A report from Bankrate. “Fannie Mae and Freddie Mac are rolling out new rules covering condo loans – and critics say the stricter reviews are causing condo sales to fall apart, even in buildings with no structural issues. Because most new mortgages are packaged and sold by these agencies, lenders typically decline to originate loans that Fannie and Freddie won’t buy. ‘It’s a reckoning for sure,’ says Orest Tomaselli, president of project review at CondoTek. ‘A lot of purchasers and owners are being denied access to financing because of these new rules through no fault of their own.’”
“As of late February, Fannie Mae had compiled a list of more than 1,000 condo associations ineligible for loans. Florida had the most properties on the list by far, with 413, followed by California with 91.”
The Real Deal on Florida. “Facing the threat of a foreclosure auction, Harvey Hernandez’s condo company filed for bankruptcy protection to save nine units at Centro Miami, a downtown Miami tower the developer built. Last month, Centro NGD Holdings submitted a Chapter 11 bankruptcy petition in Miami Federal Bankruptcy Court, two days before the nine units were scheduled to be sold at a Feb. 8 auction. In January, lender PS Funding won a $3.1 million judgment in Miami-Dade Circuit Court against Centro NGD, two years after suing Hernandez’s company for allegedly defaulting on a $2 million mortgage. The bankruptcy filing put the sale on hold.”
“According to Centro NGD’s bankruptcy filings, four of the nine condo units are currently leased and generate a combined $9,725 a month in rent. The nine units pay a combined $6,373 a month in combined condo association fees, the filings show.”
From Realtor.com on California. “Michelle Pfeiffer is done with yet another Pacific Palisades property. She and her husband took a loss when they sold for $6.5 million. The couple originally purchased the parcel for $7.7 million in 2018.”
The Los Angeles Times in California. “The mega-mansion known as ‘The One’ sold Thursday for $126 million at a bankruptcy auction. That’s a huge discount from its $295-million listing price. Agent Brent Chang of Compass said the results were a cautionary tale and might prompt builders to think smaller, given that multiple huge mansions have gone into bankruptcy in the last few years. The amount of debt attached to the property originally totaled about $180 million but has since grown to $256 million as more creditors have made claims, according to a March 2 court filing. That means many creditors will take losses.”
From Now Toronto in Canada. “After reaching new record-breaking prices in February, Toronto real estate agents say the market may have plateaued. ‘“I think we’re going to see things level out,’ says Odeen Eccleston, broker of record at WE Realty, explaining that a mad rush to purchase semi-detached or detached properties in February will now give way to buyer fatigue and perhaps even a slight cooling of prices as more supply hits the markets and COVID restrictions loosen up. Eccleston also feels prices need to plateau or cool down because the current market is simply not sustainable.”
“Meray Mansour, team leader at Meta Realty Group, agrees with Eccleston that buyer fatigue is beginning to set in, which combined with the slightly higher interest rates and the improved supply situation will help ease prices. ‘I’m seeing more and more listings not sell on the offer presentation date,’ says Eccleston. ‘People are getting a grip and they’re saying, ‘Okay, these numbers are ridiculous.’”
The Daily Mail. “Steve Smith has finally sold his luxury 13-bedroom Staffordshire mansion for £4million – nearly eight years after putting it on the market. The father-of-three, 59, slashed £2.5million off the original £6.5m asking price to seal the deal. Steve purchased Hammer Hill House in 2002 and was prepared to take a financial loss on the sale in order to push it through. ‘It has been a long process but we finally sold the property six months ago for £4million after paying £2.2 million for it in 2002 when we sold the business. We probably spent another £4million on the property doing it up.’”
From Stuff New Zealand. “New lending rules have created more hoops to jump through, cut off credit to borrowers who would have qualified only months ago, and generally shrunk the size of loans being approved. Mortgage Lab chief executive Rupert Gough says he sees clients who would have been approved before Christmas no longer qualifying, but it’s not the number of loans being approved that’s changed the most but the amount borrowers are approved for.”
“He says it’s common to see a 20 per cent to 25 per cent reduction in borrowing capability, and say’s he’s had first-home buyers who were approved for $1 million home loans three months ago now only qualifying for loans of $750,000 to $800,000.”
From News.com.au. “Houses prices in some Sydney suburbs have dropped by a whopping $190,000 in the last three months as more experts warn that Australia’s property prices are set to plunge. The inner city suburb of Beaconsfield suffered the biggest slump across the country with house prices plunging 9.2 per cent meaning they are now worth $162,662 less than three months ago, according to CoreLogic.”
“The popular inner west suburb of Newtown suffered a $120,207 loss in house prices in the past three months, a massive drop of 6.6 per cent taking typical values to $1.82 million. Surry Hills faced a loss of $134,054 with prices falling by 6.1 per cent to $2.19 million, while the waterfront suburb of Birchgrove experienced a drop of 6 per cent or $190,581 to $3.17 million.”
“Two Victorian suburbs also felt price pains with South Yarra prices dropping by 5.2 per cent to $2.16 million and Toorak suffering a 4.7 per cent loss to $4.35 million. The biggest loser in the apartment market was the Sydney suburb of Barangaroo where prices slumped by 8.5 per cent to $2.29 million, followed by Melbourne’s Box Hill where there was a 5 per cent drop.”
“Eliza Owen, CoreLogic’s head of research, said the premium end of the market was more susceptible to plunging prices but the huge increase in values had also impacted demand. ‘I think affordability constraints, tighter lending conditions and higher fixed rates have likely been enough to cool premium markets, and the sharpness of the fall relates to the volatility in the high end of the market, and the extremely strong run up in price growth,’ she told the Australian Financial Review. ‘I think it’s a reflection of how strong the upswing in the more expensive central markets has been.’”