A report from WTOP. “Bright MLS reports new listings of condos and co-ops in the D.C. metro in October were up 49.2% from a year ago, a 10-year high for the second month straight. That does not mean there is a glut of condos and co-ops languishing on the market.”
The Washington Post. “Anybody with even the flimsiest grasp on the concept of supply and demand could tell you what was coming: All over the city, a glut of rentals are sitting pretty and empty, their stainless-steel appliances gleaming for no one. D.C. luxury rentals, which make up about 89 percent of the city’s offerings, have taken a major hit, according to data from Delta Associates, a Mid-Atlantic commercial real estate research firm: From September 2019 to September 2020, the rate of stabilized vacancies — apartments that should be occupied but aren’t — went from 4.4 to 7.8 percent.”
“Rentals aren’t moving and rents are falling. According to Delta, the three submarkets in which Class A rents have fallen the most during the pandemic are the area that includes Dupont Circle, downtown, Mount Vernon Triangle and a bit of Foggy Bottom and Logan Circle, which saw rents fall 12.7 percent since September 2019; Capitol Hill and the Southwest Riverfront, where rents dropped 12 percent; and upper Georgia Avenue, where rents are down by 11.7 percent. Overall, D.C. rents for high-rise luxury units decreased by 10.7 percent from September 2019 to September 2020.”
“Philippe Lanier is a principal at EastBanc, whose real estate development branch is behind a handful of luxury D.C. buildings. The Residences at Eastern Market, where, Lanier says, ‘we put in a lot of three-bedrooms’ that they’re having trouble filling. He says that other unit classes are 85 to 90 percent occupied, but the large apartments are ‘where we’re feeling the vacancies.’”
From Curbed New York. “Year-over-year rents in October for a studio in Manhattan are down a record 21.6 percent when you factor in concessions, according to appraisal firm Miller Samuel. For one bedrooms, the drop is a record 19.1 percent, and two bedrooms are down a record 12.5 percent. Landlords gave concessions — a rent drop, a free month’s rent, etc. — on a whopping 60.4 percent of new Manhattan leases, up from 36.9 percent a year ago.”
“The free-falling rents have caught the attention of tenants, as leasing activity in Manhattan was up by a third in October. (Similar, albeit less dramatic, trends are taking place in Brooklyn as well.) Things have not been this good for renters in Manhattan since the financial crisis in 2008 — and the decline shows no signs of stopping.”
From Mansion Global on New York. “The seller of a penthouse on Billionaires’ Row, home to some of Manhattan’s most outrageously luxurious and pricey properties, is trying a new tactic in a slow market: He is putting his unit on the auction block next month. The auction is slated to take place online in December. There is no reserve price, although the seller can back out 72 hours before the auction if he is dissatisfied with the initial interest levels and the pre-bidding.”
“Chad Roffers, chairman of Concierge, said his company is seeing more sellers look to the auction market in New York amid an oversupply of inventory at high-end price points in Manhattan. He said he believes auctions are a good option when the market is ‘inefficient’ and when sellers and buyers are at odds over values. Luxury home sales in Manhattan were down by almost 47% in the third quarter of 2020, according to a report by Douglas Elliman.”
The Commercial Observer. “The Beverly Hills Saks Fifth Avenue department store at 9600 Wilshire Boulevard is set to be sold at foreclosure, Commercial Observer has learned. Wilmington Trust filed a lawsuit earlier this year against the property owners — a joint venture of Hudson’s Bay, which is Saks Fifth’s parent company, and Simon Property Group — for missed mortgage payments. Marketing materials obtained by CO show Wilmington tapped Eastdil Secured to solicit offers for the asset.”
“In a statement sent to CO, a spokesperson for the joint venture (HBS) said ‘this simply a next step by the lenders to exert pressure on (the owner of the properties).’ ‘HBS is disappointed that in the context of a global health crisis the lenders would choose litigation over cooperation,’ the statement read. ‘With that said, HBS remains committed to resolving issues with the lenders in an amicable way.’”
“Many CMBS loans have been in hot water due to the struggles over coronavirus shutdowns. About seven percent of the CMBS world — good for more than $40 billion in outstanding debt — was transferred to special servicing in the first half of this year.”
The San Francisco Chronicle in California. “Truckee resident Scott Ehlert was plotting a return to San Francisco, scouring the internet for spacious live-work lofts on Potrero Hill and in Dogpatch, places that would have been out of his price range were it not for the mass exodus of people whose jobs dried up because of the pandemic. Suddenly, lofts that were listed for $5,000 a month before the coronavirus hit were going for $3,200 or $3,500 and rents were continuing to tumble.”
“Ehlert has become increasingly optimistic. Every time he checks real estate listings rents are lower. ‘We left San Francisco in 2009 and we have been chasing that urban, walkable feel ever since,’ said Ehlert. ‘Everything is negotiable in San Francisco right now.’”
“Meanwhile the city’s workforce seems likely to shrink. Data from the jobs site Indeed.com found postings in San Francisco dropped by 38.5% from last year, more than New York City, which decreased 36.4%. From April to June, the city’s sales tax revenue dropped to $30.8 million, down 43% from the previous year, according to the city. Restaurant and bar sales were down 65% as indoor dining was prohibited, while food and drug store sales were down 8%.”
