NYC Real Estate | NYC Luxury Market | 432 Park Ave

It took two months longer on average to sell a New York City luxury apartment in 2016 compared with 2015. That’s according to the real-estate agency Olshan Realty, which on Wednesday published its year-end report on the New York residential market.

It backed up other reports released earlier in 2016 that showed the luxury market in Manhattan, New York’s most expensive borough, had a tough year. Unlike other price segments of the housing market, there’s an excess of luxury apartments, giving buyers power to negotiate asking prices lower.

“New York City’s rental market has been mostly steady, except at the high end, where the inventory has risen and rents have drifted down,” the Federal Reserve said in a recent Beige Book based on comments from its contacts.

Source: NYC Real Estate | NYC Luxury Market | 432 Park Ave

Fear Spreads of a Housing Crash in Canada | Alternative Economics

The reading marks a change from almost unbridled consumer optimism in a housing market that has carried the Canadian economy since the 2008 global financial crisis, even as policy makers warn price gains in some cities are unsustainable.

Source: Fear Spreads of a Housing Crash in Canada | Alternative Economics

The Global Real Estate Bubble Is OFFICIALLY Bursting | Seeking Alpha

Bubbly cities like Singapore and Vancouver have started punishing foreign housing investors that have pushed up property prices to unaffordable – and unsustainable – rates. Foreign investors are now being taxed in many of these areas, and as a result, their real estate markets have begun to tank.During this housing burst, the most high-end, desirable locations will be hit the hardest.

Source: The Global Real Estate Bubble Is OFFICIALY Bursting | Seeking Alpha (sic)

Big Wall Street Firms Make Lame Excuse for Volcker Rule Non-Compliance, Ask for Additional Five Year Extension | naked capitalism

Anyone who knows bupkis about finance knows if you can’t sell a financial asset in three years (or more accurately, seven), particularly with public and private market valuations at record levels, the problem is not liquidity. It’s valuation. These banks are carrying these holdings on their books at inflated marks and don’t want to recognize losses……..

“It’s laughable that the biggest, most sophisticated financial firms in the world claim they can’t sell the stakes year after year,” said Dennis Kelleher, CEO of non-profit Better Markets. “Everyone else in America has to comply with the law and Wall Street should also.”

Source: Big Wall Street Firms Make Lame Excuse for Volcker Rule Non-Compliance, Ask for Additional Five Year Extension | naked capitalism

Mapped: China’s Skyrocketing Housing Prices | Foreign Policy

realestate

 

Rapid housing price growth raises concerns about a housing bubble in China’s largest cities. Over the past year, residential real estate prices in 10 Chinese…

Source: Mapped: China’s Skyrocketing Housing Prices | Foreign Policy

The “New Housing Crisis” – Not Enough Rental Homes? | Zero Hedge

The point here is that while the housing market has recovered – the media should be asking ‘Is that all the recovery there is?’

With 30-year mortgage rates below 4%, we should be in the middle of the next housing bubble with prices and home ownership rising. The question the media should be asking is “why?” Furthermore, what happens if the “bond market bears” get their wish and rates rise?

The housing recovery is ultimately a story of the “real” unemployment situation that still shows that roughly a quarter of the home buying cohort are unemployed and living at home with their parents. The remaining members of the home buying, household formation, contingent are employed but at lower ends of the pay scale and are choosing to rent due to budgetary considerations. This explains why household formation is near its lowest levels on record despite the “housing recovery” fairytale whispered softly in the media.

Housing-NetHouseholdFormation-072516

While the “official” unemployment rate suggests that the U.S. is near full employment, the roughly 94 million individuals sitting outside the labor force would likely disagree. Furthermore, considering that those individuals make up 45% of the 16-54 aged members of the workforce, it is no wonder that they are being pushed to rent due to budgetary considerations and an inability to qualify for a mortgage.

The risk to the housing recovery story remains in the Fed’s ability to continue to keep interest rates suppressed. It is important to remember that individuals “buy payments” rather than houses, so each tick higher in mortgage rates reduces someone’s ability to meet the monthly mortgage payment. With wages remaining suppressed, and a large number of individuals not working or on Federal subsidies, the pool of potential buyers remains contained.

The real crisis is NOT a lack of homes for people to buy, just a lack of enough homes for people to rent. Which says more about the “real economy” than just about anything else.

While there are many hopes pinned on the housing recovery as a “driver” of economic growth in 2013, 2014, 2015, 2016 – the lack of recovery in the home ownership data suggests otherwise.

Source: The “New Housing Crisis” – Not Enough Rental Homes? | Zero Hedge

Chart: The Epic Collapse of Deutsche Bank

The fate of Germany’s largest bank appears to be sealed. This timeline shows the fall of Deutsche Bank, one of Europe’s most crucial financial institutions.

Screen shot 2016-07-11 at 2.17.55 AM

Source: Chart: The Epic Collapse of Deutsche Bank

Deutsche Bank Chief Economist Joins SocGen Chairman in Trying to Foment Banking Crisis to Get Germany, Brussels to Blink | naked capitalism

Another race to the crash: who goes first Deutsche Bank or Italian Banks? Can bankers get politicians to pull the emergency cord? Who gets screwed? Stay tune for Crash 2.0.

Why bank executives are stoking a banking crisis, with Deutsche Bank in their crosshairs.

