A report from the Denver Post in Colorado. “The once-predictable Denver metro residential real estate market feels topsy-turvy at the year’s midpoint, according to the monthly real estate trends report from the Denver Metro Association of Realtors. ‘A once reliable market with a peak selling season in June has taken a detour,’ Libby Levinson-Katz, chair of the DMAR Market Trends Committee, said in the report. ‘The main culprit of higher interest rates is easy to identify. However, contrasting perspectives on the market have been summed up well by memes circulating the internet: buyers fear a repeat of 2008, sellers hope for a return to 2021 conditions and renters expect interest rates to drop back to three percent. While none of these views are true, the increasing inventory is moving our market towards a balanced market with the current months of inventory sitting at 2.78.’”
“Active listings rose 11.5 percent month-over-month to 10,214, a 68.27 percent jump year-over-year. As more sellers compete for fewer buyers, they’re providing more concessions. In May, 56.3% of closed transactions paid a seller concession, with the average concession being $9,250 and the median of $7,000, according to the report. Last year, only 47.8% included a concession, with an average concession of $7,723 and a median of $5,000. The number of contract terminations is also rising, forcing sellers to make more concessions during inspection negotiations to keep closings on track.”
“Colleen Covell, a market trends committee member said June broke the historical trend of high-priced sales in June. ‘Last month featured some of the most sluggish activity the million-dollar-plus market has seen in years,’ she said. The number of closings in this segment plunged almost 50% from May. ‘With showing activity coming to a virtual standstill in the highest-priced segments, sellers and listing agents were left scratching their heads and asking, ‘Where have all the buyers gone?’ Covell said that the high-priced segment is now a buyer’s market. ‘Sellers in this market will be left out of the summer fun unless they update their home before listing, price conservatively, and expect to pay a closing concession,’ she said. ‘Otherwise, they will be sitting idle throughout the long dog days of summer.’”
Seattle Magazine in Washington. “With rising rates, Seattle may not exactly be a renter’s paradise. But for those on a budget, renting certainly beats buying. Using data from Zillow, Creditnews Research says only six cities across the United States have a bigger gap between renting and total homeownership costs. The average home price in the Puget Sound region is $753,414, and average total cost is more than $6,900 per month. Contrast that with average rent of $2,250, and residents here pay a staggering $4,662 per month to own their own homes. The study considers all homeownership costs, not just mortgage payments. Think insurance, taxes, and renovation expenses. The greater San Jose holds the dubious No. 1 ranking, with the total difference between owning and renting more than $11,000. The metro areas of San Francisco, Los Angeles, San Diego, Honolulu and Oxnard-Thousand Oaks, Calif., are the only cities ahead of Seattle.”
Fox 11 Los Angeles in California. “A mom of two says she was in danger of foreclosure after her employer, Vinivia, allegedly missed multiple payments. The female employee, who asked to keep her identity confidential, said the delay and/or missed pay checks from the live stream company left her struggling financially. Things got so bad that the employee said she struggled to pay her mortgage and started having issues with her bank. The allegations of employees struggling to get their money on time serve as a stark contrast to the optics shown by Vinivia’s social media pages, where the company shared photos of its lavish ‘brand launch’ party back in April 2024 in Los Angeles with celebrity appearances.”
“According to Vinivia’s website, the company is based out of Switzerland with an office in Santa Clara, but a handful of its former employees were based out of Los Angeles before they were allegedly let go or laid off. Initially, the employee thought it was a one-time deal and hoped Vinivia would resolve the issue. ‘Turned out that it was going on for months,’ the employee said. With the alleged missed paychecks, the employee began to wonder what that would mean for her. ‘I slowly started to become a little worried,’ she said. ‘What about my salary and how will that go?’”
KFMB San Diego in California. “People in North Park want to know why the construction of a housing complex is taking so long. Residents said the project on the 3400 block of Florida Street has been abandoned. ‘It’s decrepit. It’s been falling apart. It’s been getting moldy,’ said Lisa Mezta. Mezta has lived in her North Park home for three years. She loves it but says things started to change when construction began on the project. Mezta started noticing another change about a year ago. The crew who worked to get the project going stopped coming, seemingly halfway through. ‘It literally just stopped. And if you look at the building itself, you’ll see it’s kind of even moldy because of the storms that we’ve had recently, or, you know, the last few storms we’ve had, and it’s just been sitting, nothing’s been happening,’ said Mezta.”
“According to the City of San Diego’s website, a series of permits were granted to build a four-story duplex and four-story single-family homes. Those permits expired between February and June 2023, which may explain why there’s been no work done since then. As for the plan moving forward, CBS 8 reached out to the names and companies who submitted for a permit. Each time, we reached someone’s voicemail, or in the case of the design firm listed, the number is no longer in service. ‘To have a moldy bunch of wood and graffiti strewn pieces of lumber everywhere. That’s not what is going to help this community. Before it gets any worse, I just thought, you know, something could be done to look into it,’ Mezta said.”
