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We’re Asking Bidders And The Common Answer We Get Is ‘We’re Just Waiting’

A report from the Australian Financial Review. “Weekend property sales were boosted as sellers in inner Sydney and Melbourne cut prices by up to 20 per cent to seal deals in sluggish markets. ‘Cheap as chips,’ said Emma Bloom, buyer’s agent and director of Morrell and Koren, which specialise on prestigious inner Melbourne real estate, about the buyer’s market.”

“Ms Bloom said agents who over-quoted property values are being forced to review their original price in line with falling market expectations. Many properties coming up for auction have been on the market for more than 12 months, have been passed in once, failed to find any expressions of interest among private buyers, and are put back on the market with a second agent.”

“For example, Melbourne’s most expensive weekend sale at Mernda Road, Kooyong, a leafy dress circle suburb about 7kms south-east of Melbourne’s central business district, sold for about $4.7 million after being passed in. The four-bedroom, luxury 1930s property, which had been on the market for about 12 months, was on offer for about $5.5 million and, at the height of the property boom, would likely have sold for about $6 million, according to agents.”

“‘Prices have come off about 10 per cent in the sub $1.2 million to $1.3 million market. For the right property buyers are willing to jump in and compete,’ said Tom Scarpignato, an agent for Belle Property in Neutral Bay.”

From Domain News. “Prices are way, way down, volumes are way, way down, but now that the [federal] election has been called it will start to settle – that’s my gut feel,’ said auctioneer Jeremy Fox.”

“Partner at Nelson Alexander Ascot Vale Jon McKenna said many of the properties that were passing in were selling within a week of the auction being held. The banks’ tighter lending restrictions meant buyers were, at times, reluctant to bid in case they were unable to borrow enough for the reserve or winning bid.”

“There were also those still waiting to see what the market will do. ‘We’re asking bidders and the common answer we get is ‘we’re just waiting.’ McKenna said.”

From Nine Finance. “The Reserve Bank has warned that more Australian households could be falling into negative equity, where their house is worth less than their mortgage, as property prices continue to plummet. National Australia Bank (NAB) Group Chief Economist Alan Oster said the current housing downturn is one of the largest on record.”

“But what makes this one different to previous slumps, including the Great Depression, is that property prices in Sydney and Melbourne are falling while unemployment and interest rates remain low, he said.”

“‘Are conditions now anything like the Great Depression? Give me a break. Are they likely to turn into the Great Depression? Give me a break,’ Oster told 9Finance. ‘When house prices go down, it has big impact on construction. We have an 18 to 20 per cent fall in construction over the next two years… But is the economy falling over? No.'”

“Robert Mellor, managing director of Australian economic forecaster BIS Oxford Economics, said right now, house prices are 16 per cent below their June 2017 peak and the downturn is not as dramatic as people believe. ‘All we’re seeing (currently) is a return to where prices were back in June 2016, in nominal terms. In fact, we’ve fallen back to June 2016 levels and the price growth we saw in the 2016-2017 financial year is something that was probably not justified on the long-term fundamentals. And it was because investors went over the top, the owner-occupiers got caught up in it,’ Mellor said.”

From ABC News. “Darwin property owner Suzy Kruhse-Mountburton believes her biggest mistake in decades of investing was listening to people predicting market conditions who ‘don’t have a crystal ball.'”

“‘It certainly doesn’t help when the media pumps out endless negative media, negative reports that are all just fiction anyway. Nobody knows,’ she said. ‘When people are nervous, they’re very, very sensitive to negative media and when they keep hearing in the media that ‘Darwin’s doomed’ and so on, it doesn’t help.'”

“‘Darwin is really, really tough,” said realestate.com.au chief economist, Nerida Conisbee. ‘It’s now five years into a property downturn, prices are down almost 25 per cent from peak, so it is actually probably the worst-hit market in Australia in recent history.'”

“Ms Kruhse-Mountburton is currently advertising a house in Rapid Creek for private sale. She said she believed the market had bottomed out, and was likely to turn around in the next 18 months or so. ‘I’ve listened to this rubbish before and I’ve seen it over more than 50 years, so it’s not a new thing,’ she said.”

“She said there were very few good-quality properties on the market because people who are holding property know the price is too low. ‘They’re just sitting and waiting for it to turn,’ she said.”

“Ms Kruhse-Mountburton said while she had shown the house to several people, she would not be selling it at any price. ‘I’m not dead yet, I could wait a few more years, so that’s what I’m thinking of doing.'”

This Post Has 37 Comments
  1. ‘Are conditions now anything like the Great Depression? Give me a break. Are they likely to turn into the Great Depression? Give me a break’

    End of story! Period!

