A report from Yahoo Finance. “The stock of troubled San Francisco lender First Republic wobbled Monday after it announced it would stop paying dividends on its preferred stock and an analyst said the bank wouldn’t be able to find a buyer willing to take on its problems voluntarily. Wedbush Securities said in a note Monday that First Republic faces a ‘Hobson’s choice in which it essentially has no other choice than to move forward as a standalone company’ due to the amount of unrealized losses on its balance sheet. Even a sale at $0 a share is unlikely, Wedbush said, because any buyer would still essentially have to pay billions to absorb those losses. First Republic’s stock dropped more than 1% Monday before changing course. Over the past month, it has dropped roughly 85%.”
Loop North News in Illinois. “Mayor-elect Brandon Johnson’s proposal to more than triple the transfer tax – imposed on buyers of residential or commercial properties priced at $1 million or more – is not being well received by the Gold Coast, Lakeview, Lincoln Park, Old Town, and Streeterville real estate brokerage communities. In addition to the threat of a possible luxury tax looming over the market, values of million-dollar-plus properties already have dropped 10 to 30 percent, according to Jim Kinney, former president of Illinois REALTORS and a veteran Gold Coast broker. A seller of a two-bedroom condominium at the plush Ambassador West in the Gold Coast recently cut the asking price $625,000 from $1.875 million to $1.25 million, Kinney noted. ‘If luxury property values keep dropping, soon there will be no $1 million properties being sold, so the Mansion Tax threshold may have to be lowered,’ Kinney surmised.”
From Wealth Gang. “The fallout from tech layoffs extends beyond the employees themselves, weaving its way through the fabric of local communities. Housing markets, once bustling with tech professionals, may experience a decline in demand, resulting in dropping property values and rental rates. One Seattle-based tech worker in dire straights illustrated this ripple effect while seeking advice on how to pay their mortgage after being laid off. The post on tech job community board Team Blind, titled ‘Laid Off And Can’t Pay Mortgage,’ went viral.”
“Last year I bought a 1.5M home in the Queen Anne area in Seattle. My monthly payment is around 8500. The unexpected happened a few months ago and I was laid off my from job (sic) at Meta where I was a staff level engineer. I really need help because I depleted most of my cash in the down payment for my house and I can’t afford the monthly anymore without a job. I’ve applied to more than 50 companies and I’ve put out more than 500 applications but I can’t get an offer for the life of me. Next month will be the first month I won’t be able to make my mortgage payment and I’m terrified. I’ve thought about selling my house and moving in with friends but I’ve lost so much money in house value I can’t justify it. Please help me.”
NBC Bay Area in California. “In Oakland, a debate is heating up about how pandemic protections against eviction should come to a close. John Williams, an Oakland resident and landlord, said he lives in the same West Oakland property where he also has a tenant. ‘I still haven’t gotten five dollars from her,’ Williams said of his tenant, who he added has not paid him rent since the start of the pandemic. He said he received a foreclosure letter for his property on Friday. ‘I am losing money, I’ve lost value on the property, you know,’ Williams said, ‘Over the last year, nobody wants to buy a property with a tenant who doesn’t pay.’”
The New York Post. “Pete Davidson is willing to take quite a loss on his Staten Island condo after it idled on the market for months without an offer, The Post has learned. Davidson, 29, initially listed his two-bedroom riverfront condo of two years for $1.3 million in December. The former ‘Saturday Night Live’ fixture purchased the roughly 1,600-square-foot pad back in 2021 for $1.2 million — so the comedian was hoping to just break even if he was able to find a buyer at that price. But ‘The King of Staten Island’ star has now dropped the price to $1.1 million. ‘He has been doing well for himself in the last few years, a $100,000 loss is not too bad,’ the insider said.”
