Tuesday, May 29, 2012

Cognac golf course - a review

Regular readers of a certain age will know that around this time of year I go off on a 4-5 day golfing trip wth some old school friends from the UK.

We travel all over Europe to find decent courses and, in France, we have played some crackers like Chantilly, Paris International and Royal Medoc.

This year we are popping across the border into Spain and will be sampling the delights of San Sebastian among others.

The point of the post though is to highlight what a superb course and practice facilities I have here in Cognac.  I haven't played since our last tournament and thought I'd better dust off the cobwebs (literally and figuratively) and get in some training.

Cognac golf club is a championship, 18 hole, course of 6,125 metres from the back tees.  It's always well kept and the holes meander through the vines giving some lovely views down into the river valley. The par five 9th is my favourite hole - 484 metres all downhill and eminently reachable in two.  The great thing is that the hole funnels down, getting narrower and narrower, with a huge lake protecting the green and out of bounds tight to the left.  It's a potential card killer for those (like me) who think golf is about the glory not protecting your score-card!

The attractive clubhouse has an excellent restaurant (same team that runs the Chateau de l'Yeuse restaurant) with terrace overlooking the par three 18th.  The pro-shop is well stocked with knowledgeable staff.

The practice facilities are first class with four holes, a large, bunkered, green and two driving ranges (one covered area with mats and one uncovered off the grass).

It's definitely worth visiting if you're in the area and if you'd like to buy a house on/close to the course then for the price of a 2 bed apartment on the Algarve you'd get a wonderful family home with pool!


Wednesday, May 23, 2012

French Property News - spotlight on Jarnac

The latest edition of French Property News is running a double page spread entitled "Spotlight on Jarnac, Charente" written by yours truly.

You can see the full online version of the article here.

If you are interested in buying a house in the Charente then I'd suggest that Jarnac should play a central role in your search.  The town itself (home to Courvoisier and birthplace of Francois Mitterand) is exceptionally pretty with a lovely market and plenty of riverside walks.

It is also at the centre of some of the prettiest towns and villages of the Charente.  Segonzac, Bassac, Bourg Charente, Chateauneuf & Cognac are all within a few minutes.  There is championship golf close by as well as theatres, cinemas, tennis clubs, swimming pools, ice rinks, cycle routes and a huge amount of terrific bars and restaurants.

Take a minute to read the article and meanwhile here's a couple of photographs I have taken locally.


Guest blog: Jeff Lichtenstein of Jeff Realty

Regular readers will know that I sometimes invite guest bloggers to write about their specific areas of expertise.

My network of buying agents across France has seen a dramatic increase in enquiries from the USA over the last 12 months and I thought it would be good to get the views of an expert from "across the pond".

Jeff Lichtenstein specialises in the top end of the market including (close to my heart) golf properties. Here's his take on the market:

Housing Market in United States Improving, but Hold the Bubbly!

The United States housing markets is getting better, but hold the champagne if you think the market is going back to where it was.  It’s kind of like a student who always receives failing grades getting a D+ and being all excited.  However, it’s still a D+. Although that D+ does feel better than an F.  Some factors to take under consideration…

·       United States unemployment has decreased to 8.2% from a high of over 10% in 2009.  However, many have dropped out of the labor market and aren’t counted as unemployed in these statistics.

·       Interest Rates are at historic lows.  While it is not nearly as easy to get a loan, loans are taking place and FHA loans for example are work-arounds for home purchasers.  I just did a transaction where the buyer received a 96.5% loan utilizing FHA!

·       March retail sales were 2% higher than they were the period before.  A bit better economy and a hair better housing market helps spending and this trickles to all areas of the economy.

·       Permits for new construction were 8% higher than the previous quarter and 18 percent higher than 2011, first quarter.

·       HUD reported that total delinquencies for all mortgage loans were at 7.6% in the fourth quarter of 2011.  Subprime loans are at 20.8%

·       Total homeowner ownership in the United States is down 1.5% from a year ago at 65.4%.  Watch for this to go down further.  There is a giant backlog of foreclosures and short sales.  Bloomberg reports that distressed sales are made up 35% of the total market sales.  The homeowners who sell these distressed properties most likely have their credit destroyed and enter the rental market.
The United States is still a regional market.  My market in South Florida was hit the hardest by any in the country.  For example, Florida is at 9.4% unemployment and our backlog of foreclosures is by far the highest in the country at 3 years!  Below is a little more information on what is happening in Florida.

