It’s Friday desk clearing time for this blogger. “Many Southwest Florida condo owners are in trouble financially as they face thousands of dollars in special assessments. There is a rush of people putting their condos up for sale, and buyers are shying away. North Fort Myers residents in the Foxmoor Lakes neighborhood are seeing special assessments added to their already high-priced insurance. Kristen Moos and her husband are retired and face a special assessment of $2,450, which is due in August. She and many of her neighbors are scrambling to come up with the extra cash. ‘It’s very difficult because we didn’t budget for this. We just paid at the beginning of the year, $2,000 for flood insurance … and now we’re hit with this assessment,’ Moos said.”
“According to realtor listings, more than 6,500 condos are currently on the market in just Lee and Collier counties, and more are being added daily. ‘I hear from everybody. ‘I can’t afford it. I’m not going to be able to afford it in another year, and what happens if we get hit again,’ Moos said. A condo in her neighborhood has been on the market for more than six months, and the owner has been forced to lower the price to below $180,000. Real estate agent Sue Christiano of Engel & Volkers Realty in Fort Myers points out a lot of communities have had assessments. ‘People have become very nervous about the fact they’re buying a condo and getting hit with another assessment, and there are pending assessments, and sometimes they go to the new buyer,’” Christiano said. Potentially forcing more people to try and sell in a market that’s become overly saturated.”
“The owner of Le Penthouse, once the most expensive apartment listed in New York City, put it into bankruptcy this week. Yitzchak Tessler made the last-minute move to avoid foreclosure after failing to sell the unit and several others in his ambitious condominium project at 172 Madison Avenue. Tessler’s filing Tuesday came five minutes before a scheduled foreclosure sale. ‘These are good, valuable units, and we’re not just going to let them go in a fire sale,’ the lawyer said. It is clear, however, that Tessler greatly overestimated the market for luxury Midtown condos. The project at 172 Madison began in 2015, around the peak of a luxury condo boom in Manhattan, and sales launched that year. But the boom turned into a glut as the decade wound down, and selling overpriced, unfinished units in Midtown became increasingly difficult.”
“DeKalb County police say the new squatter law signed by Gov. Brian Kemp is still under review by their legal department and not being implemented. The Squatter Reform Act immediately became law when Kemp signed the bill in April, but many jurisdictions are not yet enforcing it. The alleged squatter in Michael Holmes’ DeKalb County home has filed more than 30 motions and counting in civil eviction court. ‘He didn’t pass the law exam, but he knows a lot about the law,’ Holmes said. The alleged squatter represented himself in a Dekalb County courtroom this week. The eviction battle has stretched on nearly a year now. ‘At this point, I am about to lose everything based on his shenanigans,’ Holmes said.”
“The co-owner of a Newport Beach-based investment firm who bilked investors out of nearly $14 million through bogus real estate deals will walk free without a day in prison. Louis Zimmerle, 64, a co-owner of BNZ Capital, was sentenced to five years probation after pleading guilty last fall of one count of wire fraud in connection to the real estate scheme, the Orange County Register reported. Federal investigators said Zimmerle’s $13.8 million scheme had promised investors returns of up to 10 percent for money they sank into what Zimmerle and co-conspirator Brett Barber, of Costa Mesa, said were real estate projects they bought and sold. Except the projects did not exist.”
“BNZ Capital ‘did not take any substantial steps to develop parcels, nor did BNZ flip real estate for a profit,’ according to the U.S. Attorney’s Office for the Central District of California. ‘Rather, BNZ primarily used investor funds to pay Barber, Zimmerle and others associated with the scheme, including purchasing residences where Barber and Zimmerle lived,’ officials said in a statement. ‘Some of the investors’ money was used to repay earlier investors.’”
“The long-delayed spring real estate market in Toronto saw sparks of life in late May as some buyers attempted to get in ahead of a potential summer revival. Pritesh Parekh, real estate agent with Century 21 Legacy Ltd., says the largest cadre of buyers remained in wait-and-see mode leading up to the Bank of Canada’s policy meeting this week. ‘We saw many, many houses that were set up for an offer date and just not selling,’ he says. But Mr. Parekh cautions that not all sellers are motivated to wrangle on price. Many hold out for a predetermined number that they won’t go below. ‘That’s not realistic,’ he says, under current market conditions, but some wait for an improvement. ‘They will sit on it until that happens.’”
“Elli Davis, real estate agent with Sotheby’s International Realty Canada, works with many downsizers who are selling or considering selling larger homes. With a higher level of inventory, she says, buyers are feeling less urgency. Many are willing to move forward, she says, but not if they believe the price is inflated. ‘The owners have to face reality that the prices might not be what they thought they were,’ says Ms. Davis. ‘Usually price is the answer.’”
“John Lusink, president of Right at Home Realty and Property.ca, is closely watching the balance between supply and demand. At his firm, with branches in many Ontario cities, listings in the final week of May stood 67-per-cent higher than in May of 2022 and 50-per-cent higher than the same month last year. ‘There’s no arguing that we’ve seen a dramatic increase in supply,’ he says. Sales, meanwhile, are down sharply from this time last year. Prices have tumbled farther in the smaller markets that saw a strong run-up during the low-interest era of the pandemic. Cobourg, Port Hope, Cambridge and Peterborough are among the Ontario towns and cities that have seen average prices tumble from their peak in the first quarter of 2022. ‘They’re just coming back to reality,’ Mr. Lusink says.”
