Showing posts with label united states. Show all posts
Showing posts with label united states. Show all posts

Wednesday, October 15, 2014

Brooklyn or Brisbane?

I can buy a two bedroom apartment in Brooklyn NYC for about the same price as a two bedroom apartment in Brisbane city.  See this listing for example.  Does that make sense?

Sunday, August 31, 2014

Australians Investing in Brooklyn

I recently came across an article from the NY Times from November 2013, discussing how Australians are investing in residential real estate in Brooklyn, NY.  It is titled G'Day from Bushwick.  It is worth reading.


Tuesday, July 1, 2014

Not out of the woods yet

I was speaking with a U.S. homeowner recently who handed her keys back to the bank.  She bought a house in NY State about 5 years ago, substantially renovated her house, but it was still way underwater today.  From what she told me, there are many other homeowners who are still in negative equity in the U.S.  And there are a large number of homes still going through the foreclosure process in some states.

One company that has been buying up U.S. homes is Waypoint.  Have a look at the Waypoint website  to see their rental homes.  They list and manage directly, without agents.  An interesting story about Waypoint is here.  There is consolidation occurring in the buy-to-rent market in the U.S.

Saturday, March 8, 2014

Florida Foreclosures

It is interesting to see that in Florida, it is possible to buy a one bedroom apartment for less than $80,000, including whitegoods.

1)  http://searchbankproperties.com/2014/03/bank-owned-condo-in-bermuda-dunes/


Makes the Gold Coast look very overpriced.

Saturday, July 20, 2013

LA property prices in dramatic increase

I was recently looking a property in the LA area of California.  When a house I was looking at was listed for sale, about 20 written offers were received.  I was amazed.
Recent stories in the LA Times state that there is a property boom (or property undersupply) in parts of LA.
See:  Low Inventory and 28% Increase.
There was also a jump in the median sales price in San Francisco.


Wednesday, July 10, 2013

A soaring apartment market in Toronto ignites fears of a crash

An interesting recent article in the NY Times about apartments in Toronto: A Dizzying Condo Market in Toronto.  How similar is this to Brisbane?  An extract:

"Median condo prices have risen 25 percent since 2009. Two-bedroom condos of about 850 to 900 square feet in Liberty Village sell for about $500,000.  For Toronto, this is crazy.

“There is no question that the housing market in Canada is overshooting,” said Benjamin Tal, deputy chief economist of CIBC World Markets. “Now the cocktail party conversation in Canada is: ‘Will this lead to a U.S. style crash?"

Wednesday, May 29, 2013

U.S. Home Prices Rise

The U.S. is in a more positive mood.  See NY Times:

"Americans are in a buying mood, thanks largely to the housing recovery.  The latest sign emerged Tuesday as the Standard & Poor’s Case-Shiller home price index posted the biggest gains in seven years. Housing prices rose in every one of the 20 cities tracked, continuing a trend that began three months ago. Similar strength has appeared in new and existing home sales and in building permits, as rising home prices are encouraging construction firms to accelerate building and hiring."

Saturday, April 27, 2013

USA real estate - note from a reader

This is a note that I received from a regular reader of this blog:

I’m currently visiting USA again for another 3 months.  (You’ll recall my visit to USA and subsequent visit to China last year). I like to try and get a feel of the real estate market and the economy in the U.S. since Australia appears (at least to me) to follow the U.S by about 18-24 months. Things are considerably worse here on the ground, than last year, in my opinion.  Looking at housing and units, empty units are everywhere in every town city, state, just everywhere. I researched this and read here that according to the U.S. Goverment, there are now 18.7 million units vacant in the U.S. Ref: http://www.thefiscaltimes.com/Articles/2011/08/04/9-Worst-Recession-Ghost-Towns-in-America.aspx#page1

Talking with estate agents (if they’ll engage in a conversation - most are in denial) affordability seem to be the lead problem; people cannot afford or will not commit to buy, and people cannot afford to rent at any price. Mortgage rates here are 3.25-3.75% for a 30 year fixed mortgage!. Their parents are telling them not to commit to a mortgage since they themselves now owe more than they paid for their own property and have subsequently become the “near-retirement working poor”.  Some apartment managers (if that’s what they are) are advertsing $500 in cash to sign-up to a lease. Last time I mentioned large numbers of shopping centres and motels were empty and closed up. This time round it’s more motels, an abundance of empty apartments and, restaurants. Restaurants is new for this visit, they have been hit badly, every town/ city along the way has scores of empty closed down restaurants. These were the mid-range market restaurants that offered good meals in the $15-$30 range. They’re closed. For example, where I stayed a few minutes from the Old Downtown Scaramento area, five in the street were shut along with 3 motels. I got talking with the manager of the Motel6 I stayed at which had 7 cars in the carpark on a Saturday night for a complex of 56 rooms.  On asking him the question about the restaurants, he simply stated “No one will spend any money now, even if they’ve got it. They’re all spooked and shell-shocked by the GFC. I don’t know when this will end, if it does.” he said.

