a-square-foot-

Dubai Property Market to Recover by the End of 2011, Dubai Pearl CEO Says

by on March 17, 2010

By Zainab Fattah March 17 (Bloomberg) — Dubai’s property market will recover by the end of 2011 as mortgages become easier to obtain and more people move to the city, according to the developer of a $4 billion hotel and residential project. “Banks can’t stay away for long,” Santhosh Joseph , 45, chief executive officer of Dubai Pearl , said in an interview. “They have to lend and, historically, most of this region’s lending goes into property.” Dubai, the second-biggest sheikhdom in the United Arab Emirates , experienced the world’s worst property slump during the global recession, with selling prices falling by more than 50 percent and project cancellations exceeding $300 billion. To sustain itself, Dubai Pearl is relying on $1.5 billion paid for apartments in advance and another $500 million that has been committed by Al Fahim Group, Joseph said. “We’re not expecting to sell substantially in 2010 and 2011,” said Joseph. “We are a zero-debt company but we may look into leveraging at a later date,” he said. Joseph has a 20 percent stake in Dubai Pearl while the rest is owned by a group of investors led by Al Fahim Group , one of Abu Dhabi’s wealthiest families. Artificial Beach Dubai Pearl is building four 73-story towers connected by a single roof less than a mile from the emirate’s palm-tree shaped man-made islands shaped like palm-trees. The project, which has the same name as the company, will have 20 million square foot (1.9 million square meters) of hotel and residential space. MGM Grand , SkyLofts, Bellagio, and Baccarat are among the six hotels that will have 1,400 rooms. The main structure will be surrounded by an artificial beach and low-rise buildings containing malls and theaters. The project is scheduled for completion 2013. The property crisis prompted Dubai Pearl to review the project and add entertainment and health components to the design, Joseph said. The company also renegotiated terms with buyers, such as longer payment schedules, to reduce the chance of defaults. “In 2010 and until the second half of 2011, I’m not expecting the international markets to be liquid or mortgages to be widely available,” he said. “Real-estate cycles are usually three years peak-to-peak and the best locations tend to bounce quickly.” Dubai Pearl is at the center of a newly developed part of the city, surrounded by populated areas such as Palm Jumeirah , Dubai Media City and Dubai Internet City where international media and technology companies are based. The densely populated Dubai Marina is also nearby. The project has the “best location with a captive clientele in a six-mile radius,” Joseph said. “Our area lacks communities where residents can walk from end to end.” The company is selling residential space at 2,250 dirhams ($613) a square foot, while furnished and serviced Baccarat- branded apartments are selling starting at $1,000 a square foot. The prices have been slashed by about 30 percent, he said. To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net .

Continue reading here:
Dubai Property Market to Recover by the End of 2011, Dubai Pearl CEO Says

Hong Kong’s $1.34 Billion Land Sale Misses Estimates; Property Stocks Drop

by on December 28, 2009

Bloomberg:

