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SAN ANTONIO — Still-dropping prices, near-in suburbs and Mexican real estate’s image problem were among the real estate topics discussed last week during an annual gathering of the National Association of Real Estate Editors, where industry leaders shared their insights about the state of the real estate industry and real estate market.
Some notable quotes:
"Did we cannibalize future sales? The answer is yes."
—Ted C. Jones, senior vice president and chief economist for Stewart Title Guarantee Co.
Jones described what he termed the long-term failure of the homebuyer tax credit program in 2010. Still, he said, "Thirty to 36 months from now we will look back and slap ourselves for not buying now," he said of current affordability levels. "That glass is half-full and getting fuller."
"Fannie Mae and Freddie Mac haven’t wanted to deal with investors (on foreclosed properties), but we recommended to them that there was a place for responsible investment."
—Shaun White, vice president for corporate communications, Re/Max International; coordinator, Re/Max national short-sale/REO programs with Fannie Mae and other asset managers.
White said the investor share of closed transactions have increased from about 13 percent to 23 percent since November 2009.
"It’s depressing to look at the future."
—H. Drake Leddy, chairman and CEO, Presidian Hotels in San Antonio. Leddy is a developer of hotels, resorts, high-rise residential properties and other major projects.
Leddy bemoaned a very tight financing environment. "Banks will lend you 35 percent, the rest is equity," he said.
"The next frontier is all about doing better with what we’ve got."
—Patrick L. Phillips, CEO, Urban Land Institute, a development think tank in Washington. Phillips said the next development frontier lies in revitalizing the first-ring suburbs of large cities.
Phillips said that when the real estate market does come back, demand for housing in the farthest suburban areas won’t come with it. "We have a huge overhang of obsolete products by location and market preferences," he said. "There will be a real shift in our appetites."
"The current pace of improvement puts the bottom of the market in mid-2013."
—Stan Humphries, chief economist, Zillow.com.
Humphries’ May data showed low-end homes falling faster than high-end homes. In most metro areas, the value of the lower one-third of homes has fallen further than the value of the upper two-thirds, his company reported.
"We expect interest rates to go up later this year — but they’re not the issue. Banks just aren’t making loans."
–Jed Smith, director of quantitative research, National Association of Realtors.
"We’re not going to hide from the fact that we have a severe problem right now."
—Christopher Hill, CEO, Stewart Title Latin America; founder, Mexico Real Estate Coalition.
The coalition is a collaboration of companies trying to restore international buyers’ confidence in the Mexican property market in the wake of severe drug violence in that nation; it has launched a website, www.LiveMexico.org.
"The (drug) issues are not everywhere — of the 2,500 municipalities in Mexico, only 80 have been affected by drug violence," he said.
Condo owner sues over bedbug-sniffing dog
A Chicago condo owner is suing his homeowner board because of its decision to allow a bedbug-sniffing dog to reside with its owner in one of the units. The condo owner claims that condo rules forbid dog and cat ownership — and that they should be applied to the owner of a bedbug-detection service whose $10,000 Labrador/border collie mix got permission from the board in January to live there.
The rules are the rules, he maintains, according to Crain’s Chicago Business. The publication also said the condo owner objected to being ordered to allow the dog into his unit to sniff for the bugs.
Live here, get thin
A new co-op building in the New York City borough of the Bronx claims it’s designed to prevent obesity among its residents. In addition to indoor and outdoor fitness centers, it has a backyard with brightly colored exercise equipment for adults, and climbing equipment for children, according to NBC New York.
Motivational signs at the building, called the Melody, tout the benefits of exercise and urge residents to take the stairs instead of the elevator.
Derailed sales, one big cake
In a survey of 1,500 Century 21 real estate agents, 75 percent said they had one or more transactions fall apart in the past six months because their clients couldn’t obtain financing, according to a company report. Century 21 CEO Rick Davidson said the current lending environment is too constraining for buyers and is detrimental to both a housing and general economic recovery.
In other company news, Century 21 got some cable coverage recently when the "Cake Boss" reality baking series on The Learning Channel (TLC) featured baker Buddy Valastro’s crew and their efforts to construct a 2,200-pound cake in celebration of the franchise network’s 40th anniversary.
The cake was trucked across the country from the bakery in Hoboken, N.J., to attendees of the company’s celebration in Las Vegas several months ago. The episode aired in June.
The international report
—One-fourth of New Zealand’s real estate agents have left the business in the past year, and industry spokesmen blame slow home sales, according to a television news report from nationwide channel TV 3. A year ago there were about 18,000 agents in New Zealand, while a recent count found about 13,000; some in the industry expect the number to drop to 10,000, the report said.
–A recent report from the Zoopla real estate company in the United Kingdom pegs Kensington Palace Gardens as London’s most expensive street. It found the average home on the mansion-lined street would cost the equivalent of $31 million. The Daily Mail newspaper reported that residents include the Sultan of Brunei and the founder of the Foxtons real estate brokerage.
–Also in England, the childhood home of the Duchess of Cambridge — you know her as the former Kate Middleton, who recently moved up a few notches in British society, to say the least — sold for about $787,000, according to the BBC. It was purchased by a schoolteacher. The duchess moved from the home when she was 12.
–Many recent news reports have come out of the housing boom in Vancouver, Canada, where home sales are up 80 percent from two years ago, apparently led by buyers from mainland China. Now come warnings of a pricing correction, according to the Winnipeg Free Press. A report from the Bank of Montreal predicts they’re in for a 21 percent drop.
–The economy is so troubled in Slovenia that it’s courting investors in India to buy as many as 20 venerable castles in the tiny European country. The Deccan Herald, an Indian newspaper, puts the value of the castles at $1.4 million to $7.1 million.
Mary Umberger is a freelance writer in Chicago.
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