A report from the Panama City News Herald in Florida. “According to Kaydee Albritton, CEO of the Central Panhandle Association of Realtors, the changes stem from a class-action lawsuit filed in 2019 by a group of Missouri home sellers who argued it is not fair for them to ‘have to pay the full amount of compensation.’ Albritton also said that if buyers are responsible, they might not be able to lump the money they owe their agents into a mortgage, meaning they would need to have additional cash on hand. For example, if a first-time home buyer is looking to purchase a property using an FHA loan, they are required to make a minimum down payment of 3.5%. So if they are eyeing a $300,000 house, that means they would need to put down $10,500. If they also are required to pay their agent, and that agent charges a 3% commission, they would need another $9,000.”
‘”The goal isn’t to get the buyer to pay out of pocket,’ Albritton said. ‘When they’re working with a realtor, their first goal is to try and seek compensation from the listing office, and if not the listing office, they would seek compensation from the seller directly. And then, at the very end of the day, if they can’t accomplish that, then the buyer would be held accountable for whatever compensation they are charging. This isn’t really about artificially inflating home prices to pay for realtors, so much as it is (knowing) exactly what the realtors are getting paid, and at the end of the day, it’s who is paying them.’”
WTSB in Florida. “The region continues to see the residual effects of Hurricane Debby despite the rainfall having ended several days ago. It is an issue some of the neighbors admit they were not expecting to deal with in the location where they purchased their homes. ‘These bags are basically to line the outside of our house what we’re going to try and engineer is like a water pump to pump water out of the house,’ Dr. Daniele Mion-Bet said. ‘As of two months ago, we were in a non-flood zone. Probably 90 to 95% of our neighbors have no flood insurance so you know we’re kind of left to our own.’”
From KING 5. “Homeowner Regge Egger in Plain, Washington, said he feels hopeless. He has spent decades and tens of thousands of dollars meticulously ensuring his home could withstand a wildfire. That’s why he was shocked in May when Farmers Insurance dropped him as a customer. The reason? ‘Wildfire risk.’ ‘I’m not the only one. I hope more people will yell and holler and say, ‘This is wrong,’ said Egger. This is the reality of someone on a fixed income with a home the insurance industry decided is a wildfire risk, no matter what. ‘If they only want to insure the sure things, that’s not insurance. To me if they want to insure in Washington, they should insure everyone,’ said Egger.”
Mansion Global. “Luxury home buyers generally have access to insurers who specialize in high-value homes, as part of their larger portfolio of assets, but that doesn’t mean they’re immune to the troubles roiling the insurance markets. ‘There’s not a part of the U.S. where the winds don’t blow, the rains don’t come, the fires don’t rage,’ said Cindy Zobian, a managing director at Alliant Private Client, an insurance brokerage based in New York. ‘This is hands down the worst market we have ever seen.’ While insurance has gotten more expensive everywhere, areas that are prone to wildfires, hurricanes and floods, particularly in California and Florida have been especially hard hit. ‘We’ve experienced increases as high as 800%,’ Zobian said. ‘Those are not the norm, but if you live in a riskier area, you’re going to see, at minimum, double-digit increases.’”
“In Los Angeles, it took three separate policies to cover a $28.5 million home, at an annual cost of $300,000, said the Will Berlin of Jules Berlin Agency, who brokered the deal. That was unheard of several years ago, Berlin said. ‘Seven, eight years ago, the way to insure a very large home did not substantially differ from insuring a smaller home,’ Berlin said. But not anymore. ‘No one company wants to be exposed to all of the risk of a $40 million house,’ Berlin said. ‘What we have to do is get multiple companies to agree to take a certain portion of the risk.’”
The New Haven Register in Connecticut. “Built in the 1980s, Pine Rock Condos contains a total of 17 units within two separate buildings. Vanessa Brown said she began noticing problems with her home around 2013 – about two decades after she made a ‘generational investment’ in the unit, which was in ‘wonderful’ condition. As her home fell into further disrepair, Brown stopped paying her dues to the condo association, which is responsible for maintaining the property’s exterior. She currently owes more than $22,000 in unpaid condo fees, for which the association has taken her to court. After a years-long battle to save her home, which the town recently condemned, Brown is now facing foreclosure because she stopped paying dues to the Pine Rock Place Condominium Association. Officials said her situation highlights a gap in the insurance industry and shows the need for policies to cover foundation repairs to prevent people like Brown from losing their investments. The condo association’s insurance plan didn’t include coverage for the foundation’s long-term failure, both sides said and Brown doesn’t have insurance. ‘When it rains, everything comes falling down,’ Brown said. ‘It’s like being a homeless person in a house. None of this is my fault, but I feel like I’m being punished.’”
