A report from KTNV in Nevada. “Las Vegas realtor Daniel Mahabir said Zillow was active in Las Vegas. ‘They very quickly, because of their platform, became the number two largest iBuyer out here in Las Vegas,’ he said, ‘and then this year, all of that blew up in their face.’”
“Mahabir said as recently as August and September he and other Realtors were looking at Zillow purchases in confusion as the company paid what they considered to be well over market value for homes based on the Zestimate algorithm. ‘We were seeing a lot of agents wondering, what is going on here? This is just not making sense,’ he said. A Zillow representative, Matt Kreamer, admitted, frankly, that Zillow simply paid too much for the homes they had been purchasing.”
The New Hampshire Union Leader. “Summer’s home-buying frenzy is showing signs of easing. Although New Hampshire had 37% fewer homes on the market in October than a year ago, the median sales price of $380,000 dropped for a second straight month and was down $30,000 from its record August milestone. Realtor Rachel Eames said prices are ‘plateauing’ with fewer bidders on a given property. ‘Still multiple offers, but not not multiples of multiples,’ said Eames, based in Concord.”
“The Seacoast area also saw a market downshift in October. John Rice, chief statistician for the Seacoast Board of Realtors. October sales for single-family homes were off 14.5% from October 2020, with the monthly median price dropping to $532,000, the lowest since May 2020, said John Rice, chief statistician for the Seacoast Board of Realtors. ‘The playing field seems to be leveling a little bit when it comes to prices, but the trick is finding something for sale,’ Rice said.”
The Santa Fe New Mexican. “Santa Fe is the unchallenged jewel of the west—and in the real estate market, this year more than ever. The interesting thing is that while some Santa Fe Realtors predict that home values will carry well into 2022, others seem not so sure.”
“Shell Goldman, Keller Williams, ‘Many people I speak with want to know about our market and before I answer, I can hear my thoughts going in different directions. The reason being, it depends on whether you are the buyer or the seller. This year, sellers have been emboldened to list homes at prices that make our heads spin — and they are getting them, and often more. The deluge of out-of-state buyers who find our higher market prices still more affordable than where they come from, adds fuel to our current values. However, I am seeing some price reductions now. Reality always strikes!’”
From KPIX in California. “A one-way, one-block alley in San Francisco has neighbors living in constant fear and afraid for their safety. Willow Street between Van Ness and Polk currently has the highest concentration of tents in San Francisco, according to the latest city data. ‘It’s pretty consistently nerve-wracking,’ said resident Amber Lutsko. ‘This just seems to be a safe space for chop shops, drug trafficking. There was a guy who passed out in front of our door with a needle hanging out of his arm all day long. And our children had to walk past that,’ added Lutsko.’”
“It’s all within feet of The Artani, located at 818 Van Ness Avenue, where units have sold for more than a million dollars. They shared photos of a man they say regularly urinates and throws feces. The smell permeates the entire garage. ‘I can’t really reconcile just the fact that this criminal activity is allowed to happen, I myself have called the cops a number of times,’ said Shannon, who said SFPD has not shown up whenever she’s called.”
From Bisnow New York. “Chris Schlank, the founder of private equity firm Savanna — best known for its New York City office investments — sits down to talk with Bisnow about the uncertain terrain facing owners of urban office buildings. Savanna owns about 7M SF of office space in New York City, and Schlank readily admits landlords like him are having a tough time right now. Workers aren’t coming back to the office as much as he had hoped, and even though companies are back looking for space, the demand in New York City is nowhere near enough to keep up with the new offices that are getting built.”
“Plus, he says, many tenants have felt no obligation to pay rent, even those who are well-capitalized — and the real estate community needs to work together to make city government aware of what the industry needs. ‘We never got any money from the government for all our tenants that were not paying rent. A lot of tenants in our office buildings got a lot of PPP money, never gave us rent,’ he said. ‘A lot of people didn’t pay rent, you’d be surprised the moral compass that went completely upside down.’”
“He said that he has very large, well-known tenants that are still not paying rent — although he declined to identify them. ‘[Landlord and tenant] courts were closed and overwhelmed,’ he said. ‘It’s shocking, it’s humbling to see the hubris of a lot of people out there, you know, take the money and run.’”
From AFP. “On the site of a luxury shopping centre under construction in Nigeria’s economic capital Lagos, a young builder steps gingerly along the top of bamboo scaffolding. Barefoot, with no rope to protect him, the young man carries a long iron rod on his shoulders. The fear is written on his face — one misstep could be fatal. The scene is all too common in the megacity’s upscale neighbourhoods, where extreme wealth and dire poverty cohabit.”