The Star Telegram in Texas. “Haley Forsyth owns her dream home: high ceilings, lots of natural light, walls she painted herself. She described her south Fort Worth house as a ‘spiritual space,’ a haven she’s invested time and money into. There’s just one problem. Forsyth’s next-door neighbor is the man who, she says, scammed her out of her life savings. ‘I wake up thinking about it. I go to bed thinking about it. I can barely function,’ Forsyth said. Forsyth, a health insurance agent, had known her neighbor Robert Rambo for about six years when he approached her in late 2023 and asked her to invest in his car-flipping business. For every $20,000 she signed over to him, he said, he’d buy one car at auction, resell it and return her money plus $1,200 profit.”
“Forsyth thought of Rambo as a businessman, a successful real estate agent with lots of balls in the air at any given time. But more than that, she saw him as a kind man, a family man. So she gave him $60,000. Rambo was supposed to give her that money back within two weeks, according to a contract they both signed. It’s been nearly eight months since Forsyth signed her savings over to Rambo, and she’s gotten less than $1,000 back, she said. A Star-Telegram investigation identified eight people in North Texas, including Forysth, who say Rambo scammed them out of money, in some cases hundreds of thousands of dollars. The people who spoke with the Star-Telegram provided documentation that Rambo owed them, in total, $1.2 million.”
“A Dallas business owner in his 30s said he and his father invested hundreds of thousands of dollars with Rambo, who signed a repayment agreement for $460,000. ‘He was paying us. It was working,’ the man, who asked not to be identified in this article in fear of retaliation, said. ‘That trust led to more trust, and then it got too deep, and he cut it off.’ Beyond the paperwork and the personal trust, his decision to invest with Rambo really came down to his own desire to make money, which he let overshadow his decision-making. ‘Really, you’re blinded by greed. And that’s the embarrassing part,’ he said.”
Market Watch. “Do they make new homes like they used to? These home inspectors don’t think so. Several TikTok videos posted by home inspectors detail major problems inspectors have found in newly built homes — revealing not just shabby workmanship but also, they say, the true cost of fast-and-furious home building over the last few years. One inspector, who serves parts of North Carolina and South Carolina, showed TikTok viewers issues such as water leaking into a home’s walls and floor, nails jutting out of framing, and more. ‘Take a look at this house with me, and let’s see what $1.5 million will buy us these days,’ the inspector says as he tours the site. ‘I was more impressed at the fifth-grade gingerbread-house contest than I am right now,’ he says. ‘It’s pitiful.’”
“Other clips posted by the same inspector show flaws in brand new houses that would send chills down the spine of many home buyers: rotten wood lurking inside a load-bearing wall; a luxuriously deep bathtub that ‘spins around like a top’ because it’s not properly anchored to the floor; wobbly gutters. ‘I don’t expect to see runs in my paint and shoddy seam jobs on my trim when I’m paying half a million dollars for a new house,’ he says in one video.”
“Part of the frenzy to build stemmed from the COVID-19 pandemic, which boosted home-buying demand. Consequently, ‘there was a marked drop from 2019 to 2020 in terms of quality construction,’ Michael Cholewa, a Portland, Ore.-based home inspector since 2018, told MarketWatch in an interview. In one video Cholewa sang about his ‘first look at a $1.8 million house’ where he found several flaws. They included a flight of floating stairs that he was able to wiggle with just one hand. He did not specify which builder had constructed the home, which was in Oregon. In another video, Cholewa showed another Oregon house where the heat pump is located on a backyard deck that also lacks stairs connecting it to the lawn. ‘Couldn’t think of a better place to put the f—ing unit for the heat pump here,’ Cholewa says in the video. ‘But also, where are the steps?’”
The Real Deal. “The sketch of multifamily distress drawn over the past year is now being shaded in by data. The picture shows problems have spread beyond value-add players squeezed by floating-rate loans. Apartment deals marked delinquent or in special servicing and financed with commercial mortgage backed securities loans jumped 185 percent in late June from January, according to a report by CRED iQ. ‘We’ve noticed a spike in multifamily since the beginning of the year,’ said report author Mike Haas. That surge marked the largest increase among any commercial real estate asset in the period. The data signals the deterioration of multifamily loans isn’t only ramping up, it’s mushrooming. Just accounting for delinquencies and specially serviced loans, nearly 10 percent of all CRE CLOs were distressed with the distress rate for multifamily clocking in at about 13 percent.”
From Bisnow. “The Department of Justice has launched an investigation into Arbor Realty Trust following a series of reports and accusations of fraud by short sellers. Short seller Viceroy Research is on the forefront of the attacks on the REIT. In a previous report, Viceroy accused Arbor of fraud, claiming it hides losses by financing the purchase of assets from its own foreclosures in off-balance-sheet transactions. Viceroy released another report Friday claiming that Moneil Capital, an Arbor borrower, has initiated a capital call as it seeks to restructure the loans tied to a Houston apartment complex, the Regard at Med Center.”
“Arbor reportedly has $52M of loans secured against the property, which was most recently valued by Arbor at the same amount. However, in the report, Viceroy claims that the property appraisal is ‘ludicrously overstated and appears fraudulent.’ ‘This loan is severely impaired but no impairment has been made by Arbor,’ the report says. ‘Moneil has outrightly stated that selling the property or refinancing is not an option, as it will completely wipe out investors.’”