The Dallas Observer in Texas. “Soraya Santos’ house was alive. It spoke in creaks and rumbles; it wore honeysuckle all over its fences. There was a ‘massive’ pecan tree, too, and Santos, then a young girl and a big fan of Shel Silverstein, dubbed it ‘the Giving Tree. ‘I was convinced it would provide for me in the same way,’ she told the Observer, ‘until I was an old lady sitting on its stump.’ But in 2006, fast-rising home insurance and property taxes forced Santos’ mother to sell the house on Belmont Avenue. Santos, now 50 and a community organizer, says the move was so painful that she’s never ventured near her old block. She now lives in Pleasant Grove (which she says hasn’t been gentrified ‘yet’) and, in some ways, she faces a similar situation. Her home, bought for less than $70,000, is now worth more than $200,000 — and in the last year alone, the cost of her home insurance has tripled. ‘I feel guilty even talking to you, because my situation is so much better than what some of my homeowner friends are dealing with,’ she said. ‘But having your insurance and tax triple is still a shock. It kind of makes you wonder what this is gonna look like in five years.’”
The Dallas Business Journal in Texas. “The housing market in Dallas-Fort Worth is shifting toward balance after years of sellers having the upper hand. Home prices have fallen in most North Texas counties from where they were a year ago and inventory was up by double-digit percentages in June, according to M&D Real Estate. The median home sale price in Dallas County was $367,500 in June, a 3.9% decrease from $382,250 in June 2023. Collin County’s median price was $506,528 in June, a drop of 6.2% from $540,000 a year ago, according to NTREIS data. Median prices fell 3.9% in Rockwall County, 5.1% in Kaufman County and 2.7% in Hunt County compared with June 2023. Overall, inventory across DFW was nearly 3.8 months in June. The last time it was that high was November 2012.”
“However, sellers can still attract multiple offers by properly pricing homes and strategically offering incentives, said Danny Perez, founder and managing director at M&D Real Estate. ‘Sellers are still trying to get that premium pricing, but they’re getting seller fatigue and buyers are starting to get wiser and making better offers that are affordable because ultimately the problem with DFW is not demand but affordability,’ Perez said. Buyers are making offers of $50,000 or even $100,000 below the asking price and getting deals done, causing the decline in prices from May to June, Perez said. ‘I think we really need to get into double-digit [drops in prices] before affordability and transactions begin to pick up to a more normalized pace for DFW,’ Perez said.’ What that means is that prices are going to have to come down.’”
From KLVY. “New homeowners in North Dakota say it has been nothing but trouble since they closed on their Oxbow house last year. From a quick glance, Tom and Katie Webster’s newly built home looks pristine, but upon closer look, a different picture is seen. ‘From the day we signed, it’s been one thing after another … after another … after another,’ Katie Webster said. The Websters say they closed on their house in March 2023, but the home that sits on a corner lot still has 37 projects that either need to be finished or completely redone. Heavy rain caused their home to flood, creating a domino effect of issues they had to focus on, something they both called a ‘dream come true turned into a nightmare.’”
“As a veteran, Tom Webster received a VA home loan for the house but says he is now at risk of losing some of his federal backing, because of his mortgage company learning these projects are not getting completed. Over a year and a half later, they’re left fixing a lot of these issues themselves, and putting extra money into repairs that shouldn’t have happened in the first place. ‘The quality of work is what really saddens me because we’ve put our entire life savings into this home, expecting this to be our forever home, and right now, we just don’t believe that’s the case anymore. We can’t keep putting more money into this,’ Katie Webster said. The $1.1 million house was built through Spire Custom Homes, which the couple says has little to no communication when it comes to their complaints.”
Durham Region in Canada. “Recently, I saw a post on one of my social sites about a home on Verdun Street in Oshawa that was sold for $300,000 less than the homeowners paid for it, so I thought I would do some digging and determine what possibly happened. A numbered company purchased the home for $406,000, and it was completely renovated. The next entry was in January 2021, when the house was sold to another numbered company for $640,000. Then, it was sold again to a different numbered company in December 2021 for $750,000. The home was ultimately sold to a buyer in January 2022 for $830,000.”
“The next time we noticed the property was when the owners placed it for sale in October 2023. The property did not sell and was placed back on the market in May 2024. However, the owner at this time was a trust company and was under ‘power of sale.’ What this means is that the owner had defaulted (the most common way of default is by no payment of mortgage payments), and the lender who had the mortgage sold the home to recover their loan. The values peaked in February 2022 in Oshawa at $1,218,000 for a detached home. In late March 2022, the Bank of Canada started what would end up being 10 mortgage rate hikes. I have only seen the market drop this dramatically twice in my four decades of selling real estate, and now that this correction is behind us, I am forecasting that we will see values grow over the next decade.”
