It’s Friday desk clearing time for this blogger. “Fewer existing houses are selling in Southern Nevada and homebuilders are offering more incentives to get buyers into new homes. Lennar did acknowledge in a first quarter earnings call that the U.S. economy is making it very difficult for the housing market right now. ‘With higher interest rates, affordability continues to be tested as higher monthly payments make qualifying for a loan increasingly difficult,’ Lennar executive chairman Stuart Miller said on the call. ‘We’ve started to see early evidence of debt delinquency showing up and derailing some mortgage applications.’ In 2023, new home sales made up 25 percent of the residential sales market, and the last time that figure was that high was in 2008 (24 percent). Nicholas Irwin, a UNLV assistant professor of economics and researcher at the Lied Center for Real Estate, said the mortgage buydown program has some eerie similarities to the Great Recession and its housing market crash given the chance that interest rates may not fall at all within the next two years, and could feasibly even increase.”
“‘(Homebuilders) are all trying to maximize their profits as best they can given the current restraints, and I am sure this is something that maybe some developers are considering,’ he said. ‘But in the same way, we weren’t asking the same questions of real estate agents back in 2005 or 2006 when they were steering people to get these exotic mortgages.’”
“On a list of 10 housing markets cooling the fastest, six are in Florida while two are in Texas (Dallas and Houston). The ones in Florida are as follows: North Port, Tampa, Cape Coral, Orlando, Jacksonville, and Lakeland. ‘Measures of homebuying demand and competition are dropping off quickly in Florida, and listings and price drops are surging,’ Redfin’s analysis read. In North Port, the Florida market cooling the fastest, the number of homes for sale is up 68% from a year earlier. ‘Florida is building more new homes than any other state in the country (aside from Texas, which is also home to two of the nation’s 10 fastest-cooling housing markets), a building boom coming at a time when high prices and mortgage rates are dampening homebuying demand,’ Redfin said. ‘The oversupply of inventory is cooling competition.’”
“May saw one of the strongest sales months for real estate in Indiana since last year, with more than 4,000 homes for sale. Dan Brown, a realtor with FC Tucker singled out an interesting data point: Indiana averages around 3,000 homes monthly going under contract, but in May more than 1,000 did not close. That is 1/3 of the transactions that started with an accepted contract and fell apart without closing. He says that figure has been high for the past several months and has never been this high before, usually averaging 20% or less. Why? Brown believes buyers and sellers have vastly different expectations, usually centered on inspection terms and repairs.”
“A years-long leak has sunk a Fair Haven Heights condo association into $138,000 in debt — landing the group in bankruptcy court, and leading to a legal fight over whether the association’s water bill or urgent maintenance should be paid for first. The South Central Connecticut Regional Water Authority (RWA) declined to comment on this case. Now, owners are staring down the barrel of ever-increasing cost burden. ’I’m a little skeptical as to where our money went,’ Jay Appi, Rose’s son and the owner of unit 25, said. Rose Appi is ’thankful everything’s getting done now. I just want my furniture back,’ she said, after noting that the leak repairs had at least brought water pressure back to her building. ‘How are you still going after these people after they declared bankruptcy?’ she wondered.”
“In Colorado, Tiffany Lockwood said she was dropped twice by fire insurance carriers over the 10 years she’s lived in Evergreen, a heavily forested exurb of Denver. Jeff Geslin lives in high and dry La Plata County, in southwestern Colorado, surrounded by 35 acres of piñon and juniper trees. They were shocked when their condo association in Summit County, governing their second home, lost its insurance policy. ‘It might be because we’re close to Forest Service land,’ Geslin said, ‘which must be more risky.’ Every condo owner was assessed $6,772 extra for the new policy the Homeowners Association managed to find — an increase of 1,000%. ‘This is insurance of last resort,’ said FAIR Plan board member Carole Walker. ‘as we don’t want to compete with private insurers. They’re struggling after 10 straight years of unprofitability in property insurance.’”