“Builders, many just out of their teens, work day and night in deplorable conditions, raising condos and malls from the ground. Those construction sites are just like the 21-storey high-rise that collapsed on Monday, killing at least 36 people including many workers. ‘What is certain is that this tragedy could have been avoided,’ the manager of a construction company in Lagos, told AFP on condition of anonymity. ‘There are always tell-tale signs when a building is about to collapse, like cracks on the walls. The majority of construction companies in Lagos do not respect the norms… and to make more profit, do not hesitate to overlook quality.’”
“The head of a real estate company in Lagos, who also asked to remain anonymous, said that ‘developers cut corners in a bid to save cost, thereby risking people’s lives.’ Since 2005, at least 152 buildings have collapsed in the city of some 20 million people.”
The Urban Developer in Australia. “Melbourne has chalked up one of the strongest apartment completion rates on record despite high-vacancy rates putting downward pressure on rents according to an industry report.Almost 15,000 apartments were completed in the 2021 financial year, boosting supply well above demand to increase vacancy rates and drive down rents in Melbourne. The city continues to feel the effects of an oversupply of unit according to Charter Keck Kramer’s State of the Apartment Market report for the first half of 2021.”
“Low net overseas inbound migration and Covid-19-induced regional migration led to a decline of Victoria’s population of more than 45,000 people in the nine months to March, 2021. JLL reported signs of settlement default starting to appear, with Melbourne beginning to see apartment sales fall last year as the pandemic began. ‘A soft pre-sales environment is seeing some projects abandoned or delayed, as developers reassess their feasibility,’ the report stated.”
From Reuters. “Some holders of offshore bonds issued by a unit of developer China Evergrande Group had not received interest payments due on Nov. 6 by Monday evening in Asia, two people familiar with the matter said. Scenery Journey Ltd was due to make semi-annual coupon payments on Saturday worth a combined $82.49 million on its 13% November 2022 and 13.75% November 2023 U.S. dollar bonds.”
“Spreads on Chinese corporate high-yield dollar debt widened to record highs on Friday, and on Monday Shanghai Stock Exchange data showed developers’ bonds once again dominating the list of the day’s biggest losers. One yuan bond issued by an onshore unit of Shimao Group was suspended from trade after falling more than 34%. Falls even extended to investment-grade names. Tradeweb data showed a 4.75% January 2030 bond issued by a unit of Sino-Ocean Group Holding fell nearly 15% on Monday to just above 75 cents.”
From Bloomberg. “Investor concerns over China Evergrande Group’s debt are shifting to the country’s stronger property companies as a selloff across the industry’s dollar bonds hits higher-quality borrowers. In a sign that not even state-owned firms are safe from the deepening rout in Chinese developer bonds, Sino Ocean Group Holding Ltd., part-owned by the finance ministry, has become the latest property company to see its bonds slump. Its 4.75% note due 2030 fell to as low as 73.48 cents on the dollar, with spreads over comparable Treasuries widening to a record 800 basis points, according to data compiled by Bloomberg.”
“That’s despite the firm being rated investment-grade at two global credit assessors and holding about 54 times more cash and equivalents than China Evergrande Group.”
From News Room New Zealand. “Kiwi runner Ocean Billy could have netted one punter almost a million dollars in last night’s Melbourne Cup. The investor (as we shall call them) wagered $27,500 on the Auckland Cup winner at odds that would have cost the TAB $977,000 if the six-year-old gelding had won. He didn’t. Ocean Billy ended up running dead last.”
“There are two lessons from that. First, don’t rely on Newsroom for racing advice. Secondly, do rely on Reserve Bank Governor Adrian Orr. Because the morning of the big race, he warned investors against putting all their money on one horse. Of course, he was really talking to the Property Council about New Zealanders’ predilection for putting all their money into houses, not horses.”
“New Zealand needs to continue to improve investor knowledge and options to ensure households develop well diversified nest eggs that meet their needs, he said. ‘Why would you put all your money on one horse – housing – when backing your retirement?’”
“That concern is why the Reserve Bank has reimposed loan-to-value lending restrictions. As of this week, banks are allowed to lend no more than 10 percent of new mortgages to owner-occupiers with a deposit of less than 20 per cent. The constraints on investors are even tighter. And that concern is also why the Bank is expected to lay out a path to impose, for the first time, its long-awaited debt-to-income limits. The loan-to-value restrictions mainly protect the banks and other lenders in the event of a downturn – but it is starry-eyed home-buyers who are protected by the debt-to-income restrictions.”
“The higher they climb, the harder they’ll fall – that’s been the Bank’s consistent warning. ‘At the source of the financial stability risk is the inability of housing supply to respond in a timely fashion to changes in demand, and the drivers that lead to a bias towards housing as an investment choice beyond simply a place to reside,’ the Governor says.”