I wonder if what’s occurred here will find it’s way to Australia.

Wednesday, July 11, 2012

Distressed America - A reader’s opinion


This interesting note was sent to me by a reader who recently visited the USA:

I visited America for another road trip during May and June of 2012. I have visited America on at least 12 occasions since the mid 80’s and estimate with reasonable accuracy to have driven in excess of 130,000 miles there by road. My previous recent trips to USA were in mid 2008 when the term “GFC” was unheard of and again in 2010 when the USA was supposedly “over” the GFC. My trips by road have usually led me into the back streets and out of City areas avoiding the tourist strips, where one can enjoy real America and also form a more realistic opinion of the economic situation. Having driven from L.A to San Francisco to Vancouver then down to Salt Lake City then across to New York visiting practically every town and City en-route, it was evident that America is in a serious downward economic decline and that, regardless of what the Government there does to try and improve the situation, it appears to have no effect. With some 12.5 million workers (that’s twelve and a half million) now unemployed in America, the effect on the economy is really “in your face” now.

Visiting 21 States and scores of towns and Cities, it was clearly evident that things had changed radically in America since 2008 and this became a fascination for me, given that I had visited America on many occasions when it was the global powerhouse of the world. I began to seek out and drive around the out- of-town industrial areas, high density housing areas,  large and small industrial and commercial areas, shopping centres, apartment blocks and hunted up the local real-estate magazines of each town and City I stopped at along the way. What immediately caught my attention in most States and Cities was the large number of closed restaurants and shopping malls, empty shuttered-up industrial buildings for lease, closed and abandoned factories, abandoned car dealerships yards and the number of residential properties and apartments for sale. The exception all over USA were the large food supermarkets which were doing brisk business.

General internal traveller tourism has evaporated in USA except for large numbers of Australians visiting places like Disneyland, Anaheim, San Fran and New York City. The tourist busses around those Cities are packed full with Aussies making the most of the exchange rate while our tourist industry here is on its knees. Outside of those tourist destinations, it’s a very different story. Once proud manufacturing towns all over America are dead, the motels are closed, shopping centres are boarded up, commercial premises empty, people are unemployed and empty houses and apartments are for sale throughout. Beggars are everywhere now, at gas stations, outside motels, the KFC and every food establishment asking for money to feed themselves. These are not the slick street corner beggars usually seen in San Francisco, these people are genuinely out of work, desperate and hungry and usually have unkempt young kids with them. The minimum legal wage in America is US$7.50 per hour for those who can get work. Many Americans work for less and “tips” are often included by unscrupulous employers desperate to stay in business and are used to gross up to the minimum wage to the legal US$7.50 per hour. For the first time ever in America, in my own experience, waiters are asking for tips, usually saying “ Would you like to leave a tip please”. The union wage system in America has been torn apart. Unions have been removed by sacking an entire work-force and rehiring non-union labour only, with wages slashed to the bone. All over America there are re-hiring billboards offering $10.50 per hour at big high-end department stores, stores that even have shops on 5th Avenue in New York. Half or less than half what they used to earn. Business owners here in Australia may think reducing wages will have benefits in terms of competition etc, etc, however, the results are clearly evident in America. Slashing wages has reduced public spending to zero. Spending starts from the bottom up, not the top down. If people have no job and or no disposable income, they have nothing to spend. Hence business suffers and business soon goes out of business. That’s what has happened in America. The result is thousands of businesses of all kinds out of business, all across America.

