A report from CBS News. “When Joy Sharp built a new home in the small coastal community of Wilmington, North Carolina, about eight years ago, her homeowners insurance cost was a relatively modest $1,400. That was then. ‘Now I’ve been given renewal rates of $6,000,’ Sharp, 39, herself an insurance agent, told CBS News. ‘So, it’s just every year, it goes up and up and up, and it’s not coming down.’ Sharp recalls being shocked to learn she would have to pay nearly $6,000 under her revised home insurance policy without a commensurate increase in coverage. ‘I kind of thought it was a joke,’ she told CBS News. ‘I kind of thought, OK, where are my discounts? This has got to be like the three-year policy or else this is crazy. The rates went up, but the coverage on my home did not increase very much. I mean, that’s a budget buster that just destroys all the economics.’”
WVUE in Louisiana. “The state’s property insurance crisis threatens the foreclosure of more than 100 New Orleans families living in Habitat for Humanity homes. George Ingmire said no one’s unscathed by the state’s high property insurance rates; some are just hit harder than others. His note has doubled since he moved into his Habitat for Humanity home in 2007, breaking his budget, but he has neighbors struggling more than he is. ‘We’re getting pinched right now,’ George Ingmire said. What happens when there are no more pennies to pinch? ‘This is pretty big of a problem,’ George Ingmire said.”
Business Insider. “In November, the city of Las Vegas issued a $180,000 fine against a homeowner who officials say ran an unauthorized Airbnb near the Las Vegas strip. The homeowner, however, told Business Insider he believes he is the victim of a scam run by the tenant renting his house at the time. In June 2021, Xin Tao purchased a five-bedroom, two-bathroom property in Las Vegas for $378,000. Tao, an engineer who lives in Oregon full-time, told BI he bought the house as an investment property. The tenant vacated the property in September 2023, and a cleaner was sent to the premises to tidy up, Tao said. Stuck to the window was a notice of a $180,000 fine. He added that the current fine would have devastating effects on his family. ‘We have a mortgage and car payments,’ he said. ‘One hundred eighty thousand dollars is definitely something I cannot afford.’”
NBC Chicago in Illinois. “For months, NBC 5 Responds has been digging into an alleged ‘real estate Ponzi scheme’ that has financially devastated dozens of South Side families. In lawsuits, Ramo & Michaele Bey, the owners of iFLIP Chicago, are accused of luring inexperienced investors into predatory loans, resulting in bankruptcies and a slew of foreclosures across communities on Chicago’s South Side. Tiffany Brown, a realtor and trucking business owner, said she was trying to diversify her assets and was looking for guidance. ‘It’s like getting in bed with the devil,’ Brown said. ‘He sold …pipe dreams and now we’re living a nightmare,’ Miranda Booker, an iFLIP investor, single mother and childhood friend of Bey’s said. Booker signed up for a joint venture with iFLIP along with her sister and best friend. ‘Everything I came in the game with, I lost,’ Deshon Carr said.”
From Newsweek. “In May 2024, according to data compiled by ResiClub using the Zillow Home Value Index, home prices in Austin were down 18.7 percent compared to the May 2022 peak. The only other cities that experienced price drops beyond the 10 percent mark from their pandemic peak were New Orleans, Louisiana (-13.7 percent); Lake Charles, Louisiana (-11.7 percent); and Boise, Idaho (-10.4 percent). In recent months, Austin has seen developers abandon several construction projects, as reported by Austin realtor Jeremy Knight in a series of videos on YouTube. In a previous comment to Newsweek, Knight explained that many of these projects started in 2020-2021 as the market was beginning to skyrocket.”
“‘Now add the delays with workforce during the pandemic, the backlog, and developers rushing to buy in Austin, and then a turn in the market of 21 percent peak to trough. The valuations many of these developers put on these projects no longer make sense. Now add the fact that interest rates have doubled and nearly tripled since the projects started. Many of these small developers are facing headwinds,’ he said. In a recent video, Knight said that over 57 percent of the inventory on the market is now vacant.”
The Real Deal. “Developer JNY Investments is hitting the market with another spec mansion, this one in Pacific Palisades with a $34 million list price. The spec home at 538 Chautauqua Boulevard debuts in a buyers’ market. Median sale prices of homes in the Palisades were off 37 percent to $3.3 million in April compared to a year ago, according to Redfin data. Construction was completed earlier this year on the home, which marketing materials describe as designed with ‘California modernism’ in mind. The Palisades listing was anticipated, as JNY Investments President Yaniv Nehemia sharied plans for it with The Real Deal in 2022, saying he aimed to sell it for $35 million.”
“At the time, JNY had just placed on the market a 21,097-square-foot home in Encino’s Royal Oaks neighborhood, which Nehemia dubbed the ‘Bel-Air of the Valley’ in describing it to TRD. The listing price was $25 million for the spec home at 15930 Woodvale Road. The home sold last February for $17.5 million.”
