A report from Moneywise. “Making an offer that’s accepted is just the middle of a real estate transaction, not the end. And homebuyers can afford to be choosier now as demand and competition softens. ‘House hunters today are taking their time and exploring their options, whereas six months ago, they had to act quickly and pull out every stop to compete because homes were selling almost immediately,’ says Tzahi Arbeli, a Redfin real estate agent in Las Vegas. ‘Homebuyers now will agree to buy a house and be doing the inspection, and then back out because they found another home they love more.’”
From News.com.au. “The hammer has finally come down on NBA player Ben Simmons’ Southern California mansion, resulting in a multimillion-dollar loss for the Aussie-born baller. Simmons bought the Hidden Hills modern farmhouse in 2021 for $26.8m ($17.75m). A year later, he put it back on the market for $34.8m (US$23m). Eventually, Simmons and his real estate reps decided to put the seven-bedroom residence that sits on nearly 1.5 acres for a no-reserve auction. The final sale price when the gavel fell was $18.3m (US$12.1m), excluding fees — resulting in a more than $8m loss.”
From ABC News. “Just a few months ago, the real estate market was favorable to people selling homes. The amount of buyers was increasing, the number of listings were down and interest rates were dropping, it seemed, across the country. Now, brokers are saying the market has shifted. ‘Today, week after week, we see more and more inventory come on the market and demand is down,’ broker Justin Itzen, who sells high-end homes in Orange County, California, told ABC News. ‘Buyers have more to choose from, they can be more selective,’ he said. ‘We did feel a very aggressive slowdown,’ said Itzen, that happened almost overnight. ‘During open houses it was like, ‘where’s all the buyers?’”
The Denver Gazette. “With summer holidays rapidly approaching, Airbnb is quelling ‘disruptive’ gatherings across the country with its ongoing anti-party system. Colorado has seen disruptive parties end in tragedy. In March, 2023, 18-year-old Rigoberto Esparza was shot and killed during a rented house party near 84th Avenue and Washington Street in Adams County. The metro Denver area has seen a bevy of other party shootings in the year since. ‘We have some experience with these types of properties being rented out and utilized for larger events, parties, for various occasions,’ said Sgt. Adam Sherman, the Adams County Sheriff’s Office’s public information officer. ‘Those messages get spread through social media, and as soon as that happens you never know who will show up,’ he said. ‘It could be gang affiliation, or other types of opportunities to where maybe the person hosting wasn’t expecting.’”
KOMO News in Washington. “An unauthorized homeless encampment scheduled to be cleared from the public sidewalk that connects South Lake Union to Seattle Center is getting bigger. The encampment along Harrison Street over the entrance to the State Route 99 tunnel nearly covered the entire block on Wednesday. The sidewalk encampment is dotted with tents, stoves, chairs and other belongings. KOMO News reached out to the City of Seattle for an update as the clock is ticking on a resolution with a little more than a week left in the month. Nine days to be exact.”
“‘Nine days for what each person is gonna probably take a day in itself, and it’s kind of sad,’ said Abre Olson. She walks Harrison Street every day to get to work at the Seattle Center, and she uses the sidewalk on the other side, away from the encampment. ‘The only reason I walk on this side of the street is I don’t want to be exposed to drugs or violence. I don’t want anybody to blow smoke or yell, it’s just traumatizing.’”
From Bloomberg. “For the first time since the financial crisis, investors in top-rated bonds backed by commercial real estate debt are getting hit with losses. Buyers of the AAA portion of a $308 million note backed by the mortgage on the 1740 Broadway building in midtown Manhattan got less than three-quarters of their original investment back earlier this month after the loan was sold at a steep discount. It’s the first such loss of the post-crisis era, according to Barclays Plc. All five groups of lower ranking creditors were wiped out.”
“Some cities are facing more stress than others, with 75% of CMBS office loans in Chicago and 65% in Denver in jeopardy, according to the firm. In north suburban Chicago, an office loan held by private equity giant Ares recently sold at just 12% of its original price. That debt was packed into a vehicle called a commercial real estate collateralized loan obligation, which are themselves facing unprecedented stress.”
From CBC News. “New home construction in Ontario has slowed to a pace not seen since 2018. Housing starts in April in urban areas of Ontario were down a whopping 37 per cent from the same month last year, according to the latest figures reported by the Canada Mortgage and Housing Corporation (CMHC). It’s a problem not unique to Ontario. TD Economics predicts that housing starts nationally ‘will continue to decline through the remainder of this year, reflecting more recent weakness in pre-sale activity in key markets like Toronto, elevated construction costs and high interest rates.’ ‘Projects that certainly seemed viable before may not be as viable as they once were,’ said Scott Andison, chief executive officer of the Ontario Home Builders’ Association.”
“Urbanation, a condominium market analysis firm, recently reported that 60 new projects totalling more than 21,000 units in the Greater Toronto and Hamilton Area have been put on hold indefinitely. New condominium sales in the region in the first three months of 2024 hit their lowest quarterly total since the depths of the global financial crisis in early 2009, according to Urbanation. ‘Outside of that brief period in early 2009, new condominium sales haven’t been this low since the late 1990s,’ said the Urbanation report.”
