A report from the American Statesman in Texas. "The receiver for struggling Austin developer StoryBuilt is asking investors for $2.5 million in new funding as the company attempts to avoid a financial meltdown. The request was made during an online conference call on Friday between StoryBuilt investors and Mike Bergthold, who is a managing director of Los Angeles-based Stapleton Group Inc. The Stapleton Group was court appointed as the StoryBuilt receiver. Bergthold said StoryBuilt would face 'financial Armageddon' if investors did not provide the $2.5 million, which he said would be used in part to hire an investment banker who could market the sale of StoryBuilt as a whole, or as individual properties. That, he said, would be far more favorable to investors than liquidating the company."

The Pagosa Daily Post in Colorado. "I keep receiving emails from Realtors in Pagosa Springs, advertising significant price reductions for unsold existing homes. One example is an Archuleta home originally listed in May 2022 for $695,000. After six price reductions, the home was taken off market in August 2022 at $550,000. In July 2023, the existing home was listed again for sale for $450,000, and price reductions continue. The current list price is now $440,000… which is more than a 36% reduction off the original May 2022 listing price. I wonder if this existing home property, located on Bob’s Place, is a forced sell investor-owned STR property?"

"I looked on Airbnb to find some great STR deals … as possible examples of where Average Daily Rates (ADR) might be going in 2023. One example STR found is an entire home hosted by Evolve vacation rental property management. The property ADR was $336.00 per night. Fortunately, Airbnb is now advertising a price reduction from $287.00 per night down to $191.00 per night. Better yet, Evolve is now advertising a price reduction from $336.00 per night down to $176.00 per night. According to Evolve, the listed STR rental price is down by more than a 47%, a whopping $160.00 reduction in the per night rate. I suspect a current per night lodging rate dropping by more than 47% might indicate the ADR is doing the same?"

From Benzinga. "In a recent episode of 'The Ramsey Show,' Dave Ramsey delivered a straightforward message to a young woman from Orlando, Florida. Ramsey bluntly stated, 'Ouch. You've screwed yourself. You've really made yourself a mess.' This response came after the woman, identified as 28-year-old Selena, shared her recent financial decision to withdraw $26,000 from her 403(b) retirement account to fund a down payment for home construction, with the intention of accommodating her growing family's needs. Ramsey's reaction was laced with skepticism as he said, 'I'm scared for you. I hope you get out of it with your skin intact, but I'm not positive you're going to.'"

From Buzz Feed. "We recently wrote posts here and here where brides revealed why they called off their marriage on — or right before — their wedding day. In the comments, grooms also shared their stories of why they suddenly called off their weddings. Here are the shocking results: 'We were together for seven years and were getting married in a few months. We'd already bought a house and started tying our lives together. She was emotionally distant for some time, but I ignored it like a fool in love. Eventually I noticed that she was spending significant time chatting with a guy she'd met on World of Warcraft. She was also taking phone calls 'from a friend' in private. I called her on it, and our wedding was called off the next day. We bought our house during the mortgage bubble, and now I'm stuck with an underwater mortgage on a house that's lost 50% of its value. I also still have the ring. It's been almost five years, and I'm still not sure what to do with it.'"

From Pro Publica. "When Noelle Geraci lost her job at a private investment firm this year, she did everything she could to protect her most important asset: the house she owns with her mother in a Las Vegas suburb. That same day she started applying for work and signed up for unemployment benefits. Then she called her mortgage company, Flagstar Bank. The bank recommended she apply to the Nevada Homeowner Assistance Fund, a pandemic-era program to help the unemployed with their mortgage payments. Under Nevada’s program rules, the assistance is paid as a loan that’s forgiven after three years if the homeowner stays in their house."

"Then a foreclosure notice arrived in the mail. The money that was supposed to flow from the U.S. Treasury, through Nevada’s assistance program and to their bank hadn’t reached Flagstar. And Noelle Geraci couldn’t get anyone to explain what was going on. 'It’s a complete nightmare,' she said. 'My mom is a senior. Me losing my job has impacted us in a severe way. The one and only thing we have is our home. Everything we have is about to be gone.' Shirley Geraci panicked. 'I don’t want to lose my house,” she told ProPublica soon after the notice arrived. 'I don’t want to end up in an apartment and lose everything we built. It’s our investment,' she added."

