A report from Island News in Hawaii. “Even before the Lahaina fires, insurance rates had been spiking because of natural disasters, global instability and other risk factors driving up costs. And now, they’re going up even more. ‘Anywhere from up to a thousand percent’, said Sue Savio, owner of Insurance Associates. And with no end in sight, ‘there’s going to be enough trouble trying to even buy food for a family of three four kids because the money’s being spent on insurance,’ Savio said. ‘They don’t go out to restaurants. They don’t go out to shows. They don’t go out and do anything because they don’t have the funds.’”
The Los Angeles Times in California. “In a mostly quiet neighborhood of older homes and small apartment buildings, some residents have drawn their own no-go zones around what might sound like a crash pad for traveling backpackers: hostels. At least two of them have popped up on West View Street in Mid-City Heights in the past few years, with more in surrounding neighborhoods. Residents say they’ve seen strangers smoke marijuana and drink alcohol outside the newly built buildings. They say the properties draw drug deals and a frequent police presence. A few months ago, a woman ranted in the street outside one of the properties for hours, at times alleging someone stole something from her.”
“With more duplex developments underway, neighbors have concerns. They said they would welcome it if people looking for a permanent home moved into the buildings, but want temporary stays ended. ‘We are being oversaturated,’ said Roxana Brusso, who has owned a home in the neighborhood since 2008. ‘The city is asking us to sacrifice our safety, quality of life and property values.’”
The Dallas Morning News in Texas. “Dallas-Fort Worth ranked second in the nation for homes sold and active home listings last month, trailing only New York as the spring selling season heats up. The report also found that active housing inventory is up 49.4% year-over-year. ‘Compared to a couple of years ago, we are definitely seeing a slightly more balanced market, as homebuyers now have a much greater supply of inventory to pick from,’ Todd Luong, an agent with RE/MAX DFW Associates, said in a statement. ‘But more importantly, buyers are facing far less competition than before and bidding wars are no longer the norm.’”
RE Business Online on Texas. “The multifamily markets of Austin and San Antonio — two of the fastest-growing cities in the country over the last decade — are on pace to deliver above-average volumes of new apartments in 2024, causing some industry experts to express concerns of potential oversupply. Panelist Bryan Brown, managing partner at Cardinal Multifamily, immediately addressed his firm’s anticipated response to the growing oversupply of apartments in San Antonio. ‘We’ve got about 2,700 units that have either been completed or will be completed this year and another 300 units that we’ll start construction on in August, and then nothing until 2026 because we’re too scared,’ Brown said.”
“In the greater Austin area, CoStar estimates that there are approximately 35,000 apartments in various stages of development, which translates to about 11.7 percent of the total inventory. The market absorbed about 11,000 units in 2023 while posting a -5.6 percent rent decline — a testament to overbuilding already taking root in the state capital. ‘The building permit situation in San Antonio is far worse than in Austin in that it’s bad, which is good [for the supply-demand balance],’ Brown said. ‘You’re not going to see the type of overbuilding in the next year or so in San Antonio that you’ll continue to see in Austin. More crazy money will come into Austin, too soon [into the next development cycle], and it won’t come into San Antonio.’”
The Vermont Digger. “The University of Vermont is stopping plans for a new undergraduate housing complex that would have accommodated about 540 students, citing soaring construction costs and a lack of available labor. ‘With interest rates where they are, and the competition for labor in the Burlington area right now, the price tag was going to drive rents so it really wouldn’t have been affordable for students to live there,’ said Richard Cate, the university’s chief financial officer. ‘There’s no point in building when it’s not going to work for them.’”
WGN TV in Illinois. “It’s been four years since the COVID-19 outbreak led to a rise in remote work. Now, even though the public health crisis has diminished, the work from home trend shows no signs of slowing, pushing downtown office vacancies higher. ‘We just don’t have the same number of people working in the Loop as before,’ said Dan McMillen, a real estate professor at University of Illinois Chicago. ‘On a normal day, before [the COVID-19 pandemic], we had 700-to-800-thousand people come and work and thrive downtown in the Loop,’ said developer Michael Reschke. ‘Now, it’s probably half that level on Tuesday through Thursday. On Monday and Friday, maybe a quarter of that level. That vibrancy is missing.’”
Bisnow Boston in Massachusetts. “The developer of Assembly Row is asking for an extension on a new lab development due to economic conditions and lack of demand. Federal Realty Investment Trust executives filed a request with the Somerville Planning Board for an extension on its special permit for its 350 Assembly Row lab project. The company said it is seeking a two-year extension on its permit because of challenges that have delayed its timeline, according to the May 19 filing. ‘The Applicant has faced hardship in pursuing the project in the form of difficulties associated with the rise in interest rates, increase in construction costs, and an oversaturation of lab product in the region,’ Federal Realty Senior Director of Development Sarah Rogers wrote in the filing.”
