A report from Mansion Global on Florida. “Lupe del Pino recently paid $258,000 for a two-bedroom condo unit with a balcony in North Miami Beach. That amount was within her allotted budget, but she had an additional cost to pay. Her building is in the process of complying with new state requirements to improve the structural integrity of older buildings. Fortunately, she qualified for an interest-free loan under a new Miami-Dade County program. ‘I was going to be eating ramen noodles for the rest of my life,’ said Ms. del Pino. ‘It really was going to be very challenging to pay that.’”
The New Haven Register. “In Woodstock, the owner of a Disney-esque castle slashed the price by $15 million two weeks ago, dropping the asking price to $35 million. At the opposite corner of Connecticut in Greenwich, the owners of a Golf Club Road home gave their listing just three weeks on the market before knocking $245,000 off the prior listed price at $3.5 million. ‘There is more willingness by sellers to be realistic in their pricing rather than overpricing as we have seen,’ stated Candace Adams, CEO of Berkshire Hathaway HomeServices New England Properties.”
The New York Post. “The saga of New York’s most iconic triangular skyscraper continues. After being bought by a surprise contender, the Flatiron Building’s fate is once again up in the air, and more bidding may well lie in its near future. Late last month, the Fifth Avenue landmark’s former owners lost their deed to deep-pocketed challenger Jacob Garlick, who placed a winning $189.5 million on the former Fuller Building. Then, Garlick — a managing partner at growth equity venture fund Abraham Trust — flaked out hard on paying a $19 million deposit, putting his possession of the iconic Manhattan building into question.”
“Although non-industry insiders might balk at simply not paying such a huge sum after committing to one exponentially larger, bankruptcy pros say the emotional reaction, at least, is not surprising. ‘I’ve often seen people’s face change in an instant when they actually win the auction,’ Greg Corbin, of Rosewood Realty Group, told Crain’s. ‘They go from a look of excitement and pride to one of fear and regret. When Jacob Garlick fell to his knees after the auction, I’m not sure if it was from joy or from buyer’s remorse in a ‘what have I done’ moment.’”
The Commercial Observer. “The party could be over for the multifamily sector in commercial real estate. While the property type has maintained its crown as the most coveted asset class these past few years, a new research report indicates a distinct cooling in the sector. CoStar found that apartment building sales have cratered to their lowest levels since 2009. At $14 billion in the first quarter of 2023, multifamily investment volumes fell 74 percent compared to the same period in 2022, the largest year-over-year decline since sales fell by 77 percent in the first quarter of 2009, during the nadir of the Global Financial Crisis (GFC).”
“David Auerbach, managing director at Armada ETF Advisors, a real estate investment trust, designated one culprit for the lack of multifamily investment sales in the first three months of 2023. ‘Obviously, what’s impacted the sales market is interest rates,’ Auerbach said. ‘You’re talking about an environment where in January, a year ago, the interest rate was zero. It was free money. Until we see a reset of where interest rates are, then people just don’t want to overpay. It does have some people spooked.’”
“The decline in multifamily building sales comes as an influx of rental units are coming on the market. More than 1 million new rental units are currently under construction, according to Yardi Matrix. Nationwide, the market saw roughly 325,000 new units delivered in 2022, with an additional 425,000 anticipated for 2023. The markets at the forefront of this predicted multifamily construction surge in 2023 include Dallas (28,000 units), Austin (20,000 units), Miami (19,000 units), Houston (17,000 units) and Phoenix (16,000 units).”
From Bloomberg. “Southern California’s Inland Empire, the warehousing mecca that’s home to Amazon.com Inc. and Walmart Inc. facilities, is showing signs of trouble. The gush of cargo that once flowed through the 27,000-square-mile area, stretching from east Los Angeles to the Nevada and Arizona borders, has dwindled to almost three-year lows and jobs are harder to come by. ‘When the party ends, then you know the drop will be even faster,’ said Johannes Moenius, an economist at the local University of Redlands. ‘The more warehouses we have today or tomorrow, the steeper the fall.’”
