A report from Gizmodo. “Zillow has been hemorrhaging cash in the home-buying arms race in certain markets. Bloomberg wrote: ‘Zillow put a record number of homes on the market in September. It also cut prices on nearly half of its U.S. listings in the third quarter.’ In some markets like Atlanta, Georgia, and Phoenix, Arizona, Zillow losing money on listings is particularly apparent, Bloomberg wrote. Its 250 active listings in Phoenix are about 6% under market price, which University of Colorado Boulder real estate expert Mike DelPrete told Bloomberg was about $29,000 off for the typical home.”
“‘Every key metric I’ve seen from Zillow over the past few months just doesn’t make sense,’ DelPrete told the news agency. ‘It’s like it’s making decisions two to three months too late relative to the market.’”
From CNN Business. “Ivy Zelman, CEO of Zelman Associates, thinks the so-called housing shortage is an illusion. ‘Some builders are saying, ‘We don’t have wait lists any more.’ But a lot of people are drinking the Kool-Aid and get complacent.’”
The New York Post. “Sara Sampaio’s East Village loft is now on the market for $3.45 million — less than the $3.51 million she paid for the property in 2018. It had been asking $3.89 million last year with a different brokerage.”
From Mansion Global. “George Strait, lowered the price of his Texas estate to $6.9 million last week, chopping more than $3 million off its original asking price It first hit the market in May 2018 for $10 million.”
The Los Angeles Times. “Joey Bosa is spending some of cash on a waterfront house in his hometown of Fort Lauderdale, Fla., paying $5.85 million for a modern abode on Sunset Lake. The star linebacker got the home at a decent discount after it first surfaced for sale at $7.5 million in May.”
The North Shore News. “A citizen of the People’s Republic of China reported average annual earnings of $40,615 to Canadian border agents yet went on to buy $32 million worth of Vancouver real estate after moving $114 million from Hong Kong-based depositors with connections to organized crime and the Chinese Communist Party, a case study by counsel for the Commission of Inquiry into Money Laundering in B.C. shows.”
“The study is one of over 1,000 commission exhibits, and it hits on a number of vital aspects of money laundering heard during the course of the 18-month inquiry, such as nominee purchases, obscure corporate structures, fraud, layering and placement of assets (particularly real estate) and links to organized crime and corruption.”
“The Man and the Wife bought their first home in Vancouver for between $2.0 million and $3.0 million, according to the study (exact details are redacted). The Child, listed as a student, then bought a $14 million home in 2012. The Man bought a second home, for at least $15 million in 2016 – the same year the Child bought a second property in the $1 million to $2 million range. The properties were tied to one another via mortgages and names on land titles. It’s unclear where the other money went.”
From ITV on the UK. “A young mum who fell foul of the UK’s cladding scandal has revealed she ‘cried for weeks’ after being told the flat she paid almost £60,000 for was ‘valueless’ because material on the building’s exterior made it unsafe. Zoe Bartley is among millions of home owners facing huge bills to make their properties safe – many with costs exceeding £100,000 – because of regulations brought in following the Grenfell Tower tragedy.”
“She ‘massively’ regrets buying her one bedroom flat in 2017, before starting a family, because she is now ‘trapped’ in the property with her 12-week-old baby and partner, unable to move to somewhere bigger because she cannot sell it without making it safe. Victims of the cladding scandal, including Zoe, have told ITV News they are facing bankruptcy over the cost of making their flats safe, despite being told they were safe when forking out tens of thousands of pounds just four years ago.”
“‘It doesn’t seem like there’s a light at the end of the tunnel,’ she said, and the ‘nightmare’ just ‘doesn’t seem to be ending.’ The block she lives in with her baby, partner, cat and dog in Essex, contains around 80 flats – Zoe says most of her neighbours are in the same situation: ‘They all want to leave.’”
“First time buyer Sophie Bichener was told by her housing management company in August that she needed to pay £208,000 in order to make her property safe – she paid £230,000 for her flat in 2017, just one month before Grenfell. She’s since been diagnosed with anxiety after learning her flat in Hertfordshire, is now ‘worth minus £208,000’ because safety defects mean ‘the property itself is valued at zero, and then you’ve got a bill 208,000 pounds to make it worth anything,’ she said.”
From The Guardian. “One third of China’s property developers will struggle to repay their debts in the next 12 months, according to a new report, as the sector reckons with increasingly serious headwinds from falling sales, restricted access to credit and a wider downturn. Even if the embattled developer Evergrande manages to meet its latest debt repayment on Friday and head off a potentially disastrous default, analysts at the credit rating agency S&P warned that many other property companies could be heading towards bankruptcy.”
“The Chinese property sector as a whole owes an estimated $5 trillion, according to analysts at Nomura. That is one-third of the country’s entire GDP and roughly equivalent to the whole output of the Japanese economy, the world’s third largest.”
“Bondholders have been trying to extract information about Evergrande’s financial situation since its financial death spiral become clear in September when it admitted that it might not be able to meet all its debts, which include an obligation to finish up to 1.6 million homes in China that it has already taken payment for.”
“Attempts to offload its most profitable assets have been unsuccessful and it cannot sell enough homes – even at discounts – because the whole housing market is on the skids. This year has seen the longest slump since 2015 in new construction starts, while property sales by floor area dropped 15.8% in September, the third monthly decline in a row. New mortgages are down 9% this year.”
“John Kicklighter, chief strategist at Daily FX, said Evergrande and other struggling companies such as Kaisa, Sinic and Fantasia, were only doing the bare minimum to keep afloat and that the crisis could widen. ‘Evergrande should be seen as a possible global threat rather than just ‘China’s problem,’ he said. ‘The company is systemically important to the Chinese financial system that had seen its rules eased during the last financial crisis (2008) and levels of gearing explode in turn. Under such circumstances, moderate risks can turn into universal hazards.’”