A weekend topic starting with the Globe and Mail. "A short three-hour flight from Vancouver, it’s possible to walk off the plane and glide into vacation mode within minutes. The B.C. connection with Palm Springs, Calif., is a long-standing one, especially for those who took advantage of the plunge in real estate prices during the economic downturn of 2008 and 2009. The survival of its large stock of one-level mid-century modern houses was largely a matter of disregard rather than any kind of preservation policy, says Vancouver’s former co-director of planning Larry Beasley, who’s owned a mid-century modern home here since 2011. The house had doubled in price since it was sold in 2020, which tells you something of the relatively recent demand for the mid-century modern gems. 'People are acquiring real estate holdings the way you acquire works of art,' says Vancouver realtor Trent Rodney, who took his cues from the Palm Springs modernism revival when he launched his West Coast Modern real estate company locally."

"Real estate developer Olga Ilrich, former MLA and the founder of Suncor Developments, has owned a home in Palm Desert since 2016, in a gated community. She doesn’t rent her place out, but she considers it a sound investment and a convenient escape. Before that, she was renting places in Palm Springs, but she discovered that it’s cheaper to own. Also, because she thinks like a person who works in real estate, she might pay taxes, homeowners association fees, and other costs on the property, but when she sells, she knows she will get a return on her purchase."

From ABC 10. "Winter or summer, a resort city tucked into the Sierra Nevada is a go-to destination for many Northern Californians and even people outside the state. Amelia Richmond is the co-founder of Locals for Affordable Housing, a group behind an initiative to get a vacancy tax on the November ballot. Owners of homes that are vacant for more than half of the year would pay a tax they could avoid if the home is occupied for six months out of the year. Richmond says the vacancy tax is a way for people to contribute to the community so it can continue being an incredible place and it's not a punishment, but rather something to help solve the housing crisis."

"'This happens in destination towns where not only do people want to own second homes there because it's a beautiful place to be, but also it's a great investment and your property value goes up every year. There is no reason not to have a second home as a business investment that you can also use as you see fit. The question is what happens to the community when nearly half of homes sit vacant?' Richmond said."

WUSF on Florida. "Troy Bielicki has dreamed about owning a home since he was a teenager growing up in St. Petersburg. At 25, he’s achieved that dream. Though it looks different than he imagined. He started his search near St. Petersburg in 2022. His wife was pregnant with their first child, and they were looking for a place to raise a family. Their budget was $200,000. But the homes they were seeing were double that. Median home prices in Pinellas County had climbed to more than $400,000. That was up from an average price of around $250,000 in 2019."

"Their household income is about $50,000, or nearly 80% of the area’s median income. 'I had to consider other ZIP codes just because of the minimum price when you sort … on Zillow,' he said. 'So, we just had to keep moving further and further out.' In Hillsborough County, it’s estimated that 8.5% of all homes are investor-owned. In Pasco County, the market share is 8%, and in Pinellas County it's 6.5%, according to an analysis of 2023 data. Compared to owner-occupied homes, properties that are bought by investors often reappear on the market as single family rentals or are renovated and relisted at a higher sale price. In the Tampa metro, where wages have not kept up with housing inflation, many are buying homes farther away from the urban core. That means they could work in Tampa or St. Petersburg and live in Pasco, Polk or Hernando counties."

"That was the case for Bielicki. His Pinellas County work truck is parked in the driveway of his west Pasco County home. 'I feel like I've achieved the best thing I could for my family in the circumstances,' he said. 'And it takes a long time to realize a dream, so to speak.' He bought much farther from where he wanted to raise his family in St. Petersburg, and the home he purchased needs a lot of work. Bielicki said he’s considering taking out a construction loan to finance the needed projects around his house. Still, Bielicki said he’s grateful he bought a home when he did. Sitting at his kitchen table, he pulls up a map of the available homes that he could afford today in Pinellas County. 'Wow, there is not a single thing in that whole area where I was looking and that was only two years ago,' he said. 'This is kind of a shock looking at it now.'"