 Law of Supply And Demand changing South Florida Real Estate Market

 The Florida real estate market was hit the hardest from the housing bubble crash in 2006.  Finally, that market is starting to come back. Here's why:

1. Overall Market
The market is improving as of spring 2012 in Palm Beach County, Florida. We are seeing a slight increase in supply because of economic conditions, but a bigger jump in sales because of a 6-year slow drip of investment and must-sell inventory that has dried up.

2. Prices: This Year versus Last
In January of 2012 the average price was $296,000. The average sold price in February 2012 was $318,000. However, the average sold price in February of 2011 was $348,000, so prices are lower today than they were a year ago at this time.

3. Sales Volume
February 2012 home sales are up compared to last month. There were 797 sales in February 2012 versus 749 sales in January 2012. 752 sales took place in February 2011, so more sales are happening now than last year at this time as well.

4. Who is Purchasing?
Snowbirds, some first timers, and downsizers are purchasing. We are also seeing a trend of people selling their northern and small Florida home and then purchasing a medium-sized permanent Florida home. A few foreign buyers, but mostly from Canada. There are not as many Canadian purchasers as the last few years because many Canadians purchased from 2009-2011. Not much activity from Europe because their economy is weak.

5. Distressed properties:
163 short sales sold in February of 2012, which is more than the 128 that sold in February of 2011. There are currently 2621 short sales out of the 9593 homes available on the market. The Palm Beach County MLS has never kept exact track of foreclosures. Some lenders had their agents hide this for fear that agents would not show the property. However, that has changed in the past month, and going forward those properties must be marked in Palm Beach County MLS. Overall it has been reported that Florida, which takes a whopping 3-year time-span to foreclose on the average property, is starting to see that number go down. Banks are foreclosing faster as the overall inventory has diminished.

6. Can Buyers still get loans?
The people who want loans are not having trouble getting them. There is much more verification. I haven’t had problems myself with buyers finding financing. The problem lies more within the appraisal process of homes not appraising. Many times it is because the appraisal is not done well. Some of the appraisers hired are from out of the area, traveling from Miami or Orlando and don’t know the property well.

Natural Laws of Supply & Demand at Work in the Housing Market

For the past six years, economists and politicians have argued about what to do with the housing market. We’ve heard all sorts of solutions, from bulldozing homes to giving huge reductions in principal to homeowners upside down on their mortgages. President Obama blamed President Bush, Republicans blamed Barney Frank, and everyone blamed Wall Street. Quietly, though, as we start 2012 in Palm Beach County, overall inventory is significantly down. There were 9,593 homes available in February of 2012 versus 10,883 in 2011, almost a 12% drop in inventory. I attribute the drop to a change in supply, not so much to a surge in demand. As evidenced by the amount of sales staying the same, there has been a slow drop in supply since 2006. In 2006 we had a perfect storm of excess inventory:

1) Investor purchases of new construction

2) Builder speculation homes

3) Over-confident Sellers who purchased first without selling

4) Sellers who were in a must-sell situation

While we still have many Sellers in the 4th category of ‘Must Sell’, due to a loss of income or loss of job, 80-90% of the first three categories that I outlined have sold since 2006.

Picture a slow dripping faucet as a sale. One drip doesn’t amount to much, but drips from 2006 to 2012 add up to an overflowing bathtub! That is what has happened in real estate over the last 6 years, and 2012 is the year the bathtub overflowed. The investor, builder, and over-confident Seller who got stuck with their good-looking homes have taken their 35% loss and moved on. These Sellers have gone though denial, trying to wait it out by renting their home, got angry at Wall Street, switched to 4 different real estate agents before they stopped blaming everyone and accepted reality. Finally, they have sold and moved on.

Now we are left with a just a bad economy and a lousy market. This market is stronger, though, because the one-time Investor/Builder Spec/Over-Confident inventory has dissipated. I’ve personally had 2 Buyers lose out on homes ranging from $500,000 to $4,000,000 in the past two weeks. Buyers are in disbelief thinking they can wait forever only to lose out. Pending sales for March and April are going to be way up and buyers need to recognize the bottom is here, not because the economy is strong, but because there are no more investors investing, spec buildings being built, and over-confident Sellers buying first without selling first.

The turnaround in housing has begun because of the natural laws of Supply & Demand. In 2007, I explained to my 7-year-old son Sam, to picture a town with 100 homes and 100 people. If one person moves to the town each year, then one new home needs to be built. What happened in housing is that builders constructed 7 homes in one year, giving the town an excess of 6 extra homes. After a 6-year-long wait with no homes being built we have hit equilibrium. We now have 107 homes and 107 homeowners. Supply and demand are smoothing out. Watch for the Republicans and Democrats to fight over who gets credit. Sam, now 13, can tell you that the credit really goes to the free market principals of supply and demand.

