A report from KVVU in Nevada. “Homeowners throughout the Las Vegas Valley in brand new homes say they’re dealing with ongoing problems that range from small to major. Doug and Sue Perns moved into their new home in September of 2021. The former Metro officer and teacher lived in Henderson for over 30 years. This is their retirement home. Three months living in their home they noticed a small crack above the kitchen counter. ‘So that was from mid-December until now and it’s approximately 35 feet if not more long,’ Doug Perns said. ‘We paid a lot of money for this house and it’s just very upsetting- we have yet to have a house warming party here because we’re embarrassed, we’re embarrassed to have people come into this house knowing what we paid and see a crack from the kitchen all the way to the family room.’”
The Mankato Free Press in Minnesota. “‘It’s definitely caused some people to pause a bit,’ says Habib Sadaka of CrossCountry Mortgage in Mankato. ‘But I do believe that the rise in rates is going to be temporary.’ That average home price in Mankato during October sales was $380,930, according to figures compiled by Sonja Zoet of The Zoet Group/True Real Estate. That’s down from a March high of $463,860. Even if one is stuck with a high mortgage interest rate, he believes today’s homebuyers should have the ability to refinance in the not-to-distant future. ‘Things are changing very rapidly,’ Sadaka said. ‘It’s definitely softening up a bit though.’”
KUTV in Utah. “‘Home prices along the Wasatch Front are falling as mortgage interest rates continue to rise. New data from the Salt Lake Board of Realtors show the median sales price for a single-family home in Salt Lake County was $590,000 during July, August, and September. That’s below the peak price of $637,000 that was recorded during April, May, and June. The challenging market was evident in the number of single-family home sales in Salt Lake County during the third quarter, which was down 30 percent compared to the previous year. Other counties along the Wasatch Front also saw declines in home sales.”
“‘Active listings are taking roughly a month to sell instead of a week. The good news for buyers is that sellers are offering more concessions. There are more houses to choose from in the process and it is much easier to get a home under contract,’ said Dejan Eskic, chief economist for the Salt Lake Board of Realtors. ‘Home buyers are also negotiating home repairs and asking sellers to pay for home warranties,’ the Salt Lake Board of Realtors said.”
The Business Times in Colorado. “Real estate activity continues to slow in Mesa County. Annette Young, the administrative coordinator at Heritage Title Co. who’s long tracked the market, said local trends are similar to what’s happening elsewhere. ‘I think it’s kind of expected when you see what’s going on at a national level.’ Property foreclosure activity continues to increase in Mesa County, Young said. Through the first 10 months of 2022, 208 foreclosure filings and 41 sales were reported. That contrasts with 22 filings and 18 sales for the same period in 2021. Foreclosure activity has increased in part because forbearance measures are no longer in place. But activity hasn’t yet reached a worrisome level, she said.”
The Baltimore Banner in Maryland. “ABC Capital, which has been selling distressed real estate in Baltimore to foreign and out-of-state investors, has been hit with three new federal lawsuits in Pennsylvania alleging they are running a Ponzi scheme. A fourth lawsuit was filed in Baltimore Circuit Court by an Oregon investor who helped ABC Capital fund purchases and says he was not paid back. ABC Capital, which since 2016 has sold investors on a ‘hands-off’ income-producing process in which the company and affiliates will acquire Baltimore properties and rehab and manage them as rental properties. But many say promised repairs didn’t take place, properties sit empty and guaranteed rent payments weren’t made.”
“One of the new federal lawsuits was brought by investor Ricardo Oved, who is said to be based in Miami and invested more than $3.3 million to purchase 25 properties, 18 of which are in Baltimore. Oved said he discovered last year that ABC had failed to make any renovations to 20 properties and ‘absconded’ with $1.24 million earmarked for such renovations. In another suit, the buyer said they spent $94,700 for the purchase and renovation of 1200 N. Milton Ave., but the title was never even transferred and the renovation has not taken place, according to the lawsuit and property records.”
