A report from the Tampa Bay Times. “Owners of more than 1.5 million condominium units in Florida are bracing for rules going into effect this year. About 78% of condo units in Tampa Bay are 30 years or older, according to Zillow. ‘Unfortunately in these older buildings, many people’s perspective was that you only need to fix it when it’s broken,’ said Greg Main-Baillie, executive managing director for the Florida Development Services Group at Colliers who oversees construction projects for condos across the state. He noted that certain repairs, like concrete restoration, could end up costing tens of millions of dollars. If the board hasn’t saved enough to cover the bill, the cost will fall on the shoulders of condo owners. ‘It’s going to force people to decide whether they can afford to stay,’ Main-Baillie said. Larry Buckner, a Florida-based advisory manager for the housing research firm Zonda said though some individuals may end up selling their units at a loss, he doesn’t expect to see any widespread price drops or a ‘fire sale.’”
Newsweek on Florida. “A five-bedroom, six-and-a-half bath property only a few minutes away from former President Donald Trump’s Mar-a-Lago residency is on the market for less than it sold about a year ago. The listing on Zillow reveals that the property was last sold in September 2023 for $14 million. It was again listed for sale in January for $15.25 million. But as of June 26, the listing on the real estate platform showed that the price has been cut to $13.9 million. The Palm Beach market has seen some slowness over the last year. Single-family properties have seen prices plunge 25 percent in the first quarter of 2024 to $15.6 million from the same time a year ago.”
The Wall Street Journal. “Long a magnet for New Yorkers drawn to its schools, historic townhouses and proximity to Prospect Park, Park Slope is awash in ‘for sale’ signs. Having so many nearby homes on the market at the same time is unprecedented, local real-estate agents said, and it has led to a glut of luxury product in the area. Andrea Farrington, 62, and her husband, Dr. Louis Mudannayake, 63, purchased their house on Montgomery Place for $2.5 million in 2004 and watched neighborhood values rise. With their children out of the house, they listed the roughly 4,700-square-foot house for $9.75 million in March. Such a large home requires endless upkeep. ‘These big houses, they are just money pits, frankly,’ she said.”
The Seattle Times in Washington. “King County home prices dipped in June after hitting a record high a month earlier, a sign that the local housing market is already beginning to cool from its spring peak. Many people are facing ‘buyer fatigue,’ said Seattle Redfin agent Bliss Ong. ‘That’s really the factor, they just got frustrated again,’ she said. ‘There is no urgency. We have a lot of people looking but not feeling they have to pull the trigger.’ Meanwhile, as potential first-time buyers struggle with high costs, rent prices have started to level off. ”They have to really decide,’ Ong said, ‘Is this worth it for me to get into the market, when, in some cases, I’m going to be buying a house that’s not as nice as my rental?’”
Denver Gazette in Colorado. “For the first half of 2024, it seemed like the Denver area’s housing market was beginning to bounce back to its regular cycle despite higher interest rates. As sellers became more comfortable putting homes on the market, according to the June Market Trends report from the Denver Metro Association of Realtors, buyers are still taking their time. Because of that, the month was ‘unpredictable,’ DMAR said in a statement. In the June report, Libby Levinson-Katz, chair of the DMAR Market Trends Committee, said buyers and sellers have a different view of the state of the market. Buyers fear another 2008 crisis while sellers want the market to go back to 2021 heights. Both are misled, she added, rather the market is balancing from the influx of listings. Then there’s buyers who are still patiently waiting for interest rates to drop. Some homes may be on the market for days, Levinson-Kantz said, but many are sitting for weeks if not months and sellers may wait longer if they don’t make concessions. Active listings are up nearly 70% from June 2023, according to the report.”
