Smashing Estate

The Columbus Board of Realtors (CBR) reported yesterday (23 March) that or the second consecutive month, the sale of on hand single-family homes dived by over 20%. According to CBR report sales of single-family homes and condominiums in the central Ohio fell 23% in February to 1,123 units, vs. 1,459 one year ago. The decline follows a 22% go down in home sales in January.

The board said home sales contracts (an indication of future sales activity) dropped 37% in February 2009 to 1,064 from 1,689 in February 2008. Simultaneously, the average sale price of an existing home in the area went down 15% to $133,604 from $156,497. And it is three times as much as the 5% sale price drop seen during 2008. CBR President Gary Parsons said that the group is hoping for boost sales activity as mortgage rates hover close to 40-year lows. As a result, for the first time homebuyers get benefits from a new tax credit.

Home sales in January and February 2009 were dropped 23% at 2,082 units, vs. 2,712 during February 2008. The average sale price is declined around 13% at $135,373, vs. $154,921 previous year. Franklin, Delaware, Fayette, Madison, Morrow and Union counties, and portions of Licking, Pickaway, Clark, Knox, Champaign, Logan, Fairfield and Marion counties sales are also monitored by CBR.

According to an industry trade group on Wednesday, the maximum 30-year mortgage rates in a year worn demand for U.S. house refinancing and purchase loans.

With interest rates declining, the amount of mortgage applications as tracked by the Mortgage Bankers Association’s (MBA) seasonally adjusted application index dropped 6.2 percent in the week ending July 18 to 489.6, with a 6.59 percent 30-year mortgage rate depressing applications for purchases and refinancing.

The trade group said average 30-year house loan rates rose 0.37 percentage point in the week, exceeding the 6.57 percent rate in mid-June to match the rate placement in the July 20 week of 2007. In that week last year, the MBA’s total applications index was 609.0, having dropped from just over 1,000 as in recent times as early February.

U.S. President Obama last month declared the Homeowner Affordability and Stability Plan, which is intended to provide much-needed support to the housing market. The objectives of the housing plan are to support refinancing for quality borrowers. IT will help upset borrowers keep away from foreclosure and inspire new housing demand through the growth of Fannie Mae and Freddie Mac, the top two U.S. home funding companies.

Another massive project is going to victim of the global recession very soon. It was the half-billion-dollar Ritz-Carlton hotel-condo project in downtown Vancouver. A 127-room lavishness Ritz-Carlton hotel was supposed to occupy the first 20 floors of the building, with condos taking up the top 40 floors. But now the project is officially dead. Purchasers who brought the luxury condos in the proposed 60-storey tower are getting letters informing them of the project’s cancellation recent week

Actually, the letter from attorneys representing developer Holborn Group states that “worldwide economic turmoil” has got a significant negative impact on the sale of units in the project, because it has with most other Metro Vancouver developments. The letter states “As a result, sales have not met the developer’s expectations,” “We hereby give you notice that the vendor cancels and terminates the contract due to the fact that the vendor has not entered into binding contracts of purchase and sale for at least 75 strata lots in the development.” “As a result of this termination, the contract is now at an end.”

Holborn had already sold around 62 of the 123 condos in the twisting tower designed by Vancouver architect Arthur Erickson. Officials said condo prices in the project (called The Residences at the Ritz-Carlton) ranged from $1.4-million to $28-million. On the other hand,Vancouver realtor Bob Rennie said the developer had the total right to cancel the project if fewer than 75 units were sold by the end of this month. Rennie marketed the project. He said “It was a tough decision for them because there were sales in place, but the 75-sale threshold was out there and they had to decide,” he said. “They’d need to see a lot of strength in the luxury market to proceed with a project like that now.”