It’s Friday desk clearing time for this blogger. “The spring housing market is turning into a bust as new home sales fell 4.7% in April from March’s downwardly revised number, the Census Bureau and Department of Housing and Urban Development said. ‘The new home sales report completes a trifecta of bad news in housing this week,’ said Robert Frick, corporate economist at Navy Federal Credit Union. ‘Building is anemic, existing home sales missed estimates and now new home sales had a big drop and remain tepid overall.’”
“‘Move-up buyers feel stuck because they’re ready for their next house, but it just doesn’t make financial sense to sell with current interest rates so high,’ Sam Brinton, a Redfin real estate agent in Utah, said in a statement. To be sure, not all homeowners are staying put, Brinton said. Despite the high mortgage rates, some sellers are forging ahead because they have no choice, he said. ‘One of my clients is selling because of a family emergency, and another couple is selling because they had a baby and simply don’t have enough room,’ Brinton said. ‘Buyers should take note that many of today’s sellers are motivated. If a home doesn’t have other offers on the table, offer under asking price and/or ask for concessions because many sellers are willing to negotiate.’”
“Another piece of luxury real estate has gotten a drastic price reduction. This one belongs to media billionaire Rupert Murdoch, and it’s a penthouse in the heart of Manhattan that evidently can’t find a buyer. Murdoch has slashed the price some 40%, from $62 million to $38.5 million. , Murdoch will be taking a substantial loss on the property if it sells at its current price. He purchased it in 2014 for $57.9 million, so it’s clear that at $38.5 million, it is priced to sell.”
“Cathy Rojas, a realtor in Vallejo of 20 years, said she expects prices to increase in the housing market when interest rates eventually drop. Rojas also noted there aren’t as many buyers in the current housing market. ‘We just have a huge inventory right now. A lot more than we’ve had in our surrounding areas in the last couple years for sure. Maybe even the last three years,’ she said. ‘There wasn’t a lot of inventory in the beginning of the year, but I feel like as soon as April hit, we started seeing more and more homes. A lot of people are leaving California, which is hard.’”
“Residents in the Irvington Neighborhood in Fremont are growing frustrated over people living in their RVs while parked near their homes. They say their generators are loud and creating health issues. ‘I’m a prisoner in my own home, despite being hardworking tax paying citizens, I pay a great amount of tax, a great amount of parcel tax to live here, how is this even justified?’ Sheila Mani of Fremont said.”
“Policy cancellations and sticker shock. That’s what Hawaii residents are grappling with when it comes to their property insurance. Kaneohe homeowner Carol Fahy is among those impacted. Last month, she got an email from her insurance agent saying her policy wouldn’t be renewed. Fahy was able to get coverage from another carrier, but now pays $500 more per year. It’s not fun when these numbers keep going up,’ she said. Fahy isn’t the only one. Homeowners and agents tell HNN insurance premiums have shot up by as much as tens of thousands of dollars each year for everything from single-family homes to condos. ‘You share a rate with a bunch of people that are bad insureds,’ Lahaina-based independent insurance broker Mahealani Strong said. ‘Because you guys all swim in the same pool, everybody gets the dirty water.’”
“Attorney Roberto Blanch says Dec. 31, 2024 will be ‘a date that lives in infamy.’ It’s one of the key deadlines for condo associations to comply with new condo safety laws that could upend the market for older buildings across Florida. Unit owners and associations at buildings and complexes that can’t be fixed or maintained, and that can’t finance these projects through a loan or line of credit, will be in the most trouble. ‘For many of us, we thought that living in condominiums would be affordable,’ said Rep. Vicki Lopez. Lopez’s district includes Key Biscayne, Coconut Grove, Shenandoah and other parts of Miami-Dade County. ‘I think what we’re coming to determine now is that it may be very unaffordable for many people.’”