From Lodi News. “If you think the local housing market is bad, a national real estate data analytics firm has put some numbers on it. A recently-published report says we live in the ‘riskiest’ housing market in the nation. Wow! ‘California has 6 of 10 ‘most vulnerable’ housing markets in the U.S., but San Joaquin County is the nation’s riskiest of the 590,” according to ATTOM Data Solutions. It says California’s high-risk counties are less-populated regions to the north (like where we live). ‘Their prices may have been pushed out of economic balance by remote workers seeking cheaper homes to live in away from the Bay Area job hubs,’ adding, ‘Local house hunters need 58% of (their) incomes to buy a $505,000 median-priced home.’ Remarkably, it says 6.7% of mortgages are underwater in San Joaquin County, and 0.11% of homes around here are somewhere in the foreclosure process. On top of all that it says the county has 7.2% unemployment. We’ve written in that past that Lodi is the second-poorest city in the county, second only to Stockton, based on per capita income.”
The Nebraska Examiner. “A mansion being built by a local businessman implicated in a multimillion-dollar bank fraud case has a new name and a record-high price. The partly finished luxury home and ‘barndominium’ being built by Aaron Marshbanks in east Lincoln is now called ‘The Plainsman’ and, when mostly finished, is being offered for sale at $6.469 million. That is the highest advertised selling price for a residence right now — by more than $1 million. The $6.469 million price is based on completing construction of the nearly 12,000-square-foot main house, both inside and out, which is expected to take a year.”
“Marshbanks, 45, died of a drug overdose in November 2022, leaving behind a wife and four children. Despite the discovery of a suspected suicide note, officials ruled that his cause of death was ‘undetermined.’ What was determined, in the weeks after his death, was that he had defrauded dozens of banks in Nebraska and Iowa out of well over $30 million, using counterfeit financial statements to obtain several unsecured operating loans of more than $2 million each. The revelations left bankers questioning how the ambitious young businessman, with ties to Lincoln’s fundamental Christian community and a charity devoted to attacking human trafficking, could have bamboozled them out of so much money. The City Bank & Trust of Lincoln, which had loaned him $2.5 million to build the structures, eventually won back ownership of the acreage. It was sold in September 2023 for $2 million.”
The Sahan Journal. “A planned Lakeville housing development aimed at Somali families is under investigation by both state and federal agencies, officials confirmed this week. In a legal motion filed Thursday, the Minnesota Attorney General’s Office says Nolosha Development has twice refused to provide investigatory documents. The motion alleges that not only is Nolosha collecting money from prospective buyers without a real estate license, but that the owners are spending money lavishly on salaries and other perks. Also Thursday, a U.S. Attorney’s Office spokeswoman confirmed that Nolosha is under federal investigation related to its attempt to sell lots on a property that is tied up in the federal Feeding Our Future food aid fraud.”
“A tipster earlier this month alerted the Department of Labor that 160 clients had paid Nolosha $25,000 to reserve a future home in Nolosha’s planned community in Lakeville, where the company aims to build 160 housing units, a mosque, a school, restaurants, and more. Nolosha Development does not own the 37-acre parcel, and lacks both a building license and a real estate license, according to state records. The Attorney General’s motion, filed by Assistant Attorneys General Mark Iris and Katherine Kelly, alleges that the project ‘is far from move-in ready.’ ‘The reality of the development project is bleak,’ the motion reads. The Attorney General’s motion alleges that Nolosha has raised $1 million, all from Somali families seeking a home, and is far short of the $3.4 million it will cost to buy the Lakeville parcel. That’s also a fraction of the full cost to develop Nolosha. No staffer working for the company has land development experience, according to the motion.”
Bisnow on Texas. “DFW apartment sales have hit a snag as the dreaded wall of supply descends on the Sun Belt. Nearly 40,000 units hit the DFW market over the last 12 months, marking a 50-year high in apartment deliveries and causing rents to decline by 4.2% on average, according to MRI ApartmentData. More than 32,000 units are expected to debut in DFW this year, the most of any major metro, according to Yardi Matrix. Distress is on the rise among value-add properties that were financed using short-term floating-rate debt during the early years of the pandemic. Many of those loans have now reached maturity, and refinancing at the current rate isn’t an option for owners who can no longer cover their monthly debt service, said Abbie Thomson, managing member and chief operating officer at Dallas-based Thomson Multifamily Group, which focuses mostly on the Class-B and C investment market. ‘Business plans built on those floating-rate debt products are no longer sustainable in the current market,’ she said. ‘They are being put in a position that they need to sell.’”
