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A Story Of Delayed Projects And Slashed Prices

It’s Friday desk clearing time for this blogger. “‘The slow-down in the New York market can be attributed to the glut of high-end apartments in New York City, which have sat longer on the market as foreign investments in New York City have slowed down as well,’ said Frank J. Rizzo, president of Cornerstone Realty. ‘This creates a ripple effect downstream and in the rest of the market.'”

“Actress Meryl Streep has put her penthouse in downtown New York back up for sale at a reduced price of $18.25 million. That’s a 26% price cut from when the unit at the River Lofts, a full-floor condominium building in Tribeca, was first brought to market for $24.6 million in August 2018. Rob Lowe has sweetened the deal in Montecito. With no takers at $47 million, the actor has trimmed the price of his 10,000-square-foot mansion down to $42.5 million.”

“Purchased for $285,000 in September of 2007, the 580-square-foot single-family home at 17 Laidley Street hit the market priced at $749,000 this past March. Reduced to $730,000 in July and then to $657,000 last month, the “cheapest single family home in San Francisco” has just been listed anew with an official ‘1’ day on the market and a further reduced $599,000 list price.”

“A shift in the St Louis housing market has some homes taking longer to sell, realtors say. Realtors say the shift started about one to two years ago when larger, more expensive homes began sitting on the market longer. They believe it’s now a buyers market. Jason Dausman is selling an historic home he renovated in the Central West End. Dausman says he and his wife put the home they renovated on the market two years ago. He’s dropped the price over $350,000.”

“‘It was sort of labor of love for us. Yeah, we hope to do well and make a profit but if that doesn’t happen, that’s okay,’ said Dausman.   

“The developer of the Palm House Hotel, one of the largest EB-5 frauds in South Florida history, can no longer afford to pay his lawyers. Matthews was the developer of the condo-hotel project in Palm Beach that began soliciting EB-5 investment in 2012. The development group assured investors that the project would be completed in less than a year and that their money would be protected in an escrow account with a bank.”

“For some realtors and developers, the pain continues. On the ground in Vancouver, where sales and prices have been dropping for a little over a year, it’s a story of delayed projects and slashed prices. Michael Geller, the developer behind the Vinson House project, told Star Vancouver in April he was “desperate” to sell the project, which had been sitting on the market for months. One of the three-bedroom units recently sold at $1.7 million, reduced from an initial asking price of $2.59 million, according to MLS records.”

“Geller declined to comment on the Vinson House development for this story but said another similar project, Major Rush Mews, is coming to market in two weeks. Geller said he was thinking of creative ways to sell the project, such as trying to identify a large extended family who might like to buy the homes together. ‘Hopefully on Rush Mews, I’ll break even,’ Geller said.”

“Homeowners trying to sell their property at the moment for the price they had initially hoped for may feel that they’re fighting a losing battle. But new figures suggests that those vendors who are realistic about the value of their home are succeeding in getting offers – as long as they shave an average of £8,000 off the initial asking price to secure a sale, according to Zoopla. In monetary terms, the biggest discount was in Kensington, where asking prices were typically discounted by £125,000. It equates to 8.3 per cent, based on an average property value in the borough of £1,395,000.”

“If you have ever wanted to live in Kileleshwa, Lavington, Loresho or Westlands, but high rent rates were hindering you, the time could be now. Reginald Kariuki has been camping in Loresho for five years now. He lives in a Sh170,000 three-bedroom house. It surprises him that the price has gone down and he believes it can go lower than that. ‘I am now paying Sh150,000 and I am confident the landlord can make it go lower because now we can negotiate. Nobody would want to leave such a big house empty, it would look bad on him,’ he said.”

“Citic has become the latest Hong Kong developer forced into selling new flats at huge discounts to attract buyers amid a property market battered by months of civil unrest. Citic launched its residential project in Ma On Shan at up to 20 per cent below the price of similar properties in the same area. In a bid to woo buyers, other developers have been forced to offer their projects at lower prices.”

“‘The second-hand market is under pressure, and some owners, especially those with less holding power are willing to reduce their asking price, allowing more room for negotiation,’ said Thomas Lam, head of valuation at consultancy Knight Frank.”

“Real estate salesman Niko Kloeten, of Harcourts in Pukekohe, agreed there were more cheap operators in the market. He said some people had come into the industry when it was busy and easy to sell properties. Now things were cooling down, it would become harder for the cheaper business models to work. ‘You can’t just chuck a sign up and wait for people to come and buy the house.'”

