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Many Are Selling Off Market So As Not To Leave The Stench Of Failure

A report from the Times of London in the UK. “Alex Johnston has reluctantly cut the price of his townhouse in Maida Vale, west London, after three years with no offers. The app developer and his wife put the five-bedroom home on the market for £3.25m in 2016, but have cut the price to £2.749m and brought in a second agency.”

“‘We’ve had 25 viewings this year,’ says Johnston, 55, who wants to downsize. ‘It’s a good excuse to clean the house, but I never expect it will end up in an offer.'”

“He says he’s a motivated seller, but not a desperate one. ‘Buyers see Brexit as an opportunity and want the best deal they can get. But this is my biggest asset. If I can ride out a market storm, I should. To sell it at a low point would make me feel foolish and as if I’d left a lot of value on the table. I feel I’ve reduced the price by a reasonable amount.'”

“Overvaluing is paralysing the market, rural buying agent Jess Simpson adds — especially with housing stock at record lows, according to last week’s RICS Residential Market Survey. ‘Agents are overvaluing by 20% — they’re desperate to get the instruction and to be seen to have properties on their books. Six out of 10 houses I see are overvalued. It’s a false market.'”

“Tim Dansie, director at Jackson-Stops estate agency in Ipswich says many vendors are selling off market so as not to leave a digital footprint and the stench of failure if a property sits around and drops in price.”

The Jamaica Observer. “Jamaica is currently facing a chronic oversupply of apartments, especially in Kingston, where there are upwards of 1,000 unsold units. This according to real estate broker Anya Levy and veteran real estate entrepreneur and developer, Peter Rousseau. Both are of the view that the apartment segment of the real estate market is already over-saturated, with very little takers based primarily on the price being demanded by developers.”

“‘When you drive around parts of Barbican, Liguanea and a number of areas at nights and look at the number of apartment buildings built recently, the number of lighted apartments to non-lighted apartments, sometimes you see upwards of 80 darkness,’ Rousseau lamented, making the case that many of these apartments are unsold and unoccupied.”

“Levy made the point that given this excess supply, ‘if you don’t adjust rate downwards, they (apartments) are just going to stay vacant. They have been inching up their prices, going from US$200 per square foot, to US$250 per square foot and now climbing to US $340 per square foot …What we want to see is for developers to taper off on the prices, because what’s gonna happen is that the mortgages persons have to service — there is going to be a disconnect with the anticipated income of prospective buyers,’ Levy explained.”

The Thompson Citizen in Canada. “The overall vacancy rate for apartments and townhouses in Thompson October 2018 was 9.2 per cent, the Canada Mortgage and Housing Corporation (CMHC) reported last fall, but for some types of rental units it was as high as 18 per cent.”

“Two-bedroom apartments had the lowest vacancy rate at 7.4 per cent, while 8.2 per cent of one-bedroom apartments were unoccupied. Rental units with three or more bedrooms, in row or townhouse complexes, had a vacancy rate of about 18 per cent.”

From Domain News in Canada. “Residents in a multi-award-winning Sydney harbourview apartment building are fighting a plan to set up a language college that they say will mean at least 150 students coming into their premises every day.”

“Meanwhile, the luxury block next door in exclusive Milsons Point on the lower north shore is also battling a ‘horrific’ scheme to potentially install a call centre in their basement, nine floors down from the street. Residents claim the plans mean unknown visitors will flood both buildings’ lobbies several times a day, tying up the lifts, and force building management to issue numerous extra security key fobs.”

“‘We’re looking at overseas students hanging around, using the foyer as a meeting place, bringing in food and drink and smoking cigarettes outside the door,’ said Sonny Mathews, the chair of the strata committee at the glamorous 18-level Bridgehill Residences on Alfred Street, where apartments have sold for more than $5.5 million.”

From Bloomberg on New Zealand. “New Zealand’s ban on foreign buyers is damping house prices in Queenstown, a stunning winter playground for the rich that has been a magnet for wealthy overseas investors. Nestled on the shores of a pristine lake on New Zealand’s South Island, and ringed by majestic mountains, Queenstown’s popularity with buyers from Australia, Asia and the U.S. had seen values double in little more than three years.”