The Globe and Mail in Canada. “A surfeit of listings in many Toronto neighbourhoods has prompted an increasing number of real estate agents to resort to an unfamiliar strategy: they are discouraging homeowners from listing their homes for sale. As inventory in Rosedale soared in recent weeks, a cluster of properties sat unsold at that level. James Warren, real estate agent with Chestnut Park Real Estate Ltd., says he is advising homeowners to hold off in areas with abundant inventory except in cases where they need to list because of a job transfer, an estate sale or another pressing reason. ‘Unless I absolutely had to, I would wait until the fall,’ says Mr. Warren. ‘The audience isn’t listening right now. You can’t have seven or eight houses in Rosedale at $20-million-plus. Where are the buyers?’”
“Mr. Warren says homeowners who set an asking price that’s too rich to start with do themselves a disservice because the house soon appears stale and the buyers have more leverage. ‘Then if you are going to reduce, hold your breath,’ warns Mr. Warren. ‘Now you’ve brought it down 15 per cent and you’re going to have to sell 5 to 10 per cent below that.’”
Blog TO in Canada. “A home sold at a staggering $800,000 loss is just the latest example of a property in and around the GTA selling for much less than its original price tag. Located in Oshawa’s Eastdale neighbourhood, the custom-built home was originally sold in March 2022 for $2.55 million — at a time when cheaper borrowing rates resulted in heightened demand throughout the province’s real estate market, which, in turn, drove prices up. In April 2024, the home was put back on the market for $1.78 million but failed to attract any buyers. After its first failed attempt, the home was re-listed for $1.799 million and eventually sold for $1.75 million — exactly 800,000 less than it sold for just two years earlier. The home was reportedly listed as a power of sale, which differs from a regular home sale. The clause is usually written into a mortgage note that authorizes the mortgagee to sell their property in the event of default to repay the mortgage debt.”
CBC News in Canada. “An Ontario Superior Court justice has ordered four landlords to hand over control of their real estate empire after it was alleged they spent millions of dollars of investors’ money on a lavish lifestyle, let rental properties fall into ruin and continued borrowing funds as their business failed. The corporations have been under bankruptcy protection — shielding them from dozens of lawsuits — since January. But, through an investigation this spring, KSV alleged the landlords ‘diverted, misused or misappropriated funds that were borrowed from investors,’ according to the accounting firm’s report. Lawyers for KSV and hundreds of investors, who are owed around $144 million, said at a hearing last week they’d only support an extension of bankruptcy protection if KSV was allowed to take control.”
“In recent years, the landlords had borrowed tens of millions of dollars from investors in the form of first and second mortgages and unsecured promissory notes, largely facilitated by a Hamilton mortgage broker. The money was supposed to be used to buy Ontario properties to fix up and then rent out or sell at a higher price. Instead, millions of dollars were transferred to the landlords’ unrelated corporations and personal bank accounts and used for ‘extravagant’ expenses like private jets, luxury vacation homes, nightclub and strip club bills, a private chef, among other things, KSV’s report said.”
“Andrew Adams, a police officer who lives in Halton Hills, Ont., lent the landlords over half a million dollars for three properties, he said in an affidavit. As more information was coming out about the landlords’ business practices, Adams asked a family member to check on one of the houses in Sault Ste. Marie in May. He was under the impression some of his $200,000 had been used for renovations, he said. What that family member found was a vacant lot. The property had sat vacant for months and experienced two fires, leading to the city demolishing it last summer, said Adams. If not for his family member, ‘I would have remained unaware of the true circumstances surrounding the property,’ he said. Now the property is worth less than half of what he invested, or about $60,000, he said.”