“Adam Neumann, the ousted founder of former unicorn co-working giant WeWork, is once again attempting to offload his Manhattan penthouse triplex. It’s at least the third time he’s tried selling it — and now, a sale at its current asking price would mark a loss. The disgraced CEO has been trying to sell the six-bedroom aerie at 78 Irving Place since 2019, when he quietly attempted to shop it off-market, before formally listing it for sale in 2020 with a price tag of $37.5 million. And now, as he continues downsizing his real-estate portfolio following WeWork’s fall from grace in 2019, he’s giving it yet another shot — with a further discounted ask of $24.99 million. When Neumann and his wife purchased the apartment in 2017, it was two separate units, one on the top floor and one a duplex just below it. The couple then combined the pair — for which they paid $27.5 million.”
“A downtown office tower has been seized through a foreclosure that points to a huge plunge in real estate values and a feeble Bay Area commercial property market. The tower at 1700 Broadway — a 10-story highrise in downtown Oakland’s bustling Uptown district — is now owned by its lender following the foreclosure, documents filed on June 7 with the Alameda County Record’s office show. Since no buyer emerged for the highrise, Bank of the Sierra took ownership of the building through a proceeding that placed a $4 million value on the building. That amount is a jaw-dropping 69.9% less than the $13.3 million the prior owner, an affiliate controlled by HP Investors, paid in 2017 to buy the building. HP Investors is a real estate firm based in the San Diego County city of Solana Beach.”
“Activity is starting to pick up for the South Okanagan residential real estate market, but sellers are having to wait for their buyers to have their own properties gone before they make the final close. ‘One of the challenges we have is we’re getting in lots of offers that are subject to the sale of homes before they can close on their new home, and some of those are not selling, so the deals are falling apart,’ said Myrna Selzler, the managing broker at Chamberlain Property Group. ‘I would say it’s more of a buyers than a seller’s market right now. So prices are definitely not going up.’”
“They’ve still been selling a fair number of costly waterfront homes. ‘We’re also going to be having, I think, a number of those homes coming up for sale because people have had them for vacation rentals, and now that that’s not going to be a real option, because of the change in the legislation,’ Selzler added. ‘It’s going to be interesting to see how the fallout of the short-term rentals, because more properties are going to come on the market in that category. So those ones might be more price sensitive, and price sensitive means having to drop their prices — which I find I appreciate what the idea behind it was — but the challenge for me is that those are people’s retirement plans, and that’s a difficult pill to swallow.’”
“As Ontario courts continue to sift through the wreckage of insolvent real estate developer Stateview Homes some lawsuits have honed in on the question of how a $37-million cheque kiting scheme was allowed to run for more than a year. Civil claims filed by Tarion Warranty Corp. have raised questions about internal controls at embattled Toronto-Dominion Bank, introduced the possibility that insiders at the bank may have assisted in the scheme and revealed new details about how the fraud was carried out. ‘The cheque kiting scheme has ruined our business and livelihood, as well as the dreams of the Stateview customers whose homes were never built. We are shocked that it was able to happen at such a large scale over many months without detection by the banks,’ the statement said.”
“Tarrant Parsons, senior economist at Rics said: ‘The recent recovery across the UK housing market appears to have slipped into reverse of late, with buyer demand losing momentum.’ Neil Foster, a Rics member based in Hexham in Northumberland said: ‘The pace of sales appears to be slowing with the impact of higher borrowing costs now coupled with pending political uncertainty ahead of the general election. Offers are more commonly negotiated off rather than added to guide price. Equilibrium? Miles away.’”
“‘The new-build market is currently dead,’ said Gerald Gollenz, chairman of the real estate association. Hardly any apartments are being sold. The forecast for 2025 is getting worse by the day. ‘We are already talking about an 80 percent drop in new construction,’ said the expert. This would also have a massive impact on the entire economy and the workforce – from large corporations to house-sitters. More and more construction workers now have to ‘go on the dole’ in the warm season, something that has never happened before. In addition, a housing shortage is to be expected throughout Austria.”