“The boom has been brought to an end by a nationwide ban on foreign property buyers the government introduced in October in a bid to make housing more affordable for its own citizens. ‘It’s very, very clear the foreign buyer ban has impacted the Queenstown market,’ said Nick Goodall, Wellington-based head of research at Corelogic New Zealand. ‘It’s a massive chunk of demand taken out.'”

“The curb on foreign buyers comes at a time of increased supply. Queenstown is the busiest region for home construction, with new building consents about 8% of existing housing stock, according to Corelogic.”

“‘Queenstown and Auckland are international markets, in particular Queenstown,’ said Kiwibank chief economist Jarrod Kerr . ‘A lot of buying was pulled forward leading into the ban. Prices in Queenstown are now falling and it looks like that will get worse.'”

This Post Has 89 Comments
  1. ‘We’re looking at overseas students hanging around, using the foyer as a meeting place, bringing in food and drink and smoking cigarettes outside the door’

    Doesn’t sound very glamorous Sonny. But hey, $5 million Australian pesos – easy come easy go.

  2. ‘The boom has been brought to an end by a nationwide ban on foreign property buyers the government introduced in October in a bid to make housing more affordable for its own citizens’

    Racists.

    1. If it worked in Canada and in New Zealand, why not try it out in the U.S.? After years of failed Democrat-sponsored demand-stimulus affordable housing policies, why not see if shutting out foreign speculators helps make America’s housing affordable again?

      1. “The curb on foreign buyers comes at a time of increased supply. Queenstown is the busiest region for home construction, with new building consents about 8% of existing housing stock, according to Corelogic.”

        It almost sounds as if the shortage disappeared overnight!

    2. “The most terrifying words in the English language are: I’m from the government and I’m here to help.” – Ronald Reagan

      1. Dumb question for the Reagan buffs out there:

        Isn’t the President technically part of the government?

          1. Does anybody out there in HBO land believe that the President of the United States can be elected President without the backing of some special interest, some political party? No?

            If your answer is “no” then it follows that the President does not represent the government, instead the President represents the special interests, the political party, that pushed him into becoming elected.

          2. Whatever we believe in HBO land, it’s an undeniable fact that the President of the United States cannot be elected President without the backing of the voters.

            Then it follows that the President does represent the voters. A bunch of duped voters, sure, but he still represents the voters that pushed into him becoming elected.

          3. “A bunch of duped voters, sure, but he still represents the voters that pushed into him becoming elected.”

            If the voters that pushed him into becoming elected had been duped then the President represents the ones who successfully performed the duping.

          1. Trump did but the deep state was plotting its coup even before he took office, actually even during his campaign

  3. ‘Alex Johnston has reluctantly cut the price of his townhouse in Maida Vale, west London, after three years with no offers’

    ‘Buyers see Brexit as an opportunity and want the best deal they can get. But this is my biggest asset. If I can ride out a market storm, I should. To sell it at a low point would make me feel foolish and as if I’d left a lot of value on the table. I feel I’ve reduced the price by a reasonable amount’

    You hang in there Alex, don’t give it away! No stench of failure for Alex.

    1. I’m going to enjoy watching “motivated but not desperate” greedheads like Alex ride the market straight down.

    2. “Tim Dansie, director at Jackson-Stops estate agency in Ipswich says many vendors are selling off market so as not to leave a digital footprint and the stench of failure if a property sits around and drops in price.”

      How exactly does ‘selling off market’ work? Does this involve somehow limiting the prospective buyer pool to a smaller group than if the sale were done out in the open, wheee anyone looking to buy could make an offee? It seems like a lower maximum potential offer is a likely consequence of selling in the shadows.

      And hiding the digital footprint of the sales result sounds illegal, stench of failure or not.

      1. ‘selling off market’

        Hmm . . . this might explain the sale I previously posted about showing up on Zillow but not the MLS.

        1. Oh! I was under the impression that pocket listings were listed on the MLS if only for a short time. I’ve noticed a realtor in my area who does this.