“While Australia is made up of many different housing markets driven by different conditions, national house prices were on a rocket rise before peaking around two years ago, and then slipping. ‘We’re going to see, I think, a significant loss of demand in the high-rise sector specifically,’ said Digital Finance Analytics’ Martin North. ‘We know that more people are now not wanting to ‘complete’ on high rise buildings that they actually committed to buy off-the-plan. Those rates of default have doubled compared to where they were … in some [areas] property values in the unit sector are down 30 per cent now from where they were and we know there’s more ahead.'”

This Post Has 55 Comments
  1. ‘We know that more people are now not wanting to ‘complete’ on high rise buildings that they actually committed to buy off-the-plan. Those rates of default have doubled compared to where they were … in some [areas] property values in the unit sector are down 30 per cent now from where they were and we know there’s more ahead’

    30%? But Australian media says to the moon Alice?

    ‘The economy looks set to record its worst annual result in two decades as key economic indicators slump and pressure mounts on the Reserve Bank of Australia (RBA) and the federal government to pump out stimulus. Prime Minister Scott Morrison said he expected national accounts data due on Wednesday to show the June quarter had been “very difficult”.’

    ‘KPMG chief economist Brendan Rynne said in those circumstances, conventional monetary policy would not be enough and “helicopter money” could be needed to get the public spending.’

    “We have not yet reached that position. But it is already abundantly clear that monetary policy won’t do all – or even most – of the heavy lifting to stimulate the economy,” he said.’

    https://www.smh.com.au/politics/federal/economy-facing-toughest-time-since-tech-wreck-downturn-20190902-p52n3v.html

    Doesn’t sound like it’s close to the moon Alice…

    1. I think it’s pretty obvious to anybody except the most braindead that central banks are the problem. It’s time to talk about moving beyond them, coming up with solutions to this failed cheap money experiment.

  2. ‘the biggest discount was in Kensington, where asking prices were typically discounted by £125,000. It equates to 8.3 per cent, based on an average property value in the borough of £1,395,000’

    This area has been falling since 2014. It again demonstrates the most expensive areas fall first, fastest and furthest. Conforms with a bubble popping. Same with the Kenya report.

  3. ‘He’s dropped the price over $350,000…’It was sort of labor of love for us. Yeah, we hope to do well and make a profit but if that doesn’t happen, that’s okay’

    And if you take an a$$-pounding Jason, okay with that?

    1. On the market for over two years without a bite… keep chasing the market down with that positive outlook. It’s ok if you loose your ass Jason, it was for the “experience” right! Least your realtor has some inspirational babble for you to cling onto:

      “If a house is completely 100 percent done, you don’t have to do anything when you walk through that door, they’ll sell a little quicker,” said Williamson.

      “A little quicker” than two years… ok Mabye if you get down on your knees and scrub those floors u til they a sparkling you can potentially sell in 729 days! Don’t worry about carrying costs, that’s the price you have pay for this awesome experience!

      “Williamson expects this trend to change in the next six months to one year.”

      Yeah the trend will be even less sales and more price slashing

  4. ‘hit the market priced at $749,000 this past March. Reduced to $730,000 in July and then to $657,000 last month, the “cheapest single family home in San Francisco” has just been listed anew with an official ‘1’ day on the market and a further reduced $599,000 list price’

    Why listing it as 1 day is false advertising. If this is widespread it would make those days on market statistics the UHS talk about so much sorta meaningless. Deceptive even.

    1. The real estaters are pretty loosely overseen. The Boards at the States level are mostly concerned over licensing fees being paid and everything else is a gray area. Deceitful practices are equated with marketing. It used to be that price per square foot meant something just like DOM did. Now basement footage whether finished or not are included in the calculations and I see that “total square feet under a roof” any roof- sheds, outbuildings, gazebo are being snuck in as well. I don’t understand how the appraisers are bending to this phenomena as below grade price/sf is understood to be a fraction of above grade, let alone pricing in a shed “open on one side”. Fantasy data.

    2. As far as I can tell it is wide spread. My guess is 10-20% of the listings I look at in San Diego have a fake days on the market statistic.

    3. They play this game in Boise as well.

      Boots: there is a 3/2 in a nice nabe, about 1600 sqft on a postage stamp lot. Listed 1mo ago for 470k. Been on market about 30 days. Seller is going to take off market if no sale, not going to lower price. Had previously been a rental, supposedly getting 2.3k/mo (although I was originally told it was 1.8k).

