It’s Friday desk clearing time for this blogger. “The share of languishing listings has been accelerating thanks to a bump in more houses being offered for sale at the same time that demand has waned. Dawn Brenengen of Trailwood Realty in Raleigh, North Carolina, comments with an anecdote of how she once had to turn down her best friend who wanted to list her place for $30,000 more than it was worth. ‘She was hoping that some sucker would just walk by and decide they couldn’t live without buying it,’ she writes. ‘You can price your house to sell or not,’ Doug Campbell, a Tampa-area agent, wrote. He gave a big shoutout to sellers who overvalue their properties, thereby ‘making it much easier for buyers to recognize that properly priced houses really are good deals.’”
“In a red-hot South Florida housing market, condos built in 1994 or earlier are just not moving as owners – hit with these massive costs – are trying to dump them – and finding resistance from buyers. ‘Now with anything older than 30 years in condos, buyers are a little bit more concerned about the reserves and maintenance that may have been deferred and what may come up in the future,’ said Monica Steinmuller, a real estate agent in Key Biscayne. The condo market in South Florida has been over-valued for years some would argue, because maintenance costs were being deferred. Now that assessments and reserves are part of the equation, those costs are very much part of any sale, Steinmuller said. ‘The negotiation is much more in-depth now than it was before,’ she said.”
“At Ocean Village Condominium, Carlos Mendia – the association president – said this choke point between safety and money was bound to happen. He said the Legislature may need to consider pushing back the requirements or providing some type of financing or even tax relief. ‘They have to do something because there are going to be people hurting out there,’ he said. ‘And they are not going to allow real estate prices to go down.’”
“‘This has been really hard because we’re not even a year in,’ said Laci Booker. She says within weeks of moving in April 2023 it became obvious that corrective work needed for the home would go far beyond what’s found during a typical blue-tape walk-through. ‘I never would have expected to have to be dealing with something like this,’ Booker said fighting back tears. For Laci and her family , their dream home quickly turned into a nightmare. When we reached out to the builder, Pulte confirmed repair work started in January; saying four months later, ‘The city of Seguin has conducted its own inspection, and we have resolved all issues that were identified during that inspection.’ Laci said, ‘I want Pulte to take this house back and let me get far, far away from them.’”
“Not even Midwestern manners can disguise Wisconsinites’ anger over how high housing prices have climbed. Wisconsin is the unhappy winner of the biggest price jump among the presidential battleground states. Prices are up here at double the U.S. average. ‘A few years ago, it was really realistic to afford to buy something while making $50,000,’ said John Johnson, a Marquette University Law School research fellow studying local politics, housing and demographic trends. ‘Not anymore.’ A protracted house hunt was enough to make Nahona Moore, 28, plan to change her lifelong record of voting for Democrats. Moore, a self-employed makeup artist living on the border of Milwaukee and Wauwatosa, said she blamed both Biden and Harris for ‘not making anything better.’ She added: ‘When Trump was still president, if we were making what we make now, we would be set.’”
“A Putnam County man was sentenced to prison Monday after fraudulently obtaining a home mortgage by falsifying documents and being untruthful with federal investigators. Jason Trador, 46, of Scott Depot, was sentenced to one year and six months in prison to be followed by three years of supervised release time for overvaluing property on a loan application, making a false statement to federal investigators and making three false statements to the U.S. Department of Housing and Urban Development, according to a news release from the U.S. Attorney’s Office for the Southern District of West Virginia. The news release said in 2018, Trador secured a home mortgage insured by the Federal Housing Administration totaling $223,870 from Victorian Finance, his employer at the time.”
“A Virginia man was sentenced to more than four years in prison for a 15-year scheme where he issued millions of dollars in fraudulent loans for his own benefit. The actions of James Stevens, 47, of Weems, led to a $2.3 million loss to the bank where he was employed as a commercial lender. He also stole nearly $100,000 from a bank customer. Beginning in 2008, and continuing through 2023, Stevens exploited his position to issue numerous fraudulent loans in the names of other individuals. Stevens would often create false documentation to support the loan applications using the personal information of multiple bank customers in the process. Stevens would then use the proceeds of these loans to make payments on other previously-issued fraudulent loans, to pay himself or to pay others.”
“According to the U.S. Attorney’s Office for the Northern District of California, 52-year-old Tjoman Buditaslim pled guilty in federal court to wire fraud conspiracy Wednesday. Three others have also pled guilty to the scheme, in which 102 home mortgages worth more than $55 million were originated based on false and fraudulent loan application information. The Daly City resident also admitted that many of the mortgages were insured by the Federal Housing Administration and that the agency lost more than $486,000 to keep some of the loans from going into foreclosure.”
“‘These defendants used their professional knowledge of the mortgage industry to perpetrate a fraud on unsophisticated home buyers, funneling these victims into loans for which they were not qualified,’ U.S. Attorney Ismail Ramsey said in a statement. ‘My office is committed to protecting all victims of fraud, whether federal agencies, Northern California residents, or—as happened here—both.’”
“The county of Los Angeles has tentatively agreed to buy the Gas Company Tower, a prominent office skyscraper in downtown Los Angeles, for $215 million in a foreclosure sale. The price is a deep discount from its appraised value of $632 million in 2020, underscoring how much downtown office values have fallen in recent years. ‘Because we are seeing once-in-a-generation price reductions for commercial real estate in the downtown area, as responsible stewards of public funds, the County is doing its due diligence and evaluating the possibility of acquiring property in the Civic Center area, such as the Gas Company Tower,’ the statement said. The 52-story tower at 555 W. 5th St. was widely considered one of the city’s most prestigious office buildings when it was completed in 1991.”
