A report from Newsweek. “A condominium in downtown San Francisco, an area that’s been rocked by several problems in the past few years, was sold last week for about half of its purchase price in 2019, as shown on Zillow. The property, a two-bedroom, two-bathroom condo on 1075 Market St, a five-minute driving distance from Union Square and a three-minute driving distance from the troubled neighborhood of Tenderloin, was listed for sale on Zillow on January 18 for $695,000. After spending months on the market, it was sold on April 8 for $675,000—about half of the price commanded by the condo in late May 2019, when it was sold for $1,250,000. This is hardly an isolated case in the Californian city. According to Redfin, nearly 20 percent of home sellers in San Francisco are taking a loss on their sale—over four times more than home sellers at the national level, at 4.3 percent.”
“Some 17.8 percent of homes sold in San Francisco during the three months ending on February 29, 2024 sold at a loss, Redfin found. In the three months ending January 31, the share was at 17.9 percent—its highest level in 11 years and a higher share than any other metro. On average, the typical homeowner sold their home for $155,500 less than they bought it for. That’s mainly because prices have gone back to normal after skyrocketing during the booming years of the pandemic, Redfin writes.”
The Los Angeles Times. “As California housing values keep rising, some cities that until recently had reputations for working-class modesty are joining the list of communities with median home values more than $1 million. Tor Black, 55, has lived in Tustin for the past five years. The real estate agent and his wife, Iris, found their ‘forever home’ in Tustin Meadows, the first planned urban neighborhood in Orange County, he said. The value of the couple’s home has shot up from $800,000 at purchase in 2022 to $1.3 million today — an increase of more than 60%. With a median household income over $100,000, the average home in Tustin is worth about 10 times what a household earns, per census data. Bonita’s ratio is similar. Nationally, homes are worth five to six times household earnings, up from a 4-1 ratio in 2019. In California, that rockets up to at least a 10-1 ratio, per Harvard University’s Joint Center for Housing Studies.”
The American Statesman in Texas. “This year’s appraisal notices are on their way to Travis County residential and commercial property owners. Overall, the median market value of homes in the county declined about 7%, Travis County Chief Appraiser Leana Mann said. The 2024 median market value for a residential property in Travis County is $551,419, down from last year’s median of $592,819, the appraisal district said. In the Austin-Round Rock metro area, stretching from Georgetown to San Marcos, sales were down 9.8% last year, with 30,438 homes changing hands. Half of those homes sold more for more than $450,000 and half sold for less, for a 10.2% drop in the median closing price.”
“Eldon Rude is an industry expert who has been tracking the Austin region’s real estate market for several decades. Rude said that the 7% overall decline in this year’s appraised market value ‘represents the continuation of the market correction that started in late 2022 and has continued through early 2024.’”
Islander News in Florida. “This week’s show-stopper sale in Key Biscayne involves a mansion selling for $18,000,000. Nestled on one of Key Biscayne’s most exclusive streets, this island estate boasts 300 plus feet of waterfront on a peninsula, with sweeping 180-degree panoramic views over Cape Florida State Park. Listed at $22,500,000 in November. $4,850,000. 1425 Brickell Ave., Apt. 56F. Miami, FL 33131. When you step into this glamorous home, you will feel the calm ambiance that living on the 56th floor can bring. The Four Seasons of Brickell boasts 3,862 square feet of sumptuous design in this three-bedroom home with four and a half bathrooms. Listed at $5,499,000 in November.”
The Journal Now in North Carolina. “Those are some of the potential — many unintended — local ripple effects from the landmark $418 million settlement by the National Association of Realtors on March 15 to help compensate home sellers. Many buyers do not have the money to pay the buyer’s agent out of pocket, particularly those preparing for their first home purchase, said Curtis Leonard, co-owner of Leonard Ryder Burr LLC and Tyler Redhead & McAlister residential real-estate agencies in the Triad. Also potentially affected are military veterans relying on a Veterans Administration loan, which doesn’t allow the veteran to pay real-estate commissions, and other government loans that allow for low down payments, such as the Federal Housing Administration.”
“Tony Plath, a retired finance professor at UNC Charlotte, said the NAR settlement is a top-of-mind topic for the banks to which he provides consulting services. ‘Home buyers will ultimately lose because they’re going to have to hire a buyer’s agent out of their personal funds, rather than relying on commission-sharing with the seller’s agent,’ Plath said. ‘This reduces the amount of money they have available to make a down payment.’”
