It’s Friday desk clearing time for this blogger. “Rupert Murdoch has slashed the price of his penthouse apartment in New York by more than half after struggling to find a buyer. The media mogul is attempting to drum up interest having first put the 7,000 sq ft apartment up for sale in 2022 with a price tag of $62m (£49m). Located in the Flatiron District of Manhattan, the triplex penthouse has been on and off the market ever since but has recently seen a sharp reduction in its asking price. It was first lowered to $38.5m in April, although Mr Murdoch has shaved off a further $10m – taking it down to $28.5m and less than half its initial asking price. Kyle Blackmon, an agent at real estate firm Compass, which is handling the sale, said , ‘My client is a realist, and he is very astute about how markets function.’”
“Single-family homes for sale in Charlotte County experienced more price reductions in May. Meanwhile, condominium and townhome prices decreased amid rising HOAs based on assessments from hurricane damage coupled with an inventory buildup. There were plenty of cash buyers for condos and townhomes in May. There were price reductions, and sales reflected that. The median sale price was $265,000 in May, down 18.5% year over year. While a few years ago buyers were engaged in bidding wars in Charlotte County, now the reverse has occurred. ‘What a ride this profession is,’ said Leanne Walker, president of Realtors of Punta Gorda-Port Charlotte-North Port-DeSoto Inc.”
“A new state law is making sure condominiums across Florida are more resilient. But complying with the legislation is pricing many condo owners out of their homes. Many condo owners are unable to pay for the large assessment fees to cover the cost of repairs. ‘I was shocked because I didn’t think it was going to be that high,’ Rufina Cappelli said. ‘My condo has been kicking the can down the road for years. Florida condos have allowed their reserves to go way down.’ ‘They have to find a way to find the money,’ said Mike Finn, an attorney based in St. Petersburg. ‘The board can and will impose a lein on the condo and ultimately sell it in foreclosure and the condo owner could lose their home.’”
“Kelly Schultz is still shocked over what her neighbor is building next door. The Phoenix mom and nurse practitioner has spent the past week watching helplessly as a new guest house goes up on the other side of her back wall, overlooking her swimming pool. Back in September, the Phoenix City Council passed a new law that makes it easier for homeowners to build a guest house or casita in their backyard. ‘I cried, and I cried, and I cried some more,’ said Schultz. ‘It was devastation, I think is a good term.’ Not only do they have to look at the giant structure every day and worry about strangers looking into their yard, they now have concerns about their property value going down.”
“A Las Vegas man is battling his homeowner’s association ove. r something he says is beyond his control: careless drivers who put holes in his back wall. ‘This used to look really nice,’ says Roger Morse as he points to his block wall. ‘And then, when someone backed a truck into it, it pops the bricks out.’ But it’s not his side of the fence his community HOA is worried about. It’s the cul-de-sac behind him, a common wall that according to Terra West Management, Morse is responsible for fixing. According to the paperwork he’s received in the mail, he still owes back fines. ‘Right now, it’s $1,100 and they’re charging me $50 every single week that I don’t pay,’ says Morse. ‘Even though the wall is fixed. If you look around, there’s trash, there’s graffiti on all the boxes in the neighborhood and it’s been there for weeks.’ For now, he has no plans to pay his outstanding fines. ‘I will never buy a house with an HOA again,’ says Morse.”
“For years, both locals and tourists see those struggling with addiction openly use fentanyl in places like 3rd and Pike, even Pine Street. Our crews went to the area Thursday afternoon and saw much of the same. And those who frequent the area tell KIRO7 it’s only gotten worse. ‘We have foil all over the ground. They’re either smoking it, blowing it….they don’t care what they’re doing,’ one woman told KIRO7. The City Attorney’s Office says Seattle Police has referred 226 cases to their office, but they have declined 112 due to a number of reasons like proof reasons. So far, they have filed 61 of those cases. With all that is being done to address the problem, some people feel it isn’t enough. ‘I’m getting to the point where I just want to leave the state and move somewhere else! And I shouldn’t want to leave my home!’ One woman said.”
