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Archive for the ‘North American Property’ Category

Canadian’s Snapping up Florida Property Bargains: Because they Can

by Overseas Property Mall on Wednesday, December 22nd, 2010 in Canadian Property

A few months ago, a report by the National Association of Realtors told us that Florida is by far the most popular region with foreign buyers with 22% of sales. The next closest was California with 12%, followed by Arizona with 11% and then Texas with 7%. Also dominant in the market was Canadians. Taking advantage of the price reductions and the strong loonie (currently at parity with the US Dollar), Canadians are currently making 23% of all foreign purchases in the US according to the National Association of Realtors.

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Goldman Sachs Now Confident & Bullish on the American Economy

by Overseas Property Mall on Monday, December 13th, 2010 in Predictions, United States Property

Goldman Sachs is a name we all know, well those of us who follow international investment of any kind for any reason. At a time when banks were the salem witches for their part in the collapse of the American economy, Goldman Sachs was Melinda Warren. While the fires are only hot coals now it will likely be a long time before we forget the stories of executives taking hundreds of thousand dollars in golden parachute payments as their banks imploded.

The feelings of the public aside, on Wall Street Goldman Sachs never lost its status. Even as other banks were completely drowned by the crisis, Goldman Sach’s seemed to have the British stiff upper lip and with cut-to-the-bone analysis the firm was one of the fastest banks to start profiting from the new realities left in the wake of the crisis.

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Drawing Parallels between Florida’s Property Bust in the 1920s and Dubai’s Boom & Burst

by Overseas Property Mall on Wednesday, December 1st, 2010 in Dubai Property, Florida

We all know about the US real estate bubble bursting in 2006, which was probably one of the largest contributory factors in the US financial crisis, along with the deregulation of lending practices. One of the hardest hit areas is Florida when its huge real estate bubble burst. This was not the first time that a Florida real estate bubble had burst, and in fact there are many parallels between the first Florida real estate boom and bust and the current bust.

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Foreign Investors Capitalise on Bargain Basement Florida

by Overseas Property Mall on Wednesday, November 3rd, 2010 in Florida

Whopping great wedges of Wonga are being slashed from the prices of US homes for sale as sellers find buyers worryingly evermore elusive (maybe that should read evermore worryingly, both describe the scene perfectly well).

According to US based real estate agent Zip Realty — a firm reported to be highly focussed on overseas buyers — foreign buyers from Asia, the Middle East, Russia and other parts of the (primarily emerging) — world are benefiting from their increasing disposable income in capitalising on great property deals at rock bottom prices from desperate sellers.

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Foreclosure Fraudsters Increase Misery for US Home Sellers

by Overseas Property Mall on Wednesday, September 29th, 2010 in Foreclosures, United States Property

A recent article in Wall Street Journal touches on the local damage of foreclosures. We can all look at the bargain foreclosed homes being sold in wonderment, but imagine you were selling the house next door, or down the block.

Say your house is appraised at $220,000 and your hoping to get at least $200k for it in the current market. When a foreclosed home down the road sells for $80,000 you can kiss those hopes good buy — not least because recent local sales are all factored into an appraisal.

It is bad enough that the self-serving banks are flushing their bad loans out into your local market at crazy-low prices, but worse, the situation has provided an opportunity for greedy fraudsters. Not happy that they will get a discount of 50% or more, fraudsters are paying potential bidders off at foreclosed auctions to get properties even cheaper.

The latest case to be announced by the Department of Justice is that of Christopher J. Deans a real estate investor from Raleigh North Carolina, who pleaded guilty to rigging bids on Friday. Deans apparently paid co-conspirators not to bid on certain properties, which he then bought for a massively low price, allowing him to benefit from a quick-sale or high-yield rental income.

I hope it was worth it because Deans now faces up to a $1 million in fines and up to 10 years in prison.

Though there are no figures on how many properties Dean fraudulently nabbed, but the DOJ said that his campaign would have done damage to the local market, by artificially driving down prices.

“The conspiracy resulted in the suppression of competitive bidding on foreclosed properties which caused foreclosing lien holders and certain homeowners to receive a lower price for properties sold through foreclosure actions,” the DOJ said in a statement.

Deans case follows a spate of similar cases uncovered this year, including: the case of 43-year Stockton, Ca investor Anthony B. Ghio, who pleaded guilty in May, and that of Baltimore lawyer Harvey Nusbaum who pleaded guilty to rigging tax lien auctions in Maryland, also in May.

WSJ said it best:

“As the feds decide the future of the government’s involvement in the housing market, whether it’s reforming Fannie and Freddie, another stimulus, or more assistance to banks weighed down by foreclosed houses, the fraudsters may seem like just another nit in their hair to weed out. But for local markets, they’re a pretty pesky bug.”

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Foreign Investment in U.S. Real Estate (2010) – The Stats (Realtors® Report)

by Overseas Property Mall on Monday, September 27th, 2010 in Research, Stats, United States Property

The latest profile of international activity in the US housing market published by the National Association of Realtors has revealed many interesting figures, some surprising and some not so surprising.

