News Alerts. Oct. 17, 2013. Afternoon Edition. #RealEstate

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  1. Real Estate Heating Up in Indonesia – News Alerts. Oct. 17, 2013. Afternoon Edition. #RealEstate

    … while skyscraper construction projects are slowing or stopped in big Indian cities like Mumbai, tower cranes in Jakarta are still floodlit at night so that workers can keep building long after sunset. The difference reflects continued foreign investment in the Indonesian economy and a diversified domestic economy.

    The Lippo Group, the sprawling conglomerate that is one of Indonesia’s largest real estate developers, is still planning to begin preselling offices in two commercial real estate projects in the coming months, which will then take about three years to build. “At this stage, there’s no material evidence the market has gone away,” said Craig Williams, who was the managing director overseeing Lippo’s real estate operations until the end of September.

    While Jakarta real estate prices may be rising, they are doing so from a very low base and remain among the cheapest in East Asia.

    Indonesians own over 99 percent of the country’s overall commercial real estate market, although there are a few investors from Europe, Japan and Hong Kong, notably Hongkong Land, part of the Jardine Matheson Group.

    …David Cheadle, the managing director for Indonesia at Cushman & Wakefield, another global real estate brokerage and consulting firm. “We’ve pretty much seen one private equity fund, one sovereign wealth fund and one institutional investor every month, every 10 days even, and we say to them, ‘It’s a very frustrating market here,'” he said. “You can’t just walk in here and buy an office building.”

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  2. Shadow Inventory: The Zombie Meme That Won’t Die – Developments – WSJ News Alerts. Oct. 17, 2013. Afternoon Edition. #RealEstate

    Like a zombie that keeps coming back from the dead, news reports continue to suggest there’s a large “shadow” inventory of potential foreclosures threatening to sink the housing market.

    There’s just one problem: the data doesn’t show it.

    We think this “Zombie” thing is just another semantical misunderstanding.

    It is our understanding that not everyone who subscribes to the “Zombie” concept holds that it will necessarily sink the economy but will at least be a huge drag on it and could cause a recession. However, we don’t think the Fed will sit idly by this time.

    Source …

  3. Strategic Defaulters in Fannie and Freddie’s Crosshairs | Realtor Magazine

    Fannie Mae and Freddie Mac are looking to collect unpaid mortgage debt from “strategic defaulters,” those underwater home owners who skipped out on their mortgages even though they had the ability to pay.

    Some states do not allow deficiency judgments, but in more than 30 states and the District of Columbia, they are permissible.

    We wonder how many people didn’t realize they lived in a state where they couldn’t just walk away liability free.

    Source …

  4. East Bay Apartment Rent Growth to Cool as Capacity Expands | The Registry News Alerts. Oct. 17, 2013. Afternoon Edition. #RealEstate

    The East Bay supply surge, however, will push the average vacancy rate 60 basis points higher to around 4 percent by the end of the year, Marcus & Millichap predicted. That’s still tight, but the average monthly rental rate of $1,575 at year’s end will represent a year-over-year increase of 3.3 percent, less than half the growth in 2012. Still, East Bay apartment rental rates have ballooned an average of 21 percent since early 2010, the brokerage noted.

    While some technology workers are receiving robust wage increases and can afford the escalating housing costs, others in the industry are fetching raises of only 2 percent to 4 percent, if that, said Essex CEO Michael Schall. That will require the technology “have-nots” to consider the East Bay as an alternative.

    “[The] East Bay will be a logical place to go because there are still some very good markets within the East Bay and they’re not as expensive as some of the better locations,” he said.

    Source …

  5. Fitch on China: “There Has Been No Progress in Rebalancing the Economy Away From Investment Towards Consumption, Year to Date.”

    The key structural vulnerability facing China’s credit profile is the unsustainability of the investment-driven growth model. The longer investment and leverage remain on an unsustainable path, the greater the risk to the sovereign credit profile and ratings, Fitch says in a report published today.

    Capital formation rose to account for 48.1% of GDP in 2012 – unprecedented for any large emerging market. If investment continues to grow faster than GDP, it would soon exceed domestic savings (50.8% of GDP in 2012) – and China would sink into a trade deficit, dependent on capital inflows to fund growth. Fitch believes the authorities are determined to avoid such an outcome.

    There has been no progress in rebalancing the economy away from investment towards consumption, year to date.

    Source …

  6. Real Estate Taxes by State 2012 | Eye on Housing News Alerts. Oct. 17, 2013. Afternoon Edition. #RealEstate

    The median real estate tax bill in New Jersey was $7,183, the highest in the nation, according to the recently released 2012 American Community Survey (ACS). The median real estate tax bill, by contrast, in Alabama was $535, the lowest in the nation. Eight of the top ten highest real estate tax states are located in the Northeast while a majority of the lowest tax states were found in the South.

    In addition, although property taxes remain the largest source of revenue for state and local governments in the United States, some states rely more heavily on property taxes as a source of revenue than others. For example, in Texas the median real estate tax bill is relatively high (16th) but residents do not pay an individual income tax at the state level. Alabama, on the other hand, has the lowest median real estate tax bill, but residents pay an individual income tax of 5% on all income over $5,000.

    Therefore, when comparing residential tax bills across states it is important to consider government finances.

    Source …