Bisnow New York. “Vornado’s need to lease its redeveloped office buildings around Penn Station was greater than its desire to develop a casino, Chairman and CEO Steven Roth wrote this week in his annual letter to shareholders. ‘Frozen capital markets and sky-high interest rates have and will continue to shut down new builds and tenants’ normal growth will lead to a very tight New York City office market,’ he wrote. He said ‘the market now demands’ concessions to tenants at roughly $300 per SF, split down the middle between tenant improvement allowances and free rent. ‘There is no new debt available for office, so no buying, no selling, no new builds,’ he wrote. ‘How long and deep this all goes is unknowable. So, coming out of the cycle, many good but overleveraged buildings will change hands, will be de-levered, and the second or third owner will enjoy a much lower basis.’”
CBC News in Canada. “Anshul Jain says he hasn’t received a single payment from two tenants at his rental property in Thunder Bay, Ont., but is most upset about the unpredictability he faces with the Landlord and Tenant Board (LTB). Jain is a physiotherapist at a long-term care home in the northwestern Ontario city. He and his wife purchased a rental property at the end of July 2023 in hopes of earning additional income. They inherited the previous owner’s tenants and he said while there have been no issues with those in Unit A, the people living in Unit B have accumulated more than $11,000 in arrears.”
“‘I’m at my wits’ end and I’m losing a lot of money there because I still have to pay the bills, I still have to pay the mortgage and all my savings are gone,’ Jain said. In March, Jain said he offered to forgive the rent owed if his tenants moved out, but they never left. He plans to sell his rental property as soon as he can. ‘It’s not worth it,’ he said. ‘I have a young family and I don’t want to take any more stress.’”
Plymouth Live in the UK. “The company which failed to develop Plymouth city centre’s Mayflower House office block went bust leaving debts of nearly £5m – much of which won’t be paid. London-based Mayflower House Developments Ltd went into voluntary liquidation in 2021 leaving the five-storey building derelict and now the scale of the company’s collapse can be told. The firm had debts of £4.84m when it went under. Of this, £2.688m was owed to specialist lender White Hall Lending Ltd, according to documents filed at Companies House. They say the lender is likely to still be out of pocket despite the building being bought. And it said unsecured creditors, owed a total of £2.155m, won’t receive a penny.”
Radio New Zealand. “A decades-old building company has had to ‘pull the pin’ after a sharp down turn in business. Tony Boyce of Tony Boyce Builders was finishing up a few jobs this week before closing down his company for good. Things had been tough with no work coming in, Boyce told Checkpoint. ‘Telling the men I had to lay them off … that was my worst problem.’ Boyce said he had got his team down to nine but even that was not enough. He had thrown ‘mega bucks’ into the business to keep it afloat but had decided to ‘pull the pin’ now. ‘I feel gutted. I feel like I’ve failed. In a lot of ways I haven’t, but it’s really hard.’”
“Boyce said the construction industry as a whole was struggling. People were closing up their wallets, worried about a recession and dealing with high interest rates. He told Checkpoint he had spoken to a builder this morning who worked in housing and usually had two-and-a-half years work lined up. Now he only had eight months and was worried about what the future would look like. ‘It’s affecting everyone, really.’”
“‘We do know that workloads are slowing and also anecdotally we’re just starting to see those concerning reports about a few more builders going into liquidation,’ said CoreLogic’s chief property economist Kelvin Davidson. ‘The near-term indicators are that that will continue.’”
South China Morning Post. “Vice-Premier He Lifeng urged on-time delivery of properties and financing support for developers at a meeting in central China over the weekend, rallying efforts to revive a sector critical for this year’s economic growth target and financial stability. China’s property sector once contributed about a quarter of the national economic output, but it has yet to bottom-out in terms of investment and sales, while market confidence remains weak. Zhengzhou is among the Chinese cities grappling with a large number of abandoned or stalled residential projects, with homebuyers seeking either a refund of their down payment or access to their new homes.”
“Since the downturn in 2020, there has been a spate of projects, undertaken with bank loans and down payments from buyers, that have failed when developers collapsed or defaulted. Nomura estimated in November that there were 20 million units of unconstructed and delayed pre-sold homes in China in 2022, with 3.2 trillion yuan needed for their completion. A report by the Shanghai-based E-House consultancy said 3.85 per cent of all projects across China had financial woes last year, totalling 231 million square metres (2.49 billion square feet).”