States that appeared unaffected by this economic downturn were Nebraska, Iowa and Kansas, all food producing States. It was immediately evident when driving those States that things were different. Restaurants were open and well patroned, new car dealerships aplenty, people were out shopping, mall car parks full and it was easy to conclude the economy there was in reasonable shape.  Move 50 miles to the next State however and one can see the difference. Leaving an apparently wealthy State like Nebraska or Iowa and driving to Illinois, once a huge manufacturing centre, the change is evident. I decided to look at Peoria, Illinois. This is the earthmoving and mining equipment manufacturing headquarters of the world, or, once was. I drove to the Komatsu factory, once the largest earthmoving and mining equipment factory in the USA formerly employing 4-5000 people in its hey-day. The employees car park was less than quarter full and where I have in the past, seen row upon row of finished equipment ready for shipping, I saw the frames of just four dump trucks packed for rail. I then visited the Caterpillar factory across the Illinois River. Same again, employees car park less than half full. These two companies are manufacturing the bulk of the equipment for the so called “mining boom” here in Australia. Just a minute, “Mining Boom”?. These two major factories have not increased production space since I was there last in 2006 and one gets the appearance of a declining market. Their workforces have been vastly reduced. If there was a “mining boom” on here, would they not be frantically filling manufacturing demand with factory expansion and increased employment? Not so. Quite the opposite. The curious part here is that this is a location where wages are still unionised at US$37.00 per hour. But 3 bedroom houses in Peoria are just $49,000-$80,000 each for a nice family home.

Dayton Ohio is an example like many major Cities across America.  I stayed at a well known motel chain which is my favourite, reasonably cheap and clean with an average of US$40-50 per night. The complex had 140 rooms. On arrival there were 9 cars in the car park at 6.30 at night, peak check in time. This was very common across America this time round. Motels are empty, night after night. The owner was seated on the visitors couch looking sad. Greeting me, I booked in and got talking to him. Turns out he was a franchisee. I asked why there were no cars in the car park. “No customers” he said, (obviously). He said he was not sure if the next car in would be a customer or the Sheriff’s Bailiff. All over America this situation was repeated. Many motel chains had simply shut shop or gone broke, even big motels with 50-100 rooms and an accompanying but now closed restaurant belonging to (a now defunct) restaurant chain.

Shopping centres were another story. In big Cities in locations such as California, (all over) Washington, Salt Lake City, Dayton Ohio, Denver Colorado, big shopping centres and malls were deserted of customers. Usually, it was possible to park a car in the first row after the handicap parks in a 5-acre car park. I went into a huge Target store in Denver. There were 20 cash registers, one was open and I was the only person in line. The store was empty of customers. A walk around the out-door mall complex revealed many small and large stores closed up and empty. This was common all over America. In some Cities, entire shopping centres,  the size of Toombul on Brisbane’s north side to give an example of size, were completely closed up and gated off. Factories, large and small are deserted, all with the names of the former occupants intentionally painted over or removed. Car dealers are offering nothing down and zero interest for 2 years followed by 1.2% p.a after that for new cars. Some still have brand new 2010 inventory at giveaway prices. Still, no buyers. Philadelphia, Pittsburgh, Columbus, Detroit, some of Chicago and Cleveland are the same.  Detroit, home of Motown music, steel mills and big car manufacturing factories is a fascinating place. Scores of factories are simply abandoned, thousands of homes are deserted, many partially burned down, unemployment is rampant and the downtown CBD is deserted at 5.00pm in the afternoon. Large 20-story office blocks are empty in the downtown CBD. Where are the thousands of office workers that once worked there one may ask? Nowhere to be seen, they are now unemployed. Motown music has survived though. Bethlehem Pennsylvania, was once the home of steel mills, each miles long, employing 15,000 workers. Now they are closed. Allentown Pennsylvania is the same, steel mills closed, thousands of people out of work and no money to buy anything.

House prices in America have fallen and continue to fall. There are no buyers for many reasons. I spoke with a number of real-estate agents there. Some were reluctant to discuss anything but a specific property and would not be drawn on the state of the market. Others were more willing to talk outside the square and  predicted falls of another 30% and no capital gain for 5 years, perhaps 10 years. Reasons given were:  no buyers, potential buyer inability to accrue a deposit, bank reluctance to lend, high unemployment hence inability to obtain a mortgage, high stock numbers on the market and, an undefined but large “secret sales market”. This secret sales market they claimed, comprised millions of homes and apartments for sale but which were not advertised for fear of bringing down the housing market in entirety. Agents told me to take no notice of the asking price. Many houses and apartments are publically displaying a higher sales price than sellers will accept so the financier doesn’t see the real lower price being asked by the seller and grab it before the seller defaults.  The rising unemployment obviously has a flow on effect. Reduction in take home wages and increasing unemployment certainly have had a very detrimental effect on the U.S housing market. Rental affordability is also declining as the more wealthy tenants also become unemployed, making investors nervous and they are selling up rental properties and apartments as their ROI falls, placing further downward pressure on prices. 

