is correct, remains to be seen, but for now one thing is undisputed: the Vancouver market is being roiled as the latest numbers from the Real Estate Board of Greater Vancouver confirmed. In August, the board reported that Vancouver home sales fell 26% from a year earlier, while prices slid as the 15% tax crimped demand. Compared to July, sales tumbled by 23% to 2,489 transactions. Detached properties were hit hardest as sales dropped 45% from a year
earlier. Transactions of attached homes such as town-houses dipped 25%
and apartment sales were down 10 percent.

 

[Randolph Kinney]

Are cash homebuyers paying more than non-cash buyers in San Francisco?

Cash homebuyers in the Bay Area may be paying more per square foot than non-cash buyers, a potential warning sign of an overheating housing market.

Homebuyers paying with cash in San Francisco-Oakland-Hayward metro area shelled out a 4.8 percent premium per square foot during the first quarter of 2016.

 

[Randolph Kinney]

On Wednesday, the U.S. Treasury Department announced it will require buyers of luxury homes in Los Angeles and other California counties with pricey real estate to reveal their identities when laying out cash to purchase homes through secretive shell companies.

The move is an expansion of the government’s effort to learn more about possible money laundering in the luxury market. Earlier this year, the Treasury Department mandated similar requirements in Manhattan and in Miami-Dade County in Florida.

http://www.latimes.com/business/la-fi-LLC-money-laundering-20160727-snap-story.html

 

[Noreen]

Appraisers were busy doing REO and short sale appraisals during the downturn. I remember normal sales dried up as well as refinancing because values were falling that fast and many became upside down on their mortgages. People were walking away from their houses. Investors started buying up the excess supply of distressed sales for cash. Some were flipped, the rest were converted to rentals.

My neighbors bought at peak of market, could not refi even today. He has a first and second mortgage and the second refuses to subordinate to the first on a refi. It is estimated that at least 10% of homes are still underwater with their mortgages.

Randolph, so I went to the Dr Tuesday, reading the paper in the wait, sure enough 5 full pages of foreclosures. Now this particular paper is out of Manchester and tends to reflect state wide information. Then Friday morning I went in for blood work, sure enough there were EIGHT pages of filings. I guess what I'm saying for my market area, I have to be diligent for every town, every inspection because though the "trend" seems to be increases in a lot of areas, I think there is another wave of "distressed" properties on the horizon (IN MY MMARKET AREA). The general outlook is things are so much better, and they are in many areas but I don't see this "optimism" lasting longer than the exceptionally low interest rates. I know here, we need more jobs.

 

[Meandering]

Randolph, so I went to the Dr Tuesday, reading the paper in the wait, sure enough 5 full pages of foreclosures. Now this particular paper is out of Manchester and tends to reflect state wide information. Then Friday morning I went in for blood work, sure enough there were EIGHT pages of filings. I guess what I'm saying for my market area, I have to be diligent for every town, every inspection because though the "trend" seems to be increases in a lot of areas, I think there is another wave of "distressed" properties on the horizon (IN MY MMARKET AREA). The general outlook is things are so much better, and they are in many areas but I don't see this "optimism" lasting longer than the exceptionally low interest rates. I know here, we need more jobs.

Same here.

Plus small businesses that opened since '08 are mostly vacant again and ones that have been around longer are also up for sale or rent. Commercial land for sale signs are popping up everywhere.

But we got new doctor complexes by-golly!

And a new hospital!
While the old hospital put on a great big addition!

Although, Domino's pizza seems to be holding its own here.

.