A report from WFLA in Florida. “Floodwaters from Hurricane Debby devastated their homes, but many believe overdevelopment contributed to their problems. Those homeowners took their concerns to Sarasota County commissioners and they didn’t hold back. Residents said they were blindsided. ‘We put our blood, sweat, tears and all of our savings into this house and now it’s gone,’ Tara Schermerhorn told 8 On Your Side.”
Click Orlando in Florida. “Cora Hayes and her husband had just replaced the roof on their Ocala home when she says they were approached by an employee from another roofing company. The contractor claimed if they had waited, they could have had their roof replaced for just the cost of their deductible — $1,000, Hayes said. ‘I think it’s insurance fraud myself,’ Hayes said. ‘I think that the insurance companies are having to pay for something that didn’t get damaged.’ Hayes’s neighbor, Robert Feeney, had a similar experience. He was approached three times by a representative from the same company, offering a free roof inspection and a low-cost replacement, Feeney said. Feeney had recently had his roof inspected and declined the offer. ‘I think they’re ripping off the insurance companies, all of them, and everybody else is paying for it,’ Feeney remarked.”
From Arizona Family. “A growing number of Arizona homeowners who live in HOA communities are seeing a significant increase in their HOA dues. Christina Manasses wonders how long she’ll be able to keep paying the higher HOA fees in her Mesa condo community. ‘It’s a financial burden every year to keep going up and up and up,” said Manasses. ‘A lot of people with limited incomes, what do they do? Where do they go if they can’t afford a condo?’ Dave Russell sits on the board of a number of associations in the East Valley. One of his communities was just informed that its premium was going up from $60,000 to $249,000 a year, and it had no choice but to pass that cost on to homeowners. ‘Homeowners keep seeing their dues increase and increase and increase, but they are not seeing any return because it is all going to insurance,’ said Russell.”
Fox 5 Vegas in Nevada. “Approximately 85 families in Henderson are left in limbo in the Somerset Park Townhome community due to major plumbing issues. The city of Henderson determined that residents could not live there unless urgent repairs were made, but the new property management company says it doesn’t have the money. The homeowners report paying more than $300 a month in HOA fees. Their question: where is all the money paid over the years now? Husband and wife Sarah D’Amato and Rick Martinez say being able to buy a home two months ago in such a tough housing market was the American Dream, now turned unexpected nightmare. ‘It is absolutely heartbreaking because we put so much money on a down payment… It is very scary to know our house, we are going to end up losing it if nothing happens and we are still going to have to pay a mortgage,’ Martinez contended.”
From CBS Bay Area. “Condo, renter, and home insurance rates are skyrocketing for many customers across the Bay Area and California, with more increases looming. State Farm Insurance is asking for another 30% hike for homeowners and waiting for state regulators to approve the request. All State just got the green light to raise its home insurance rates by an average of 34%. Homeowners living farther north in parts of Santa Rosa feel they’re being burned. ‘Because of the fires around here, they say my home is in the fire zone. So they added $1,200 to it. So now instead of $900 a month it’s $2,100. How do I pay that?’ said a homeowner who asked not to be identified.”
The New York Post. “The Democrat-controlled California Legislature has passed a polarizing bill that would make the Golden State the first in the nation to offer down payment assistance to illegal immigrant home buyers. Assembly Bill 1840, which was approved Wednesday, would grant undocumented immigrants access to the state’s taxpayer-funded home loan program, which provides up to $150,000 in down payment assistance for eligible first-time home buyers. Assemblywoman Kate Sanchez (R-Rancho Santa Margarita), who is the granddaughter of legal immigrants, argued that migrants crossing the border illegally ‘look to California’s current policies like a giant welcome sign.’”
“‘Welcome to California, where illegal immigrants get free healthcare, free food, and now a free home with 0% down,’ she said. ‘This is not rocket science. If you’re giving out free stuff, more people are going to come.’”