Market Watch. “The Federal Reserve on Wednesday kept interest rates steady at a two-decade high. That wasn’t exactly music to the ears of commercial property owners facing an estimated $2 trillion mortgage bill coming due through the end of 2026, or their lenders. And getting a new loan has become even harder as property prices have tumbled, with office values down 37% and multifamily values now 26% below peak 2022 levels, according to Green Street Advisors. ‘Office buildings are in a free fall,’ said real-estate developer Don Peebles of the Peebles Corp. in a CNBC interview Wednesday. One New York City office property, in Manhattan’s Hell’s Kitchen neighborhood, recently sold at a 67% discount to its previous purchase price, according to Bloomberg News. The deal comes after the sale of a distressed Midtown Manhattan office loan left holders of AAA-rated bonds with a loss for the first time this cycle.”
“Many lenders have been selling top assets to bolster their balance sheets, which have been weighed down by unrealized losses since the Fed began raising rates two years ago. ‘We see more risks of bank failures, and a lot of forced consolidation across banking,’ said Greg Friedman, co-founder of Atlanta-based real-estate investment firm Peachtree Group. ‘I don’t agree with Powell.’ Friedman still sees insolvency risks and more bank consolidation on the horizon. ‘There’s a lot of zombie banks out there,’ he said of stress at regional lenders, adding that his group has already bought about a dozen loans in the past five to six months.”
The Globe and Mail in Canada. “Restraint seems to be the guiding principle of the Toronto-area real estate market in June. ‘The stink bid is back,’ says Andre Kutyan, real estate broker with Harvey Kalles Real Estate, who has received lowball offers on some properties as buyers step tentatively off the sidelines. Mr. Kutyan says the homeowners at 356 Brooke Ave. rejected the lowball offer for the 3,482-square-foot house. He knows the buyers have bid on other properties in the area around Avenue Road and Lawrence Avenue West. ‘They’re going from place to place and making offers – trying to see who is hungry,’ he says. ‘They haven’t bought a house yet. That tells me there is hesitation from the sellers.’”
“Victor Tran, mortgage specialist for rates.ca, cautions that market watchers will be preoccupied with the direction of interest rates for the next couple of years because many people who took on mortgages when rates were at historic lows will be renewing at higher rates this year and into 2025 and 2026. ‘That’s going to be a concern for the next couple of years,’ he says. ‘That will be a huge payment shock for most.’”
Barrie Today in Canada. “South Simcoe police and Ontario’s Office of the Fire Marshal are investigating after two unoccupied Bond Head homes have caught fire for the second time this year. At around 1:45 a.m. on Wednesday, emergency crews were called to the scene of a blaze at the construction site on Rowe Street, located in the west end of Bradford West Gwillimbury. ‘Once on scene, emergency crews discovered two unoccupied homes in a new subdivision were ablaze,’ said Police spokesperson Isabella Soligo. ‘The same two homes were involved in a fire a few months ago. The cause of the fire is under investigation.’”
Radio New Zealand. “More than 8500 first-home buyers who bought their homes during the market peak have properties that are worth less than they paid for them. CoreLogic data shows that 81 percent of homes bought by first-home buyers between October 2021 and March 2022 have dropped in value from the time of purchase. About 18 percent, or 2000 first-home buyers, now have properties that are worth more than 20 percent less than they were bought for, indicating that any equity they had in the deal would probably have been wiped out. Of those that are worth less than they were purchased for, 42 percent are in Auckland, which made up 36 percent of all sales over that period, and 10.8 percent in Wellington. Of those that are still more than 20 percent below their purchase price, two-thirds are in Auckland and 18.8 percent in Wellington.”
“But for some buyers, the value drop could make their mortgages harder to service for longer. Banks usually apply a low-equity fee or margin to borrowing when a borrower has a deposit of less than 20 percent – and also often do not allow them to access cheaper ‘special’ interest rates. When the market was hot, many borrowers took out loans with these margins expecting to be able to have the properties revalued and the margin removed before long. CoreLogic head of research Nick Goodall said: ‘If you were hoping to get rid of that and now you have to pay it longer while you’re paying greater costs on everything else it will continue to sting your income. You could have higher interest rates on top of higher insurance bills and rates, it could get to the point when even though you’re not forced to sell in a mortgagee sale and there’s no change in your circumstances it might get to the point where it’s costing too much.’”
From ABC News. “West Australian Minister for Commerce Sue Ellery has demanded a meeting with the directors of Perth home builder Nicheliving amid concerns about the company’s finances that have left potentially hundreds of customers with incomplete homes. Customer Cindy Richardson told Damian Smith on ABC Radio Perth she first entered a contract with the company to build a home in Tapping in March 2021. ‘I’m a single mum, [on a] single income, and my house is not finished,’ Ms Richardson said. I had a letter from Nicheliving saying to my bank that my house would be finished and I’d be in it this month. And I still don’t even have a roof, so it’s just it’s really frustrating, soul crushing.’”