A report from the Wall Street Journal. “BlackRock Inc. made a well-timed bet on distressed loans during the financial crisis. Now the firm has moved its windfall to its charitable arm. The giant asset manager said it has donated all of its nearly $600 million worth of shares in the mortgage company PennyMac Financial Services Inc. to fund nonprofits. By moving the stake to charity, the firm will also reap tax gains. In 2008, the firm invested $34 million from its corporate balance sheet to back PennyMac in anticipation of a wave of mortgages at bargain prices that could be restructured.”
“The venture was controversial because it was run by former executives of Countrywide Financial Corp., a now-defunct lender that became a symbol for the excesses that led to the financial crisis.”
The Boston Globe in Massachusetts. “A lot of us would welcome a little more space at home, all else being equal. But when does a big home become too big — and risk overwhelming buyers? Size can become a liability, too, when a home is starting to feel outdated — because there’s just so much more that needs updating. Doug McNeilly, an agent in Wayland said there was such a glut of large 1990s houses on the market in Sudbury in the middle of last year that, at one point, there was 72 months of inventory in the $1.25 million to $1.49 million range.”
“The seasonal winter slowdown brought those inventory levels back down to normal, McNeilly said. But the same thing could happen again this summer, he added, because a lot of those houses are starting to show their age — and the prospect of updating something that size can overwhelm buyers. ‘A 6,000-plus-square-foot house built in the late 1990s with minimal or older updates might need a new kitchen, updates to all four and a half baths, new flooring, and interior paint,’ he said. ‘That can easily top $250,000.’”
The Observer in New York. “After four months and a $710,000 price cut, a buyer has emerged for Kim Kardashian and Kanye West’s former Soho home. The 2,427-square-foot apartment popped up on the market with an ambitious $4.7 million price tag in September 2019, but the ask was discounted to $4.3 million less than a month later. That apparently didn’t bring in too many offers, and the price was subsequently lowered to $3.99 million. That seems to have done the trick, as the loft-y abode is now in contract.”
“The current layout is the result of a two-unit combination; West paid a total of $3.14 million for the adjacent apartments, and brought in Italian architect and designer Claudio Silvestrin to bring his usual über minimalist vision to life. West and Kardashian used this as their New York home base for several years, before eventually offloading the property for $3 million in 2018, taking a loss in the sale.”
The Los Angeles Times in California. “Hollywood producer turned speculative home developer Nile Niami is selling his Opus project in Beverly Hills for a little over $50 million. Niami, who is currently putting the finishing touches on a $500-million estate in Bel-Air, found a buyer for the property himself, according to sources with knowledge of the deal. While the property itself is expected to record in the $40-million range, the higher price reflects the custom Italian furniture, champagne cache and exotic cars that were negotiated separately in the deal.”
“The 20,500-square-foot mansion, built in 2017, originally hit the market that year for $100 million and was more recently listed for about $60 million, records show.”
From Socket Site in California. “As expected, the number of homes on the market in San Francisco (610) has jumped 20 percent since the Super Bowl and inventory levels are now back to within 3 percent of their mark at the same time last year and a 7-year high. And the percentage of listings which have undergone at least one official price reduction (which doesn’t include any of the homes which were withdrawn from the market at the end of last year and have recently been relisted with a reduced asking price and a reset ‘days on the market’ count) has ticked up to 15 percent, which is one (1) percentage point higher than at the same time last year, while the percentage of homes on the market with a price tag of a million dollars or less is now holding at around 25 percent (which is down 3 percentage points on year-over-year basis).”
The Houston Chronicle in Texas. “Dallas Cowboys star Deion Sanders’ onetime Texas mansion is back on the market, this time with an entire community built around it. The Prosper, Texas, property — dubbed ‘Chateau Montclair’ — was a sprawling, 112-acre estate when Sanders lived there. Sanders sold the chateau in 2014, after which a real estate agent sued him, claiming he’d withheld $1 million from the sale (a reported $15 million).”
“Public records indicate it sold again in 2016. That same year, developers divided into several lots and broke ground on what is now an upscale residential enclave known as Montclair, all built on the dwelling’s original parcel. The residence’s land has been reduced to six acres. Of course, that’s still a sizable private estate, and one that qualifies as this Texas town’s priciest home listing, despite its market challenges: it was originally listed at $21 million and reportedly sold at auction for just $4 million in 2014 that deal fell through. It was then listed, removed and re-listed before going back on the market for $12.75 million. It saw a spate of price reductions during its for-sale time.”
“Just weeks ago — in late January — it saw a $1.8 million price cut. Its current list price: a mere $5.75 million.”
From 3 News Las Vegas. “There are 20 zip codes in Nevada that have been identified as the hardest-hit by foreclosures, delinquency, and negative equity, and 18 of them are right here in Clark County. To stabilize housing prices and prevent future foreclosures, there’s now $17.9 million available for home buyers. The money, which is being offered as part of the Treasury Down Payment Assistance Program, will be given to around 900 Nevada families to help make a down payment towards a single-family home, condo, or townhome in the struggling areas.”
“There are 18 zip codes in Clark County and 2 in Nye County that qualify. Eligible homeowners can receive up to $20,000 from the program.”
From DS News. “DS News’ Webinar Series, in partnership with Altisource, will present its next webinar on Tuesday, February 18, with Holding Down the Fort. Jim Vaca, Altisource, points out that 19% of all new loans are FHA insured and that the agency is looking to change the servicing standard to get large banks to increase the market share of FHA from 15%. That mark was previously 50%.”
“Additionally, default rates among FHA loans are two-to-four times the rate of other investors. According to a survey by Auction.com, 80% of servicing professionals polled—an increase from the 72% polled last year—expect their FHA loan portfolio to increase over the next two years and 85% expect that increase to be more than 25%.”
From The Georgetowner. “Throughout the year, The Georgetowner seeks comments from real estate professionals on the state of the market. It seems that the sky’s the limit when it comes to home prices in Washington, D.C. Is that, in fact, true? And when will too much become too much?”
“Not sure I agree with this beyond a few ultra-ultra-luxury sales that occurred on Virginia’s Gold Coast. Beyond those few waterfront sales, the remaining ultra-luxury sales over $10 million that have occurred in recent months frankly represent properties that have been for sale for several months and did not achieve asking prices or very close to them. In summary, we are fortunate in seeing an upswing in ultra-luxury sales at high numbers, but I wouldn’t categorize them as the sky is the limit. — William F.X. Moody.”
“I think the one crucial misunderstanding buyers and sellers have in 2020, and frankly have been struggling with for a few years now, is that there have to be documented credentials justifying the value of a home purchase. Whether it be recent sales in similar price ranges and areas, units sold or comparable house sales, all of these factors contribute to documented value information. For the first eight years in the early 2000s, those credentials weren’t as necessary. Buyers would pay numbers because they were confident it would be worth more next year either way. What we experienced was emotional sales: ‘I love the house,’ ‘It works perfectly for our family,’ etc. That has been gone for more than 12 years now, and it’s our job as realtors to help buyers and sellers still feel at peace with their investment. Most of the emotions of real estate purchases today have pushed aside by financial prudence.”