If you’ve always dreamed of owning oceanfront property in Long Island’s posh community known as ‘The Hamptons’, the good news is, prices are down up to 40% from their 2007 peak.
Just as it appeared that new construction starts for personal residences were beginning to stabilize in the U.S. (as evidenced by very small increases In March and April as opposed to severe decreases in the 12 months before that), commercial real estate starts plunged in both months, taking new housing construction for April to an historic low.
Bloomberg, The Times and all the other major newspapers are apparently shocked thta there was a drop in US housing starts in April. According to Bloomberg yesterday:
U.S. stocks declined as banks fell after Moody’s Investors Service said commercial property values plunged and Home Depot Inc. retreated following an unexpected slump in housing starts.
And the Times ran with a similar lead in, which is entertaining because in March they reported “an unexpected rise in new home sales,” which apparently heralded “the first tentative signs of economic “green shoots.”
More on Unexpected drop in US housing starts says Bloomberg and The Times
The European Central Bank began buying Spanish covered bonds last week, which will hopefully prevent the Spanish property market from collapsing this week, but the long term effects are difficult to predict. Clearly the Spanish real estate market is undergoing a massive correction and I am wondering what exactly the effect is likely to be for the smaller investor.
How would you like to live in a palatial estate with no housing or utility costs and nothing much to do except care for a dog and deal with occasional emergencies if and when they arise?
More on As High End Properties Languish, Need for Caretakers Grows
London townhouse sold for huge discount; the UK, Hong Kong, Dubai and Calgary markets have bottomed out; Luxury resort in the Bahamas goes broke; Irish property prices have fallen 52 percent and a British Member of Parliament forgets he paid his mortgage off.
Volatility still rules the property markets – although when the term “volatility,” started to mean “dropping prices,” remains a mystery. A few interesting reports from the property investing world make disturbing reading for some markets – particularly some of the emerging markets.
Yet another law has been introduced in Dubai to protect the developers against defaults by small investors. Law Number 9 of 2009, announced recently by the Dubai Land Department and Real Estate Regulatory Agency (RERA), introduced a sliding scale to determine how much money a property buyer who defaults on payments will end up losing.
If you get the sense that the entire North American continent is still in the midst of a real estate meltdown, that’s not surprising, given the news coverage of the catastrophic events of the past year and a half, but actually, a few U.S. cities have weathered the storm pretty well.
More on One Industry Towns Among Few to Show Housing Appreciation