The Globe and Mail in Canada. “Patrick Rocca, broker with Bosley Real Estate, has noticed a shift in the Toronto market in recent weeks. Rising inventory allows house hunters to be circumspect. ‘Buyers understand that they’re not under the gun,’ says Mr. Rocca, who works mainly in the midtown Leaside and Davisville area. Recently he has sold three properties with multiple offers – but all three sold below the asking price. With more supply between $3-million and $6-million, he says, many are sitting. ‘That’s where I’m seeing the logjam of listings.’”
“He says some sellers are still setting aggressive asking prices, but when buyers don’t jump on it, a listing can appear stale. ‘If you’re not realistic I don’t even want to talk to you,’ he says. ‘You’re going to burn your property.’”
From BBC News. “An affordable homes estate remains empty six months after it was officially opened. No-one has been able to move into the eight social housing homes in St Anne’s Chapel near Kingsbridge in Devon because of ‘issues’ with a contractor, says the local council. Kathy Hutchings, who was hoping to be in by last Christmas with her daughter, said she was ‘living in limbo, just stuck.’ She said the delay had been ‘very stressful.’ ;You feel like you’re living in limbo, just stuck. And it’s not just us. There are eight families all waiting, who were like us, packed, ready to go at Christmas. You have to just trust that it will happen eventually,’ she said. House prices in the district were above the England and Wales average at £385,000 in 2023, according to the Office for National Statistics, while wages lagged behind the average.”
From ABC News. “Small business owner Mia Li breaks down in tears when she recalls losing her family home. She made the tough decision to sell her property to save her business that was on the brink of collapse because of mounting debts to the Australian Taxation Office (ATO) and suppliers. The debt was made worse after she took on a small business loan she didn’t understand came with a big catch. ‘We tried everything [we could] to stop [losing the family home], but we had to sell the house first to pay the lender,’ she says.”
“Ms Li imports window frames from China and sells them to local builders, many of whom went bankrupt post-COVID and stopped paying her. When the cash flow dried up, she panicked. She couldn’t pay her suppliers and debts owed to the ATO, which she said together had amounted to almost half a million dollars. She went to a broker that got her a $250,000 loan through a small lender. The cash landed in her account almost immediately. But Ms Li had no idea the interest rate and fees applied would mean she ended up with another $100,000 of debt and would be in financial turmoil. Some days, she lives out of the office. Others, with relatives. ‘You just can’t sleep,’ she says in tears.”
“Gavin Waring runs a company called Your Business Angels, which offers small businesses tax advice, and says he often meets business owners when they are in over their heads with debt and suicidal. ‘What they’re losing first is their dignity,’ he says. ‘They also face the risk of losing their house. They are angry with themselves, like, really angry with themselves that they’re letting people down. They feel that they are letting their families down.’”
“The lenders, he says, network through broker channels — especially those who front out of legal offices — and often pay high commissions. ‘It’s very easy to get a loan, they’ll lend to people who have got loans from other lenders because they know that, in the end of the day, the odd loss they have when someone goes bankrupt isn’t anything compared to the massive profit that they’re getting from all the other loans that they’ve got,’ Mr Waring says. ‘It’s the double whammy of inflation and tax debt, and really just making poor judgement,’ Mr Waring says.”
“George Papageorgiou, who fixes food trucks and other commercial trucks for a living, is another victim of this type of lending. He found the lender on the internet and soon after took on a loan for $500,000 to pay debts he owed to the ATO and suppliers. He thought he was going to see the full $500,000 but the lender took the interest up-front and gave him $380,000. By the time he’d signed the contract, the damage was done. He’d put up the family home as collateral after convincing his wife to sign up to the loan. ‘I thought we’re getting the full amount ($500,000) and you could refinance it after a year. But it didn’t work out that way. We’ll probably have to sell the house.’”
The Telegraph. “China’s housing market may be in the midst of a painful downturn – but for decades it has claimed to have trumped Britain, as well as many other western countries, on its rates of private homeownership. The country’s central bank, the People’s Bank of China, claims 96pc of residents own a home and 20pc own more than one. This compares to 64pc in Britain – and the 4pc who own a second home. In China, average house prices soared from 2,885 yuan (£321) per square metre in 2005, to 6,626 yuan (£737) in 2020 – leading to a housing price-to-income ratio of 29, according to national data. In England, the price-to-income ratio was 8.3 last year according to the National Office for Statistics, and 6.1 in Wales.”
“So, is it better to be a young, budding homebuyer in the UK or China? A few years ago, it might have been China. But recent market movements seem to have flipped the tables. ‘Even the most bullish developers agree that China’s housing market golden age has passed,’ said Duncan Wrigley, of research firm Pantheon Macroeconomics. ‘House prices are still falling and when the recovery comes no one expects the same kind of capital appreciation as over the last couple of decades, given slowing growth and demographic headwinds.’”