“Office owners are in a whirlwind of trouble in the nation’s capital. Properties are hitting the foreclosure auction block weekly, while others are selling for a fraction of what they were worth just a few years ago, with both banks and owners taking massive losses. Developers have already begun converting some office buildings to residential, but Transwestern Development Co. regional partner Toby Millman said those properties have been the ‘low-hanging fruit,’ and strategy can’t solve the whole problem. ‘This next phase is going to be much heavier,’ Millman said. ‘And I see that as being a more wholesale, massive redevelopment of downtown. And I mean literally tearing down whole blocks of old office buildings.’ Federal agencies were only using 12% of their federal headquarters buildings on average, the PBRB found in a study. ‘We’ve seen the values of office buildings in D.C. fall by almost 50% on average,’ said Carr Properties CEO Oliver Carr. ‘Half the buildings in this market, at least, are over-leveraged. So it’s a pretty dire situation.’”
“The Troy, Michigan, property at the center of a federal investigation just sold in a foreclosure auction for $21 million. Boruch Drillman and Aron Puretz bought the vanilla office complex outside of Detroit for $42.7 million in 2020, but presented a fake purchase price to its lender for $70 million. The lender used that inflated price to provide Drillman and his co-conspirators with a $45 million loan, a larger loan than they would otherwise have received. Once Drillman pleaded guilty, the loan was sent to special servicing. The Department of Justice is pursuing cases throughout the country where property owners allegedly defrauded lenders or Freddie Mac and Fannie Mae. In many cases, the owners ‘flipped’ the property to a related party so they were able to obtain a larger loan from the lender. In essence, the scheme allows property owners to buy properties without putting any equity in the deal.”
“On January 3 of this year, the Weingart Center, co-applicant with the City of Los Angeles for Homekey funds, paid $27.3M for a property at 3340 Shelby. An exclusive report by the Current showed that was $16.1 million more than the property had sold for just 12 days earlier. BBG, a national appraisal firm with offices in Los Angeles, was commissioned by Weingart to appraise the property and had turned in a $27.3 million valuation to support the elevated price Weingart paid for the property. BBG, it turns out, is under investigation by Fanny Mae and Freddy Mac for mortgage fraud with allegations that the firm demonstrated a pattern of inflating values in appraisals it had submitted.”
“BBG, known as one of the ‘Big Five’ national commercial real estate valuation firms, boasts 4,500 clients and maintains 50 offices nationwide. The nationwide probe focuses on brokers, investors, and title insurance companies linked to potential mortgage fraud schemes. These schemes typically involve inflating property valuations to secure larger loans, which are then sold to Freddie or Fannie. The mortgage giants have stopped accepting loans with valuations underpinned by BBG appraisals as part of the widening investigation into BBG’s business practices.Current showed the BBG appraisal to another appraisal expert who characterized the BBG appraisal as ‘circular’ saying, ‘Basically, the appraisal argues the price paid by LA for the property should go up because LA is also paying for the ongoing operating costs of the property.’”
“It was around 1 a.m. when Alyssa Provencher called Sault Ste. Marie Fire Services after noticing flames and smoke rolling out of 108 Albert Street East, a two-storey home in the city’s downtown core that has sat vacant since it was purchased by an out-of-town landlord in 2021. Although she has erected a tall fence in a bid to keep intruders out of her backyard, she’s still had to deal with squatters and ‘addicts’ next door hurling syringes over her fence. There’s seemingly ‘nothing preventing’ squatters from taking over vacant properties in the Sault. And with all of the open drug use in her neighbourhood, she’s only left to wonder what can be done for folks who live downtown. ‘I can’t even sell my house,’ said Provencher. ‘Who wants to live beside this?’”
“This Cambridge, Ont. home recently sold at a significant loss, and is one of many properties in Ontario that failed to sell multiple times even with hefty discounts. The 3,300-square-foot residence was first sold in February 2022 for $2,275,000, at a time when cheaper borrowing rates led to skyrocketing prices and heightened demand throughout the province’s real estate market. Just a few months later, the home was put back on the market for just shy of $1.5 million. Even with this significant discount, the home failed to attract any buyers, and was subsequently taken off the market. Finally, the home was sold for $1.45 million earlier this month — representing a staggering $825k loss when compared to its selling price back in 2022.”
