A report from the Denver Post in Colorado. “A big jump in new listings and a modest increase in closings helped drive up the number of listings available to buyers in metro Denver during the peak home-selling season, according to the Denver Metro Association of Realtors. A year ago, buyers in metro Denver had 4,632 home and condo listings to choose from, and two years ago, only 3,204. At the end of last month, there were 6,990 active listings on the market. Libby Levinson-Katz, chairwoman of the DMAR Market Trends Committee, expects the inventory will keep climbing in May and that sellers should account for that as they determine a listing price. ‘Buyers on the hunt for their next property will likely choose the one priced at fair market value, with very little work needed. This is not the time to push the price or to place a home on the market to see if you can obtain the price you hope to achieve,’ she said in comments accompanying the report.”
Moneywise on Texas. “One TikToker wanted to highlight what happened to the cities that saw an influx of people who fled the Golden State. Dani posted a video about how Californian tech workers ‘cooked’ the Austin real estate market by buying up their cheap homes during the pandemic, leading to inflated prices and a low supply of homes. Now, with tech giant Oracle moving its headquarters out of Austin and major Tesla layoffs happening in the city, Californian techies are leaving the city in droves — but without much of a return on their housing investments. Now, those prices are starting to fall. ‘They’re still delusional,’ Dani said of the California homeowners in Austin. ‘They’re trying to sell houses for crazy, crazy inflated prices, and that’s not going to work.’”
“But due to the increase in home buying, the apartment industry came swooping in to capitalize on a population looking for places to live. There has been so much construction to build apartments, that rental rates decreased in Austin by 7.4% since last year, according to Apartment List.”
The Dallas Morning News in Texas. “There’s an oversupply of apartments in D-FW right now. Some units sit unoccupied, and rents have fallen slightly over the last year. Supply is expected to hit its peak sometime within the next year. But experts said the oversupply is a short-term issue. The buildup in the Dallas metro area over the last decade has been immense. Since 2014, more than 181,000 apartments have been built — a whopping 35.5% increase in a huge market, according to RealPage. Another roughly 35,000 apartments are under construction, and developers are proposing more than 80,000 additional units, according to the MRI data.”
“The oversupply is a trend MRI is seeing not just in Dallas but in other major Sun Belt cities — like Atlanta, Orlando, Houston, Austin, Nashville and San Antonio. ‘It’s just bad timing for the moment,’ said Bruce McClenny, an industry principal at MRI ApartmentData. ‘The current oversupply of apartments is just another chapter in the supply-demand extremes initiated during the COVID pandemic.’”
Arizona Family. “The Realtor.com report shows the metro region around Austin, Texas, had the widest gap between mortgage payments and monthly rent. This area also includes the towns Round Rock and Georgetown, where people can save as much as $2,165 per month — a gap of 141.5%. The gap is 121% for residents in the Seattle-Tacoma-Bellevue, Washington metro region. A mortgage payment may be up to $2,422 more than the average monthly rental price. The Phoenix, Arizona, metro area is third on the list. Renters there pay 99% less in rent than in mortgage payments. Although California is the most expensive state in the U.S., Bay Area residents pay $2,689 less rent. That’s a 95.5% savings in house payments. The Los Angeles-Long Beach-Anaheim metro area is fifth on the list. Renters in those cities pay $2,539 less — an 89.7% difference.”
The Des Moines Register. “A prominent Des Moines gastroenterologist has filed a lawsuit in Polk County alleging Orton Homes President Rob Orton and jailed Johnston developer Daniel Pettit failed to repay him $850,000. Dr. Bernard Feldman filed the lawsuit April 22 in Polk County. Though Pettit, 43, alleged to owe millions, is the target of a criminal investigation involving widespread allegations of fraud, the new suit is the first to name Orton, CEO of the American Group LLC, a holding company for roughly 20 real estate companies that also includes RE/MAX Precision in Clive. A Watchdog probe in December found judgments and debts of nearly $70 million claimed against Pettit and limited liability corporations in which he is involved. The court actions show his failed deals affected not only yet-to-be-constructed developments in West Des Moines, but a wide swath of business associates, lenders and companies beyond Iowa.”