Bisnow New York. “New York Attorney General Letitia James is taking action against a Brooklyn developer she says swindled millions from families by taking money for condominiums that don’t exist. Xi Hui ‘Steven’ Wu filed an offering plan for a 25-unit condo building in Bay Ridge, but the AG’s office said in a lawsuit Wu never put in the correct paperwork, meaning the property never achieved condo status with separate tax lots and deeds to be transferred over to buyers, The Real Deal reports. Wu still sold those nonexistent condos, mainly to Chinese immigrant families, some of whom put in their life savings. In total he took in some $5M from the sale and fake mortgage payments and building fees, per James’ office.”
“Those funds went into Wu’s personal expenses, rather than an escrow account. ‘Steven Wu took advantage of hardworking immigrants and sold them and their families a lie,’ said James. ‘He earned their trust as a pillar of the community only to exploit it and steal their life’s savings. These families were cheated out of their livelihoods, so we’re taking action to ensure they get their money back.’”
Bisnow Washington DC. “In times of turmoil, the Washington, D.C., office market has often counted on the federal government as a countercyclical force, increasing its footprint to accommodate massive spending packages. But despite the passage of three major spending bills over the last year and the potential political shakeup from next week’s midterm elections, experts don’t foresee the federal government growing its office footprint. The disconnect between spending and leasing could hardly come at a worse time for downtown D.C.”
“An estimated 30% of the total workforce in D.C., roughly 245,000 employees, work for the federal government, and most have their offices in the District, said Transwestern Managing Director Lucy Kitchin, who leads the firm’s D.C.-based Government Services group. ‘Anyone who deals with federal real estate or pays attention to it is hearing the constant refrain of reduction, reduction, reduction,’ Kitchin said. ‘There’s a sense there’s been a disproportionate amount of federally leased space empty in D.C. versus the rest of the market.’”
From CNBC. “According to Elizabeth Ptacek, senior director of market analytics at commercial real estate information and analytics company CoStar, there is currently 232 million square feet of surplus commercial real estate up for sub-leasing. To put those numbers into perspective, Amazon’s HQ2 is 8 million square feet. Even more telling, the 232 million square feet is twice the level of surplus from before the pandemic.”
“The only property owners selling today are either desperate for cash or they are sitting on trophy assets. And those trophy assets are few and far between. Well-leased medical offices and laboratories with high credit score tenants and secure income streams are still attracting plenty of attention from investors, according to CoStar, but that’s about it. Any corporation that has abandoned a satellite office that used to be key for its in-office staff, is sitting on a property that Ptacek says, ‘no one will buy for anything less than a substantial discount.’”
“Uncertainty is the ultimate deal killer, she said. No one wants to buy assets with the risk of no demand barring rent cuts of 50%. It’s difficult right now, she said, for either buyer or seller to reach what would be defined as a ‘reasonable price.’ Companies should expect the situation may be even worse a year from now. ‘It’s probably a fair assumption that this is not going to be a lot better in a year, in terms of demand,’ she said. ‘There could be another leg down in transactions.’ ‘As loans come due and they have difficulty, it’s refinance or sell,’ she said. And more borrowers won’t be able to refinance, and the wave of distressed sales will ensue.”
From CBC News in Canada. “After drastic influxes in the market during the worst of the pandemic, the real estate market in Waterloo region is “going back into a more balanced state” mainly due to rising interest rates, says a local expert. ‘I would regard it as balanced,’ said Paul Anglin, a real estate professor at the University of Guelph. ‘It’s not favoring the sellers as was true a year ago.’ The sales price on average for a single family home in October of this year was about $860,500, which is down by about 27 per cent from the height of the market back in February. Condos have seen a drop too but not as significant — last month the sales average was about $488,200, down 14.5 per cent from February.”
“Anglin offers advice to both buyers and sellers: ‘For now, buyers and sellers have to make their best decision given the available information,’ he said. ‘For sellers, there is always the possibility of regret but, again, if you like where you live now, then enjoy living there. In both cases, you need to accept the risk, since life offers few guarantees.’”