The biggest finding for us was in the state by state breakdown of foreign purchases. According to the report, Florida (22%), California (12%), Arizona (11%) and Texas (7%) dominated in terms of the percentages of sales to foreigners this year.

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Canadian Housing Looks Overpriced Says OECD

by Overseas Property Mall on Tuesday, September 21st, 2010 in Canadian Property

The influential Organisation for Economic Cooperation and Development has said that Canadian housing “looks” overpriced both in terms of price-to-income and price-to-rent ratios.

“Canadian house prices, or at least some regional or local housing markets, notably those of Toronto and Vancouver may still reflect excess demand conditions,” says the Paris based OECD in their annual review of the Canadian economy.

According to data, the average price of a Canadian home is 5 times the average Canadian’s salary (net). This ratio is 35% higher than the long term average.

But the OECD was more concerned that Canadian’s may be overstretching themselves in the low-interest-rate environment. According to the report by 2012 some 7.5% of Canadians will be vulnerable to interest rate rises, unless household borrowing slows.

The report says: “High household indebtedness also implies a growing vulnerability to any future adverse shocks. Household credit growth needs to slow down!”

It’s a funny old tale; the Canadian housing market, which never boomed during the global housing boom, and then boomed during the global housing bust. The OECD explained their beliefs on why this happened.

“For one thing, Canadians entered the cycle with less debt than their U.S. counterparts. Secondly, they had access to a banking sector still willing to extend credit at favourable rates. And lastly, subprime mortgages never made up more than 5 per cent of new issues, compared with 33 per cent in the United States at the peak.”

Despite these realities the Canadian government acted quickly in introducing stimulatory measures to the housing market, which turned out to be far more than was needed (for the reasons given above). Low interest rates and other measures including a first time buyer tax credit caused house sales to soar and prices to grow massively, including a 24% increase in prices in 2009.

Fears quickly emerged that the market may be overheating, and that Canadian’s may be borrowing more than they would be able to afford when rates started to rise again. The government started to take measures to cool the market this year.

Sales saw a huge drop when the tax credit ended, and it emerged that the tax credit had caused people to bring their purchases forward leaving a lull in sales for months after it ended. And the government has also tightened the criteria for government insured mortgages twice. But the OECD believes they may need to do more.

OECD suggestions included: larger down payments on all federally insured mortgages and forcing banks to disclose how “sensitive” their mortgage revenues are to rate hikes.

“Lending standards and the framework for mortgage insurance are the right tools to contain this cycle,” says the OECD.

The Canadian Association of Accredited Mortgage Professionals, which represents brokers across the country, disagrees sternly with the OECD:

“We believe new mortgage insurance rules from Ottawa would be a solution looking for a problem,” says Jim Murphy, CEO and president of CAAMP. “The real estate is already cooling with sales down and prices that are stable.”

Murphy says the government has already tweaked mortgage regulations twice and there is “No need for a third time.”

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US Homeownership Rate Slipping, Could Slip Back to 1960 Low

by Overseas Property Mall on Wednesday, September 1st, 2010 in Foreclosures, United States Property

Homeownership in the US threatens to fall to its lowest percentage since 1960, because of the volume of foreclosures which has continued to increase into 2010. The latest data showed that 66.9% of Americans owned their home in the second quarter of this year, down from 69.4% in 2004.

“Anybody who knows anything about housing thought it would be flat in the second quarter,” said John Burns, CEO of John Burns Real Estate Consulting, a national housing market analyst based in Irvine, Calif. “Homeownership fell during the quarter when government was offering a tax credit (to first-time homebuyers). What do you think is going to happen now that there’s no tax credit?”

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Conservative Asian Buyers Snapping Up Distressed US Property

by Overseas Property Mall on Tuesday, August 3rd, 2010 in California, United States Property

A survey by a US realtors group has highlighted a remarkable rise in the number of Asian and Asian-Americans buying houses in the US. The consensus is that the demographic primarily avoided being caught in the housing crash, because they tend to be conservative towards property purchases, and that now they are capitalising on the fact that they have the cash and the credit to get good deals on homes.

According to the California Association of Realtors Annual Housing Market Survey, the proportion of ethnically Asian — most commonly Asian Indian, Japanese, Chinese or Filipino — buyers rose 3.8% between 2007 and 2008 and a further 2.3% between 2008 and 2009. This left the total proportion at 18.1 percent in 2009, up from 12% in 2007. The surveys also tell us that the proportion of Asian buyers never went higher than 12% even at the height of the boom (2003-2006).

Leslie Appleton-Young, chief economist for the California Association of Realtors (CAR), said the change in the proportion over time was noteworthy.

“They’re buying in distressed markets and utilizing (government incentive) programs,” she said.