      In comparison, 3 weeks ago, 2/1 with basement 5 lots down on same exact street sold in less than 48hrs at $425k asking, with a 7 day close (on a triple lot, going to be a big renovation). Great location, but needed lots of work – but the lot is buildable if you have cash.

  5. ‘he was thinking of creative ways to sell the project, such as trying to identify a large extended family who might like to buy the homes together’

    This ain’t Utah Mike.

    ‘Hopefully on Rush Mews, I’ll break even’

    You are fooked Mike.

      1. I had a vague recollection of mews having something to do with buildings which meant I had to look it up to know exactly what it refers to. a row or street of houses or apartments that have been converted from stables or built to look like former stables.
        “an eighteenth-century mews”
        a group of stables, typically with rooms above, built around a yard or along an alley.

        Sounds like the equivalent of being raised in a barn.

    1. They don’t have dumpsters in Queens?

      Everyone just dumps their trash on the sidewalk on “trash day?”

      It looks like a 3rd world banana republic.

      1. Trash bags? What’s with the trash bags. If you’re gonna trash a car correctly or trash your city correctly then forget about using trash bags.

        Here …

        https://www.google.com/search?biw=1088&bih=470&tbm=isch&sxsrf=ACYBGNRw_W-_424Sf3ckW-EN9uuKVhfjVw%3A1567788440331&sa=1&ei=mI1yXcTtE4Pf-gTGiZKIBA&q=bay+area+homeless+trash&oq=bay+area+homeless+trash&gs_l=img.3…14327.17254..17989…0.0..0.102.489.5j1……0….1..gws-wiz-img…….0j0i30j0i24.EPSG8foN71Y&ved=0ahUKEwjEmcaI07zkAhWDr54KHcaEBEEQ4dUDCAY&uact=5

      2. No its the managements responsibility to cart the trash to the street and its usually very early in the morning like 4 am that’s not a lot of garbage if they collect twice a week ….. they put it around the illegally parked car but the residents piled it on his roof. in protest

  6. Purchased a place. Sell less than a year later for a $6 million loss.

    And these “smartest people in the room” Hollywood celebrities want to lecture on how to totally revamp the American economy in order to combat “climate change.”

    -#-#-#-#-#

    “Actress Meryl Streep has put her penthouse in downtown New York back up for sale at a reduced price of $18.25 million. That’s a 26% price cut from when the unit at the River Lofts, a full-floor condominium building in Tribeca, was first brought to market for $24.6 million in August 2018.

    1. You’re not reading this correctly. It wasn’t bought a year ago for 24 million, it was originally put up for sale at this price. She hasn’t lost 6 million from her purchase— just hasn’t realized 6 million she was hoping for.

  7. And write love letters.
    And write letters to the squirrels.
    And bidding wars!

    “You can’t just chuck a sign up and wait for people to come and buy the house.”

  8. Besides digging stuff up and selling houses to each other (or the rich Chinese)…what would those different conditions be?

    “While Australia is made up of many different housing markets driven by different conditions,”

  9. The results of central bank policies and actions on the global economy. Central banks as agents of their respective governments, and they don’t do it for free. They’re setting the value of money, which is no longer fixed and tied to precious metals. Money at a constant value is a store of wealth, and largely limits governments from spending beyond their means without raising taxes (very unpopular with voters). Under central banks, the value is dynamic (mostly declining), and is essentially valued at whatever they say it is. The results are: 1) Debts are exploding. 2) Interest rates are becoming more and more negative (currently ~30% of global bonds). See (1), since highly indebted economies can’t support rates much above the zero bound. 3) Wealth destruction for the 99% and the related wealth and income inequality. That belief that this can go on forever is of course is ludicrous/insane. Doubling down on failed policies will only hasten the demise of the current unsustainable economic system. Asset inflation as an economic policy is the same as asset bubble economics. Bubbles always pop. Since virtually all Western governments and central banks are following the same policies, it seems inevitable to me that a global financial hurricane coming. Australia just seems to be a little ahead of the curve.