The Globe and Mail in Canada. “Real estate investment is a way of life in Vancouver, with investors – people who don’t reside in the homes they own – representing close to half of the condo market. In recent years, Toronto has pretty much caught up, with a 28 per cent increase in all investor-owned condos from 2019 to 2022. Investors aren’t only active in the condo market. Andy Yan, director of Simon Fraser University’s City Program found that the University of B.C. area had an unusually high rate of investor ownership of detached houses, at 54 per cent. UBC is within the wealthy Point Grey district known as Metro Vancouver A. That compares to investor ownership of 19 per cent of detached houses for Vancouver overall.”
“There are problems with an investor-fuelled housing market. Such homes can sit empty for long periods or be used for lucrative short-term rental. Both issues have added to the housing affordability crisis. There is also the problem of investors driving up prices and creating instability for the entire housing market, a dark side to investment buying that is playing out in Toronto right now, say industry experts. John Pasalis, president of Toronto’s Realosophy Realty, a brokerage that does data analysis, says there was a major acceleration of preconstruction condo investors in Toronto, with buyers willing to pay 30 to 40 per cent more for a preconstruction unit than a resale. That’s because, he says, a preconstruction unit requires less of a down payment and staggered payments, and then buyers can either flip the unit or rent it out and sit on it for a few years. But once those buyers stopped buying in the last several months, the system started to crack, he says. Investors are now trying to unload units that have put them in a negative cash flow, with costs higher than the rents they can charge.”
“‘When you have an investor-driven market, prices end up getting ahead of where they should be, right? And this is what we’ve seen across the world during the financial crisis when it’s driven by investors. It’s the exuberance that drives prices higher than what they otherwise should be and what they rationally should be,’ he says. ‘There’s the expectation that prices are just going to keep going up forever. And now that prices have been relatively flat for the past three or four years in Toronto, no one wants to buy preconstruction condos any more, and many people with existing units are actually trying to sell them. So, we have a record number of condos on the market right now, and this is largely what’s driving it.So, in some ways, it kind of is a Ponzi scheme that falls apart when prices aren’t increasing rapidly. And we’re starting to see the negative side of that.’”
Wales Online in the UK. “A second home owner fears losing her dream retirement if council tax premiums rise. Sandra King, a Leicestershire retiree who has enjoyed holidays in Wales for 16 years and bought a property in Llandudno in 2009, says she would have a difficult decision if council taxes are increased on second homes. At 70, Sandra worries that her retirement dream could be dashed by proposals to hike council tax premiums further in Conwy. ‘Our plans for retirement risk being shattered by the proposed increase in council tax premiums,’ Sandra stated. ‘We’re waiting to see what happens but it could become too expensive for us to keep the property. If we have to sell up we will do so reluctantly as we love the area so much. What’s happening now is making us feel like we’re being booted out.’”
“Sandra also mentioned her recent canvassing of three local estate agents last month. All reported a downturn in overall demand coupled with an increase in second homes coming onto the market. ‘This is materialising in a glut of circa £225,000-plus properties for sale,’ she claimed. ‘Second homeowners are now trying to sell up and if that was the council’s intention, it’s working. But owners are struggling to off-load their homes as no one wants them. At least that’s the feedback I’ve had. Even if values fall 10%, this glut of second homes is not going to benefit first-time buyers.’”
ABC News in Australia. “That’s the thing with silver linings. They’re usually attached to dark clouds. After salivating for months about the prospect of interest rate cuts and blithely ignoring reality, financial markets suddenly are in a mad panic about the fundamentals driving the push for cuts. This time last week, our stock market surged to a new record, buoyed by the idea that we may exit the inflation danger zone without the usual after-effects; the self-induced slowdown that leads to recession. But no sooner had the champagne corks hit the ceiling, Wall Street encountered a dose of the jitters which has since turned into a full-scale rout as investors make a mad rush for the exits.”
“The fear of a global slowdown has quickly permeated global markets. And even though Australian stocks have lagged the incredible boom on Wall Street, the strong gains since last November have pushed local companies well beyond their long-term value measures. Why? Because investors were lulled into a false sense of security that as interest rates eased, markets would remain buoyant and few, if any, believed the economy would slow enough to tip into recession.”
“The reaction across the developed world in the past week will no doubt be a sobering influence on today’s Reserve Bank of Australia board meeting. After centuries of missteps, governments and, these days, central banks try to smooth out the cycles by slowing activity in booms and speeding it up during busts. We’ve just emerged from a boom caused by over-stimulating during the pandemic bust. After three decades of ever-slowing inflation, the world’s biggest central banks, including America’s and the RBA, refused to believe the sudden shift to soaring prices was anything but a temporary affair. Eventually, they were goaded into action by money markets that abandoned any guidance from the US Federal Reserve. Embarrassingly, it was forced to follow the markets rather than guide them to the future. As a result, it was late to the party when it came to rate hikes.”