The trend has also been noted by local realtors in San Diego and Southwest Riverside counties, who said that Asian’s tend to be uncomfortable taking on too much debt, and have preferred to invest in their small business rather than buy property during the boom.

“Asians are very conservative when it comes to buying,” said Scripps Ranch realtor and president of the San Diego chapter of the Asian Real Estate Association of America, Shonee Henry, “We don’t go out there and buy, and forget about what’s going to happen tomorrow. We tend to make sure we have enough money to support ourselves and everyday expenses.”

Henry mused that homes being too expensive was also a reason for Asians holding off buying during the boom:

“They might have had the down payment, but the monthly payments were too high,” she said.

Now that average house prices are down 35% the conservative Asians are in the fortunate position of having sizeable down-payments.

The CAR survey said Asian buyers put down an average down-payment of $90,000 in 2009, triple that of non-Asians. This was mostly in the form of 20% of the purchase price, compared to the 10% stumped up by non-Asian buyers. Appleton-Young said Asians may be avoiding low-down-payment programs such as those offered by the Federal Housing Administration.

This is one trend that is not echoed however; Ric Manalo, a Realtor with offices in Temecula and Chula Vista, said that Asian buyers in Southwest Riverside were making use of low-down-payment programs.

“The margin between what it costs to rent a home and what it costs to buy a home is so small, most of these are FHA and VA (Department of Veterans Affairs) deals they can get in for very little money,” he said.

Henry pointed out variations between the different nationalities; she said that her Filipino buyers went with low down-payment programs, while Chinese buyers tended to have cash for big down payments.

Photo credits: Jeff Turner via Flickr

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Most Expensive Homes in the United States – 2010

by Overseas Property Mall on Tuesday, June 29th, 2010 in Billionaire Homes, United States Property

One thing that this global recession and accompanying housing crash has shown us is that the ultimate in prime property will hold its value, and in fact grow during such times.

We recently profiled the most expensive homes in the world, and compared it to a similar list we compiled in 2008. Not only did this show that the world’s most expensive homes were more expensive on the whole, but because several properties featured in the 2008 list were in the 2010 list with a higher price tag, it also showed that prime property prices had risen.

We will now feature the most expensive homes in the US, as some of these homes appeared on the global list for 2010, we will see what their value has done over the past few months.

The Manor – Holmby Hills, California – $150 million.

The Manor is a 56,500 square foot English-style mansion set on 4.6 acres and owned by Aarron Spelling’s widow. The property features a library, gym, bowling alley, wine cellar, gift-wrapping room and media room. The grounds feature pools, gardens, a waterfall, and parking for over 100 cars.

The Manor was the 8th most expensive home in the world in April.

Fleur de Lys – Beverly Hills, California – $125 million.

At 35,000 square feet, Fleur de Lys pales beside the Manor in terms of size. In terms of splendour however, few can match the 12 bedroom 15 bathroom mansion modelled on the Palace of Versailles. In terms of features, Fleur de Lys boasts a 50-seat screening room, as well as Italian marble and gold-embossed leather walls.

Fleur de Lys was the most expensive home in 2008 according to our list compiled in November.

Tranquility Estate – Lake Tahoe, Nevada – $100 million.

Owned by Joel Horowitz, co-founder of the Tommy Hilfiger brand, Tranquility Estate is the ultimate in luxury, set in 210 acres of Lake Tahoe wilderness. The main-home is 20,000 square feet and includes a cigar lounge, art studio and gym, and a staircase that replicates the one on the Titanic. The grounds feature a golf course and boathouse.

Tranquility Estate has been on the market for four years, and was the fourth most expensive in 2008.

Kaiser Estate – Honolulu, Hawaii – $80 million.

Among other things Kaiser Estate is rich in history, having once been home to industrialist Henry J. Kaiser. The property spans 5.5 acres, split into 3 oceanfront parcels with tropical landscaped gardens forming the grounds. The main-home is 15,000 square feet with beautiful views. The ground also feature a 12,000 square foot boathouse and a marina.

Humming Bird Nest Ranch – Simi Valley, California – $75 million.

Humming Bird Nest Ranch is a gorgeous 123 acre estate featuring a 17,000 square foot Spanish-revival-style main home, ten townhouses, parking for 200 cars, a helicopter pad and a full equestrian facility.

Former Julius Forstmann House – New York, New York – $75 million.

This really is one of the most uniquely special properties on the list; a five storey, 21,000 square foot limestone townhouse in New York’s Upper East Side, with a trendy address near Fifth Avenue. The landmarked building, which was built in 1922 for Forstmann, a German merchant, has retained many of its original features, including the marble staircase and hand-carved mouldings.

Porcupine Creek – Rancho Mirage, California – $75 million.

The owner of Porcupine Creek is selling due to bankruptcy, making this one of the few distressed sales you will ever see in this price range. The property features a 25,000 square foot main home, pool, spa, grotto, gym and a 19-hole golf course that won acclaim from Golf Digest magazine. It went on the market in early 2010.