    1. “Are conditions now anything like the Great Depression?”

      Depends on whom you ask. For instance, the guy who lives under the bridge or his compatriot who stands all day long near the stoplight, holding up a sign pleading for handouts, might opine that conditions right now are much like those of the Great Depression. And the number of people in dire economic straits appears to be increasing.

      1. What is it they say? A recession is when your neighbor loses his job, a depression is when you lose your job.

      2. if all the people collecting food stamps were knocking on doors begging for food it would change people’s perspective.

  2. ‘Kruhse-Mountburton said while she had shown the house to several people, she would not be selling it at any price. ‘I’m not dead yet, I could wait a few more years, so that’s what I’m thinking of doing’

    You stick to your guns Suzy Kruhse-Mountburton. (Sounds kinda made up). Don’t give it away.

  3. ‘All we’re seeing (currently) is a return to where prices were back in June 2016, in nominal terms’

    I thought they said 2014 the other day?

    ‘Darwin is really, really tough,’ said realestate.com.au chief economist, Nerida Conisbee. ‘It’s now five years into a property downturn, prices are down almost 25 per cent from peak, so it is actually probably the worst-hit market in Australia in recent history’

    Nerida, there are neighborhoods in Sydney that are off over 30% a few months ago.

    1. ” … negative report$ that are all just fiction anyway. Nobody knows,’”

      $orry Mr. Ben, yous knot gonna bee on her $pring $ales $oiree gue$t li$t eye reckon$.

  4. “the price growth we saw in the 2016-2017 financial year is something that was probably not justified on the long-term fundamentals. And it was because investors went over the top, the owner-occupiers got caught up in it,’ Mellor said.”

    So as the RE market craters is AUS they acknowledge how it is unjustified for long term fundamentals. What makes the US market any different…

  5. This one is going to auction in a couple of days:

    $1,013,9074 bd2.5 ba2,068 sqft
    722 Cimity Ct, San Jose, CA 95138
    Pre-foreclosure / auctionForeclosure

    https://www.zillow.com/homedetails/722-Cimity-Ct-San-Jose-CA-95138/19808858_zpid/

    Went into default over 11 months ago.

    Foreclosure Trustee or Attorney
    Name: MORTGAGE LENDER SERVICES INC
    Address: 11707 FAIR OAKS BLVD 202, FAIR OAKS, CA 95628
    Legal
    Foreclosure type: Non-Judicial
    Recorded: Notice of Sale: 23917113 on 4/24/2018
    Parcel number: 678-24-032

    1. This one about a week later:

      5458 Clovercrest Dr
      San Jose, CA 95118
      3 beds 2 baths 1,620 sqft
      Off Market
      Zestimate®: $1,155,206
      Rent Zestimate®: $3,600 /mo
      Est. Refi Payment
      $4,336/mo
      $See current rates
      5458 Clovercrest Dr, San Jose, CA is a single family home that contains 1,620 sq ft and was built in 1961. It contains 3 bedrooms and 2 bathrooms. This home last sold for $625,000 in January 2008.

      The Zestimate for this house is $1,155,206, which has decreased by $29,176 in the last 30 days.

      https://www.zillow.com/homedetails/5458-Clovercrest-Dr-San-Jose-CA-95118/19756934_zpid/

      Zillow doesn’t know about the auction, apparently.

          1. Even dumber question: Now that Zilldo has entered the flipping business, don’t they realize that it would enhance their purchase opportunities if they lowballed the Zestimates?

    2. “going to auction in a couple of days”

      Yeah, right. It was first scheduled to be auctioned off 5/25/18, but it wasn’t. This week’s auction date will be postponed to next month, then the month after that, then the month after that. Then maybe a knife-catcher will buy it from the underwater seller (not at auction) with the bank’s blessing at $10k less than market price and think they got a bargain.

  6. “‘It certainly doesn’t help when the media pumps out endless negative media, negative reports that are all just fiction anyway. Nobody knows,’ she said. ‘When people are nervous, they’re very, very sensitive to negative media and when they keep hearing in the media that ‘Darwin’s doomed’ and so on, it doesn’t help.’”

    You’re kidding, right? The media has been the parrot on the shoulder of its REIC advertisers, and were squawking the “Everything is awesome!” line while central bankers blew the Everything Bubble. So now all the FBs fault the media for finally acknowledging that shack sales and prices are tumbling? Sorry, greedheads, ignorance may be bliss, but when the cratering gets this severe even the dullest of the sheeple are going to opt to sit on the sidelines while the carnage plays out.