“In a statement to Bisnow following news of the investigation, Viceroy doubled down on its fraud allegation. ‘We have provided investors with substantial data, surveillance reports, and case studies to support the fact that Arbor’s book requires significant impairment which will wipe out equity holders,’ the group said in an email. ‘We maintain our belief that Arbor’s equity is worthless. It is no surprise that Arbor is being investigated, as the fraud is so obvious.’”
The Windsor Star in Canada. “For the third consecutive month, rents remained stable or even declined in the Windsor area according to a report compiled by rentals.ca and Urbanation. ‘There is a lot of inventory right now with the students moving out,’ said Patrice Surrette, owner of Windsor’s Goldmar Property Management. ‘Some landlords are looking at the market availability and are trying to make their units look more affordable by setting a lower price point.’ Surette, who oversees the management of 1,000 units locally, said the market is also adjusting to a potential change in the number of international students coming this fall.”
“The federal government’s decision to cut down on the number of international students allowed into Canada has introduced an air of uncertainty into the market for landlords. ‘That change could have an interesting impact on Windsor’s market,’ Surette said. ‘We’re not going to have as many international students at both the college and the university. That’s going to result in a higher number of vacancies and lengthen the time it’ll take to get tenants.’ Surette said the Windsor market is further stabilized by an increasing number of newly built condos coming onto the market for both sale and rent. Surette added there has also been a return of more negotiations with tenants. With the uncertainty around student rentals and the glut of units that were created to target that market in recent years, landlords are being more flexible rather than hoping there’ll be enough international students to fill all the rentals in two months.”
Blog TO in Canada. “A condo sold at a substantial loss in Toronto in May shows just how much prices fluctuate in the city’s unpredictable real estate market. Located in The Beaches, this two-bedroom condo first sold for just under $1.5 million in April 2022. The unit was put back on the market less than two years later in February 2024 for just shy of $1.33 million. However, the condo failed to attract any buyers and was re-listed the next month for just under $1.25 million. Despite these price reductions, the unit failed to sell again, and was eventually put on the market for $999,000. After six days on the market, the condo finally sold for $1.19 million in May 2024 — exactly $305,000 less than it originally sold for just two years earlier.”
This Is Money. “The housing market is in the doldrums, according to surveyors and estate agents. Fewer buyers in the market are resulting in fewer sales and falling house prices, according to the latest survey by the Royal Institution of Chartered Surveyors (Rics). It revealed more of its members, comprising estate agents and surveyors, continued to see fewer buyer enquiries and fewer sales in June. East Anglia, alongside the South East and South West of England all returned clearly negative readings for house prices in June. David Hickman, a Rics member in South Devon paints a more dramatic picture, suggesting there are too many homes for sale and not enough buyers.”
“He said: ‘There hasn’t been a spring rush. Properties are coming to the market at below last year’s levels and quick reductions are needed to snag a buyer. Also long chains and long completion times. Redundancy adds to slow down and repossessions where higher fixed rates can’t be serviced. Too many new houses.’”
From Eureka Street. “The fundamental distortion in the Australian economy is extremely high house prices. It has created a damaging generational divide between those who were lucky enough to buy cheaply and those who are unlikely ever to be able to afford a house, or are saddled with long term burdensome mortgages. Just how bad the situation is was underlined by the US journalist Tucker Carlson when he visited the country recently. Although presumably well off, he said he was shocked by the prices – he initially thought they must be ‘in pesos or something’ – and noted that even he could not afford to purchase.”
“The problem has no obvious solution because governments will not change the negative gearing and capital gains tax mix that triggered the bubble in the first place. They know it would be electoral suicide. The other main factor, interest rates, governments do not control – the central bank does. So what they do instead is tinker at the edges, talking about the availability of land and giving limited hand-outs to first home buyers. The first option is usually short circuited by property developers who are big funders of political parties. The second option just drives prices up more, or at least puts a floor under them.”
“It does seem to be a problem for English speaking colonies, and also the UK. The same cul-de-sac faces Canada and its government is similarly impotent. Like Australia, house prices have approximately tripled over the last two decades, fuelled by the combination of aggressive bank lending and, until recently, falling interest rates. Canada has the same mix of relatively modest government debt and soaring household debt that is the case in Australia.”
“Over two million taxpayers in Australia, about a fifth of the total, are property investors while 3.25 million Australians own investment properties. That is an awful lot of people who are punting on an investment that is not very logical. A comment made by this writer’s brother, who owns an investment property, underlined to me the dubious nature of relying on negative gearing. He lamented that things had gone ‘wrong’ because the rent on the property actually covered the interest costs and other expenses, so he did not get a tax deduction. He considered this to be a failure.”
“What kind of investment relies on losing money? One that is a punt on sharp rises in the capital value, which is perfectly sound – until it isn’t. If property prices start to fall dramatically, expect investors to bail out with great speed as they start to realise the implications of their gamble. Should that happen, property investment would go from being the nation’s greatest financial distortion to its greatest vulnerability.”