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Husband, father, inline skater, cycling and triathlon athlete and sometimes coach, graduate civil engineer, commercial and residential and commercial Broker Realtor® working in Ellum, Expo Park, Munger, Peak Suburban, PD 98, PD 269, Swiss Avenue, Baylor PD, all of in-town east Dallas, former home building land acquisitions executive, home builder, home designer (chief architect X3 design solutions), LEED Green Associate (GA), NAHB Green Professional (CGP), NAHB Graduate Builder (CGB), Universal Design and Accessability student and Certified Aging in Place Specialist (CAPS), Advanced Historic Home Specialist certified by Preservation Dallas..........EdgyDad is Biff Bailey of Dallas, Texas

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Real Estate Price Recovery Losing Steam Recently

A report for propertywire.com with some international perspective on real estate prices and a note from my work in our local market.

Last Update: 2012-07-04 11:26:44

Filled out a survey today for National Association of Realtors which brought me back to the realization that the biggest impediment to progress in our business right now is the gap between asking prices and offered prices. I mean the gap between seller expectations and buyer perceptions continues to be great. Great enough that both sit on the sidelines. I saw a report that for most real estate classes, less than 50% of the buyers surveyed were ready to resume buying. The exception was apartments at, I recall, about 60%. Many sellers I speak to remain confident, or at least hopeful that prices will return to the levels or 2007 and the sales I see show me somewhere between a third and two-thirds of that level. I think those that talk about a lost decade of real estate values may be right. The exception is the niche property or lot for which there is truly limited supply. I'm going to pull the Case-Schiller home price index for Dallas and post a multi-year chart with their data, but for the mean time, here's a piece from propertywire.com that give some broad perspective. Food for thought if you want to price to sell......

Below is from propertywire.com:

Global real estate recovery faltering, led by dip in Europe

Monday, 06 December 2010
Global real estate recovery faltering, led by dip in Europe
Global real estate recovery faltering, led by dip in Europe

The global real estate price recovery is losing its steam with over half of all countries seeing negative growth in the third quarter of 2010, a report published today (Monday December 06) shows.

Average annual global house price growth in the third quarter was 3.1%, according to the latest Knight Frank Global House Price Index. The strongest world region was Asia Pacific with average growth of 9.9%, and the weakest was Europe at 0.8%.

Although the growth rate is up substantially on the same period in 2009 when it was -6.2%, it is down on the 4.3% of the second quarter of 2010.

The critical driver of this weaker recent performance is the number of countries tipping back into negative growth in the most recent quarter. Some 14, mostly European, countries saw negative growth after they had experienced several quarters of rising prices.

In the previous quarter 67% of all countries saw positive annual growth, but only 46% experienced growth in the most recent quarter. It means there is a growing gap between the less debt afflicted European economies of Austria, France and Finland, ranked 8, 9 and 12 in the league table, and their neighbours to the south and west of the continent, with Greece, Spain and Ireland ranking 38, 41 and 48 out of 48 respectively.

Liam Bailey, head of residential research at Knight Frank, said on the positive side prices are rising for the first time since late 2008 in each of the six world regions. Asia Pacific is up 9.9%, the Middle East up 5.1%, North America up 4.2%, South America up 3.5%, Africa up 3% and Europe up 0.8%. And prices are rising in 67% of the 48 countries on an annual basis.

‘Unfortunately these upbeat headlines do not tell the full story. Digging into the data we can see that there are still considerable issues playing out across the global markets. While a majority of countries are reporting positive annual growth, 56% saw prices fall in the third quarter of this year,’ he explained.

‘There is growing evidence that the global housing market recovery, which began in early 2009 following the desperate conditions in 2007 and 2008, may just be beginning to run out of steam. Nearly 30% of countries which had experienced strengthening conditions in 2010 saw quarterly price growth turn negative in the third quarter, Led by European markets the list includes Greece, Iceland, Netherlands, Norway, Portugal, Slovenia and the UK. Outside of Europe the list also extends to cover China, Canada, Columbia, Dubai, New Zealand, South Africa and Taiwan,’ he added.

In Europe annual growth varies from an increase of 26.1% in Latvia to a fall of 14.8% in Ireland. The performance of Latvia’s housing market in recent years has been extremely volatile. A year ago it was the poorest performer. But the good news for Ireland is that the rate of decline is slowing with prices falling by 1.3% in the third quarter compared to 1.7% in the previous quarter.

In the US annual price inflation has fallen back to 0.6% compared to 4.2% in the previous quarter and average prices now stand at their mid-2003 level. ‘Whilst the weakening of growth in the third quarter is partly due to the end of the government’s tax incentive for first time buyers, the additional issue of high supply volumes, much of it hidden due to pending foreclosures, is continuing to blight the housing market,’ said Bailey.

Efforts to cool the Asian housing markets appear to be taking effect with more muted quarterly growth recorded in Hong Kong, Singapore and China. ‘In China, central government intervention in the housing market, mainly aimed at controlling strong price growth, is being focussed on increasing the supply of affordable housing. The government plans to provide more support for developers of low-income housing, but crucially it has stated that it will hold provincial governments accountable for failing to curtail price inflation by not expanding their own affordable housing programmes,’ Bailey said.

‘Our Hong Kong based research team reports its confidence that prices in China’s key cities may avoid a significant correction in prices, especially as local governments fine-tune their land supply programmes. Despite this positive outlook they still anticipate price falls of up to 20% in Beijing, Shanghai, Guangzhou and Shenzhen in 2011,’ he added.

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