It’s Friday desk clearing time for this blogger. “The stratospheric housing market may be returning to earth. Through the first eight months of the year, 28,306 homes were listed for sale in Greater Columbus, up 13.5% from the same period in 2020. ‘Even with record sales last month, the number of homes still available for sale was 24.4 percent higher than last year, providing buyers with even more selection,’ said Columbus Realtors President Michael Jones.”
“The week after Labor Day, something happened that caught realtors off guard. There were over 300 new Boston listings in MLS in the days after the holiday, practically unheard of in these times. In Jamaica Plain, over 25 new condo listings popped up in a couple days. Could Boston’s painfully hot real estate market finally be pivoting in favor of buyers? According to the Massachusetts Association of REALTORS’ August 2021 report, median home sales prices are dropping, but are still higher than last year at the same time.”
“According to RE/MAX of Southeastern Michigan in Troy, for the first time since February, the month-over-month sales price decreased in metro Detroit, down to $281,425 in August from $288,725 in July. ‘Buyers aren’t as quick to put in an offer, and sellers are finding their home may be on the market for a few weeks before they get an offer. This is still a market that favors sellers, but it isn’t the frenzy we saw in early spring,’ said Jeanette Schneider, president of RE/MAX of Southeastern Michigan.”
“‘If things are staying on the market a little longer, versus staying for a couple of days, then it might be time for [buyers] to get back in the market,’ says Terri Robinson, a real estate agent with Re/Max Distinctive in Ashburn, Virginia. Recently, the inspector tells her that the demand for walk-and-talks has gone away, and buyers are back to getting full-fledged inspections that take a few hours. ‘It indicates that sellers are more amenable now to a buyer coming in and asking for a home inspection, so that’s good news for buyers,’ Robinson says.”
“‘Kelly Clarkson has hauled in $8.24 million for her Encino farmhouse. It chalks up as a slight loss for the singer, who paid $8.5 million for the property in 2018. She’s been shopping the home around since last year and most recently listed it for $9 million.”
“A big project that would have brought several hundred affordable homes to an up-and-coming downtown San Jose neighborhood has lurched into a default on its loan. The development, if built as proposed as a co-living project, would total 803 units and sprout at 199 Bassett St. in downtown San Jose’s emerging North San Pedro district. Now, the prospect of foreclosure has jolted the project, which is delinquent on a large loan the property was provided in 2019, according to documents filed with the Santa Clara County Recorder’s Office on June 21. But the project has tumbled into delinquency on one of its mortgages.”
“A Shoreline multifamily development site at 18110 Midvale Ave. N. has sold for $6.5 million, according to King County records. The seller was the court-appointed receiver for Northlake Capital & Development, which acquired the property in 2019 for $2.1 million, then later was foreclosed by its lender. With Studio Meng Strazzara, Northlake had a five-story, 210-unit apartment project planned.”
“Taylor Bend, an apartment complex that primarily houses University of Mississippi students, filed for Chapter 11 bankruptcy, leaving current residents in limbo. Nelson Partners owns 20 student housing complexes across the country with residents complaining of similar issues. Reviews for The Alpine Flats apartment complex located near Utah State University revealed that residents did not have internet access or hot water for weeks at a time and maintenance requests almost never got completed.”
“According to a May 18, 2021, New York Times report, Nelson Partners has been accused of running a ‘ponzi-like scheme’ with the Skyloft Austin Student Housing complex, one in which investors were impressed by a shiny high-rise. Investors told The New York Times they were ‘taken for a ride by a group of professional real estate investors who raised tens of millions of dollars from people like them to finance the purchase of the student dorm.’ The investors told The New York Times that they don’t know where the money went or who owns the building today.”
“Efforts are underway to secure local and state approval to finish up some long neglected construction of homes near the lower mountain of the private ski resort run by Hermitage Members Club Inc. ‘In essence, it’s completing the project that was partially done when the mountain went under,’ Ham Hodgman of Steven & Associates, representing the club, told the Wilmington Development Review Board at a hearing. Permits for construction on Stag’s Leap Lane timed out when the club went bankrupt under prior ownership, requiring the new owners to go through the process again. Hodgman said two of the eight six-bedroom houses were built to completion and one of the houses had a foundation built.”
“The condo board at 432 Park Avenue, the supertall Manhattan tower that is one of the most expensive addresses in the world, is suing the developers for $125 million in damages, citing multiple floods, faulty elevators, ‘intolerable’ noise caused by building sway, and an electrical explosion in June – the second in three years – that knocked out power to residents, according to a lawsuit filed on Thursday.”
“Built in 2015 with a projected sellout value of $3.1 billion, the pencil-like tower marked a pinnacle in luxury condominium development in the city – much of it geared toward part-time residents and investors who hid their identities behind shell companies. Noise complaints related to the quality of construction were frequent. The suit claims that even Richard Ressler, a founder of CIM Group and a unit owner, once said the sound and vibration issues were ‘intolerable,’ and made it difficult to sleep during inclement weather. Another resident said the trash chute ‘sounds like a bomb’ when garbage is tossed.”
“Robbie Williams and his American wife have cut the asking price of their English country estate. Now available for $9.2 million, Compton Bassett House, named for the nearby village in Wiltshire, was purchased by Williams in 2009 for about $11 million. It’s been on and off the market since 2010 at various prices; if sold at the current asking price, Williams stands to lose about $2 million.”
“‘Recent crackdowns have proven that few sectors are safe from Beijing’s control,’ says the FT’s Lex column. ‘No industry looks as vulnerable as Macau’s gambling market.’ Deflating Hong Kong’s real-estate bubble won’t just mean squeezing the tycoons – it will also require a big shake up in tax policy, adds Jacky Wong in The Wall Street Journal. The territory earns twice as much from land sales as income tax, which is partly why tax rates have stayed so low until now. ‘Hong Kong’s housing market has produced immense wealth for some… Leaner times could be ahead.’”
“The unfinished buildings, which formed a complex called Sunshine City II, had stood empty since 2013 after one developer ran out of money and another found defects in the construction work. ‘This urban scar that stood for nearly 10 years has at last taken a key step toward restoration,’ said an article in the official Kunming Daily after the demolition. Such ‘urban scars’ are common all over China, where Evergrande – the world’s most heavily indebted property company – is suffering a liquidity crunch that could prove terminal.”
“Evergrande, for all of the high drama of its meltdown, is merely the symptom of a much bigger problem. China’s vast real estate sector, which contributes 29 per cent of the country’s gross domestic product, is so overbuilt that it threatens to relinquish its longstanding role as a prime driver of Chinese economic growth and, instead, become a drag on it.”
“There is enough empty property in China to house more than 90 million people, says Logan Wright, a Hong Kong-based director at Rhodium Group, a consultancy. To put that into perspective: there are 5 G7 countries – France, Germany, Italy, the UK and Canada – who could fit their entire populations into those empty Chinese apartments with room to spare.”
“‘We estimate existing but unsold housing inventory is in the range of 3 billion square metres, which is enough to house 30 million families, conservatively,’ Wright says, explaining his calculations. The average size of a household in China is just over three people, giving enough space for over 90 million people.”
“Evergrande is proving to be the first big victim. As the company falters, its undoing raises a fundamental question for the world’s second-largest economy: has China’s property-driven growth model – the global economy’s most powerful locomotive – run out of road? Yes, says Leland Miller, chief executive of China Beige Book, a consultancy that analyses the economy through proprietary data. ‘There is a recognition that the old build, build, build playbook does not work any more and that it is actually getting dangerous. The leadership now appears to be thinking that it can’t wait any longer to change the growth model,’ Miller says.”