The U.S. real estate market has turned for the top end has peaked. Luxury homes for the top 5% are now off by 2%. In my personal search, I have been looking at homes in Florida for the past year. Some of the high-end homes they showed me on the beach were still on the market. I looked at one that just came on the market at $4.5 million and cost $7.5 million to build. It was a divorce. The agent told me that he has been selling this end of the market in cash deals and rarely in mortgages.
CNBC has reported that Redfin real estate company tracked the top 5% of the more than 600 U.S. markets, which fell an average 2.2% in the third quarter compared to the same period last year. When the rich stop buying, the rest follows.
Government has ensured that real estate will collapse, for you see the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loans under the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X). New disclosure requirements and forms in Regulation Z for most closed-end consumer credit transactions secured by real property have gone into effect with the turning point on the Economic Confidence Model. Government combined the existing disclosure requirements and implemented additional requirements imposed by the Dodd-Frank Act, which applies to transactions for which the creditor or mortgage broker receives after the ECM turning point. This new legislation became effective October 3, 2015 with the ECM.
Real estate agents are reporting that mortgages are now taking far longer to process and approve and have caused transactions to come nearly to a halt. To get a mortgage, one must prove they have the capacity to pay it and must document everything that has gone through their bank accounts.
The World Real Estate Report will be sent to attendees next week. This will be placed on sale for everyone as of January 1. The price will be $400 for both reports covering North America, Europe, Central & South America, Australia, the Middle East, and of course Asia.