Frontier Myanmar. “When Ma Kyi Kyi Lwin inherited K50 million from her late parents last year, she debated whether to invest it or deposit it in her bank account, but amid the economic uncertainty of post-coup Myanmar, the latter option made her uneasy. She decided her safest option was to invest in real estate. ‘Investing in houses and land is more secure than putting money in a bank account, so I bought an apartment in North Dagon,’ she said. By then, real estate prices were already surging. The 400 square foot fifth-floor apartment she bought in a housing estate in the township would have sold for about K16 million in 2020, Kyi Kyi Lwin said, but she bought it for K26 million.”
“‘Prices are going up everywhere. The demand is so high,’ said Ma Zune Pwint*, a real estate agent in Yangon’s downtown Lanmadaw Township. She said a 15-by-60-foot apartment in Lanmadaw valued at about K10 million before the coup would fetch nearly K30 million today. ‘Prices have risen at least two-fold, it’s abnormal.’”
“Ko Hein, the real estate agent in Shwepyithar, said the increase in the number of brokers, and more speculative practices, are pushing up prices even more. For example, he said a group of brokers bought a house in Shwepyithar in September for K35 million and sold it a week later for K45 million. ‘I fear the prices,’ Ko Hein said. He worries the bubble could burst and prices could collapse, leaving ordinary people who invested in real estate to avoid losing their life’s savings with less valuable plots of land.”
“Kyaw Min, the former bank official, said people putting money away in real estate can also have knock-on effects elsewhere in the economy. ‘When the money doesn’t flow to the bank, it will not flow to the businesses. So small and medium enterprises find it hard to get money, which slows down the country’s economic development,’ he said. Kyaw Min said eventually prices will peak and fall back down again. ‘At that point, people who bought at high prices will suffer and lose their money,’ he said, adding that only ‘speculators and brokers’ will benefit.”
Australia Women‘s Weekly. “Fans and contestants alike were shocked by The Block 2022 auction results. But no one was more furious than host Scott Cam who revealed he almost lost his voice from ‘screaming’ at the real estate agents.The Block host revealed on the Today show that he ‘wore’ out his voice from yelling. ‘I did a lot of shouting at real estate agents yesterday; I got a little bit cranky at times,’ he said. ‘I do shout at them down the phone – I have to ring them because they’re miles away at the houses, and I’m screaming at them.’”
“Meanwhile Tom and Sarah-Jane were extremely emotional after their shocking profit. ‘I’m not even miserable. I’m gobsmacked,’ Tom said. ‘I didn’t expect to make a sh-tload of money, but I didn’t expect to come out at a massive loss too. It’s the way the cookie crumbles. I can’t change it. Just go to roll with it.’ Following the auction, the pair revealed they would have to sell their $80,000 Ford Ranger they won during Landscape Week after spending ‘more than $20,000 of our savings’ to participate in the renovation series.”
Stuff New Zealand. “You don’t have to look far at the moment for stories of recent first-home buyers with major financial worries. On Reddit at the weekend, one buyer who purchased in 2021 said they were worried about what might lie ahead for their home loan of $1.4 million. Even though they had a household income of $250,000, the prospect of their 3.45% interest rate turning into 7% or more was a scary one. ‘As far as I can tell, [I] am not in a position to sell without still owing the bank,’ the person wrote.”
“‘While [I] know am in a privileged position it is taking a huge toll on my mental health, especially seeing other fellow FHB and close friends cheer the property price falls on. Obviously FOMO’d in and wearing the consequences of that, it feels like a weekly drip of bad news on bad news.’”
“Mortgage adviser Glen McLeod says there’s no magic solution, so the first thing most people need to do is work out what their repayments are going to increase to when they refix, and how their household budgets could be tweaked to cope with that. ‘At the end of the day I think we’re going to see a lot of this over the next couple of years – it’ll only get worse before it gets better.’”