    “Trees don’t grow to the sky.” – German Proverb

    Stein’s Law: “If something cannot go on forever, it will stop.” – Herbert Stein (1916-1999), Economist

    “Permit me to issue and control the money of a nation, and I care not who makes its laws.” – Mayer Amschel Rothschild, International Banker

    “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” – Milton Friedman

    https://www.smh.com.au/politics/federal/economy-facing-toughest-time-since-tech-wreck-downturn-20190902-p52n3v.html
    Politics Federal | Australian economy
    Economy facing toughest time since tech-wreck downturn
    By Eryk Bagshaw and Shane Wright
    September 2, 2019 – 7.30pm

    “The economy looks set to record its worst annual result in two decades as key economic indicators slump and pressure mounts on the Reserve Bank of Australia (RBA) and the federal government to pump out stimulus.”

    “Prime Minister Scott Morrison said he expected national accounts data due on Wednesday to show the June quarter had been “very difficult”.”

    “JP Morgan economist Ben Jarman said there was a “very real possibility of a negative quarter”.

    “[That] makes it harder to sell the idea that recent stimulus will prove sufficient,” he said.

    Two consecutive negative quarters would push Australia into a recession.

    KPMG chief economist Brendan Rynne said in those circumstances, conventional monetary policy would not be enough and “helicopter money” could be needed to get the public spending.

    “We have not yet reached that position. But it is already abundantly clear that monetary policy won’t do all – or even most – of the heavy lifting to stimulate the economy,” he said.”

    From the comments section:

    Wise Man 3 days ago
    A recession = loss of jobs.

    Australia’s population in 2000 was approx 19m v 25m+ in 2019.
    A recession in 2019 will be far worse than 2000 with significantly more jobs lost, thanks to the crazy ponzi housing/immigration program run by ScoMo and his mates.

    Add in a few investment properties per lost job, and the banks have a mortgage default disaster on their hands. Add into the equation renters who have lost their jobs and its a disaster of epic proportion (similar to Spain/Europe in 2008).

    Time to deleverage debt and risk folks. Don’t say you weren’t told!

    https://www.bloomberg.com/opinion/articles/2019-09-03/negative-interest-rates-threaten-the-financial-system?srnd=premium
    Markets
    Negative Interest Rates Threaten the Financial System
    Markets may need to be rebuilt on a new set of assumptions, but we don’t know what those should be or how they would work.
    By Jim Bianco
    September 3, 2019, 3:00 AM MDT

    “In a negative rate world, forcing rates on short-dated debt to zero would keep the yield curve permanently inverted. The fractional reserve banking system cannot operate properly in this environment.”

    “In a similar vein, pensions use a discount interest rate to determine if they are properly funded. If one plugs in a negative interest rate as the discount rate, all pensions would technically be underfunded. The only pensions that would be properly funded would be those with assets exceeding expected liabilities. No pension is set up this way. Negative rates on fixed-income securities also means there is no way pension funds can ever generate enough income to meet their obligations.

    When repurchase, or repo, rates go negative, lenders of securities must pay rather than receive income. Why would anyone lend out their securities if they also must pay for the privilege of doing so? Repos are the basic plumbing of the financial system, enabling the trade and settlement of securities transactions. If this market becomes dysfunctional, it is akin to the pipes in your walls leaking.

    To see the results of low or negative rate environments, look no further than the euro zone and Japan. They account for 87% of the negative rates worldwide. Europe is essentially in recession with negative GDP in Italy, Germany and elsewhere. Its banking system is a mess, thanks to negative rates. As the chart below shows, European banks are trading at the lowest levels in more than 30 years.”

    https://howmuch.net/articles/rise-and-fall-dollar
    Visualizing the Purchasing Power of the Dollar Over the Last Century
    by Raul | 5 September 2019
    What is $100 worth in 1913 over time?

    1913: $100.00
    1923: $57.89
    1933: $76.15
    1943: $57.23
    1953: $37.08
    1963: $32.35
    1973: $22.30
    1983: $9.94
    1993: $6.85
    2003: $5.38
    2013: $4.25
    2019: $3.87

    1. “In a negative rate world, forcing rates on short-dated debt to zero would keep the yield curve permanently inverted. The fractional reserve banking system cannot operate properly in this environment.”

      Yet they are rushing towards that willingly, as fast as they can. What’s their plan once they get to zero? Print, baby, print. They have one tool – a hammer – and everything looks like a nail. It can’t work.

      1. In a negative rate world, forcing rates on short-dated debt to zero would keep the yield curve permanently inverted.

        Sounds like a recipe for a permanent recession. Everybody just lives off ever-larger loans instead of producing.

