A report from ABC 7 in California. “A former HGTV star and house flipper from Los Gatos has been sentenced to four years in Santa Clara County Jail. On Tuesday, Charles ‘Todd’ Hill, star of the show ‘Flip It to Win It,’ was ordered to pay close to $10 million for real estate and financial fraud. Prosecutor Oanh Tran said Hill’s scams including a Ponzi scheme impacted 18 homes in the Silicon Valley. ‘I think this is a major real estate fraud case – there are 11 victims here who are still dealing with the fallout,’ Tran said. Tran said Hill falsified balance sheets and fraudulently obtained loans. Victims were left with either unfinished homes or barely finished homes to finish themselves. ‘Businesses were shut down, one victim lost his home, so the consequences of his fraud are far reaching that cover various aspects of life that these victims are still dealing with,’ Tran said.”
“Ten years ago, Beau Eckstein was on the show ‘Flip it To Win It’ with Hill, and had a positive experience with him. Overall, Eckstein said the house flipping show was more for viewers and not the most realistic glimpse into the business. ‘I think the TV channels always show, like everybody’s making 150K profit – have you ever stopped and said well, there’s no interest there’s no real estate commissions involved – like what you’re forecasting is not actually reality,’ Eckstein said.”
The San Francisco Chronicle. “Huge swathes of Northern California real estate are on sale for a fraction of the prices they sold for just five years ago, with discounts as steep as 80% off the original list price. But the properties could come with some serious baggage. Marcus Schaible, a real estate agent with Emerald Realty in Garberville, told SFGATE that many of these properties were formerly used to grow cannabis and can have tax liens and fines, often referred to as ‘abatements,’ from unpermitted pot cultivation, which a purchaser will then be responsible for paying. The price cuts in southern Humboldt County are massive. For example, one 40-acre parcel with rolling hills and a pond is listed at $249,000, which is nearly 80% less than the $1.5 million it sold for in 2019. Another 40-acre lot that sold for $505,000 in 2007 is now listed at just $399,000.”
“Many of the region’s small farms are either out of business or near failure, so the formerly high property valuations of just a few years ago are no longer justified, according to Mark Crosson, a real estate agent with Coldwell Banker Sellers Realty in Arcadia. ‘People were able to get their foot in the door and get these properties and were willing to pay a high price for those, and when the cannabis industry took a dive, it just didn’t pencil out,’ Crosson said. Laura Lasseter, the director of operations for the Southern Humboldt Business & Visitors Bureau, told SFGATE that the local industry’s ‘crash’ has hurt the entire area’s economy and driven down land prices. ‘It’s been in crisis mode for a long time, and we’re just really seeing the effects in the housing market,’ Lasseter said.”
The Boston Globe in Massachusetts. “In some of Boston’s wealthiest suburbs, where McMansions are seemingly built more often than apartments, something bizarre happened between 2022 and 2023: Home prices actually dropped. Over that year, the median sales price of single-family homes fell in Belmont (down 7.28 percent), Brookline (6.29 percent), and Hingham (5.14 percent), among other places — all toney communities where high home values often feel the most insulated from turns in the market. In some communities, such as Lincoln, prices dropped by double figures, according to the Warren Group.”
“‘It’s a math issue that is fundamentally a function of interest rates,’ says Sage Jankowitz, a realtor with RE/MAX Destiny in Cambridge. ‘In markets where you have super high price points already, the higher [interest] rates are a killer. The numbers just don’t work.’ In Cambridge, where Jankowitz works, he says he’s seen homes sell in recent months for almost a million dollars less than what they were listed for. One of the most pronounced shifts was in Lincoln, where The Warren Group found prices fell more than 15 percent in 2023. The median-priced single-family home there sold for $1,411,250 last year, down more than $200,000 from 2022.”
The Wall Street Journal. “In April 2023, tech entrepreneur Jon Hunter and his wife, Laurie Hunter, listed their European-style Phoenix home for $10.995 million. A year later, following only a few lowball offers, they are gearing up to cut the price to about $8.7 million. Hunter, 54, said he blamed the Covid-era real estate hype for their ambitious expectations last year. ‘You’re hearing all these crazy stories about what people are selling for. It definitely was hyped up,’ Jon said. ‘In hindsight, we were just priced too high.’”
“Stories such as the Hunters’ are playing across the country, as sellers in luxury housing markets that boomed during the pandemic are having to reckon with prices coming back to earth. The metro area with the largest share of price reductions was Austin, Texas, where the share of $5 million-plus homes with price reductions was 18.7%. Other markets with a significant share of price cuts at $5 million and above include Phoenix, where the share was 13.6%, and Tampa, Fla., where the share was 12.8%. ‘A lot of sellers are upset,’ said Monica Fabbio, a luxury agent with The FAB Property Group in Austin. ‘They don’t want to let go of the number that they could have had during Covid.’”
“In Austin, retired technology executive Ron Wolfe and his wife recently cut the price of their waterfront Lake Travis estate to $6.999 million. That brings the asking price to nearly 15% less than the $8.2 million asking price in October 2021, Zillow shows. Their agent, Fabbio, said that, a couple of years ago, the Wolfes likely could have gotten more than the current asking price. It has been difficult to keep a handle on how quickly prices spiraled upward over the past few years, Fabbio said. ‘We were chasing the market up for so long from a pricing perspective. It was almost like you could barely price it high enough,’ she said. ‘At some point, the merry-go-round stopped.’”
