A weekend topic starting with two reports from the Globe and Mail. “Berkeley Loh, 29, and Tom Holmes, 35, have been together a few years and living in their 800-square-foot Olympic Village rental, but they always had a plan to buy. They’d seen friends and family members buying properties, and they had a fear of missing out. ‘You feel behind or something, I think that has something to do with it,’ said Ms. Loh. ‘Our group of friends and family, everyone is buying. We never felt like we were not going to buy. It just seemed like the next thing to do.’”
“Adds Mr. Holmes: ‘We have never bought into the fact that the millennials will be renting forever. We’d hear these things like, ‘They aren’t going to own cars — they’ll just rent cars.’ No, we want property and we want a Tesla.’”
“‘John Pasalis, president of Realosophy Realty, says he’s seeing the return of a particular type of investor that we haven’t seen in some time: house flippers. ‘These first flippers made a significant amount of money in a very short period of time and that’s the spark that is needed to fuel more investors to want to do the same thing,’ he says.”
“Since the start of pandemic restrictions, the overriding message from Ottawa has been that interest rates will be low for a very long time and, if the economy sputters, they have plenty of tools at their disposal to kickstart it, he says. ‘I don’t blame investors for wanting to jump into this market,’ he says. ‘The consensus view from the investors I hear from is that, if you’re going to invest in a housing bubble, you want to ride the bubble that governments are supporting on the way up and the one they’ll throw every policy tool available at to avoid a decline in house prices should things cool.’”
The New York Times. “The last decade has been a period of relatively low interest rates. That incentivized many homeowners to stay in their homes longer than they would have in the past, clinging to cheap mortgages. The low rates also encouraged many homeowners who bought a new home not to sell their previous one but to treat it as an investment property instead.”
“‘Right now it’s a screaming good deal to have two properties: When my mortgage rate is 2.7%, why not have two of them?’ said Michael Simonsen, the CEO of Altos Research. ‘It took a long time, I think, to realize that that’s what was going on.’”
From KHON in Hawaii. “The tourism-dependent island has left many on Maui without jobs during the pandemic and the uncertainty has kept many people in their homes, unable to pay the mortgage. ‘The banks are respectful, they’re not going to kick somebody out during a pandemic, so they’ll wait, and then some [foreclosures] will start popping up here and there, and I think it’s probably going to be like, two or three years, and you’ll start seeing more and more foreclosures,’ said Joe Hogin, Realtors Association of Maui president. ‘Everything’s going up, but what goes up, it’s going to go down.’”
The Inlander in Washington. “On March 18, 2020, Washington Gov. Jay Inslee made it temporarily illegal for landlords to evict anyone for not paying rent. As the pandemic raged, Inslee extended the moratorium again and again. A few weeks ago, Ben Stuckart, director of the Spokane Low-Income Housing Consortium, reached out to Spokane’s 10 largest low-income housing nonprofits to assess the damage. Nearly a quarter of their units — 1,100 households in all — were at least a month behind on rent. Total them up, and those 10 providers were owed more than $1.3 million in Spokane County alone.”
“‘It’s affecting their ability to pay their mortgage payments, any loans they took when they built their low-income housing,’ Stuckart says. ‘It puts them at risk as a nonprofit — if they go under, that puts all of their housing units at risk.’”
“Landlord Keith Kelley is in the process of selling at least one of his own West Central properties, taking it off the rental market entirely. ‘I’m liquidating property,’ Kelley says. ‘I’m fighting tooth and nail to keep my business alive.’”
From KSBY in California. “Right now, county officials estimate there is upwards of $25 million in rent debt in San Luis Obispo County. County Supervisor Bruce Gibson said, ‘[The] money [is] going back to tenants, so they can stay up on their rent, so they can stay in their housing and money also going back to landlords because the ripple effect there is they face foreclosure.’”
“Ken Trigueiro, the CEO of People’s Self Help Housing, is optimistic about the program. ‘Probably, you know, landlords aren’t going to be able to make any profits at this time. But you know, paying the bills is the most important thing,’ he said.”
The San Jose Spotlight in California. “Robert Aguirre, a 67-year-old advocate for affordable housing, hasn’t been able to pay his rent since the pandemic started. He’s lost track of exactly how much he owes his landlord. ‘The situation is bad for tenants and I’m concerned when the money is gone and the eviction moratoriums expire, many people may become homeless,’ Aguirre said. ‘But right now landlords are really getting screwed.’”
From The Real Deal on New York. “The owner of two Midtown office buildings claims its bank threw it to the wolves after promising to help it weather the pandemic. R&B Realty Group told a state court in Manhattan last week that Signature Bank did not honor a verbal pledge to extend forbearances on 28 West 36th Street and 32 West 39th Street, instead declaring loans on those buildings in default and selling the debt to distressed-asset buyers.”
“The landlord alleges that Maverick Real Estate Partners, which purchased the mortgages, is taking advantage of the Covid-19 pandemic to grab R&B’s buildings for a song. ‘Among other things, [Maverick] is charging a default interest of 24 percent on each of the loans, and seems intent to continue to do so in order to … acquire the buildings on the cheap,’ R&B’s complaint states. (Rates above 25 percent are subject to New York’s usury law.)”
“The landlord said it has been unable to pay principal or interest on its loans since May 2020 because rent collection was only 30 percent to 40 percent from April to February. Since buying the loans from Signature, Maverick has told tenants at the West 36th Street building to pay it rent directly, the lawsuit asserts. R&B called the action an ‘end run’ around Gov. Andrew Cuomo’s bans on commercial evictions and foreclosures, telling the court Maverick’s attempt ‘should not be permitted.’ In a separate case, Maverick sought to foreclose last week on a Chelsea apartment building at 416 West 25th Street, alleging the owner had defaulted on a loan in May 2019. A judge had previously stopped the foreclosure.”
From Slate. “Big cities have clearly lost some verve during the pandemic. The signs are everywhere, from vacant storefronts to idle stages to muted downtowns. A weekly drumbeat of data, on sales tax receipts and school enrollment and home prices and rents, offers bits and pieces of evidence to back this up. Between 2011 and 2015, an astounding 952,000 people moved out of New York City—and another 265,000 New Yorkers died. At that rate, it would take just 35 years for the nation’s largest city to be left to the rats.”
“Overall, departures have always exceeded arrivals in large cities. This is in part because some walkable, central neighborhoods in cities like Chicago, San Francisco, and New York have been, on net, losing people for years as rents go through the roof. Manhattan’s Upper West Side, for example, lost 12 percent of its population between 2006 and 2018 as median household income rose.”
From Realtor.com. “Justin Bieber and his wife have officially sold their smaller—but still very spiffy—spot in Beverly Hills. The listing came on the market about a year after they had picked up the property in 2019, for $8.5 million. An $8 million deal on the home closed last week—so the hit-maker took a hit. The couple had originally placed the home on the market for $9 million in the fall of 2020. It reportedly sold fully furnished.”
“Bieber announced to his Instagram followers his intention to unload the property, and in the fall of 2020, placed it on the market with a $9 million price tag. ‘I think I wanna sell my home in Beverly Hills who wants it,’ the Grammy winner teased to his followers.”