A report from the Northside Sun in Mississippi. “‘People are paying so much more for houses than they did a year and half to two years ago,’ said William Fincher, a Realtor in Madison County. ‘They are paying $40,000 to $50,000 more than what they had historically and that concerns me.’ Fincher said this is concerning to him because, if a young family goes to purchase a home, they are paying $40,000 over the typical cost of what the house is actually worth.’”
“‘If they don’t plan on staying there for ten years or so, then they’re not going to get their money back and are going to be upside down in it,’ Fincher said. ‘Something has got to happen. There is going to be a correction period in the market because there always is.’”
“Fincher said as much as he doesn’t want this to happen, he is anticipating another recession in the housing market. He said he has handled foreclosed properties for eight to ten different banks in the area for the past six to seven years since the last recession, and it has made up 60 percent of his business. ‘It is all real estate business, and I think that is going to happen again at some point in time,’ Fincher said. ‘It could be 12 months or 36 months – it just depends on how the feds regulate all the inflation.’”
“‘The people that have money are still going to be buying houses, but my fear is another 2010. I don’t think it will be another housing collapse, but I think you’re going to have some people upside down if they decide to sell it after spending 30 percent more than what the house is actually worth. But people are paying ridiculous prices right now. It’s nuts’ he said.”
From WFTV Orlando. “The Central Florida eviction and foreclosure market is beginning to heat up as landlords and creditors look to finally shed their dead weight two years into the pandemic, a real estate attorney said. Mark Lippman, of Lippman Law Offices in Orlando, said many landlords didn’t immediately seek to oust their tenants once an eviction moratorium was lifted because they wanted their tenants to apply for rental assistance.”
“Now, that excuse has passed. Millions of dollars have been distributed throughout the area, though demand remains high. Volusia County reopened its portal this week, only to shut it back down a half hour later after the maximum 500 families applied. Pressure is also building on the landlords themselves, especially the smaller ones.”
“‘I think in the next few months, we’re going to start seeing a lot more foreclosure complaints,’ Lippman predicted, saying he had heard banks are gearing up those divisions. He said some of his clients were mom-and-pop operations who couldn’t make their mortgage payments after their tenants stopped paying. He said their choices will be to either refinance their properties or fight the eviction, though he noted banks usually win those fights.”
From News 10 in New York. “With the eviction moratorium ending in just a few days, tenant advocacy groups are protesting for an extension on the moratorium, while landlords plead for its end. Small landlords say they’ve gotten the short end of the stick throughout the moratorium. Elmira Landlord Michael Birdges owns five apartments. He said he was overburdened when one of his tenants didn’t pay rent for almost two years. ‘She owed me $20,000,’ he said. ‘I could not afford $20,000. It was a tremendous burden.’”
“In the worst cases, some report foreclosures. ‘Our clients are going into foreclosure where they themselves are unable to get out of this situation,’ said Jaime Michelle Cain, an attorney representing landlords in New York. She said the goal is to keep local landlords in their cities, but what’s happening is the exact opposite. ‘Landlords who have been in the business in their home towns locally for 20 to 30 years, they’re just putting up their hands and they’re selling to out of town investors,’ Cain said. ‘It’s scary to watch.’”
“Regardless of what happens in three days, the damage is done. The housing market in New York has been turned around and upside down. ‘The will to want to own property in the state of New York has been shaken,’ said Cain.”
The Daily Journal of Commerce in Washington. “Developer Mark Goldberg, of MBG Co., announced a pair of nearby Bremerton apartment projects some five years ago. One of those, at 1943 Wheaton Way, is now headed to a May 6 foreclosure sale unless a new lender or buyer can be found. Goldberg’s Water Wind & Sky LLC now owes about $2.8 million to MGP Beacon Guaranty, which is calling in the prior loan.”
“Goldberg acquired it in 2016 for about $375,000. It’s now fenced, cleared and graded. Goldberg said in 2017 that he hoped to find a financial partner and contractor, then break ground that same year. The six-story, 111-unit project began life as Water Wind & Sky; later sales efforts by NAI Capital called it the Beacon. NAI had said, some two years back, that it was entitled and shovel-ready. It was then offered at $3.6 million.”
The Steamboat Pilot. “As mountain towns across the state are grappling with how to regulate short-term rentals, the Colorado Legislature is exploring multiple avenues to legislate the issue on a statewide level. If the bill passes, local municipalities could apply for state funding to incentivize property owners to rent to a long-term tenant, rather than a nightly guest. Ulrich Salzgeber, president of the Steamboat Springs Board of Realtors, said the idea is helpful in theory, but may not work for most property owners.”