          1. Everybody with assets that qualify for the low rate loans gets to live off the loans as their assets appreciate. Everybody else gets crammed down to a third world lifestyle.

          2. a third world lifestyle

            For people who have gotten out of debt and learned to live below their means for a while, that’s a long way down. For the debt donkey spendthrifts, not so much.

  10. “Vancouver home prices are falling and condos are delayed, but industry says real estate recovery on the way

    Now is the BEST time to buy!!!!

  11. Fraud$ter + $cam + deception$ … (Eye can’t remember any Fed.Fund$ & Wanker.Banker$ big.chief$ ever $hedding any remor$eful tear$)

    Market$
    Former Math Teacher Gets Two Years for $71 Million Ticket $cam
    Bloomberg |By Chris Dolmetsch | September 6, 2019

    Jason Nissen admitted to running ticket-re$ale Ponzi $cheme
    Case is part of crackdown on mi$deeds in $15 billion industry

    A tearful Nissen, his voice trembling at times, apologized to his victim$ and his friends and family, including his two young children and his wife, who was seated in the front row behind him and is eight months pregnant.

    “$omehow I lo$t my way in trying to keep my company afloat,” Nissen said. “I always believed things would work out.”

    The case emerged amid a crackdown by federal prosecutors on misconduct in the largely unregulated $15 billion ticket-resale industry, where middlemen purchase blocks of tickets and resell them at inflated prices. The highest-profile person targeted in the effort, sports radio jock Craig Carton, was convicted in November and sentenced to 3 1/2 years in prison in April.

    A former math teacher was sentenced to more than two years in prison for fleecing investors of $71 million through a Ponzi scheme disguised as an operation to buy and sell tickets to high-profile concerts, musicals and sporting events.

  12. Maybee Boeing should get into the crui$e ship bidne$$.

    California diving boat owners seek to head off lawsuit$ after 34 die in fire
    Truth Aquatics Inc., which owned the Conception, filed the action in U.S. District Court in Los Angeles under a pre-Civil War provision of maritime law that allows it to limit its liability.

    AP News | 9/6/2019

    Truth Aquatics Inc., which owned the Conception, filed the action in U.S. District Court in Los Angeles under a pre-Civil War provision of maritime law that allows it to limit its liability.

    A judge will hold a non-jury trial to see if the company can successfully show it wasn’t at fault. If that’s the case, any claimants would only be entitled to the value of the remain$ of the $hip, which the suit said is a total lo$$ with zero value.

    There’s a long history of ship owners successfully asserting this protection. The case involving the White Star Line, the owners of the Titanic, went all the way to the U.S. Supreme Court, which held that a foreign owner could assert protection of the Limitation Act, attorney James Mercante said.

    In that case, plaintiffs eventually withdrew their law$uits and filed them in England, where the company was based. British law, even though it also limited damages, provided a bigger payout than the value of the remaining lifeboat$.

      1. Many of these smaller commercial vessels are constructed with injected Styrofoam flotation material sandwiched between the hull and the interior walls. Unfortunately this material is highly toxic during combustion.

  13. https://www.thetimes.co.uk/article/boris-johnson-vows-to-defy-mps-over-brexit-delay-h3lv79zqh

    ‘Boris Johnson has again said that he will refuse to ask for an extension to Britain’s stay in the European Union, even when MPs compel him by law to do so. The prime minister argued that he would secure a deal at the European Council on October 17 and hinted that leaders on the Continent would not accept another extension to Article 50.’

    ‘He branded the opposition parties’ bill to rule out no deal and order him to ask for Britain to remain in the EU until January “undemocratic” and argued that most people want the UK to leave on October 31.’

    ‘Asked if he would seek an extension if it is passed in law, Mr Johnson said: “I will not. I don’t want a delay.”

    ‘The prime minister said he had “several friends” in the EU who had questioned the wisdom of a short extension and that France is sceptical of a “pointless delay”.’

    This is what I was saying the other day.Several big names in the EU went on record the past few days saying they won’t agree to another extension even if asked by Johnson. All this parliament stuff has been meaningless.

    ‘During a visit to Darnford Farm in Aberdeenshire, Mr Johnson attacked Labour and the SNP for refusing to vote for an election on October 15. He claimed that the opposition parties, which have agreed to block any poll until the prime minister has secured an extension to the Brexit deadline, are scared of the electorate.’

    And they certainly are scared of the electorate. Even the EU is sick of this BS.

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