By Kelvin Wong and Wendy Leung Dec. 28 (Bloomberg) — Sino Land Co. and K Wah International Holdings Ltd. together paid HK$10.4 billion ($1.3 billion) for two waterfront sites in Hong Kong’s New Territories, falling short of estimates for the land auction. Shares of Hong Kong property companies , the best-performing group this year on the Hang Seng Index, fell. Three analysts polled by Bloomberg News gave estimates that ranged between HK$11.4 billion and HK$13 billion for the 20,925 square meter (225,000 square foot) plots in the Tai Po district, the largest properties offered since September 2007, according to Lands Department records. “Apart from Sino Land, which owns sites nearby and would benefit from paying a higher premium, other developers weren’t keen on pushing up the price,” said Conita Hung , head of equity markets at Delta Asia Securities Ltd. in Hong Kong. Shortage of land and buying by overseas speculators has fueled gains in home prices of as much as 30 percent this year, sparking a public outcry over housing costs and prompting the central bank to warn of “sharp corrections” in asset prices should fund flows reverse. “This shows the developers are being more cautious,” said Kevin Lai , an economist with Daiwa Institute of Research in Hong Kong. “A lot of this year’s economic recovery comes from short- term capital inflows and the money isn’t likely to be swimming around in the next 3-5 years.” The Hang Seng Property Index fell after the close of the auction. The gauge, which had gained as much as 1.3 percent before the sale began at 2:30 p.m., retreated as much 0.5 percent. It has advanced 60 percent this year, outpacing the 50 percent added by the benchmark Hang Seng Index. Sino Gains Sino Land, controlled by the family of Chairman Robert Ng , added 0.5 percent. It had gained as much as 2.2 percent before the auction commenced. K. Wah fell 1.7 percent. The auction result “suggests that developers are not pushing too aggressively because of concerns that interest rates will begin to rise,” said Kenny Tang , an analyst at Redford Securities Co. in Hong Kong. Morgan Stanley forecasts yields on U.S. 10-year treasuries will climb about 40 percent next year, pushing interest rates on 30-year mortgages almost to their highest in a decade. Because Hong Kong’s dollar is pegged to the U.S. currency, official interest rates track those in America. The peg to the dollar has also meant that speculative money has flown into Hong Kong as a decline in the greenback has made asset prices relatively cheap. More than HK$640 billion flowed into Hong Kong since October last year, Hong Kong Monetary Authority Chief Executive Norman Chan said this month. Asset bubbles are the “No. 1 threat” to financial stability in Asia, he said. Crisis Brewing? Chan’s comments followed those from Donald Tsang , the city’s chief executive, who said Nov. 13 he was “scared” that money flowing into Asia because of low interest rates in the U.S. could lead to another financial crisis in the region. Hong Kong’s economy has contracted for four straight quarters, year- on-year, even as property prices surged. In October, the city raised down-payment requirements on mortgages for homes valued at more than HK$20 million to 40 percent from 30 percent of the purchase price to curtail speculation. Developers say the government, one of the largest suppliers of building sites, should offer more land to help hold down prices. Raymond Kwok , vice chairman of Hong Kong’s biggest developer Sun Hung Kai Properties Ltd., said Dec. 3 that property prices in Hong Kong are still “reasonable.” Hang Lung Properties Ltd. Chairman Ronnie Chan said Dec. 4 that Hong Kong’s home market is a “good bet,” joining billionaire Lee Shau-kee in forecasting rising prices. Lee is the chairman of Henderson Land Development Co. Luxury Prices Low mortgage costs, near-zero interest rates on savings deposits and buying by mainland Chinese pushed up existing home prices 28 percent this year as of Dec. 20, according to the Centa-City Leading Index, a weekly measure developed by Centaline Property Agency Ltd. and the City University of Hong Kong. Hong Kong home transactions almost tripled in November from a year earlier, figures from the Land Registry show, marking the eighth straight monthly gain. Transactions of luxury homes, or those costing at least HK$10 million, jumped to 595 in November from 99 in the same month last year, according to the Land Registry . Henderson Land said in October it set a global record by selling an apartment for HK$88,000 ($11,354) a square foot on a net area basis. The first Tai Po site sold today at HK$7,145 a square foot, according to Ricacorp Properties Ltd. “We’re satisfied with the result,” said Chris Mills, assistant director of lands for the Hong Kong government. “The media has been talking up the value of the sites over the past few weeks to some quite major extent.” To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

Read the original here:
Hong Kong’s $1.34 Billion Land Sale Misses Estimates; Property Stocks Drop