The London Free Press in Canada. “A regulatory agency’s allegations of wrongdoing by a well established London mortgage brokerage raise larger questions about the industry, including how many other mortgages arranged by the company may have allegedly been compromised, an industry expert says. The authority said Forest City Funding, a London mortgage brokerage, gave ‘false or deceptive information and documents when dealing in mortgages,’ contrary to the the Mortgage Brokerages, Lenders and Administrators Act. The company also is alleged to have acted ‘when it ought to have known that by acting it was being used by a borrower to facilitate dishonesty,’ the authority said.”
“Chirag Mehta, director of operations at True North Mortgage, said his Calgary-based agency has seen dozens of fraudulent applications for mortgages. ‘Right after the pandemic when housing markets started to boom we saw an influx of those types of deals which we stopped all of them or most of them,’ he said. There are two different fraudulent documents borrowers can forge, Mehta said. ‘One is letter of employment, the company doesn’t exist or people don’t work there,” he said “The other one is bank statement fraud – showing money is in there but they are borrowing money from friends or family.’”
“Carl Davies, head of fraud and identity at Equifax Canada, said Ontario has the highest mortgage fraud rate among all provinces. ‘Rates are 30 to 40 per cent higher than other provinces,’ he said. Mortgage fraud becomes more of an issue when people aren’t getting mortgages due to obstacles such as high interest rates, Davies said. A few years ago a CBC investigation found mortgage agents in the GTA manufacturing forged documents so their clients could get mortgages, he said. ‘It is a problem especially in a time where volume was dropping very low,’ Davies said. ‘Now you’ve got lots of brokers fighting for a small number of transactions.’”
ABC News in Australia. “A Queensland landlord says he has been left thousands of dollars out of pocket trying to evict renters who refused to leave after their contract was up, delaying the sale of the house. Adam Le Fevre told the ABC he was hit with “12 interest rate increases in a row” and found his Mackay investment property stopped covering its cost. ‘The decision was made to bail out … before we end up down the tubes,’ he said. Mr Le Fevre said he has spent more than $2,000 on legal representation, QCAT fees, and flights to Mackay for the tribunal, and is now being sued by the new home owners over the delayed sale. ‘I feel for the tenants, [but] I wonder if they understand the carnage they have caused,’ he said. ‘I’m just mentally, emotionally, and physically exhausted.’”
Radio New Zealand. “Interest rates might have peaked but the mortgage pain is not over yet, and there is likely more of an impact felt in the housing market, commentators say. While the market drop has now largely stopped, prices are still well down on their peak – about 15 percent by the Real Estate Institute’s (REINZ) measure. That is putting pressure on people who bought in recent years and now face both higher interest rates and softer values. Corelogic data showed that 7.1 percent of homes that changed hands in the first quarter of this year sold for less than they had been bought for. The median hold period of those that made a loss was 2.4 years. The median loss was $50,000.”
“Infometrics chief forecaster Gareth Kiernan said there were signs of increased stress in the housing market. The number of houses for sale on Realestate.co.nz was up 23 percent since July last year, to its highest level since 2015. ‘The biggest lifts have been in Wellington and Wairarapa – up 43 percent and 35 percent respectively, as the spectre of public sector job cuts has hung over the lower North Island. Other regions with increases of 30 percent or more over the same period are Auckland, Bay of Plenty, and Coromandel – areas where affordability metrics remain highly stretched given the current combination of house prices and mortgage rates.’”
“Property investor and coach Steve Goodey said he had seen a number of people buying houses from people taking a big loss. ‘Some are really feeling the interest rates.’ He said some developers were probably under pressure because it was possible to buy new-build homes at prices below what it would cost to build them.”
South China Morning Post. “Sentiment in China’s property market is improving, with homebuyers in some of the biggest cities rushing to sales offices to scout for deals, days after Beijing rolled out the strongest stimulus measures yet to rescue the troubled sector. Ma Yunman, a sales agent at 5i5j Real Estate Brokerage based in Beijing’s suburban Fangshan district, said some 100 people visited its regional showrooms to view projects and consider purchases last weekend. ‘The overall volume of inquiries has increased noticeably since the new support measures came out last Friday,’ Ma said in an interview. ‘This is helped by the fact that prices for both new and pre-owned homes in our area have declined by 20 to 30 per cent from last year.’”
“In Shanghai, more prospective homebuyers are asking sellers for more generous discounts. Weng Lingjie, a 40-year-old entrepreneur, said he would only buy a lived-in home in the eastern Pudong district on a further 15 per cent price cut. ‘It is a buyers’ market and we have the bargaining power,’ said Wang, who is not alone in angling for bigger discounts. Local real estate agencies said a growing number of clients have also started hunting for bargains after last week’s major incentives.”