“There is also a poor mood on the market: because it is constantly being said that nobody can afford property any more, many people do not even ask for a loan, according to Michael Pisecky, chairman of the Viennese specialist group. His colleague from Lower Austria, Johannes Wild, knows of estate agents and property developers who sold their last property nine months ago. Many real estate developers have come under pressure after a boom phase of several years last year. Medium-sized companies have been particularly hard hit and some have gone bankrupt. In addition to the insolvencies, there is also the question of what will happen to the unfinished apartments. Property developer spokesman Hans Jörg Ulreich assumes that projects that are close to completion will also be completed. This is because the banks also know that nothing is worth less than a half-finished construction site.”
“As Melbourne Water redesignates flood zones, home owners in Kensington Banks could be faced with futures where their homes are valued at less than what remains on their mortgage. Roger Hadgraft says the news came as a shock to him, after new flood modelling was done for the first time in two decades. ‘You do worry about the future value of the house because you think … you can easily lose a quarter or a third of the value,’ he said. Another resident who 7.30 spoke to but wished to remain anonymous was angry at Melbourne Water. ‘We’ve got a big mortgage, what’s going to happen if we need to sell and all of a sudden the property is worth less than we’ve got to pay back?’”
“When Jessie Moss and her family bought their first home, it seemed like a bargain – but now the drop in the market has wiped out their deposit. They are among about 2000 first-home buyers whose equity has been erased by falling house prices. Moss and her family bought a three-bedroom, former state house in Waiwhetū, Lower Hutt in November 2021, at what turned out to be the peak of the housing market. It was valued at $860,000, but they paid $743,000 with a 20 percent deposit pulled from their savings, KiwiSaver accounts and borrowed from family. ‘At the time people were buying similar houses in Lower Hutt for as much as $900,000 in places like Naenae and Taitā.’”
“But then the market started to slow. A year later, the house was worth $560,000 – and they were due to refix their mortgage as interest rates rose. ‘We are now in a situation where the house is worth 19.9 percent less than we paid for it, putting us among the 2000 first-home buyers who have no deposit and no choices but to pay through the roof for a house that is hardly worth it. We are stuck. We have no plans to move, however we cannot afford to maintain the house beyond things like getting blinds. We are just managing the weekly repayments which have gone up by 30 percent from $675 to $888 weekly, plus insurance and rates is $1000 weekly.’”
“‘It’s a feeling of hoping that none of the wheels fall off. We can’t afford the roof to give in or the weatherboards to rot out. There’s no buffer. If anything drastically goes wrong like that, we will have to be begging and borrowing off family. We cannot get additional lending to maintain this really expensive asset we have.’ The house might cost $600 or $700 a week to rent, she said. ‘We are paying way above rental rates. Whereas when we first bought the house it felt like, ‘okay we are paying a bit more in insurance and rates but the mortgage is more or less what we had been paying in a rental’. It felt okay. Now it feels a bit ridiculous.’”
“She said her situation illustrated the madness of the movements in the housing market. ‘Literally in a matter of a few months in any direction it makes a really vast difference in situation – then and for years and years to come.’”
“China Evergrande’s former CEO, who Chinese regulators recently said was ‘uncontactable,’ has sold his home in Hong Kong at a loss of HK$74 million ($9.48 million) from the purchase price, according to a property agent. Xia Haijun last month sold a 2,834 net sq ft (263 sq m) five-bedroom duplex flat in North Point Mid-Levels district on Hong Kong island for HK$82 million, said Gary Lam, a senior sales director at real estate agency Centaline. In a filing last month, where Evergrande’s onshore flagship unit was fined $577 million for fraudulent bond issuance and illegal information disclosure, the China Securities Regulatory Commission (CSRC) said Xia’s involvement was ‘particularly vile.’ A mansion on the Peak in Hong Kong once owned by Hui was also sold last month for $57.37 million, half the valuation it received in 2023, records from the Land Registry showed.”