A report from Barron‘s. “Investors are spooked by rising inventory, says Wedbush analyst Jay McCanless. The number of completed new homes for sale at the end of May was at its highest level since early 2010, census data show. ‘Builders may have started too many houses at the beginning of the year,’ because of expectations for lower rates and a better spring, McCanless says.”
Market Watch. “Lumber prices have come full circle in the years following the pandemic — reaching record highs in 2021, then falling to record lows. The drop in lumber prices, meanwhile, could also spark a surge in new home-building activity, boosting inventory for buyers, said Kim Lanham, senior vice president at Mphasis Digital Risk. Builders are ‘eager to make deals,’ unlike private sellers, she said, adding that almost one-third of builders cut home prices in June to stimulate sales, with an average reduction of 6%. Builders have been cutting prices for a year, and 61% offered incentives like closing cost credits and upgrades, Lanham said. ‘I anticipate these trends will continue into the fall as builder sentiment declines.’”
The Dallas Morning News. “The hot start North Texas home builders saw in the first three months of the year cooled slightly in the spring. Builders continued to use interest-rate buy-down programs to make homes more affordable, but selling was still a challenge. Builders of entry-level homes remained aggressive, but the market for homes above $1 million in the northern metroplex has weakened somewhat, said Ted Wilson, Residential Strategies Inc.’s principal. ‘We’re hearing from builders that traffic and sales are down 20% to 25% in a lot of neighborhoods,’ he said. ‘Those that are getting sales many times are having to sacrifice profit margin to get them.’”
The Boston Globe in Massachusetts. “Justin Harrington’s Boston-area basement was flooded with several inches of water. After a freezing day in December 2022, plumbers discovered that a pipe had burst in the crumbling house next door. A developer had purchased the home and was trying to get approval to convert it from a two-family to a three-family home. The developer paid for the repairs to Harrington’s home out of pocket. By the following spring, he was asking Harrington for help to gain neighborhood approval for the conversion. He asked Harrington to speak to a neighbor resistant to the idea. Harrington obliged, but he was unsuccessful and relayed the news to the developer.”
“His response left Harrington in shock. ‘He’s like, ‘Well, I’m going to put some people in there that you’re not going to like. I can’t make any money on a two-family home. So if I do a two-family, let’s just say you’re not going to like the people that rent from there,’ Harrington said. ‘He’s, like, ‘And the other thing I can do, not that I would do this, but I could. I can put a meth clinic there instead.’”
The Philadelphia Inquirer. “Is the ‘Shore crowd in Italy?’ Again? That’s the buzz, or rationalization, among some renters, Realtors and homeowners at the Jersey Shore, who are seeing another summer of a softening market with vacant weeks, price drops and a rising chorus of people who say they can go to other destinations. And the panic is setting in even earlier this season, with owners offering discounted weeks, incentives for last-minute bookings, and tossing out long-standing practices, like requiring renters to book Saturday to Saturday. ‘I’ll tell you that there was a lot of inventory that went unrented for people asking $30,000 a month for houses that are only worth $20,000 a month,’ said Cole Checkoff, who runs a short-term rental management website, Host House Rentals, in the Atlantic City to Ocean City area.”
“‘The world changed back to what it used to be,’ said Tara Cruser-Moss, a Realtor at Berger. ‘Internationally, people have the options they didn’t have three years ago.’ People who bought at high prices and high interest rates assuming they could make money on rentals without much effort are having a reality check. One recent investment property buyer in Sea Isle, who did not want to be identified, raised his rents this year to help cover his mortgage, and said he’s been surprised at the difficulty in filling out a full season this summer. ‘Last summer, I had the whole place rented,’ he said. ‘People were reaching out left and right. I upped my rates slightly, the highest at $3,500 to $3,750. It’s a lot of work. I’m not making a lot of profit. I thought I’d have just an easier time filling it.’”
Bangor Daily News. “Maine’s active inventory for single-family homes statewide is 74 percent higher than this time last year, according to Maine’s Multiple Listing Service. ‘It’s the beginning of a potential shift,’ Brit Vitalius, principal and owner of the Portland-based Vitalius Real Estate Group, said. ‘The market has opened up a little bit.’ It could be that the demand for homes that peaked during the pandemic is subsiding, or that we’re seeing some results from Maine’s efforts to boost housing production in recent years. Vitalius hypothesizes high mortgage interest rates prohibit buyers from entering the market. ‘The expectation that the rates would drop and you could refinance have changed,’ he said. ‘We’re in an adjustment period.’”
Celeb Tattler on New York. “Even a $10 million price reduction isn’t helping Alec Baldwin unload his sprawling Hamptons estate. The first time the property hit the market was November of last year and it carried a $29 million ask. Now, the price has dropped to $18 million after several reductions. A source close to Baldwin rejects such claims saying, ‘There is no financial strain. The rumors are not true,’ he insisted, stating unequivocally: ‘That house has been on the market for two years.’”
NBC Bay Area. “As California works toward its ambitious clean energy vision, an almost counterintuitive challenge has emerged: The state is, at times, generating more solar energy than it can handle. It’s to the point where loads of clean energy are going to waste. State regulators with the California Public Utilities Commission have taken a more controversial approach: drastically cutting financial incentives for homeowners looking to install solar. The move has outraged many in the rooftop solar industry, like Ed Murray, the president of the California Solar and Storage Association, who operates Aztec Solar outside Sacramento. The changes, he said, have been devastating for his business. He said he has laid off 10 employees over the last year.”