From CBS Boston in Massachusetts. “Former Harvard fencing coach Peter Brand and a wealthy Maryland businessman were arrested Monday on accusations that Brand accepted $1.5 million in bribes in exchange for helping the businessman get his two sons into Harvard. Federal prosecutors said Brand, 67, conspired with Jie Zhao, 61, a Maryland businessman, to get Zhao’s two sons into Harvard by recruiting them to join the fencing team in exchange for money.”
“Back in 2016, Brand sold his home in Needham for almost twice what a tax document said it was worth. Zhao bought Brand’s home for $989,500, according to the deed. Questions about the relationship between Brand and Zhao first surfaced last year when The Globe reported on the sale of Brand’s home. Zhao never lived in the house and sold it for a steep loss 17 months later, the newspaper reported.”
From CBS Denver in Colorado. “Michael Scott Leslie, 57, of Boulder, was sentenced earlier this month to five years in federal prison for engineering a scheme that bilked a single bank out of nearly $32 million in fake residential mortgage loans. Leslie, according to documents in the plea agreement with federal prosecutors, sold 144 fake loans valued at $31,908,806.88 to an FDIC-insured bank in Texas over the course of two years starting in October 2015.”
“Leslie ‘closed’ the fake mortgages using the names of real people obtained by his brokerage, Montage Mortgage. Some of those names were those of clients involved in legitimate business dealings with Montage. Others belonged to people who had asked Leslie’s company to check their credit score in hopes of potential refinancing. According to case documents, Leslie forged their signatures.”
“Prosecutors said the Leslie’s alleged real estate transactions never legally occurred – they were no closings, no liens were ever recorded, and no filings were made in the respective counties in which the properties were located. They described the complex flow of money as ‘Ponzi-like.’”
From Now Toronto in Canada. “The Toronto real estate market may finally cool following month-after-month of unseasonably frantic behaviour. Toronto area realtors Meray Mansour and Odeen Eccleston feel that now is a good time to start looking for real estate deals. Toronto prices continued to rise through October despite the pandemic, which is an indication of the demand. But after months and months of hustling between realtors, buyers and sellers, they say exhaustion is setting in.”
“‘People are getting what I might call a little bit of Toronto real estate fatigue,’ says Eccleston, explaining that it’s a good time for buyers to get a deal from sellers who want to offload remaining listings. ‘It’s more difficult to put deals together because of the collective anxiety,’ explains Mansour, who says she’s working 10 times harder because pandemic fatigue is taking its toll on transactions.”
“‘There are announcements every week from the government telling us numbers are up, numbers are down, we’re locking down, we’re opening up,’ says Mansour, adding the emotional toll COVID-19 is taking on people affects real estate decisions. Nowadays, realtors feel more like therapists. ‘The levels of anxiety are high. People are drinking a lot more. We don’t have the normal things that we do every day, like going to the gym or being with friends and family. There’s a lot more isolation. All that stuff affects us psychologically. And most people are not even aware of that. It’s kind of like this underlying factor.’”
“‘Sometimes when people are anxious, they make bad decisions,’ she adds. ‘I’ve had to really put on my therapist hat and be like, ‘OK, is this something you really need to do or is this something you’re doing because of your anxiety?’”
From Yahoo Canada. “The lowest housing inventory in Fort McMurray in 13 years is a sign the market is stabilizing and that the plummeting home values of the last decade may be coming to an end, realtors say. ‘Homeowners have suffered greatly,’ says Tom Albrecht, a realtor with RE/MAX First in Fort McMurray and Calgary. ‘People either can’t or won’t sell.’”
“For many people the value of their home is less than their mortgage, forcing potential sellers to keep their property off the market, he said. Others are holding off on selling, because they’re optimistic that prices will go back up. Albrecht said he has a list of a few hundred people who looked into selling their homes in the last six years, who wanted to sell their homes but changed their minds after an evaluation. ‘The big picture story is that we had high sales [in 2014] and now we have low sales. It has not recovered.’”
“Katherine Barbour bought a three-bedroom home in 2014 for $610,000. Her most recent valuation was $433,000. ‘It feels like sick to your stomach,’ Barbour said. At some point she would like to get a bigger home to make room for her growing family, but she would need the market to turn around, she said. ‘We may very well be here for 10 more years, because we can’t afford to sell.’”
“Barbour and her husband also own a mobile home, which they’ve tried selling on three occasions, but weren’t able to without losing money. Melanie Galea, real estate agent with Re/Max, has also spoken to many clients who can’t afford to sell because their home valuation is so low. ‘It’s a common conversation,’ Galea said. But ‘there’s no trying in this market. Buyers are not overpaying.’”
“In 2014 the average single-family home sold for $737,000. In 2020, the average home is selling for $501,000. Ann-Marie Lurie, chief economist for the Alberta Real Estate Association, said the low inventory is good news for Fort McMurray’s struggling housing market. ‘That’s going to support some at least modest improvement for prices if that continues,’ Lurie said. ‘This market has struggled with too much supply relative to the demand for quite some time.’”