The Real Deal. “Once the most expensive apartment in New York, ‘Le Penthouse’ has been put into bankruptcy. If that sounds familiar, it’s because Yitzchak Tessler previously filed bankruptcy papers in June for the penthouse and several other unsold units in his condo development at 172 Madison Avenue. This newest filing comes from Madison 33 Owner, the entity that owns the actual remaining unsold units. The shell games have not dissuaded creditor ArcPe, which began a UCC foreclosure proceeding Thursday. The distressed debt investor is trying to recoup nearly $63 million in debt from a mortgage it purchased in January. Tessler, in a rare interview, fired back at ArcPe, calling it ‘a ruthless company — all they do is buy loans and foreclose.’”
“His filing said the debt had been paid down to $32.5 million. Asked about ArcPe’s demand for twice that amount, Tessler said, ‘They can go fuck themselves.’ The initial plan for the unit called for 11 bedrooms, 14 bathrooms, a pool and jacuzzi across five stories. Tessler dropped the asking price to $76 million in 2020 but it still didn’t sell. ‘He’s had three or four years to sell everything and he’s sold nothing,’ said ArcPe managing director John Olsen.”
Better Dwelling in Canada. “Greater Toronto real estate is slow but new housing has ground to a halt. Altus Group and BILD GTA data shows Greater Toronto has never seen fewer homes sold in July. Prices have dropped significantly from the peak, but not enough to prevent demand from hitting a record low. If a firmer market is ahead, it’s hard to see with a multi-year inventory high and distressed condo investors standing in the way. The price of a benchmark single-family home fell to $1.59 million in July, falling 18% since the peak. They have rolled back almost two years of progress, stalling recently. However, last month’s slip may be indicating that further downward pressure persists.”
“Condo apartments have seen demand erode even faster, leaving a bigger price correction. The price of a benchmark condo apartment fell to $1.02 million in July, shedding 22% since the peak. Virtually all of this downward pressure is attributed to record weak demand. New condo prices are roughly where they were in mid-2020, though the sharpest (and frothiest) climb occurred in the years prior due to speculative demand.”
The Globe and Mail in Canada. “Buyers smell blood in the water as distressed commercial properties are put up for sale. But so far, sellers of that troubled real estate are refusing to accept rock-bottom values. Jeffrey Berger, managing director of insolvency firm TDB Restructuring Ltd., said there has been a gross mismatch between buyer and seller expectations. He said buyers ‘smell blood in the water’ and want the best deal possible. Meanwhile, he said, ‘Sellers are still clinging on to these appraisals from five years ago with unrealistic valuations of their property.’ TDB is working on 20 to 25 real estate receiverships and has about 20 properties up for sale.”
“Minto Group, a major Canadian housing developer, said it has become more common to receive pitches for power-of-sale assets and court-ordered sales, which occur after an owner defaults on payments and creditors push the project into receivership. Pitches to Minto include one for a high-rise development concept in Brampton, Ont., and another for the unfinished luxury condo tower The One, in Toronto. Minto has also been pitched on two residential developments sites in the Vancouver area; a redevelopment in Surrey, B.C.; a townhouse subdivision in Simcoe, Ont. Minto passed on all of them. ‘It would have to be an extraordinary opportunity. And by that I mean extraordinarily cheap,’ said Dan Dixon, Minto’s senior vice-president of corporate affairs.”
The Northern Echo in the UK. “A stunning Bishop Auckland mansion has been reduced in price by £600k to just £1.4m. Tindale Towers, on Dilks Street, was built as a four-story family residence with no expenses spared. A statement from the agent states: ‘Tindale Towers was built as a family residence without thought to cost, this four-story building has been constructed with both luxury and the environment in mind and a blend of imagination and inventiveness coupled with a desire to leave a lasting legacy.’”
From The Observer. “As Ugandans increasingly adopt condominium living for its numerous benefits, concerns have arisen over developers who market substandard apartments, taking advantage of people’s hard-earned money. Last October, a group of diaspora condominium owners petitioned the inspector general of government (IGG), raising issues such as collapsed roofs, water seeping through walls, poor ventilation, and defects in plumbing and electrical systems. State Minister for Housing Persis Namuganza toured four condominium apartments in Najjeera and Kungu villages, located in Kira municipality, Wakiso district. She was appalled by what she found. ‘I am very disappointed. This is corruption of the highest order. The apartments are congested, and the workmanship is poor, yet people paid a lot of money,’ she said. ‘In one, garbage greets you at the entrance, and the children’s play area is too small; moreover, it was turned into a dumping site for construction materials.’”