“‘Sales went flat, because nobody wanted it anymore,’ Murray said. ‘It was not productive or cost-effective to do solar, and we were left figuring out what do we do now.’ In making the announcement in 2022, Public Utilities Commission member John Reynolds said net metering ‘has left an incredible legacy and brought solar to hundreds of thousands of Californians, but it is also profoundly expensive for non-solar customers and was overdue for reform.’ Murray disputes that argument and says most of his clients have made annual salaries of $50,000 to $60,000, often financed through loans at a time when interest rates have also skyrocketed.”
The Globe and Mail in Canada. “The Toronto-area real-estate market tipped more decisively into buyers’ territory in June, but that has not dissuaded some sellers from launching their property in July in order to get a jump on the fall market. ‘It has been busy in terms of people who want to list their places,’ says Davelle Morrison, broker with Bosley Real Estate Ltd. She is hearing from house and condo owners who are contemplating listing now because of typical life transitions. In many cases, they figure they will have an even greater number of listings to compete with if they hold off. Often, Ms. Morrison agrees with them. This year, Ms. Morrison is urging some clients who are considering a sale to list before the fall brings a rush of new supply.”
“In the upper echelons of the market, some agents in neighbourhoods awash in listings are advising sellers against placing a ‘for sale’ sign on the lawn. ‘The condo market is quite dead,’ agrees Ms. Morrison. Soon after Canada Day, Ms. Morrison listed a three-bedroom detached house for sale near Eglinton Avenue West and Caledonia Road. She set an attention-grabbing asking price of $898,000 for the renovated home and an offer date one week later. But as the deadline approached, she was uneasy about how many buyers might step up. ‘We haven’t seen as many showings as I would have liked,’ says Ms. Morrison, who believes that many buyers are waiting to see if the Bank of Canada lowers the policy rate again at the next scheduled meeting on July 24.”
Daily Express on the UK. “The threat of Labour’s anticipated tax bombshell is already causing billionaires and multimillionaires to flee for Dubai, according to new research. This morning The Times reports that there has been a 23% fall in value in the luxury property market compared to last year, with the extremely wealthy forking out £244 million less on costly pads than in the first six months of this year. Now, luxury estate agents have said the plummet in spending by Britain’s wealthiest individuals comes amid a growing concern among the super-rich about an imminent clampdown on non-doms by new PM Keir Starmer and Chancellor Rachel Reeves. This has, in turn, already reduced how much money foreign buyers are prepared to spend in the London housing market.”
From Reuters. “Germany’s real estate industry, already in its third year of turmoil, faces more pain ahead as further companies go bust, the CEO of Germany’s largest landlord warned. The bleak assessment from Rolf Buch, the CEO of Vonovia and one of the nation’s property titans, defies hopes for an imminent turnaround as the sector goes through its worst crisis in a generation. ‘We’re going to see an extreme number of bankruptcies over the next few months, maybe over the next few years. We’re already seeing them today,’ Buch told journalists on Tuesday. ‘It is going to be bitter.’”
“Buch built Vonovia through a series of multi-billion-euro takeovers, building up a debt mountain as the property crisis struck, forcing it to sell swathes of homes. In its wake, Vonovia, which has roughly 550,000 apartments, slashed the value of its properties by almost 11 billion euros in 2023, taking the group to a 6.7-billion-euro loss, its worst ever. ‘The market for apartments is going to get worse,’ he said.”
ABC News in Australia. “Donna Corbin dreamt of a tranquil abode that would give her freedom and privacy when she decided to build a tiny home in a friend’s backyard. But a year after paying a south-east Queensland builder $42,000 — with the promise that the $52,000 home would be finished in three months — she’s still living with her family and friends in Toowoomba. Her home was never built and her last contact with builder Chris Edards was in August 2023, six weeks after she paid the money. When progress stopped, she said the excuses started. ‘We were continuously sending messages, emails, texts, just to see whether we could get traction on this,’ she said.”
“Jess Hanson from the central-west Queensland town of Tambo said trying to recoup the more than $90,000 she and her employer paid to Mr Edards had been ‘bloody heartbreaking.’ She said they had ordered six cabins in 2022 for their short-term accommodation business. After being asked to show proof that he was doing the work, Mr Edards stopped communicating with her and her lawyers. ‘It’s taxing on everything like your financial health, it’s impacted us dramatically,’ Ms Hanson said.”
“‘Local police [said] what he’s done is criminal but when it was referred to [Queensland Police fraud investigators], they just kept saying it was a civil matter,’ Ms Hanson said. ‘They said because we’ve signed a contract that’s the end of it, too bad, so sad.’ Ms Hanson said they had tried to recover money from Mr Edards through their lawyers but he had disappeared. ‘He just went to ground then, he had our money — couldn’t get a hold of him, couldn’t find him,’ she said.”
South China Morning Post. “The Ho Shung-pun family, known as one of Hong Kong’s ‘invisible rich,’ has sold four homes on The Peak for HK$1.1 billion (US$141 million), about 50 per cent lower than their worth seven years ago, to repay a loan from Gaw Capital, according to sources. The proceeds will be used to repay a private loan of as much as HK$1.6 billion due in January 2025, one of sources said. The loan, securitised against the Ho family’s properties on 46 Plantation Road, carries an interest rate in the ‘teens,’ the source added. Raymond Lee, CEO of Hong Kong, Macau and Greater China at Savills, which brokered the deal, said that the transaction price was about HK$65,000 per square foot, about 50 per cent less than what the properties would have fetched at the height of the market. This deal will put downward pressure on other luxury homes in the city, he added.”