A report from the Wall Street Journal on New York. “A drop in sales of new Manhattan condominiums has been even steeper and broader than conventional sales measures indicate, according to a Wall Street Journal analysis of contract signings. Looking at contracts signed over the first seven months of 2019 indicates that sales were only one-third what they were than during a comparable period in 2015.”
“The steepest declines in both sales and prices weren’t in huge expensive apartments, but in studio and one-bedroom units and in apartments selling for less than $2 million. Developers have responded to the slowdown in sales and high inventory by offering a variety of concessions. But some of these concessions weren’t reflected in the reported sales prices.”
“Beth Fisher, a senior managing director at Corcoran Sunshine Marketing Group, said the current glut is the result of a one-time wave of building that began a few years ago, after the dramatic success and rising prices for the first wave of luxury buildings that came on the market after the financial crisis.”
“There is also increasing competition from new developments in Brooklyn and Queens, which offer luxury finishes, often at lower prices. There will be more than 9,000 unsold new condo units on the market in Manhattan at the end of 2019, a supply that could take nine years to sell out, according to an estimate by appraiser Jonathan Miller of Miller Samuel Inc.”
From Curbed Boston in Massachusetts. “The developer behind plans to replace two vacant lots and a commercial building at 1199-1203 Blue Hill Avenue in Mattapan with a mixed-use project has adjusted the proposal for the site. The previous proposal called for 21 condos in a four-story building stretching to nearly 55 feet. The new plans call for 32 rentals in a five-story building.”
The Columbus Dispatch in Ohio. “Former Columbus Blue Jackets goaltender Sergei Bobrovsky has dropped the asking price of his Arena District condominium. The four-bedroom, four-bath condo, with 5,474 square feet, is now listed at $2.95 million, down from $3.2 million.”
From Arlington Now in Virginia. “Question: I recently read an article by the Sun Gazette that median price per square foot was down since last year in Arlington and the rest of Northern Virginia. Is that what you’re seeing in the market, despite reports of prices going up?”
“Answer: I read that article as well and was equally confused by the statistic that $/sq. ft. was down 6.8% in Arlington in the first nine months of 2019 compared to the first nine months of 2018. While this data point may be technically correct, it doesn’t accurately represent what’s happening in the Arlington/Northern Virginia marketplace. Even without having access to the data behind it, does anybody believe that with all the news about the Amazon-effect on Arlington’s real estate market, that people are paying less per square foot in 2019?”
“The truth is that while the median $/sq. ft. did drop year-over-year in the first nine months of 2019, it was actually due to a shift in the type of inventory that sold, not because buyers are getting more for their money.”
The Union Tribune in California. “Home sales in San Diego County jumped 14.7 percent in September from the same time last year. At the same time, home prices dipped slightly. The median home price was $570,000 in September, down from $575,000 at the same time last year. It marks the second consecutive month of declining prices.”
“Gary Kent, a La Jolla-based real estate agent, said it is important to remember the housing market slowed dramatically in August last year. So, September’s numbers may be more a reflection of things returning to normal. Kent said prices are still catching up from the slowdown, and sellers are sometimes still eager to list homes higher than the market. He said tracking what homes recently sold for in the area, and what neighborhood homes are currently listed at, is a way to make sure homes are priced correctly.”
“‘If you price a house right, you will sell it in a few days or a few weeks, or maybe a month,’ he said. ‘But, if it is priced too high, it’s not going to sell, and you’ve got to take it down.’”
From OU Daily in Oklahoma. “Two bond ratings experts with Standard & Poor’s Global said the significant disagreements between OU and its Cross Village partners are ‘unprecedented’ and likely to lead to legal proceedings.
Cross opened in fall 2018 and saw low occupancy — and was marketed as a luxury housing option for upperclassmen, and the price of living at Cross matches or exceeds many other Norman luxury housing options. After OU did not renew the parking and commercial leases in June, Cross Village dining has not been available for residents, and the complex continues to see low occupancy.”
“‘Despite the lack of a legal obligation for OU to renew the lease and make the requisite payments,’ the MMA report said, ‘the institution was heavily involved in the transaction and knew that continuation of its leases was critical for debt service payments, particularly in the early years after capitalized interest ran out.’”
“In the original letter sent from a representative of Cross Village in September, the representative maintained that ‘major mutual funds, which aim to judiciously invest ordinary peoples’ valued savings and pension monies, lent $250 million based on trusting the promise of the university that it would honor its obligations,’ meaning that investors believed OU would renew the leases, though it did not have legal obligation to do so.”
“Bobbi Gajwani, S&P Global’s primary analyst rating on the Cross Village bonds, said the rating reflects that S&P Global expects Provident Oklahoma to default on the debt service payments. ‘The rating particularly reflects our expectation of default on the bonds, (our expectation) that they won’t pay the next debt service payment, which is due in February,’ Gajwani said.