“Earlier this summer, Swiss bank UBS’ real estate investment arm opted to auction off a Midtown Manhattan office rather than go through the effort of finding a buyer. Wednesday, the building at 135 West 50th St. found its buyer — the sole, undisclosed bidder in the auction, which scored the property for an eye-watering discount. In 2006, UBS Realty Investors bought the 920K SF building for $332M. The bidder spent just $8.5M to scoop it up, a 97.5% haircut from the previous price. ‘What’s shocking is how fast the valuations dropped now that we’ve seemingly reached bottom, or close to it,’ David Sturner, whose family’s firm sold the building to UBS, told the Times. In the second quarter, commercial foreclosures occurred at the highest rate since 2015. At the same time, $94B of commercial real estate debt is in distress, with another $201B at risk.”
“Maeve Ellis had given up on finding an apartment with friends while studying at the University of Toronto for the past couple of years. This year, though, when she restarted the hunt for a shared apartment, she found a distinctly different market. It only took one viewing and application before she locked down a three-bedroom unit with two friends near her school for $2,400 a month – well below current market rates. Toronto rental agent Sundeep Bahl said the people who own these condo units face very high interest rates and a sluggish real estate market for small condos, leaving them desperate to fill the apartments they’re struggling to sell.”
“‘At newer buildings, a lot of landlords will accept students because they really want to fill the units,’ said Mr. Bahl, who added that some owners are facing mortgage costs and condo fees above $4,000 a month. ‘Just like it’s a buyer’s market right now, it’s a tenant’s market in the same sense.’ Mr. Bahl said savvy renters, especially those looking for condo units in larger cities, can consider playing hardball and negotiating rent down with desperate owners. ‘Students need to be made aware that there are a lot more options than they’re led to believe in the market,’ Mr. Bahl said.”
“A well-supplied Ontario housing market throughout the spring and early summer meant that potential home buyers benefitted from increased choice and more negotiating power on prices. As a result, more and more properties — including this Guelph townhouse — were sold well below their original prices, and even struggled to finalize a sale despite multiple price reductions. The townhouse first sold for $765,000 in October 2023. Just six months later, the home was re-listed for $789,900, but failed to attract any buyers. In July, the home was re-listed twice, once for $699,900, and another time for $749,000. The townhouse eventually sold for $720,000, representing a $45,000 loss when compared to its price less than a year earlier.”
“Many other properties throughout Ontario have sold well below their listing prices this year, including a three-bedroom home in Toronto’s Silverthorn neighbourhood, which sold in June at a loss of $207,500, and a Mississauga condo which sold at a $125,000 loss after 10 failed to attempts to sell.”
“German Chancellor Olaf Scholz is launching a fresh bid to tackle a property crisis as the country braces for recession and elections that could bolster the far right. The meeting will address the housing shortage in Europe’s most populous country, one exacerbated by the failure of major developers and a crash in investment and financing as real estate prices slumped. ‘The housing shortage can lead to populists increasingly taking up the issue with supposedly simple answers,’ warned the Iris Schoeberl, president of the German Property Federation.”
“A Perth building company with more than 230 unfinished homes on its books has failed to get its building contractor registration renewed, leaving customers facing further uncertainty. It was revealed earlier this month that more than 230 houses on the company’s books were unfinished, with some projects in progress for more than four years overdue. Dozens of customers have been left in distress, including single mother Cindy Richardson, who said she was working two jobs to pay rent on top of the mortgage and rates for a home with no roof or second floor which was long past its scheduled completion date. Fellow customer Richard has been building in Orelia with Nicheliving and said he’s felt misled by the company for more than two years. ‘I think [the deregistration] is wonderful news but it’s also late, it’s too late, things should have happened much sooner,’ he told ABC Radio Perth.”
“Mortgage broker Vijay Gounder has seen plenty of incentives for new build properties being offered to his clients. He said simply discounting properties could pull down values for nearby homes in the same subdivision, whereas something like a cash back after purchase wouldn’t. Gounder said in a soft market, some developers would rather get homes sold than have them sitting empty, especially because easier loan-to-value ratio lending rules define a new build as no older than six months and bought direct from the developer. ‘When it comes up to the six months mark, then you see developers start to, I guess, panic and start offering these crazy incentives to make sure that those properties are sold because obviously they’re holding costs as well.’”
“Fletcher Living announced in July, it will offer a $10,000 grant toward deposits for people who buy the company’s homes in Auckland or Canterbury. CoreLogic chief property economist Kelvin Davidson has been watching for new construction and said it’s quieter than it used to be. Davidson said new builds aren’t the only option. ‘If you can find something there, you probably don’t necessarily need to look at a new build. You might choose to get the equivalent existing property. You can probably put in a cheeky offer and it might get accepted because it is a buyer’s market. So yeah, the the new build sector is in a downturn at the moment.’”
“A Chinese property developer is giving back homebuyers the deposit they paid for apartments in a project it was unable to finish as part of a housing return programme coordinated by the local authorities, official media reported. The refund coordinated by the government of the city of Nanjing is believed to be the first such case in China, the New Beijing News reported this week, and could set a precedent for other cities and developers to resolve the problem of unfinished homes that has dogged the real estate sector.”
“Zhang Dawei, chief analyst at property agency Centaline, said the refund programme will likely make it more difficult to guarantee the delivery of unfinished homes. ‘The vast majority of local governments and developers are unable to refund the owners of unfinished developments on a large scale, and Nanjing’s practice can hardly serve as an example,’ Zhang said.”