Source: Deutsche Bank Chief Economist Joins SocGen Chairman in Trying to Foment Banking Crisis to Get Germany, Brussels to Blink | naked capitalism

Our global financial system is broken. Here’s a plan for fixing it | World Economic Forum

The result is what has been called secular stagnation, new normal, ugly deleveraging, balance sheet recession and Japanification. I call it “QE infinity”: a prolonged period of low growth and low interest rates, where policy-makers persist in implementing policies that won’t fix the problem. They won’t ever say they’re out of ammunition, but central bankers are starting to look like naked emperors. “Is monetary policy by itself going to create growth, employment? You seem to give a lot of responsibilities to the European Central Bank. Can monetary policy create growth by itself? The answer is no. Monetary policy can create the economic conditions for growth,” ECB President Mario Draghi told the European Parliament last year. Put differently, there is only so much monetary policy can do to re-start growth: it is an anaesthetic, not a cure. to the European Central Bank. Can monetary policy create growth by itself? The answer is no. Monetary policy can create the economic conditions for growth,” ECB President Mario Draghi told the European Parliament last year. Put differently, there is only so much monetary policy can do to re-start growth: it is an anaesthetic, not a cure.

Source: Our global financial system is broken. Here’s a plan for fixing it | World Economic Forum

Manhattan Retail Market | Retail Vacancies NYC

These days, hardly a week goes by without a new report about struggling retailers and rising vacancies in Manhattan.

Average retail asking rents fell year over year in seven of the borough’s 12 main retail submarkets in the first quarter of 2016, according to Cushman & Wakefield. And several prime shopping districts now have availability rates well over 20 percent, while stretches on Bleecker Street and Broadway have become notorious for their empty storefronts.

These signs of trouble are coinciding with record spending by retail investors and the rise of the retail condo.

Investors have shelled out $25 billion on Manhattan retail properties since the beginning of 2011, according to data from Real Capital Analytics. And in recent years, buyers have been more willing to dig deeper into their wallets and accept higher per-square-foot prices — forcing them to find tenants willing to pay high rents to justify their purchases.

Since 2000, RCA’s database counts 24 Manhattan retail condo sales that were priced at $10,000 per square foot or more. All of them closed after July 2011 and 17 closed in 2014 and 2015.

“I don’t want to say it’s a bubble but it’s been constantly bid up for six years,” Lee & Associates Managing Principal Peter Braus told The Real Deal.

Consolo added that retail condo sales prices have gone into the “stratosphere” in recent years.

“It is clear that there were numbers that were far too aggressive and the market just couldn’t keep up,” she said.

While real estate insiders are reluctant to call it a retail bubble, many acknowledge that a correction is imminent.

Michael Weiser, president of commercial brokerage GFI Realty Services, said the best indicator of whether Manhattan’s retail market is weakening is vacancy.

Availability rates — which measure the amount of retail space that is vacant or will become available — rose in all but one of Manhattan’s main retail submarkets between the first quarters of 2015 and 2016, according to Cushman.

Among those neighborhoods, several stand out: On Fifth Avenue between 42nd and 49th streets, a staggering 31 percent of retail space was available for lease. Meanwhile, Soho clocked in with a 25 percent availability rate followed by Herald Square and the Meatpacking District (both at 22 percent), Times Square (20 percent) and Madison Avenue (17 percent).

Braus said that owners who paid a steep price for retail space are more reluctant to accept lower rents. “That’s one reason why you’re seeing a lot of vacancies in those neighborhoods,” he noted.As it happens, those six districts were also home to the bulk of the priciest Manhattan retail purchases in the last two and half years, accounting for 57 of the 73 sales priced at $100 million or more recorded by RCA since January 2014. (That excludes office properties with retail components.) They are also among the neighborhoods where asking rents saw the steepest rise over the past two years, the numbers from Cushman & Wakefield show.

Worth the time to read the entire article here:

Source: Manhattan Retail Market | Retail Vacancies NYC | Thor

Bear Stearns 2.0? UK’s Largest Property Fund Halts Redemptions, Fears “Vicious Circle” | Zero Hedge

Beginning of the end?

In the summer of 2007, two inconsequential Bear Stearns property-related funds were gated and then liquidated, exposing the reality of the US housing bubble and catalyzing the collapse of the financial system. While equity markets have rebounded exuberantly post-Brexit, suggesting all is well, British property-related assets have tumbled and, as The FT reports, Standard Life has been forced to stop retail investors selling out of one of the UK’s largest property funds for at least 28 days after rapid cash outflows were sparked by fears over falling real estate values. As one analyst warned,

Source: Bear Stearns 2.0? UK’s Largest Property Fund Halts Redemptions, Fears “Vicious Circle” | Zero Hedge

Goldman Sachs Probably Won’t Have To Pay All Of The New $5 Billion Mortgage Fraud Settlement | ThinkProgress

Since the initial JP Morgan deal that sparked outrage over tax deductions, consumer relief wiggle room, and other fine-print details that make such deals cheaper for companies than press releases indicate, Sen. Elizabeth Warren (D-MA) and other lawmakers have tried to force federal and state lawyers to stop the doublespeak. Warren and Sen. Tom Coburn (R-OK) have pushed for the Truth in Settlements Act since early 2014.The measure would require federal agencies to clearly delineate between deductible and non-deductible settlement costs, and include an estimate of the actual corporate costs of such deals in their formal communications about them. It passed the Senate in September, but hasn’t moved out of any of three separate committees with jurisdiction over it in Speaker Paul Ryan’s (R-WI) House.

Source: Goldman Sachs Probably Won’t Have To Pay All Of The New $5 Billion Mortgage Fraud Settlement | ThinkProgress