The West Elgin Chronicle in Canada. “The Brantford Regional Real Estate Association reports 176 homes sold last month, up from 138 in February 2022. The average cost for detached homes in Brantford and area has plummeted over the past year by 23 per cent, from $983,000 in March 2022 to $756,000. The quick succession of increases eroded buying power as borrowing costs rose and sent prices falling. With Canadian Real Estate Association data showing average prices have dropped 19 per cent from their February peak of $816,578 to $662,437 last month.”
I News on the UK. “Lou Valdini, 68 and living in Yorkshire, is one of thousands who bought into the buy-to-let dream, believing it would provide a steady monthly income and secure his retirement. For years, that dream was a reality. But after Conservative chancellor George Osborne announced he was axing higher tax relief in 2015 and would start to tax landlords’ income based on their revenue, things started to go wrong for buy-to-let. The change wiped out many landlords’ profit and thousands were forced to sell up.”
“He sold one property at a 20 per cent loss and is unable to sell the other because it is in negative equity, nor can he remortgage it. ‘With rates now so much higher, the mortgage has increased from £294 in March 2022 to £621 in March 2023. I’ve increased the rent but by only 7 per cent, which is way below what I need to break even,’ he says. ‘Consequently, I am subsidising my tenant.’ Lou’s nightmare experience is familiar to many private landlords across the UK.”
The Guardian. “Housing prices in some of Australia’s most affluent suburbs have had the biggest falls from pandemic peaks. Some high-end houses and apartments have lost more than a quarter of their value. Nationwide data shows that many of the same wealthy areas that enjoyed exuberant price runs in the years leading up to and the initial period of the pandemic have now retraced the most. The falls are most pronounced in Australia’s three most populous cities – Sydney, Melbourne and Brisbane – but also noticeable around the country, according to research compiled for Guardian Australia by CoreLogic.”
“And while the biggest declines in Sydney apartment prices were clustered in beachside suburbs, the suburbs with the largest house price declines are dotted across greater Sydney. City-edge suburbs Redfern and Newtown lost around one-quarter of their value from peaks hit in late 2021 and early 2022, but so did Killcare in the north and Taren Point to the south. In greater Melbourne, some coastal suburbs on the Mornington Peninsula recorded near 20% falls from peak pricing. The southern areas of Brisbane also experienced steep drops, with Fairfield seeing a decline of 33% from its recent high.”
“A series of rapid-fire interest rate hikes is also putting pressure on many mortgage holders, with a sizeable cohort at risk of becoming forced to sell in a scenario that would depress prices. Known as ‘mortgage prisoners,’ more than 15% of indebted homeowners can’t refinance because they no longer meet lending standards, Reserve Bank data shows. Many of these households are also stuck with loans at uncompetitive interest rates and may be in homes worth less than when they bought them, due to the recent price falls.”
From Asia One. “DK bought a resale one-bedder, both for a lower price and so that he could get rental income immediately. Unfortunately, Singapore’s rental market softened from 2013 onward. DK says that when he started renting, rates were just over $4 psf. But by May 2017 when he decided to sell, rates had fallen to $3.35 psf. He had also seen a slew of intensified cooling measures since then, and had finally accepted the measures were permanent** and would keep prices down. He felt compelled to sell. ‘But by the time I sold the ABSD rate had risen to 10 per cent, and by then TDSR was also introduced*. The shock factor of these measures was still fresh and recent in market memory.’”
“Reader KT and his partner owned a three-bedder in the Katong area, which they had bought in 2004. In August 2018, the couple decided to sell the unit, as KT would be working in Australia indefinitely. He says: ‘As you know, in August 2018, there were new cooling measures and higher ABSD. The painful part is that we’d found a realtor and started marketing our house, exactly three days before the cooling measure.’”
“In the end, KT sold at a ‘slight loss’ which he describes as being less than five per cent below valuation. Even so, he feels he got lucky as — over the next two months — the realtor was only able to secure two serious offers. KT says the experience shattered his former illusions about the safety of the property market, as ‘no matter how safe property is, you can still end up being one of the unlucky few who suffers a loss.’”