Jeff Lichtenstein specializes in luxury real estate in Juno Beach Condos  and  Egret Landing Jupiter Homes in South Florida. 

His website is at www.JeffRealty.com

Monday, May 14, 2012

Are the French "super rich" really going to up sticks?

There's a feeding frenzy amongst the UK media at the moment to see who can run the biggest headline about wealthy French bankers upping sticks and moving to London.

The Daily Telegraph seem to regurgitate the same story daily, this is today's effort entitled "High earners say au revoir to France".

Francois Hollande has come into power on the back of pledges to tax the wealthy and put an end to the austerity drive implemented by President Sarkozy.  It will be interesting to see how many of these pledges he will be able to keep.

For sure those French residents with earnings over €1m pa are worried.

However, whether there is really a "huge exodus" is not yet clear.  London agents looking for a bit of free PR are, of course, going to stoke the fire and make all kinds of claims. 

There are already around 400,000 French people living in London so it's hardly a new phenomenon and I remember ten years ago the Chesterton agents in South Kensington and Sloane Square talking about the high amount of interest from French buyers.

And why not?  London is a fabulous city with a huge variety of parks, restaurants, museums and some excellent schooling (if you can afford it).  If you want to earn big money there's no better place.

Time will tell of course but with the pound at around €1.25 now (and getting stronger) even the super rich had better make their mind up quick. 

Having lived and worked in London for 20 years before moving out to France I do have one piece of advice for anyone looking to move the other way though:

Don't forget to pack your umbrella :-)


Friday, May 04, 2012

Findaproperty app for ipad reviewed

The first thing I should say is that I'm being paid for this review - not much I grant you, but certainly enough Amazon vouchers to buy my youngest the Ed Sheeran album she wants. 

With that caveat in place it was actually a fun half hour running through the new Findaproperty app for ipads and comparing it with the French equivalent.

My comparison is with the SeLoger app that is used this side of the channel (download here).  The best word to describe the SeLoger pages is "ugly".  The site does all the basics (including GPS position to search by your current location), it's fast enough to load but it's pretty clunky to use and everything seems to be a struggle.

To be fair it is also drawing on much more basic information than you get in the UK.  Agents here take lousy photographs and the thought of putting a floor plan on their details is probably still 2-3 years away!

In contrast the Findaproperty app (download here) was pretty slick and a pleasure to use.  The "kid" in me liked the fruit machine effect when you put your price parameters in and the pinchable (is there such a word?) map feature worked quickly and smoothly. 

I didn't even try to use the GPS positioning (not sure how many houses they have for sale in Cognac) but I honed in on my old road in Walton on Thames within seconds of opening the app and it was simple to look at all the houses on the market, download photos and floor plans and save to favourites. Setting up my personalised search criteria was a breeze and the whole site was quick to load.

The size & quality of pictures was far, far better than on the French equivalent and whilst this probably has little to do with back end IT capabilities it is surely the most important issue when househunting and Findaproperty have got it right.

It's going to be interesting to see how the mobile revolution continues to shape the way that househunters look for property.  What's clear from this exercise is that this isn't going to be a "French Revolution" and that it's going to be the UK portals and agents leading the way.


Wednesday, May 02, 2012

Pound reaches 2 year high against the euro

I have a little icon on the top right of my computer screen which shows the real time changes between the pound and the euro. It's important to my business for pretty obvious reasons.

It's currently showing that a shiny one pound coin will buy 1.23 euros which is the highest it's been for a couple of years.

The euro is under huge pressure - concern for the Spanish economy is getting worse and the continued woes of other continental european countries (with doubts over the depth or viability of their austerity measures) means that the euro is in real trouble.

According to research from Morgan Stanley, of the €1.5 trillion lent to commercial real estate developers in Europe, Spain alone accounts for more than 20% .  It's also been reported that between 1992 -2010 Spanish housebuilders were building at a rate of one new house per head of population....incredible eh!

If Hollande wins the election next Sunday, as is looking likely, his "anti austerity" policies will go down like a lead balloon in Germany. Who knows what will happen if these two powerhouses fall out.

When we moved out to France in 2003 we got 1.43 euros for our pounds.

Goodness knows, I'm not an Economist (struggled badly at A level, should have opted for something less taxing on my little grey cells) and am no FX specialist but I do have a hunch that my little icon may well continue clicking upwards for a while.

This does, of course, make a big difference to the demand for houses here from international buyers.

This time last year the rate was 1.10 which meant that my typical client (£300,000 budget) was looking at houses around €330,000.

Today my same client would be looking at houses around €370,000.

Oh for a crystal ball :-)