Bisnow Los Angeles on California. “The Brookfield fund that has already defaulted on $754M in loans secured by two Downtown LA towers is facing — like so many other office owners — a 2023 full of more loan maturities, a new filing with the Securities and Exchange Commission shows. On the soon-to-mature debt in its portfolio, the filing noted that Brookfield would attempt to negotiate with lenders so it could retain its properties but also noted that without that help, it would not succeed. Office owners ‘have been trying to work out something with their lenders, but if the debt is coming due and they don’t have the liquidity themselves, the attitude becomes, ‘Fine, then take it,’ Seyfarth partner Christine Kim told Bisnow last week.”
The Globe and Mail in Canada. “13 Hickory Dr., Rockwood, Ont. Asking price: $1,199,000 (Late November, 2022).Selling price: $1,140,000 (January, 2023). This three-bedroom bungalow just east of Guelph and about 70 kilometres from downtown Toronto came to market in November priced under the $1-million mark. It received a handful of offers, but all were either insufficient or came with unacceptable terms. The property was relisted at $1,199,000 and received two more offers, but those eventually fizzled out. Finally, in January a new bid emerged and, after negotiations, agreed to at $1.14-million.”
“‘Getting multiple offers doesn’t always mean it’ll sell way over asking,’ said agent Gerald Lawrence. ‘The sellers are getting the message people like their house, but they’re not going to pay what they would have paid last year when things were crazier.’”
The Evening Standard in the UK. “The pandemic’s race for space — and specifically al fresco space — has had a major impact on the value of flats in the capital. Surprising new figures released today by online portal Zoopla show that London flats, many of which don’t have any outdoor space, have seen no change in their average prices since 2016. This equates to a decline in real terms of 24 per cent.”
From Reuters. “The Reserve Bank of New Zealand announced on Monday the framework for a new macroprudential tool that would give it the ability to restrict how much banks can lend based on home buyers’ debt-to-income ratios. ‘DTI restrictions on residential mortgage lending, when implemented, set limits on the amount of debt borrowers can take on relative to their income,’ said Director of Prudential Policy Kate Le Quesne. House prices in New Zealand have fallen more than 15% since their peak in November 2021, in part because the central bank has aggressively hiked the official cash rate. Economists expect prices to fall further.”
9 News in Australia. “A Melbourne family is in ‘absolute agony’ after their Porter Davis home was destroyed by a suspicious fire on Monday. The fire came days after the construction giant announced it had appointed liquidators following its collapse. The heartbroken owners, who don’t wish to be identified, have told 9News they have been left with nothing but a smouldering mess. ‘We are in absolute agony. We don’t have a house,’ they said.”
“They have a $400,000 loan they still have to pay and had paid a $94,000 lock-up fee just a day before the company folded. ‘We are struggling and we are stuck,’ the couple said. ‘We are thinking about our kids and how we will survive from this situation, we don’t know.’”
Daily Mail Australia. “A devastated customer who is facing a $20,000 loss after her home builder went into liquidation said she’s living a ‘nightmare’. Porter Davis had not started construction on Belinda Georgieski’s home when it went into liquidation last Friday. The business’ sudden collapse has put more than 1,700 homes at risk in Victoria and Queensland, and on Tuesday morning angry customers were told over a webinar by liquidator Grant Thornton that many of them were left uninsured and could lose their deposit.”
“Ms Georgieski said she is one of the Porter Davis victims who stands to lose everything she spent years working hard to save. ‘It’s been nightmare after nightmare. Stressing, unable to sleep, not knowing what’s going to happen,’ she told Sunrise on Wednesday. ‘It’s just a waiting game and getting told we may not even get the deposit back, we just have to start from scratch again. It’s a kick in the stomach.’”
News Reporter on Australia. “A customer of collapsed building company Porter Davis claims he was encouraged to hurry up a payment, under the guise of a discounted rate, before the builder went into liquidation on Friday. George claims he was contacted last week and was offered a discount if he paid money to Porter Davis by Thursday. Enticed by the saving opportunity, the father of four met the deadline and said he paid thousands, only to learn the company went into liquidation the following day. ‘If they knew it was going to happen on Friday, why would you still take people’s money?’ he told A Current Affair. ‘To me that’s theft.’”
“Matt Barnseley, another Porter Davis victim who reportedly lost hundreds of thousands of dollars, was able to attend the meeting but shared with A Current Affair that it was ‘disappointing.’ ‘Everybody that had a deposit… it’s gone,’ he said.”