World’s Most Expensive Office Markets Get Cheaper as Job Cuts Pare Demand

December 1, 2009

By David M. Levitt and Simon Packard Dec. 1 (Bloomberg) — The world’s most expensive office markets got a little cheaper this year. More than 130 cities worldwide saw rent expenses decline an average of 7.7 percent in the year ended Sept. 30, CB Richard Ellis Group Inc. said in a report today. Almost 50 cities reported declines of more than 10 percent. Rental costs fell about 30 percent in Midtown Manhattan , 53 percent in Singapore and 41 percent in central Hong Kong. “The places that went up the fastest and highest also came down the fastest and at greater depth,” said Raymond Torto , chief economist for CB Richard Ellis, the largest publicly traded broker. “You party Saturday night and you pay for it on Sunday morning. That’s true across the globe.” The global recession and credit crisis are pushing down office rents as companies pare jobs. About 1.93 million job cuts have been announced worldwide this year, Bloomberg data show. In the U.S., the unemployment rate jumped to 10.2 percent in October, the highest level since 1983. London’s West End district retained its position as the world’s most expensive office location, Los Angeles-based CB Richard Ellis said. Offices there cost $184.85 a square foot. That’s down 26 percent from a year ago in U.S. dollars or 18 percent in pounds. With the exception of CB Richard Ellis’s May survey, when London was passed by inner central Tokyo, the broker estimates that the West End has held the title of the world’s most expensive office site since 2001. West End Rents West End rents have been pushed higher by the Mayfair and St. James’s neighborhoods, home to Europe’s largest concentration of hedge funds. The cost of leasing space in the two locations may rise as the municipality lifts business property taxes by at least 70 percent over the next five years, CB Richard Ellis researcher Gary Martin said. “None of the other main global office markets will have such an uplift,” said the London-based analyst. Inner central Tokyo came in second in the CB Richard Ellis survey, while outer central Tokyo came in third. Central Hong Kong was fourth and Moscow was fifth. A year ago the order was the West End, Moscow, central Hong Kong, inner central Tokyo and Mumbai. London and many Asian markets are showing signs of economic stability, Torto said. Most of the rent declines in those markets have probably already happened, he said. “I would think that a year from now those markets will have sobered up,” he said. New York Falls New York City’s Midtown Manhattan came in 24th in the CB Richard Ellis survey, down from 15th last year. It remains the most expensive U.S. office market. In the Americas, Sao Paulo and Rio de Janeiro displaced Midtown as the most expensive markets for offices. Rio rose to 12th in the semi-annual survey from 37th a year ago, while Sao Paulo rose to 16th from 26th. The rise in the two Brazilian cities is “part of the changing world,” with the country’s oil and sugar cane ethanol industries helping to push demand, Torto said. New York’s decline paralleled a drop in financial services employment, he said. Offices in New York averaged $68.93 a square foot at the end of September, compared with $87.47 in Rio and $81.81 in Sao Paulo, South America’s biggest city. Rio office costs increased 12.1 percent, the second biggest increase in the survey. Sao Paulo has about 115 million square feet of offices, about the size of Chicago’s office market, according to Torto. ‘Violent Increase’ “With the emerging economies, their office markets are much more volatile, and they have a much more limited supply of grade-A office space,” said Dan Fasulo , managing director of Real Capital Analytics Inc., a New York-based firm that tracks commercial property sales. “So when there’s an economic boom, there’s always a violent increase in occupancy costs due to constrained supply.” Brazil may grow 5 percent in 2010 after an expected 0.2 percent growth this year, according to the median forecast in a Nov. 27 central bank survey of about 100 economists. Rio was among 41 cities in the survey where costs rose. The biggest increase was in Aberdeen, Scotland, where office costs rose 12.3 percent. Sao Paulo office costs were little changed. CB Richard Ellis defines occupancy costs as a rental charges including taxes and service fees. To contact the reporters on this story: David M. Levitt in New York at dlevitt@bloomberg.net ; Simon Packard in London at packard@bloomberg.net .

Read the full article →

Goldman Sachs Unloads Foreclosed Florida Condos for About a Third of Cost

November 16, 2009

By John Gittelsohn Nov. 16 (Bloomberg) — Goldman Sachs Group Inc. sold 158 condominiums in a foreclosed project outside Miami for about $113,000 each, roughly one-third the cost of land and construction. A partnership of Armco Capital Inc. and Southwest Properties Ltd. paid $17.9 million in cash for the apartments in Downtown Dadeland, a seven-tower residential and retail development in Kendall, Florida, about 6 miles south of downtown Miami. “They took a big haircut,” said Peter Zalewski , principal of Condo Vultures LLC, a real estate brokerage and consulting firm in Bal Harbour, Florida, that reported the transaction on its Web site . A spokesman for Goldman Sachs confirmed the condo sales and declined to comment further. Condo prices in the Miami area fell 37 percent from a year earlier to an average $137,900 in the quarter ending Sept. 30, the Florida Association of Realtors reported . The number of condo sales rose 43 percent to 1,763 units. The Downtown Dadeland purchase comes to about $109 a square foot, compared with building costs of an estimated $250 to $300 a square foot, according to Zalewski and Jim Spatz, chairman and CEO of Southwest Properties. Downtown Dadeland, which broke ground in 2003, is next to the Dadeland Mall, owned by Simon Property Group Inc. and anchored by the largest Macy’s store in South Florida. The development is at the intersection of U.S. Highway 1 southwest and Kendall Drive. Rentals Planned The condos range from studios to three bedrooms with an average size of about 1,100 square feet (102 square meters), Spatz said. The new owners, both based in Halifax, Nova Scotia, plan to rent the condos until Miami prices rise enough for them to be sold at a profit. That may take three to five years, Spatz said in a telephone interview. Goldman Sachs continues to own and operate retail stores in the Downtown Dadeland complex, which Zalewski estimated cost $224 million to develop and build. The bank acquired the property through foreclosure. To contact the reporter on this story: John Gittelsohn in New York at johngitt@bloomberg.net .