“Among the developments Feldman invested in was a planned West Des Moines apartment complex next to the new Des Moines University campus that never got built. Now, Feldman, the city and an insurance company are arguing in court over who should be financially responsible for site improvements that went uncompleted.”
From Bloomberg. “Massachusetts is jumping into the national debate on the affordable housing crisis with a proposal to tax high-value property sales. Governor Maura Healey’s $4 billion housing bond bill, the state’s biggest-ever investment in its residential stock, includes a provision allowing cities to impose a transfer fee of 0.5% to 2% on property sales exceeding $1 million. The revenue generated would go toward affordable housing projects. Critics argue that the additional tax would burden commercial property developers already facing high vacancy rates, particularly in office buildings, and could lead to a decrease in overall real-estate tax revenue. ‘Commercial property owners right now are really struggling,’ said Evan Horowitz, executive director of Tufts University’s Center for State Policy Analysis. ‘So even though their properties are valuable, they’re not profitable. And they’re in a bad position to pay.’”
Bisnow San Francisco in California. “Hudson Pacific Properties wants to sell three office properties from its West Coast and Pacific Northwest holdings totaling around 900K SF, the company said in its earnings report Friday. Two of the listings are off-market and one is already under contract, HPP Chairman and CEO Victor Coleman said on the company’s quarterly earnings call. On the same call, HPP announced it bought out its partner in 1455 Market St., a 1M SF Mid-Market office tower that once housed some of the country’s biggest names in finance and technology, for $43.5M — a fraction of its peak value.”
The Business Journal in California. “The Fresno area had an average annual unemployment rate of 7.5% in 2023, but counting the ‘functionally unemployed,’ the actual jobless rate is closer to 31% and as high as 60%. The Ludwig Institute for Shared Economic Prosperity (LISEP) last week released its True Rate of Unemployment (TRU) analysis, which tracks the ‘functionally unemployed,’ defined by LISEP as the jobless plus those seeking full-time employment paying above poverty level — about $25,000 a year.”
“The Fresno metropolitan area had a TRU unemployment rate of 31.1%, according to the Washington, D.C.-based economic research firm. That gives it the second-highest functional unemployment rate among the 100 largest U.S. cities, edged out by McAllen-Edinburg-Mission, TX with a TRU of 48%, which was unchanged from last year. LISEP’s other metric, called the TRU Out of the Population (OOP), measures the functional unemployment rate of the entire working-age population age 16 and above. On that metric, Fresno’s unemployment rate for 2023 was 60%. LISEP also noted that Fresno had the third-highest increase in functional unemployment in the past year with a 7-point increase. Bakersfield’s TRU was 21% — below the national average of 23.3%, but a 9-point increase in 2023.”
Business Insider. “In 2017, Blackstone — the world’s largest private-equity firm, — decided to give ordinary investors an opportunity to get in on the firm’s magic. It created BREIT, a p’rivate fund that buys commercial real estate like warehouses and apartment buildings, and marketed it to everyday investors as an “all-weather strategy to build long-term wealth across market cycles.’ But over the past two years, some investors have grown suspicious that BREIT isn’t the rock-solid investment Blackstone claims it is. Faced with a run on the fund, Blackstone cited a provision that allowed it to take its time refunding antsy investors — a decision that only served to further alarm the market. Shares in Blackstone tumbled by nearly 20%. Last year, BREIT failed to generate enough cash to cover its annual dividend.”
“When BREIT faced a flood of redemption requests from investors, it only fulfilled all those requests after raising cash from new investors — including one that received a sweetheart deal from Blackstone to invest in BREIT. ‘It is the absolute definition of a Ponzi scheme,’ said Nate Koppikar, who runs a hedge fund called Orso Partners that has shorted Blackstone’s stock because of concerns over BREIT. Unless the real-estate market comes roaring back, analysts warn, BREIT could end up shrinking to a fraction of its current size, leaving the fund’s investors holding the bag.”
CBC News in Canada. “The tenant in Nazar Ajeely’s one-bedroom unit stopped paying rent, refused to take his calls and gave no explanation. The tenant also refused to leave the apartment in Windsor, Ont., Ajeely said, giving him no choice but to go to the province’s Landlord and Tenant Board to seek an eviction order. But the tribunal is mired in delays and the wait for his hearing went on for 11 months. In the meantime, Ajeely’s tenant racked up more than $14,000 in unpaid rent and left the landlord questioning how this could be occurring.”