Where this will all end is not my guess. Stalled spending is detrimental to an economy. Low inflation and interest rates may appear on the surface to be prudent economic management  however, these two factors coupled with increasing unemployment and pressure on wages which reduce individual spending also cause a stalled economy. America is a stalled economy with almost zero inflation and near zero interest rates. People have no disposable income, and those who do will not open their wallets, regardless. It is often said in Australia that we follow America in economic matters. Our stock market proves it so daily. I hope not.

It is sad to see a once proud and productive nation in such decline. I hope we can choose our own path here in Australia, make our own decisions and avoid the same mass unemployment and social decline America has today.
        

Monday, May 28, 2012

USA property market is turning around?

From my conversations with U.S. brokers (real estate agents), it appears that in some markets in the United States, there are now more buyers than sellers, with multiple offers on properties for sale.  This view is supported by a recent USA Today article:

Seller's market returns as homes for sale drop in some areas
http://usat.ly/JvJMoI

Update:  See also NY Times

Monday, August 15, 2011

Wednesday, June 1, 2011

How Low Can the US Market Go?

For real estate, some economists say, an end to the seemingly endless decline in housing values might be in sight.

Not immediately. At the moment, prices are still dropping. In 20 large cities, prices fell 0.8 percent in March from the previous month, according to the Standard & Poor’s Case-Shiller Home Price Index released Tuesday. That pushed the closely watched index below its level of two years ago to a new post-bubble low, and put it 33.1 percent under its July 2006 peak.

Few analysts expect housing prices to rebound anytime soon. But quite a few are predicting that the market is close to the moment when things will stop getting worse, which will be a major improvement all by itself.

“By far the bulk of the downturn of housing prices is beyond us,” said Paul Dales of Capital Economics. He expects the market to slip 5 percent further, slightly more than he was expecting a few months ago.

“There are some amazingly favorable signs. Housing is the most undervalued it’s been in 35 years,” Mr. Dales said. “At some point, it’s going to do very well.”

See NYT

Two Bedrooms Are Back in NY

As the real estate market in New York City shuffles toward recovery, two-bedroom apartments have been the last to rejoin the party.

Sales of studios and one-bedrooms rebounded first after the market crashed in late 2008, followed by three-bedrooms, but it wasn’t until mid-2010 that the two-bedroom market started its comeback. Now, brokers say that the demand for smaller apartments has ebbed and that two-bedroom apartments are all the rage, especially those priced at the lower end of the market.

Alan Nickman, an executive vice president of Bellmarc Realty, says that more buyers have recently come to him looking for apartments between $750,000 and $1.2 million. “That’s basically your starter two-bedrooms,” Mr. Nickman said, adding that the pool of potential buyers included “first-time buyers who are going straight into a two-bedroom,” bypassing smaller units.

See NYT

Monday, May 23, 2011

US Banks Own Nearly A Million Homes

"Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year. Regions that were hardest hit by the housing collapse and recession could take even longer to recover — dealing yet another blow to a still-struggling economy."

Sunday, May 1, 2011

Saturday, April 30, 2011

USA Prices Reverse Again


From the USA:

"PRICES for both homes and commercial real estate are falling again. Meaningful improvement may have to wait until there are many fewer distressed properties for sale.

Indexes of the two markets showed this week that the latest declines had almost wiped out the mild gains the two markets had shown after prices appeared to have hit bottom.

The Standard & Poor’s/Case-Shiller index of home prices ended February 3.3 percent below where it was a year earlier, and just 0.5 percent above the low reached in May 2009. The Moody’s/REAL Commercial Property Price Index was reported to be down 4.9 percent over the last 12 months, but still 0.8 percent above its low, reached last August. ..."

NY Times

Sunday, April 10, 2011

From the USA

"Developers say that renters do not make the same price-per-square-foot calculation as buyers, and that smaller apartments — with some studios less than 500 square feet and larger one-bedrooms barely topping 1,000 square feet — will not discourage the target audience. "
Note that 1000 square feet is 92 sqm. You can't find many one bedrooms in Brisbane at 92 sqm. Brisbane apartments are small, and overpriced.


Sunday, May 30, 2010

Buy in the Bust?

"Mr. Sternlicht hopes to foreclose on many of Corus’s errant borrowers, restyle their buildings and sell units for a significant profit once the real estate market recovers. He says he and his investors can afford to wait until then because the F.D.I.C. has provided them with $1.4 billion in zero-coupon financing and an additional $1 billion in low-cost loans that can be used to complete unfinished projects."

See full article in NY Times: "Barry Sternlicht, the Real Estate Bargain Hunter"