“It’s worth mentioning that several properties throughout Ontario have sold at significant losses in 2024. In one example, a six-bedroom Brampton home sold at a significant loss of $600,000 in January, while another 11-bedroom home in York University Village sold at a $400,000 loss in May.”
“A lending-rate cut that was expected to stir Canada’s housing market into action has led to anything but: Inventory of new homes for sale went up in May, but buyers weren’t budging. And after the newest inflation report darkened hopes for another cut in July, buyers are feeling even more emboldened – some offering lowball ‘stink bids’ in hopes of catching frustrated sellers willing to move on. I asked The Globe’s veteran real estate reporter and columnist Carolyn Ireland to walk us through the stalemate. There seem to be For Sale signs everywhere. Don’t these sellers see that? Homeowners who want to fund their retirement by downsizing from a large house have been holding out for an influx of buyers, who may in turn push prices higher. So, while inventory stood 83 per cent higher in May compared with the same month last year, agents predict that even more listings will stream on as rates drop. ‘It’s the lemmings,’ one agent quipped. ‘They’re all running off the edge of the cliff.’”
“Melbourne’s lacklustre property market is taking its toll on other regions in Victoria, with the knock-on effect slashing median house prices by nearly 20 per cent in some cases. Domain data shows that in the Surf Coast-Bellarine Peninsula region – about 90 minutes from Melbourne’s CBD – the median house price has fallen 15.5 per cent to $895,750 in the past year. In that region, Ocean Grove has lost its million-dollar median, with prices down 16.2 per cent to $970,000, and while Angelsea maintained its million-dollar median, it has still recorded a drop of 18.1 per cent over the year, to $1.475 million. ‘What happens in the bigger city definitely affects our region and takes its toll,’ says Ocean Grove real estate agent Toby Lee of Bellarine Property. ‘We reached [the price] peak in 2022 and there’s been a 20 per cent drop since then. Once upon a time, our average sale price was $1.1 million and now it’s about $980,000. It’s a fair drop … If you purchased in that peak market and were to put your house on the market now, you’re probably not going to recoup all of the costs.’”
“Ratings agencies S&P Global and Moody’s drew fire at a US congressional hearing on Wednesday for failing to reflect the risk of a ‘multi-trillion-dollar time bomb’ that China’s local government financing vehicles pose for global financial markets. These firms borrow on behalf of provinces and municipalities to finance roads, ports, and other infrastructure projects, using leases on land controlled by the government authorities as collateral, said California Democrat Katie Porter. This was a risky proposition, she added, given that China’s property prices have been stuck in a steep decline. With property built on the leased land falling in value, Porter explained, the situation was comparable to the global financial crisis of 2007-2008, which was sparked when the value of debt backed by subprime mortgages and other risky assets collapsed.”
“‘Once this batch of long-term urban leases … expires, which will start in the next five years, there’ll be a glut and leases won’t be as valuable,’ the congresswoman said. ‘That will cripple the bond market.’ Mary Kissel, an adviser to former US secretary of state Mike Pompeo during the Donald Trump administration, lauded Porter’s analysis as ‘the first time I’ve seen Congress take a deep dive like this. You mentioned the rating agencies and the triple-A ratings [that they give to Chinese debt],’ said Kissel, addressing Porter. ‘Congress could act to break up the duopoly of S&P and Moody’s and force American investors to do their own due diligence and not outsource their due diligence to rating agents or rating agencies.’”
“After congratulating Porter for her ‘deep dive on what’s happening in the Chinese economy,’ former World Bank representative Erik Bethel said: ‘A lot of these bonds are being sold globally and internationally, and so I think we should be aware that there’s a ticking time bomb.’ Pimco, a global investment management firm, estimated last year that Chinese LGFV debt quadrupled to 55 trillion yuan [US$7.6 trillion] in 2022 from 13.5 trillion yuan in 2012.”