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As US home price growth continues to soften, expert says market is not back to normal
Home price growth across the US has softened for six months in a row with experts warning that the overall health and recovery of the residential real estate market is far from guaranteed. National home prices in April were up 5.1% year on year but while the quarterly rate of growth continued its path to normalisation coming in at 0.5%, according to the latest data from real estate firm Clear Capital. Most of the regions sustained price growth through the winter, but the Midwest is already seeing negative quarterly declines of 0.10% Midwest and the region remains volatile. The report points out that for nearly seven years, it has struggled to get on equal footing with the nation. Within the top performing markets for April, eight are Western markets. While the West’s market by market performance may exceed the other regions, gains have been softening since the beginning of 2014 and this is leading to softening gains at the national level, the firm says. Three Florida markets that rank among the top performers boast high levels of distressed and short sales. All three markets have distressed saturation rates that are at least 10% higher than the national level, at 16.5%, suggesting growth is dependent on a higher propensity of distressed inventory in this area. The report also points out that the stigma once associated with REOs has turned around and today, REOs and short sales signal opportunity to investors and traditional home buyers alike, and an indication that market level gains could be ahead. ‘While spring brings renewed confidence and demand, the numbers through April are mixed. Sales may be up, but subsiding gains imply the recovery is at a critical inflection point,’ said Alex Villacorta, vice president of research and analytics at Clear Capital. ‘As the market normalises, which is a good thing for housing overall, small losses could have greater impact, forcing a standstill or even worse, a return to negative territory in certain areas across the country,’ he explained. ‘Confidence is down in April, suggesting consumers aren’t quite convinced that the economy, much less housing, is as rosy as some early spring metrics suggest. Yet, we continue to see blooms of opportunity as distressed properties continue to provide fertile ground for investors of all sizes to take advantage of a red hot rental market. As we saw back in early 2013, this type of inventory can be the catalyst that revives confidence and re-engagement,’ he added. ‘The early spring numbers are encouraging but rest assured, the overall market is far from being back to normal. There is reason to be hopeful, but arm yourself with accurate data and remember to read headline numbers with the right perspective,’ he concluded. Continue reading
Rich West Africans now buying in London’s prime property sector
Russians and the Chinese are known to be keen buyers in London’s prime property market but now investors from West Africa are entering this prestigious market. Prime London estate agent, Harrods Estates Mayfair Office, is reporting a surge in demand from West African buyers in Mayfair with a 40% rise in sales of luxury property to the nationality in the last 12 months and up 400% compared with the previous year. Shirley Humphrey, director at Harrods Estates, explained that the firm has seen a considerable increase in demand from West African’s looking to purchase a pied a terre in Mayfair. The majority are looking to spend between £2.5 million and £6.5 million on a two or three bedroom apartment, where they can stay when visiting London on business or for pleasure. As with many international buyers, West Africans are seeking apartments in luxury developments, which offer 24 hour security, concierge and spa facilities. ‘Family is very important to them and they prefer to cluster buy more than one apartment in the same building so that they have somewhere for their children, parents and grandparents to stay,’ said Humphrey. She pointed out that Mayfair is seeing resurgence over the coming years, with an array of new luxury developments in the pipeline and the return of many commercial buildings put back to residential use. The area has long appealed to British nobility, aristocracy and high society as well international wealthy individuals from around the world, including Middle Eastern, Chinese, Indian and Russian buyers. ‘Mayfair offers a village lifestyle in a fantastic central location. The excellent shopping on Mount Street and Bond Street, fantastic restaurants and five star hotels, contribute to the areas popularity and with Hyde Park and Knightsbridge a short stroll away, many of our clients love the location as both an investment and lifestyle choice,’ explained Humphrey. ‘West African purchasers are drawn to living north of Hyde Park or just off Park Lane on Upper Grosvenor Street or Mount Street and prefer period buildings with newly refurbished luxury interiors which they can move straight into. Although they are buying property as an investment, the key thing for West Africans is owning a home in London which they can use for a minimum of a few months of the year,’ she added. Continue reading
Prime central London real estate agents report major boost from election
Reports from estate agents in the prime London property market shows there has been a surge of high end deals since the election result just a few days ago. Over £200 million worth of residential property has been sold since it became clear that the Conservatives would win the election and form the new government. Peter Wetherell, chief executive of Wetherell said that the firm is currently processing some £29 million worth of offers that were made on Mayfair property on Friday 08 May straight after the election, which included a £26.5 million property in Mayfair. ‘I’ve had correspondence last Friday and over the weekend with some 70 clients and other property contacts and all of them have said to me that the luxury London market is now back in business, especially with the mansion tax worries now over,’ he explained. ‘Whilst stamp duty remains a significant cost on the prime London market, I believe that we will now see a wave of new luxury residential sales and new instructions coming onto the Mayfair and wider West End marketplace,’ he explained. ‘I’ve already had several clients coming onto me on Friday and over the weekend asking me to prepare launching new luxury properties into the market shortly. The next few months will be very exciting for the luxury residential market in central London,’ he added. Gary Hersham, managing director of Beauchamp Estates said that firm is still busy finalising the multi million pound of business activity that started on Friday, most notably a £20 million pound property in the West End which exchanged on Friday. ‘We will now see property activity in prime central London return to previous levels, if not surpass them, as delayed and pent-up activities are given the green light. Property played a very influential role in this election, voters wanted economic stability and their homes safe from a mansion tax,’ he pointed out. ‘We will now see a big wave of previously pent up demand unleashed in the London housing market, which will lead to a rise in new instructions and sales across London and the Home Counties in particular, especially in the premium sector of the housing market,’ he added. Becky Fatemi, managing director of Rokstone, revealed that the firm had exchanges and offers on prime London property worth a cool £59.7 million at the end of last week, the biggest set of deals since the rush on the day before stamp duty changes. The activity included a £20 million penthouse in Belgravia, and a £2.2 million flat on Duke Street in Mayfair. It also had offers on £37.5 million worth of additional property consisting of a £7.1 million house in South Kensington from a Lebanese buyer, a Saudi family offered on a £2.5 million apartment in St Johns Wood, an investor made an offer on a £6 million property in Hyde Park Street, and there was… Continue reading