“As house prices plunge across much of Europe, Spain’s property market is experiencing a mini-boom. Property prices grew by a respectable 4.3pc in the final quarter of 2023, according to statistics body Eurostat. By contrast, residential property prices in the EU fell by 0.3pc in 2023 and 1.1pc in the eurozone. Northern Europe has been particularly hard-hit. In Germany and Luxembourg, house prices collapsed by 8.4pc and 9.1pc respectively. Prices in Denmark fell by 5.6pc, while Britain saw a modest 1.4pc dip. Mark Stücklin, head of data company Spanish Property Insight, said the market is experiencing a ‘mini-boom,’ despite an apparently hostile economic environment. He added: ‘Demand has been very strong. You look around at Germany or Sweden and it’s not the same story.’”
“Data from CoreLogic showed a slowdown in Auckland house prices for a second month. Over time, an oversupply in a relative sense would improve affordability, Infometrics chief executive Brad Olsen said. ‘Unless you’re someone who’s built a stackload of houses and wants to keep them so you can count them every morning, you want to get some pay off so you’ll eventually drop the price to generate a sale.’ He said the market had been through a lot of changes: ‘At one point you would have bought a cardboard box if it was on a decent bit of land and paid a couple of million for it. Now it’s competitive for even getting a sale. Interest rates are a big part of that.’”
“A top Aussie economist has warned the Reserve Bank (RBA) is risking the country falling into an ‘entrenched period of weakness’ and ‘entrenched higher employment’ by not cutting interest rates. The cash rate is currently at a 12-year high, with many mortgage holders desperate for some repayment relief. ‘What I’m talking about is the RBA trimming rates two, three, four times over the course of six, nine, 12 months to take some of the heat off the household sector, which is clearly under significant downward pressure,’ Economist Stephen Koukoulas said.”
“Earlier this week, RBA governor Michele Bullock issued a word of warning to Aussies hoping for an interest rate cut, saying nothing was being ruled out. Finance expert David Koch said Bullock was using a ‘carrot-and-stick strategy’ on Aussies and if ‘we don’t toe the line then the stick comes out.’ ‘It doesn’t get much clearer than that. Think the infamous soup nazi in the Seinfeld TV series: no rate cuts for you!’ Koch wrote in The Nightly. ‘Because that is what Ms Bullock is saying. No rate cuts for us for quite a while. Forget any cuts before the end of the year. There is now every likelihood of rate INCREASES.’”
“A modest uptick in residential home prices, driven by the special administrative region government’s move to give Hong Kong’s battered property market a new lease of life, seems to have allowed owners who had bought their homes in the past few years to breathe a sigh of relief. Many of them have seen the value of their apartments plummet by about 20 percent since 2021 as the COVID-19 outbreak approached its height, leaving many who have sunk their life savings into the world’s most expensive housing market in a quandary — bundled with negative equity.”
“‘I have seen the value of my apartment slump 10 percent since I bought it in late 2019,’ says a homeowner surnamed Zhang, who purchased a 760-square-foot (70.6 square meters) second-hand flat at Lohas Park in Tseung Kwan O, the New Territories, at below market prices. The 35-year-old says he isn’t hurting. ‘Since the depreciation hasn’t been realized in cash, the impact is not too severe.’”
“UBS analyst Mark Leung says some Hong Kong retirees or low-income people may consider relocating to the mainland cities of the GBA. ‘Hong Kong’s rental yields are around 2.3 percent but, in mainland cities like Guangzhou or Shenzhen, they are less than 2 percent, making them less attractive from an investment perspective,’ Leung says. ‘Besides, concerns about home oversupply and the risk of renminbi depreciation have dampened expectations of capital appreciation.’”
“As China’s property downturn grinds into a fourth year and house prices continue their downward march, an increasing number of mortgages are slipping underwater. Now, with income growth slowing and job losses increasing, people are questioning whether it’s worth the struggle to pay a loan on a property that’s in negative equity. Lucy Liu’s bank is threatening court action after she missed four instalments on a three million yuan mortgage for her Shanghai home. It’s an abrupt change from three years ago when she bought the property for 4.2 million yuan with a belief that house prices would only go up. Since then, the value of the house has sunk below what she owes, she’s lost her high-paying job and she’s settled for one with 80 per cent less salary.”
“‘I have lost hope,’ said the 32-year-old financial worker, explaining she fears the price will continue to fall, leading to a bigger loss. ‘If I stop repaying I may only lose the down payment, but if I continue paying I may lose more.’”
“Carl, a former property consultant in Hangzhou, had to sell two of his homes at a total loss of one million yuan to repay his mortgages, one of which went underwater. After the sale, he still had to pay another 110,000 yuan on the property to clear the debt. At one point in 2022, he was sitting on a monthly mortgage bill of over 30,000 yuan, almost triple his wage, forcing him to use consumer loans to cover the debt. ‘I still feel scared looking back,’ said the 28-year-old, who also had to postpone buying a car for his family. ‘I didn’t expect such a severe consequence nor the harsh lesson – I’m a living example of people getting burned. It feels like my life journey was delayed a few years due to the property cycle.’”
“He still considered himself lucky as compared with his friends – one couple had to sell their home with a two million yuan loss to pay off their mortgage. That’s equivalent to about seven years worth of their savings. Some of his former colleagues are still struggling with monthly mortgage payment of around 80,000 yuan, far outstripping their income, he said. Chenchen, who works at a private property firm in Shanghai, has no choice but to continue paying her mortgage so her child can enrol in the school nearby. The 38-year-old has not been paid for five months and her home value has fallen about 40 per cent to 4.5 million yuan.”