“Billionaire Barry Sternlicht is convinced the real estate market will rebound with just a bit more time. Many investors in his $10 billion Starwood Real Estate Income Trust aren’t so sure — and want their money back now. The recent pushback in rate-cut expectations means that investors such as Sternlicht are having to write new chapters to the industry playbook. ‘They were wrong this year about rates coming down,’ said Jeff Langbaum, an analyst at Bloomberg Intelligence. ‘This stretches out their liquidity in hopes that eventually, they’ll be right.’ The pain, meanwhile, continues to ripple out. Investors in top-rated bonds backed by commercial real estate debt are getting hit with losses for the first time since the financial crisis. A Los Angeles landlord sold the city’s third-tallest office tower for 45% less than its price about a decade ago.”
“In the first quarter of this year, there were 2,003 insolvencies (1,599 bankruptcies and 404 proposals) across Canada, which was an increase of 87 per cent over the same quarter last year. It was the highest three months of insolvencies since the beginning of 2008. Steven Graff, a partner at Aird and Berlis who specializes in restructuring, said developers and construction companies are being particularly hit hard now by high interest rates and an inability to refinance their debt. ‘Real estate is the most challenged sector right now,’ he said. Daryl Ching, a Toronto-based chartered financial analyst, has worked with dozens of small business owners over the years. Some of them, unfortunately, fell on hard times and had to close. Mr. Ching said failing small businesses will sometimes try to renegotiate their debt with vendors without going through the formal insolvency process. He said it happened to him once, when a client in dire straits offered to pay only 40 per cent of his bill. ‘What am I going to do? I’ll take it,’ he said. ‘It’s a company closing down. I’m going to take whatever I can get.’”
“While property prices across England rose one per cent in the past year, according to the latest House Price Index from HM Land Registry, London continued to register declining prices. Central London areas with the most expensive properties saw the biggest drops. The City of London saw a 22 per cent drop that knocked £192,553 off average property prices, but the ONS noted that low transaction numbers in the area mean the data is not necessarily reflective of the market. Hammersmith and Fulham saw property prices drop 21 per cent, taking £191,322 off property values to an average price of £720,149. Westminster saw a 20.9 per cent drop that knocked £240,072 off the average value, which now stands at £910,652. Kensington in Chelsea saw a drop of 13.6 per cent, but with an average property price of £1,193,478 it’s still the most expensive place to buy property in the whole country.”
“Higher-for-longer interest rates and affordability pressures are forecast to keep house prices in check over the coming years. BNZ chief economist Mike Jones on Thursday updated his predictions for where house prices would go this year. ‘Last year’s short string of monthly house price gains now look like a false start. And we think current scratchy momentum will stick around for longer amid high mortgage rates, a deteriorating economic and labour market backdrop, and a jump in unsold inventory. The prospect of mortgage rates sticking around higher levels for longer adds to the case for a lower house price track this year at least,’ Jones said.”
“Mortgage rates were part of a wider cashflow crunch, he said. ‘There is pressure on household and individual finances – they have bigger fish to fry rather than participating in the housing market. Making the numbers work at the moment is difficult. Something has to give – we need to see mortgage rates come down before we see the house price cycle turn.’”
“The rental market for luxury properties, particularly Good Class Bungalows (GCBs), slashes monthly rentals in response to a muted premium housing market. EdgeProp Singapore reports that according to Ms Jacqueline Wong, executive director of Hardington Private, a niche consultancy for ultra-high-net-worth individuals and family offices: ‘Some GCBs listed at monthly rents of S$100,000 before have now been marked down to about S$65,000 a month.’ One example is the Nassim Road GCB, formerly leased to Su Baolin, a key figure embroiled in Singapore’s largest money laundering case. Once commanding a staggering S$120,000 monthly, the property’s rent has plummeted to S$60,000.”
“Amidst these developments, PropNex associate group director, Mr Shawn Wong, an exclusive marketing agent for a GCB at 4 Cable Road, notes that ‘owners are more realistic about asking rents today.’ In addition to rental adjustments, broader factors influence the luxury property market. ‘That’s why there is quite a lot of supply,’ said Mr Wong.”