Read the full article →

Macklowe Worldwide Plaza Successor Wrestles With Towering Vacancy Dilemma

October 23, 2009

By David M. Levitt Oct. 23 (Bloomberg) — Real estate investor Peter Duncan , who negotiated the nation’s biggest property deal of the year in buying Manhattan’s Worldwide Plaza, is now in charge of a skyscraper that’s 40 percent empty. The Italian marble south lobby of Worldwide Plaza, the gateway to 14 vacant floors, is quiet. It’s one reason Duncan, president of George Comfort & Sons Inc., was able to buy the 49- story building in July for $590 million, two years after it sold for almost three times as much. The purchase price may allow Duncan to undercut the rents competitors charge as he leases his 709,000 square feet. Manhattan has 59 million feet of available offices , according to brokerage Colliers ABR, the most since June 1996, and rents for the best space are down more than 30 percent from their peak last year. Duncan’s outcome may help investors determine whether it’s time to resume buying New York office buildings. “They are one of the first waves of risk-takers here in this asset recovery business,” said Robert Freedman, executive chairman of New York-based brokerage FirstService Williams. “They made a great deal if they can manage this risk.” Pinched by scarce credit and the recession, New York City may hit a record low dollar value for commercial property sales this year. Manhattan office properties have lost almost 47 percent of their value since 2007, more than any other major U.S. city, according to the Concord Group, a consulting firm in Newport Beach, California. Investor Signal If Comfort and its partners lease the space at 825 Eighth Ave. quickly, it will be a “signal for investors” that could increase their appetite for risk, said Jim Frederick , a principal at Colliers ABR, a New York-based commercial broker. Not a single lease for more than 250,000 square feet in Midtown has been signed this year, according to CB Richard Ellis Group Inc. , the world’s biggest commercial brokerage. Tenants have plenty to choose from. Just eight blocks south at Eighth Avenue and 42nd Street is 11 Times Square, a new 1.06 million square-foot office tower that’s almost finished and has no tenants. Just up the street is 3 Columbus Circle, the former Newsweek Building, where 417,000 square feet is available, according to Colliers. Six blocks southeast lies the former New York Times building, where all 644,000 square feet is up for lease. Comfort’s advantage may be price. The partnership paid $370 a square foot for Worldwide Plaza, while competitors paid $1,000 a foot or more for similar buildings at the height of the five- year U.S. property boom. Rents Fall “No longer will they have to get $80 or $90 or $100 a square foot” for a lease, Robert Sammons , research director at Colliers, said in an Aug. 20 interview on Bloomberg Television. “They can do deals in the 30s, 40s or 50s now, which is going to help start to move the market.” Rents for so-called Class A Midtown offices averaged $68.38 a square foot at the end of September, according to Colliers data. The law firm Cravath Swaine & Moore LLP agreed to pay almost to $100 a foot when it renewed its 600,000-square-foot lease at Worldwide Plaza in 2007, a person involved in the transaction said at the time. “I look at the vacancy as being an opportunity,” said Duncan, whose company owns or has interests in eight other New York office properties . “The success of any deal is dependent on how well occupied you keep your buildings.” Comfort, a closely held family-owned company, and its partners set aside “in excess of $100 million” to cover leasing costs, including maintenance and a reserve to renovate for new occupants, Duncan said in an interview. He declined to disclose the building’s expected first-year yield, or capitalization rate. Higher Vacancies The vacancy rate for the highest-quality offices in Manhattan was 12 percent in September, near the highest in more than 12 years, Colliers said. Tenants haven’t been in a better position since the mid-1990s, when the market was coming out of a recession, Sammons said. Duncan’s challenge is the latest for a skyscraper that helped gentrify part of the west side in the 1980s. Built on the old 50th Street site of Madison Square Garden, it was the first sizable skyscraper built that far west in Manhattan. A PBS program, “Skyscraper: the Making of a Building,” documented the construction. William Zeckendorf Jr. developed the property. It was the first New York commission for Skidmore Owings & Merrill architect David Childs , who went on to design the nearby Time Warner Center. Macklowe’s Purchase Developer Harry Macklowe purchased Worldwide Plaza and six other Manhattan buildings from Blackstone Group LP in February of 2007, the same day Blackstone bought billionaire Sam Zell’s Equity Office Properties Trust in what was then the biggest leveraged buyout in history. A year later, Macklowe lost all seven properties to lender Deutsche Bank AG when he was unable to refinance almost $7 billion in short-term debt he used to acquire the buildings. Deutsche Bank financed a $470 million loan for Comfort’s group to make the purchase. The partners include RCG Longview, an investment firm whose founders include former Shearson Lehman Brothers Inc. Chief Executive Officer Peter Cohen; and DRA Advisors LLC, a New York-based sponsor of real estate investment funds. “We wanted to put together a group that has been through the wars a little bit,” Duncan said. The partners “are all long-term holders of real estate.” The floors they need to rent make up the second-biggest empty space in the city: 14 stories at the base of the tower vacated in June by the advertising firm Ogilvy & Mather. Empty Space While some floors have been stripped to the fireproofing, traces of the ad agency remain. The walls on the fourth floor are covered with artwork, including a red and black 1960s-style pop-art mural that reads: “Next time there’s a war for sale, it’s alright to say no thank you.” Representatives of accounting firm Deloitte LLP have spoken with Comfort about taking some of the space, according to two people familiar with the discussion. They declined to be identified because they weren’t authorized to speak publicly about the space. Jonathan Gandal, a spokesman for Deloitte, declined to comment. “We’ve had lot of people look at the available space,” Duncan said. “We are actually discussing having active negotiations with certain tenants. And that and $2.25 gets you a ride on the subway.” To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net .