    1. It sux to have bought flip investments over the past couple of years, only to discover, much to your dismay, that you got stucco.

  7. I thought I’d seen everything at the Housing Bubble Blog. How did I miss the Llama Bubble?

    https://www.msn.com/en-us/news/us/llamas-in-the-united-states-are-disappearing-heres-why/ar-BBVVTKV

    “Llama prices skyrocketed through from the 1980s into the 2000s.

    Darrell Anderson, an auctioneer at one of the first production sales of llama held in the United States back in 1986 in Salem, Oregon, helped sell a llama that went for a record price of $220,000. The prices, he said, became unsustainable.”

    1. “un$u$

      tainable”

      Embelli$hment$ edit:

      $tupendou$ly, $erendipitou$ly, $pectacularly $ynchronized … Un$u$tainable price$!

    2. They don’t call it the Everything Bubble for nothing!

      Business
      Bubble Bursts On Alpaca Market. Sales Slowed, Hay Costs Doubled
      November 26, 20155:08 AM ET
      Heard on Morning Edition
      Luke Ruynon

      The llama-like animals were the next hot thing coming to backyard farmers. Investors sank tens of thousands of dollars into top-of-the-line breeds. Some breeders were left with near-worthless herds.

      RENEE MONTAGNE, HOST:

      With the news that another bubble has burst, the alpaca bubble, for those of you who missed it, a few years ago, those llama-like animals were the next hot thing for hobby farms. People sank tens of thousands of dollars into top-of-the-line breeds hoping to cash in. Then prices tanked. Luke Runyon of member station KUNC has that story.

      LUKE RUNYON, BYLINE: One day, about 10 years ago, Terry Holtz and his wife, Dena, came across a photo on the Internet of a cuddly creature with a slender neck and long eyelashes.

      TERRY HOLTZ: And she says, oh, they’re the most adorable animals. What is it, you mean like a llama? No, they’re called alpacas. There’s a difference.

      RUNYON: Holtz says initially, he was skeptical about alpacas as investments.

      HOLTZ: What’s the bottom line here? How are they – are they making money? The answer was absolutely.

      RUNYON: They decided to put a few alpacas on their 10-acre ranch outside the northern Colorado town of Wellington. At the height of the bubble, some animals were fetching hundreds of thousands of dollars at auction. The couple started breeding them and selling the offspring.

      HOLTZ: Wow, all I have to do is sell seven of them. And I’m making more than I am at my regular job, and I only sold seven alpacas. And it wasn’t hard to do.

      RUNYON: The Holtzes weren’t the only ones. Back in the 1980s, you’d really only find alpacas in zoos. Now there are close to 150,000 in the U.S. Their only marketable product is wool, and the high hopes for a U.S. alpaca garment industry never materialized.

      HOLTZ: The sales slowed down. The cost of hay doubled.

      RUNYON: The value of their herd plummeted. That’s why after a decade in the alpaca breeding business, they’re selling out. Their Craigslist host calls it a super deal, 30 alpacas for $3,000. That’s just a 100 bucks a head.

    3. The Great Texas Emu Bubble
      The Economist
      December 18, 2018

      In its fundamentals, though, the Texas “emu bubble” of the 1990s was, like all investment bubbles, stoked by exuberance and greed. “Men, it has been well said, think in herds,” wrote the Scottish journalist Charles Mackay in 1841 in his book “Extraordinary Popular Delusions and the Madness of Crowds”. Had Mr Mackay travelled to Lubbock or Midland a century and a half later, he would have believed that men think in mobs, as groups of emus are sometimes known.

  8. If only the Fed got busy respiking the punchbowl, the Dow could 10,000 points higher, and we all could be rich!

  9. “Even dumber question: Now that Zilldo has entered the flipping business, don’t they realize that it would enhance their purchase opportunities if they lowballed the Zestimates?”

    You mean, something like an inherent conflict of interest?

    1. Doubly so, now that they have constituents who prefer inflated valuations and a possible self-interest to lowball.

      1. It makes their business model that of your average pawn shop, ready to prey upon and profit from the misfortunes of the financially troubled at a moment’s notice.

  10. ‘Cheap as chips,’ said Emma Bloom, buyer’s agent and director of Morrell and Koren, which specialise on prestigious inner Melbourne real estate, about the buyer’s market.”

    Gosh, Emma, in that case I better jump on one of these bargain shacks right this minute before the green shoots of Spring burst forth in all their verdant glory. Cuz it’s far better to buy at 2016 prices than wait for the early 1990s prices to return.

    Oh, wait….

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