    3. It is his feelings which need to be validated. He did not say his new price is based on comps, price to rent or price to wages but it feels like a reasonable price. He could finance the sale but the person who buys it may tell him he feels like he attempted to pay the mortgage and he feels like he should not have to pay more than it is worth.

  4. From recent CNBC article regarding a present political candidates positions
    On the debt issue, aggregate levels have increased. Nonhousing debt has jumped from $2.63 trillion in mid-2009 as the last recession was ending to $4.02 trillion as of the end of the first quarter of 2019, an increase of 52.8%, according to New York Federal Reserve data.

    More importantly, though, consumers’ ability to pay has increased at a pace well above the aggregate debt totals.

    ability to pay is WELL above debt totals? hmmmm

    1. I call BS. Consumers high debt due to no real wage gains while big ticket item inflation is huge (housing, healthcare, higher edu.).
      Duh. But the “everything is awesome” and MMT is great narratives…

      1. America Can’t Shake Baumol Cost Disease

        Good summary:

        “So although Baumol cost disease is one part of the story for increased health-care and higher-education prices, it doesn’t look like the whole story. Other explanations — monopoly power, falling productivity and perverse incentives should all be considered. It’s likely that the U.S.’s service sector cost disease has multiple causes.”

  5. “‘When you drive around parts of Barbican, Liguanea and a number of areas at nights and look at the number of apartment buildings built recently, the number of lighted apartments to non-lighted apartments, sometimes you see upwards of 80 darkness,’ Rousseau lamented, making the case that many of these apartments are unsold and unoccupied.”

    It sounds like it might be as bad as downtown San Diego in Jamaica!

  6. “Overvaluing is paralysing the market, rural buying agent Jess Simpson adds — especially with housing stock at record lows, according to last week’s RICS Residential Market Survey.

    Get to sawin’ and slashin’, greedheads. Jess wants some occasional chicken or beef with her Ramen noodles.

  7. People’s pay certainly has not increased 52.8 percent. Have not read the article but a lot of time they are addressing the ability to service the debt so low interest rates are factored into the equation. If so, just another reason why raising interest rates will be politically difficult.

    1. Yes. Real wages are flat to down. Many don’t have $400 saved for emergencies. A huge steaming pile of debt is not a substitute for wealth. High debt load necessitates low rates, else implosion. This is the bizzaro world we live in. There’s no U.S. “budget”. Just deficit spending as far as the eye can see. Free stuff for all. Got gold?

      1. The debt agreement is good for Trump’s reelection prospects but the increased debt itself is bad for the country’s future. However if Trump is not reelected the US has no future. The fact that the Democrats would sign off on a deal that will help reelect Trump due to the stimulus it will provide going into the election shows how much they want their programs. If a Democrat is elected the programs will explode financed by MMT and a lot of the money will flow overseas to buy manufactured goods we no longer even attempt to produce here. Accepting the compromise is a necessary evil but a bitter pill nonetheless.

        1. The debt agreement is good for Trump’s reelection prospects but the increased debt itself is bad for the country’s future

          Agree 100% ABQDan.

          1. Hitting the delete key a few time$ and adding a few ‘…’$, I get$:

            “…good for Trump…but… bad for the country’s future”

        2. “However if Trump is not reelected the U$ has no future.”

          No Ber$hire $tock aqdan? $ad.

      2. “A huge steaming pile of debt is not a substitute for wealth.”

        It is if you are positioned on the right end of it.

        Think of it: The debtor is a slave to the lender. Persuade a puke to willingly go deep into debt to you and – presto! – you have just created for yourself a debt-slave, one who will work hard for most of his miserable life for wages and then will willingly ship off to you each and every month huge chunks of these hard-earned wages. He works, you hang out at the beach.

        I like it and I love it and want more of it.

        1. “A huge steaming pile of debt is not a substitute for wealth.”

          It is if you are positioned on the right end of it.

          Careful now. At the far, FAR, end of it is a guillotine. For sure for you if you stick around…maybe for all of us with time and resources to type on a computer.