Read the full article →

Retail Vacancies in U.S. Climb to 17-Year High as Unemployed Cut Spending

October 8, 2009

By Daniel Taub Oct. 8 (Bloomberg) — Vacancies at U.S. shopping centers rose in the third quarter to a 17-year high as unemployment climbed, consumers cut spending and stores closed, real estate research company Reis Inc. said. Vacancies at neighborhood and community shopping centers increased to 10.3 percent, the highest level since 1992, from 8.4 percent a year earlier, New York-based Reis said today. Vacancies at regional and super-regional malls rose to 8.6 percent from 6.6 percent a year earlier, a high for this decade. “Until we see stabilization and recovery take root in both consumer spending and business spending and hiring, we do not foresee a recovery in the retail sector until late 2012 at the earliest,” Victor Calanog , Reis research director, said in a statement. U.S. payrolls dropped by 263,000 in September and the unemployment rate rose to 9.8 percent, the highest since 1983, according to Labor Department data. Retail sales excluding automobiles, gas stations and restaurants fell 4.3 percent in August from a year earlier, according to the Washington-based National Retail Federation. Occupied space at neighborhood and community shopping centers dropped by 5.3 million square feet in the third quarter while developers added less than 600,000 square feet that went empty, Reis said. The average asking rent at shopping centers dropped to the lowest since the first quarter of 2007: $19.22 a square foot, compared with $19.59 a year earlier. ‘Daunting to Observe’ “It is daunting to observe this acceleration in decline in what has traditionally been regarded as a stable property type,” Calanog said. Neighborhood shopping centers tend to be 30,000 to 150,000 square feet and are home mainly to convenience retailers. Community shopping centers are 100,000 to 350,000 square feet and may include a discount department or home-improvement store, according to the International Council of Shopping Centers . At regional and super-regional malls, asking rents fell to $39.18 a square foot from $40.62 a year earlier, Reis said. The 3.5 percent decline represents the worst year-over-year deterioration in a decade, Reis said. Regional malls typically include department stores and fashion and general merchandise retailers and range in size from 400,000 to 800,000 square feet, while super-regional malls are defined as those larger than 800,000 feet. Super-regional malls include the Mall of America in Minnesota, South Coast Plaza in Southern California, and Tyson’s Corner in Virginia. “Continuing job losses and inconsistent consumer spending patterns will weigh on retail properties for at least another 18 to 24 months,” Calanog said. To contact the reporter on this story:

Read the full article →

Rents in the World’s Most Expensive Shopping Streets Fall Most Since 1985

September 22, 2009

By Peter Woodifield Sept. 22 (Bloomberg) — The global recession is taking its toll on even the priciest shopping streets, where rents have plunged the most in at least 24 years, according to Cushman & Wakefield Inc., the largest closely held real estate broker. Manhattan’s Fifth Avenue ranked as the world’s most expensive retail address for the eighth straight year, even as annual rents dropped 8.1 percent in the 12 months through June, to $1,700 a square foot, the New York-based company said today in a report. Rents in Hong Kong’s Causeway Bay declined 15 percent to $1,525. On the Avenue des Champs-Elysees in Paris, they were little changed at $1,009. “The last 12 months have been one of the most difficult periods ever for the retail sector,” John Strachan , global head of retail at Cushman & Wakefield, said in an e-mailed statement. “The impact has been much more significant as the full impact of the downturn has been realized.” Shop rents are falling worldwide as household and consumer spending contract and unemployment rates rise, prompting retailers to curb expansion plans. Financial companies have fired 286,400 workers in the past year, according to data compiled by Bloomberg. The average rent in the 274 shopping streets monitored across 60 countries by Cushman & Wakefield fell 23 percent to $213 a square foot from $276 a square foot a year earlier. Rents declined in 147 locations, the most since Cushman & Wakefield first published its survey in 1986. They were little changed on 76 streets and rose on 51. Asia-Pacific Slides The biggest regional decrease was in the Asia-Pacific, with rents down 15.1 percent. In central and eastern Europe, they slid 14.7 percent. They dropped 12 percent in the U.S. and Canada and 5.8 percent in Europe as a whole. “A significant resumption of rental growth in the short term is unlikely, at least until the wider global economy and labor market show firmer signs of recovery,” Anthea To, a Cushman & Wakefield retail analyst, said in the statement. Rents in less profitable areas may continue to fall as retailers focus on the places that are most in demand, she said. Milan’s Via Montenapoleone, where annual rents rose 1.5 percent, ranked as the fourth-priciest street in the survey, at $887 a square foot. It was followed by Tokyo at $776 and London’s New Bond Street at $768. The most expensive streets in Zurich, Dublin, Munich and Sydney rounded out the global top 10. Munich’s Kaufingerstrasse jumped to ninth place from 12th after annual rents rose 7.1 percent to $470 a square foot, the biggest increase of any street in the top 10 cities. German Affluence “Munich’s affluent consumers and the region’s continuing prosperity make its prime pitches a No. 1 target for international brands seeking to expand into the German market,” Inga Schwarz, Cushman & Wakefield’s head of research in Germany, said in the statement. Rents on Dublin’s Grafton Street tumbled 23 percent, the most of any of the 10 costliest addresses. They surged as much as 111 percent in Sao Paolo. Ho Chi Minh City in Vietnam recorded the biggest jump in the Asia- Pacific region, at 50 percent. Mumbai had the steepest decline worldwide, at 64 percent, the broker said. Other shopping districts in the survey included New York’s Madison Avenue , Rodeo Drive in Los Angeles, Moscow’s Tverskaya, Shanghai’s East Nanjing Road and Vienna’s Kaertnerstrasse. Cushman & Wakefield’s list of the 10 most expensive addresses is based on a ranking of countries by their priciest street. A country can’t have more than one street in the top 10. To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net .

Read the full article →

80% Off

April 27, 2009

From the Sacramento Bee : It’s now possible to buy a Sacramento home for less than the price of a Honda Accord. At least two dozen homes in the Sacramento region sold during the last three months for $25,000 or less….In Oak Park and Del Paso Heights…median home prices have fallen 80 percent from their mid-2006 peak to around $60 a square foot. … On Tuesday…Deutsche Bank lowered the price on a vacant, 728-square-foot home on 21st Avenue in the heart of Oak Park from $29,000 to $19,000. The house had belonged to the same family for years. An investor purchased it for $197,000, or $270 per square foot, in mid-2005, property records show…Seven months after buying it, the first investor sold the property again to another out-of-town buyer for $255,000, or $350 per square foot. In December, Deutsche Bank foreclosed. Today, the home is selling for $26 per square foot. … Most real estate experts expect many more sub-$25,000 homes on the market. They predict more foreclosures, leading to more vacant homes, leading to more desperate banks…”There’s a whole lot of inventory that has not been cleared,” said [Real estate investor Reggie] Lal, the real estate investor, referring to foreclosures still on the market. The number of homes selling for less than $25,000, he added, is “going to explode.” Related post: Housing Bubble Casualties: Professionals ‘Suckered’ into Oak Park

Read the full article →