“‘I can’t believe this is happening in Canada. There is no fairness in this system and so many people are in severe stress, both financially and mentally, because of it,’ Ajeely said. ‘The government of Ontario must put an end to this misery because landlords can’t suffer forever. It’s not just the landlords but also tenants simultaneously. Both bodies are suffering and struggling because of this delay. The bank will not wait for me to make my payments. This person living for free has no one who can stop him and he is living for free — why would he bother to pay?’”
Storeys in Canada. “Getting any housing project from the planning and approvals stages to actual construction is a feat these days, and it’s one that has become insurmountable for many developers who are increasingly struggling to pencil things out. This is the reality in major urban hubs like Toronto, as well as smaller outskirt towns like Ajax. On April 22, 2024, the Ontario courts granted a receivership order over a real estate holding company known as Ajax Meadows, appointing TDB Restructuring Limited as the receiver. In the receivership application, Vector alleges that Ajax Meadows has racked up over $4M in debt, and that construction on the project, to date, ‘has not been commenced in any material fashion.’”
“Long story short: Ajax Meadows never managed to cough up what was owed — despite being informed on multiple occasions of the indebtedness, including with respect to interest. Around mid-March in 2024, it came to Vector’s attention that Ajax Meadows had entered into an agreement of purchase and sale in respect of the development property off of Rossland Road. ‘According to Vector’s receivership application: “during discussions between Vector and Mr. Khan with respect to [Ajax Meadows] it became clear to Vector that, in Vector’s view, Ajax Meadows has an unrealistically high perception of the value of the Mortgaged Property, and that this misconstrued (and unsupported) valuation was likely to frustrate any attempts by Ajax Meadows to either sell the mortgaged property or refinance the Indebtedness in the near term.’”
Daily Mail in the UK. “More Londoners are now deciding to stay in the capital as staff are encouraged back into the office and the city’s property market appears to regain its appeal to buyers. Others who have moved out from London to the countryside say they have been unimpressed by the lack of things to do, poor local transport and nosy neighbours. A third wrote: ‘We moved out from London to somewhere very pretty and rural in the South West and it’s a been a terrible decision, for me personally. Left a house in an area we’d lived in happily for eight years, for a lovely looking, larger one in a pretty looking rural village and ever since we moved I’ve struggled. I think the root issue is we left because we thought we should, not because we wanted to, and didn’t think hard enough about the realities because the pandemic made us panic about house prices.’”
From Reuters. “German commercial property prices fell 9.6% in the first three months of 2024 compared with a year earlier, the VDP banking association said on Wednesday, as the nation’s property industry suffers its worst crisis in decades. The continuing decline in values of commercial real estate follows a 10.2% drop for all of 2023. The latest drop is less severe than the 12.1% drop for the fourth quarter, which was the biggest ever. ‘Prices for commercial property show no sign of bottoming out,’ said VDP’s chief executive Jens Tolckmitt.”
“For years, property in Europe and particularly Germany boomed as interest rates fell, turbocharging demand. But a sudden jump in rates and building costs tipped some developers into insolvency as bank financing dried up and deals froze. Germany is so far Europe’s hardest hit in a rout that has also struck China and the United States. Jobs are increasingly on the line, and the industry has called for aid.”
Newshub New Zealand. “Kiwis looking to buy their first home are being advised now might be their best shot. It comes as CoreLogic’s latest report shows first-home buyers are getting more bang for buck thanks to weaker property prices. But those looking to get on the property ladder are being warned the pendulum could soon swing in favour of another group. ‘I was eating out all the time… friends, drinks – usual things people do. But after that I decided to minimise my expenses a little bit, live cheap,’ Auckland homeowner Mathew Simupande said, telling Newshub of how he saved up to buy his place.”
“Swift Mortgages negotiated a 6.8 percent interest rate for Simupande. ‘I am able to manage it OK, believe it or not but, of course, if interest rates go down then… that would help tremendously as well,’ he said. But that’s not expected to happen until next year. For now, at least, Simupande will be sitting back in the comfort of his own Auckland home.”