  8. As far as servicing the debt K. Harris is advocating legalizing prostitution. I guess she believes that servicing Mr. Banker could service debt. I guess with her history with Willie Brown etc. It should not be a surprise. But is this what women wanted when they fought for the right to vote? To elect the first woman as president who would then fight for legalized prostitution? I really think I feel like Romans did when the Republic was coming to an end.

    1. “Harris is advocating legalizing prostitution.”

      Could this be the answer to the problem of a growing glut of luxury airboxes?

      1. Yes, since Warren just introduced her student loan forgiveness, the money will not have to go for repaying those loans. Plus since it would be a place of “business” no nasty SALT limitations.

  9. “Jamaica is currently facing a chronic oversupply of apartments, especially in Kingston, where there are upwards of 1,000 unsold units.’

    So is everyone in Jamaica living in high quality housing?

    All this stuff about oversupply and glut. Maybe in some places, in the exurbs, in declining rural areas or collapsing cities, there is more real estate than can possibly be occupied.

    But in many more places, the problem is price, price, price. And if you paid too much when you bought or built, that doesn’t mean there is a glut. That means you paid too much.

    1. Might$ bee that the $helter.$hacks was knot built Fed locals, but Fer airbnb touri$t’$

      Marley music + comfort$ whilst lounging on the I$land.

    1. It’s in Amazon’s interest to keep people from sleeping on the sidewalk, in their cars, or in RVs. I’m guessing that those people don’t make very good Amazon Prime customers.

      1. You would think that keeping house prices affordable is in their best interest. Someone paying over 30% or 40% of their gross income don’t have much leftover to buy “junks” on Amazon 🙂

        1. “Someone paying over 30% or 40% of their gross income don’t have much leftover to buy ‘junks’ on Amazon 🙂”

          Looking at this a different way: If 30% or 40% of these pukes gross income is spent on housing then that means I get a shot at getting huge chunks of the remaining 60% or 70%. All I need to do is convince these ignorant pukes to sign a dotted line or two and – presto! – I am sent up for … sometimes for life.

          1. These pukes don’t need much left over in order to buy junk on Amazon, what they need is a wonderful Newest Best Friend, such as myself, to loan money to them (money that belongs to somebody else).

      2. They’re gonna profit$ from both side$ of the $it.u.ation: check out the selection & price$ of tents + free delivery!

        (The homeless are quite re$ourceful, with a lil’ “group.think” they, x10, could use just x1 prime.acct!)

    2. But hey, maybe Amazon will give displaced UHS priority for hiring in its fulfillment centers.

      Maybe they won’t have to learn to code after all.

  10. Isn’t the sale of property a matter of public record? Or is the impetus to force a prospective buyer to have to do something like a title search to discover the prior transaction history?

      1. Does school begin in August or September in Thee Manitou?

        They might have enough credit$ left over to hit the buy1get1 $ale @ $taples!

    1. I guess not that many end users wish to catch themselves falling knives. Who knew?

      1. Why does Reuters feel it’s necessary to drop in the shortage thing. Inventory is up, again! This MSM bias is ridiculous.

        1. They never finish the sentence.

          Just for once, they could tell the truth that it’s a persistent glut of luxury property dumped on the market by avaricious builders, flippers and property ladder climbers, fueled by cheap Fed dollars, and priced out of the reach of the comparatively pitiful wage growth of the majority of buyers.

          I guess “shortage” is easier to type.

    2. If the “experts” would only reach out to us, the non-experts, maybe they would understand the market and be less surprised.

      Hey experts, houses are overpriced, inflated. You get nothing decent for the money. My pay check hasn’t been inflated. Get it? Houses are and so are property taxes. The “rich” homeowners who bought in 2011 at such low price are getting raped by property taxes in most States. Here in Texas they are. Feels like a scam. Buy low and get screwed in taxes when prices rise, wait and buy high get screwed by paying more but start being raped by property taxes later on, instead of since 2011. Try to sell it and give your saving to realtors, yeah then pay taxes on the gains.

      This housing market needs to crash.