The Real Deal on New York. "Blackstone unwound itself from a struggling multifamily portfolio and the threat of foreclosure last week, selling off a majority stake in 11 Manhattan buildings where rising rates had whacked revenues. Buyer Atlas Capital Group scored a 51 percent interest in the properties for $142.4 million, PincusCo first reported. A Blackstone spokesperson confirmed the purchase price that also included $90 million in mezzanine debt. 'The sale basically means Blackstone had decided to move on,' a broker said. 'Atlas controls the ownership and it bought the loan so it can take the properties pretty quickly.'"

"Brokers extrapolated the $142 million purchase price for a 51 percent stake to peg the portfolio’s total value at $278 million — a 43 percent decline from the $487 million Blackstone had paid in 2015. PincusCo’s back-of-the-envelope math arrived at the same result. That decline would mean the equity in the deal had been wiped out and the buildings were worth just $7 million more than the senior debt."

The New York Post. "Times Square is looking a lot like its bad old self, with vagrants, boozy migrants, junkies, and scofflaws making the Crossroads of the World look more like the third world. On three separate days over the past week, The Post saw junkies brazenly smoking crack pipes on West 43rd Street, drug dealers peddling their wares within eyeshot of cops, hobos conked out wherever they can find a spot, and scores of aimless migrants loitering the day away. Long Island native and Lower East Side resident Joe Massaro, 39, didn’t mince words when summing up the current state of Times Square: 'It’s a sh-thole around here.'"

"The nonprofit responsible for the upkeep and improvement of Times Square recently pushed for the managers of the nearby migrant shelters to increase their outdoor security patrols — and to take out their own trash. But the amount of trash the shelters produce, and who has to deal with it, are still prevalent problems. 'They’re are making a lot of money catering to this crisis, and they need to make sure that they maintain their building. It’s not the city’s responsibility to make sure that the outside of these buildings is clean, it’s the building manager’s,' said Tom Harris, president of the Times Square Alliance."

The Globe and Mail. "One of Canada’s major mortgage insurers has stopped disclosing numbers about the riskiest part of its balance sheet, where it has guaranteed mortgages for borrowers who now owe more than the value of their home. Until the first quarter of this year, Canada Guaranty Mortgage Insurance Co. disclosed the share of loans it guaranteed for borrowers who had a loan-to-value (LTV) ratio greater than 100 per cent. Also known as an underwater loan, it means the principal of the loan is greater than the home’s market value."

"In Canada Guaranty’s 2023 data reports, the metric is absent. Today, the highest LTV ratio it now discloses is for loans with an LTV above 95 per cent. These disclosures show its riskiest loans have more than tripled over the past 12 months. The change in disclosure comes after The Globe and Mail published an article showing how Canada Guaranty and the other two mortgage insurers were increasingly guaranteeing underwater loans. The rapid rise in interest rates over the past year and a half has triggered a drop in home prices. It has also increased the cost of mortgages. These two factors – falling home prices and expanding loans – have increased LTV ratios. In some cases, these shifts have pushed homeowners underwater."

"That stress can be seen in most of the big Canadian banks’ financial statements. Borrowers with amortizations greater than 30 years accounted for more than one-quarter of their residential loan books, according to their results for the second quarter ended April 30."

From CNBC. "The Bank of England’s losses on bonds bought to shore up the U.K. economy after the financial crisis will be 'materially higher than projected until the middle of the decade,' according to Deutsche Bank. In late July, the central bank estimated that it would require the U.K. Treasury to backstop £150 billion ($189 billion) of losses on its asset purchase facility (APF). The program ran from 2009 to 2022 and was designed to improve financing conditions for companies hit by the 2008 financial crisis. It saw the BOE accrue £895 billion worth of bond holdings while interest rates were historically low. However, the central bank began unwinding that position late last year. Higher rates have driven down the value of the purchased government bonds — known as gilts — just as the BOE began selling them at a loss."