Radio New Zealand. “In the dozens of waterfront houses along Waiheke Island’s most popular beach, all the curtains are closed. The last permanent resident died recently, and now, all these houses are holiday homes – the ghost houses of Waiheke, according to local board member Paul Walden. Some say this is the direct result of over-tourism. On Airbnb, there are 698 listings on Waiheke. When we looked at TradeMe this week, there were four available three-bedroom homes for long-term rent. Walden says there are hundreds of people homeless, an imbalance that’s been seen globally in tourism hot spots. ‘It’s not so much the tourists coming, it’s the people who have the multiple properties that they don’t live in, that are leaving a lot of houses empty,’ one shop owner says.”
From News.com.au. “Millions of dollars worth of Aussie homes have been seized for mortgagee sales from McMansions to townhouses and inner city apartments as data shows 100 suburbs in trouble. Realestate.com.au listings show close to 50 properties already listed as mortgagee sales – a jump from more than 30 two months ago – with S & P Global Ratings expecting more to come after naming the 10 worst postcodes in Australia for home loan arrears covering over 100 suburbs where owners could soon be forced to hit the market in distress sales. The worst hit is postcode 2170 in NSW where 3.16pc of home loans are in arrears, covering a dozen suburbs including Casula, Liverpool, Liverpool South, Moorebank and Warwick Farm.”
“The Australian Financial Complaints Authority says ‘sometimes the financial firm will advertise its sale of the property as mortgagee’ which ‘might suggest that it will be sold for a cheap price.’ Several entire blocks of units to make you an instant millionaire landlord are also being put up for sale by mortgagees including 172 Lower Plenty Road, Rosanna, in Victoria which has 17 bedrooms, 14 bathrooms, and 14 carspots on a 1,037sq m block priced from $4.5m to $4.95m. Then there’s 1-4/14 Fontainebleau Street, Sans Souci, in NSW with 11 bedrooms, 10 bathrooms, and eight car spots in four townhouses. Not all mortgagees will simply take the highest offer though with some never-to-be-repeated properties sitting on the market for several months. A home built at 37 Warne Terrace in Caloundra in Queensland has the best waterfront views in the area and has been on the market for over two months.”
The Wall Street Journal. “China’s epic housing bust has crushed big developers, bond-market investors and homeowners, causing billions of dollars in losses. Now Chinese regulators are zeroing in on another important player: PricewaterhouseCoopers, the auditor of choice for many of China’s biggest property firms. PwC’s Hong Kong and mainland China operations audited more than a dozen large Chinese developers, including many that crashed and burned—notably China Evergrande Group, the poster child for China’s property woes. Earlier this year, Chinese authorities found that Evergrande fraudulently inflated revenues by nearly $80 billion in 2019 and 2020—when it was a PwC client—and fined the developer more than a half billion dollars.”
“Chinese and Hong Kong regulators are now examining whether PwC’s local operations, PricewaterhouseCoopers Zhong Tian in the mainland and PricewaterhouseCoopers Hong Kong, should have flagged Evergrande’s problems. ‘It certainly has not been helpful at all for confidence in Chinese financial statements,’ said Charlene Chu, a senior analyst at Autonomous Research. Long before the real-estate industry ran into trouble and attracted Beijing’s ire, some analysts alleged it was rife with financial chicanery, and called on auditors to pay closer attention.”
“Andrew Left of Citron Research—who was barred from trading in Hong Kong securities for five years in 2016 because of his 2012 allegations against Evergrande—and analysts at Hong Kong-based GMT Research said Evergrande was overstating sales and failing to properly write down the value of assets that generated little or no income, such as deserted buildings or empty parking spaces, creating an illusion that profits were holding up.”