      1. Excellent post. This is maybe the most succinct description of the scam that rising house prices are for the average Joe/Jane. It doesn’t make things better except for spend-crazy politicians, realtors, and bankers.

        1. Exactly, and here’s the kicker:
          You house is “worth” double, “you are soooo rich”. Property taxes also doubled.

          If you are still living in the house, the value increase is theory only. You don’t get that monetary gain unless you sell. HOWEVER, the property tax is real. A real added expense. So you are actually poorer, really with the illusion of being so rich while getting screwed.

          CLEVER WAY TO INCREASE TAXES ON THE SHEEP.

          When it all comes crashing down, and your house is back to normal, you will realize you overpaid taxes for a decade and got nothing for it. You actually lost money because of the inflated “value”.

          Imagine if politicians said they would double your taxes for 10 years. People would revolt. BUT, give them the illusion of being rich by inflating the housing market and now you have idiots bragging about it.

          1. The exception is if you can artificially lock in lower property taxes (e.g. prop 13 in CA) while simultaneously pushing for higher property taxes for new (younger) buyers. This artificially increases the price of your dwelling and you can sell your $200k-$300k place for $1.2 mil and buy cash on an overpriced $500k-$600k place in Boise, ID. Equity locusts and geographic arbitrage will work for some, even though it absolutely hammers the locals.

          2. the illusion of being rich

            Goes well with the illusion of choice in our representatives.

          3. What is artificial about prop 13? It’s just a tax law like every other tax law. Benefits some. Hurts others. It’s not like California aggregate tax burden is insignificant. This is the trick. Pit the serfs against each other over who is less screwed by the system so they demand everybody be screwed equally. And the internecine battle never ends. If my neighbor gets a better deal on his taxes, good for him. Anybody who wants to donate to the treasury can send in a check anytime.

          4. What is artificial about prop 13? It’s just a tax law like every other tax law. Benefits some. Hurts others.

            But who does it benefit and who does it hurt?

            Landlords and Heirs: Why Prop 13 isn’t just unfair, it’s un-American

            The reason I think Prop 13 is bad policy is because it has dramatically distorted the housing market. It basically rewards older, wealthier baby boomers with a lower tax bill and punishes younger, poorer millennials and gen X.

            It has also forced CAs taxes up in other weird ways because revenue was artificially suppressed because it couldn’t be collected from a wide swath of property.

          5. “It’s just a tax law like every other tax law.”

            $ocial Engineering Tax: It benefit$ long.term investment$, residential & commercial.

            CA 13:
            Purcha$e a good $helter.$hack + a good indu$trial/commercial building + some good rural acreage = inve$tment protection$ that can bee di$tributed to family members for decade$.

        2. Not sure how unaffordable prices help the used home sellers, other than the ones who enjoy Top Ramen noodles for dinner.

  11. This is not housing related but instead is related to how information is controlled by the MSM…

    Air-conditioner maker Lennox cuts forecast, sees ‘cooler temperatures’
    https://www.cnbc.com/2019/07/22/air-conditioner-maker-lennox-cuts-forecast-citing-significantly-cooler-temperatures.html

    Say what?

    “Despite a blistering heat wave across the East Coast this weekend, air-conditioner maker Lennox International pointed to colder weather as a key reason for cutting guidance and underperforming in the second quarter.”

    (snip)

    “’Significantly cooler temperatures and higher precipitation across the United States adversely impacted the HVAC market in the second quarter, and especially in key Central regions where cooling degree days were down over 30% and precipitation was up over 60%,’ Lennox International Chairman and CEO Todd Bluedorn said in a press release Monday.”

    So much for the MSM pushed Global Warming narrative.

    1. Exactly. Who are you going to believe? Why would Lennox willingly turn their backs on additional revenue by not wanting to add capacity and grow their business?

    2. One summer doesn’t make a swallow as the saying goes. Usually these companies will blame anything but themselves when their earnings slip.

      1. “these companie$ will blame anything but them$elves when their earning$ $lip.”

        Nix, nix, nix … On account$, they is “professional$.type$.of.biddne$$.manager$!” … No tom.foolery permitted!

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