"Imogen Bachra, head of U.K. rates strategy at NatWest, said the hit to public finances — and therefore to the government’s coffers — is two-fold. 'On one hand, QT loses money because the Treasury takes the BoE’s losses when gilts are sold at a lower price than paid. This was expected: the BoE bought bonds in a falling rate environment due to disinflation, while ‘success’ was to be defined by reflation and so higher rates,' Bachra said. On the other hand, though, while QE gilts are not sold, the BoE pays Bank Rate on the ~£900bn reserves it created to buy them. The higher Bank Rate rises, the more costly this interest expense becomes.'"

Stuff New Zealand. "People who are buying homes are committing more than twice as much of their income to their repayments as they would if they were renting, on average, new data shows. And one economist says it raises questions about the benefits of buying. In Auckland, renters were paying 19% of income, and in Tauranga 29%. Those who bought a home were paying 55% of the average household income in mortgage repayments in Auckland, and 65% in Tauranga. Christchurch had a rent-to-income ratio of 21% compared to 18% in Wellington, and required 43% of average income for mortgage repayments, compared to 42% in Wellington."

"Infometrics chief executive Brad Olsen said he hoped the past couple of years would have changed people's perception that house prices would always go up. He said, looking at the data on the proportion of income required for rent compared to a mortgage, 'part of you thinks why does anyone buy? When you eyeball those long-term average figures, you think do I want to pay 38% of my average income to repay a mortgage, or 21% for pay rent? It highlights the idea that is sometimes pushed forward that you must buy isn’t as strong as it's made out to be.'"

South China Morning Post. "If you ask small-business owner Bill Ye, the writing was on the wall for China’s embattled property sector long before Country Garden said its net losses in the first half of this year could reach 55 billion yuan (US$7.6 billion). For the past two years, the owner of a relatively small piling company says he has been trying to collect more than 200 million yuan owed by the world’s most indebted property developer – China Evergrande Group. All the while, his own unpaid workers, investors and suppliers are angrily clamouring for tens of millions owed to them – showing how the crisis has trickled down and hit the entire industry."

"It wasn’t too long ago that times were great. Ye, now in his early forties, started the piling company in southern China in 2010 and was able to capitalise on China’s post-financial-crisis construction boom. For Ye, the future looked especially bright in 2017, when he scored a partnership with property giant Evergrande. But the good times would not last. 'A huge number of suppliers for developers, like me, have been deeply trapped by the crisis,' Ye said, lamenting that the vast majority of his wealth has been wiped out in just two years."

"Fears have spread that pre-sold homes might not be completed, due to the slow progress. China Business News, a state-backed newspaper in Shanghai, reported that only a third of unfinished pre-sold homes identified in September 2022 had been completed as of May this year. The current downturn in China’s real estate sector is caused by government policies, not by the real estate sector itself, said Yao Yang, a Chinese economist, while speaking at a public forum in Shenzhen last week. 'Now the debts are hanging in the air. Some big companies are too big to fail, but it’s leading to their suppliers being dragged to death.' Yao was quoted as saying."

"Zheng, who is also in the piling business, has similarly seen his fortune plunge amid the property crisis. To make matters worse, his credit standing took a hit because he defaulted on payments to third parties, meaning he is now restricted from borrowing money, using a credit card or even buying an air ticket, according to China’s social credit system. 'I used to be a successful, private entrepreneur,' Zheng said. 'But now I’m making preparations for the worst – going bankrupt personally and corporately.'"

"The two piling entrepreneurs, Zheng and Ye, expressed doubts that the newly introduced policies will have a practical effect, and they were concerned that enforcement and governance are fraught with arbitrariness on the ground. They fear that, if the Country Garden crisis deepens, it could strike a big blow to market confidence and debt chains among the country’s developers and their suppliers. 'There is a serious surplus of houses, especially in fourth- and fifth-tier cities. Besides, everything is unknowable ahead, like how much property prices will fall, in which direction policies will change, and whether the business environment for private companies will continue to deteriorate,' Ye said."