“Salzgeber said most who operate their properties as short-term rentals are second homeowners who hope to use their property several times a year and retire to it one day. Many of them, he added, would not be able to afford their second property without renting it out to nightly visitors. ‘Incentivizing them might be a good idea, but the problem with that is you no longer have the opportunity to use your property if you long-term rent it,’ Salzgeber said. ‘It’s going to fit some, but I don’t think it’s going to fit a lot.’”
From NPR News. “Some booming mid-sized cities like Boise have put caps on the number of short-term rentals operating in hot neighborhoods. Others have tried to ban them outright with little success. In hard-line conservative Idaho, there are already rumors of private property lawsuits. And then some people living in expensive neighborhoods have come to rely on the income from renting out their property.”
“Economist Megan Lawson tracks housing at the Bozeman, Mont., based think tank Headwaters Economics: ‘When we talk about short-term rentals, we’re careful to not condemn the idea. Because they do offer an opportunity for people who’ve been living in these places and are dealing with rising cost of living. It offers them an opportunity to continue to afford to live in these places.’”
“This is part of Jennifer Carr’s story. She’s a young realtor and a lifelong Idahoan. When she and her husband bought what they called their dream home in Boise’s trendy North End, they kept their old house nearby and decided to Airbnb it. JENNIFER CARR: ‘I got to be honest. Like, during the summer, it’s, like, we could have easily lived off of it no problem.’”
“Now they have plans to put a second home on the app with her husband basically treating its management as his full-time job. CARR: ‘I feel bad because I’m also seeing and hearing about so many people not being able to find rentals. And when they do, they’re just – the prices are just astronomical. But at the same time, it’s like, well, this is kind of one of those scenarios where this is our future. We’ve got to look out for what we’re doing and our goals.’”
The Prince George Citizen. “The federal government is using tax dollars to dream up a new way to hammer homeowners. In 2020, the online news site Blacklock’s Reporter discovered the federal government funneling $250,000 through the Canada Mortgage and Housing Corporation to figure out how to improve housing affordability.”
“The big brains funded by the CMHC just released a report recommending that the government target the ‘housing wealth windfalls gained by many homeowners while they sleep and watch TV.’ The annual tax would hit the value of Canadian homes assessed above $1 million. The bill would need to be paid when the home is sold or when it’s inherited, and it could cost many families thousands of dollars.”
From NCA Newswire on Australia. “Soaring coffee prices have reignited the smashed avo debate, with a financial data group warning the morning cuppa may be the one thing aspiring homebuyers have to forgo if they want to put a roof over their heads. In 2016, renowned demographer and The Australian columnist Bernard Salt wrote that ‘the evils of hipster cafes’ were part of the reason young people struggled to purchase their first home, saying he’d ‘seen young people order smashed avocado with crumbed feta on five-grain toasted bread at $22 a pop and more.’”
“But it was the following year when property tycoon Tim Gurner hit international headlines for making a similar remark. Now Grafa chief executive Heidi Cuthbert has waded into those same waters. She said the group most likely to be affected by the price rise was young people living in urban areas and already confronted with the double challenge of high city rents and rising property prices.”
“‘Foregoing the morning brew may be a necessary sacrifice to save for a deposit,’ Ms Cuthbert said. ‘Every coffee you drink is pushing that dream home ever further away.’”
From Bloomberg. “The crisis engulfing China’s property sector is impacting its biggest developer, with Country Garden Holdings Co.’s shares and bonds hammered amid fears that a reportedly failed fundraising effort may be a harbinger of waning confidence. Country Garden is one of the few remaining large, better-quality private developers that had been largely unscathed by the liquidity crunch, even as peers such as Shimao Group Holdings Ltd. saw dramatic reversals in their credit ratings.”
“The firm is viewed as a bellwether for contagion risk, as unprecedented levels of stress in the offshore credit market threaten to drag good credits down with bad. It has relied heavily on access to funding in the offshore credit market, like many peers that binged on debt to fuel growth. It has the largest pool of outstanding dollar bonds among China’s biggest property firms, excluding defaulters, with some $11.7 billion outstanding, Bloomberg-compiled data show.”
“Some of Country Garden’s dollar notes plunged to record lows in the wake of a report that the firm failed to win sufficient investor support for a possible convertible bond deal. Longer-dated bonds were trading as low as 69 cents on the dollar as of late Friday. Any sign of doubt in the firm’s capacity to weather liquidity stress risks may prompt a widespread repricing of other higher-quality developers.”
“With more than 3,000 housing projects located in almost every province in China, Country Garden’s financial health has immense economic and social consequences. If the firm starts showing signs of stress, it will severely damage already fragile investor and homebuyer confidence, posing threats to China’s economy and even social stability.”