The New York Post. “A former talk show host is once again trying to find a buyer for her Midtown East penthouse. Rosie O’Donnell, 62, first attempted to sell her 255 E. 49th St. triplex apartment for $8.3 million last spring amid a move to Malibu, only to take it off the market in December. Now, the abode is back up for sale — and this time with a reduced $7.5 million price tag, Robb Report first reported. O’Donnell paid an even $8 million for the unit in 2017, meaning that even if the unit sells for its new asking price, she’ll be losing $500,000 on the investment. The property is far from the only piece of real estate she has struggled to turn a profit on recently. After years of being unable to sell her mansion in Saddle River, New Jersey, O’Donnell finally sold it at a loss to buyers who planned to demolish it and turn it into affordable housing, The Post previously reported.”
From Fortune. “There’s been a slowdown in both single-family and multifamily housing construction, according to U.S. Census Bureau data issued Tuesday. Indeed, single-family starts fell in March because ‘builders are beginning to anticipate that mortgage rates will likely remain elevated for much longer than previously thought,’ according to Zillow. To combat high mortgage rates and home prices, builders have sweetened incentives to entice prospective buyers to actually make a move. ‘Incentive’ is just a big fancy word for discount, and what we’re seeing on that front is that it’s what’s creating a competitive advantage for the new-home market,’ Devyn Bachman, senior vice president of research with John Burns Research and Consulting, previously told Fortune. What’s more, 22% of builders cut their prices this month, according to Zillow, further sweetening the pot for buyers. The average price cut is 6%. But for some buyers, that’s still not enough.”
From Axios DC. “It’s ugly out there for office building owners. Their investments were sky-high during Washington’s renaissance — and now their net worths have tumbled as white-collar workers would rather WFH than clock-in downtown. Why it matters: As D.C.’s office market gets pummeled, the plight of bruised real estate titans is also a drag on the rest of the city. Consider 1899 L Street NW. It sold for $44 million in 2004. Its value on paper has since climbed to $66 million. But the reality of telework meant the 12-story office building recently sold for $22.6 million, the Washington Business Journal reports. A building across from Franklin Park that cost $100 million in 2018 sold for a $64 million markdown last December, the Washington Post recently noted. Another building on 14th Street lost $44 million in value, selling for $18.2 million in January.”
“Some buildings might just need to come down, an ironic reversal from the days when empty downtown land was gobbled up and turned into blocky office buildings. Bernstein Management CEO Joshua Bernstein predicts some midblock office towers may be demolished for the sake of making neighboring structures more attractive, providing more air and light. ‘It’s an astonishing devastation of value,’ he says.”
Durham Region in Canada.”Over the past week I sold a property in a way I had not done in years. It was sold conditionally upon a home being sold. Lately, I have seen very few properties sold with a home sale condition. If we go back to the early 2000s, it was common for a buyer to purchase a home subject to their home selling, however as the market became active over the past decade, these types of conditions were not saleable. A few weeks ago, I had an agent who has been in her career for over 15 years asking questions about an agreement with a home sale condition due to the fact she had not had to work with an offer with this condition. Ever.”
“In today’s market, it appears that homes that sell with home sale conditions are ones that are unique, in a high price point or for some reason have been sitting on the market for a long time. If a property is listed for sale and is a very desirable. The fact that home sale conditions are being discussed indicates the market has not recovered to one that is as robust as we have seen over the past few years. In 2021 almost all of the homes sold were sold unconditionally.e home in a great area and priced well, a home sale condition would rarely be one a seller would consider.”
The Evening Standard. “House prices across England and Wales decreased by 1.1 per cent, according to the latest House Price Index from the Office for National Statistics, with the capital registering the steepest drop. At borough level, house prices fluctuated between rises of over one per cent and drops of more than 20 per cent. Westminster saw the sharpest drop of 20.8 per cent, knocking almost £240,000 off the average house price. Kensington and Chelsea, while still the most expensive place in the entire UK to purchase property with an average house price of £1.2 million, saw prices drop 14.1 per cent.”
“House prices were down seven per cent year-on-year in Lambeth, taking £37,500 off house prices. Homes in Merton saw a £38,000 drop (-6.6 per cent) in value, while Lewisham had a £28,000 fall (-6.3 per cent) and Croydon £24,000 (-5.8 per cent).”
From Reuters. “Spain’s Santander will exit the mortgage business in Germany and cut around 500 jobs there by the end of 2026 as part of a process to concentrate on more profitable activities, a spokesperson for the lender told Reuters on Wednesday. Germany has been going through its worst real estate crisis in decades. After years of boom, mortgage lending slowed sharply in Germany after a rapid rise in interest rates to stamp out inflation caused potential homeowners to stay on the sidelines. In Germany, its biggest competitor Deutsche Bank has also been streamlining its mortgage business, a move that is reducing hundreds of jobs. Santander Consumer in Germany reported a decline of 41% in last years’ net profit to 264 million euros.”