From Newsweek. "Home prices are being slashed by sellers in Florida at a much faster pace than in the rest of the country, according to Zillow. February data show that 33 percent of home listings in the Tampa metropolitan area had a price reduction in the same month—the highest number for a metropolitan area in the entire country and up 3.7 percent compared with a year before. At the national level, 20.1 percent of home listings had price cuts, up 2 percent from a year ago."

"The other metropolitan areas that saw the highest price reductions in the country after Tampa were all in the South. Some 32 percent of home listings in Phoenix, Arizona, had price cuts in February, while San Antonio, Texas, had 27 percent. In Jacksonville, Florida, 26.8 percent of home listings had had a price reduction in the same month, according to Zillow. Nashville, Tennessee, followed with 26.5 percent. Some 28.9 percent of listings in Ocala had a price reduction in February; in Palm Bay, the number went up to 30.9 percent; in North Port, to 35.5 percent. Some 29.6 percent of listings had a price cut in Naples in February, while the figures were 29.1 percent in Port St. Lucie, 28.6 percent in Lakeland and 26.9 percent in Cape Coral. The figure for Orlando was 25.2 percent and in Miami 23.8 percent of listings had price cuts."

"Orphe Divounguy, senior economist at Zillow, told MarketWatch that sellers were struggling to get the price of their homes right. 'After a drought of activity in the housing market, nobody is quite sure how to price their home,' he told the website. 'Successful sellers are those who adopt [a home builder's] strategy,' cutting prices and making concessions."

Curbed New York. "When Brooklyn Tower topped out in October 2021, Michael Stern threw a party. As sunset approached, staff herded guests milling around the lavishly ornamented rotunda of the Dime Savings Bank into construction elevators for a toast at the top of the 1,066-foot building that was now, officially, historically, the city’s only supertall outside of Manhattan. But two and half years later, the mood at Brooklyn Tower had dimmed. At the end of March, Larry Silverstein’s Silverstein Capital Partners, the mezzanine lender, which gave Stern a $240 million loan in 2019, moved to foreclose."

"People in the real-estate industry have always talked about it for a different reason, with some speculating it was doomed from the start — its super tall, super skinny design better suited to Billionaires’ Row, the kind of rarified, globe-trotting enclave preferred by the people who could pay the kind of prices a project like this would need to break even. 'It’s one thing to pay a premium to be 1,000 feet above Central Park,' a source who works in development tells me, 'but 1,000 feet above Trader Joe’s?'"

RE Journals on Texas. "Austin’s multifamily market is dealing with an oversupply of available units — a 'too much of a good thing' scenario. ALN Apartment Data indicated that this trend is likely to persist through at least 2024. Its data ranks Austin eighth in the country for cities with the most new units under construction. As of September, it recorded 63,882 units under preconstruction, 41,071 units under construction and 10,124 units under lease-up or being filled. Add to that another 17,364 units under construction/lease-up, and Austin’s apartment cup runneth over."

"The Austin multifamily sector is currently grappling with an oversupply of units, largely driven by significant new construction in recent years,' said Cheryl Higley, managing director of debt & equity for Northmarq’s Austin office, which offers comprehensive services in debt, equity, investment sales and loan servicing. 'This oversupply has led to vacancy rates reaching a 20-year high. We need to be prepared for a higher-for-even-longer reality and a dim path for interest rate markets in the near future.'"

The Real Deal. "Former executives of CA Ventures are tussling over a nearly $6 million judgment against the Chicago-based developer, and their fight has held up big investment firms from taking over an industrial real estate platform caught in the middle. More legal problems have popped up for CA Ventures this year as the developer is hampered by the market slowdown for new construction and sliding property values for projects financed during the cheap debt era, before interest rate hikes starting in 2022."

"An investor in a West Sacramento, California, multifamily building developed by CA Ventures and its partners also sued the company last month, alleging that it’s owed the more than $10.5 million it put into the project because the developer failed to come up with funding needed to complete the property that it agreed to contribute. CA Ventures didn’t notify the investor of financial hurdles the project encountered during its construction over the last several years, the lawsuit claimed."

"'The reality of the situation is the market has tanked,' a CA Ventures executive who requested anonymity to discuss sensitive company matters said about the West Sacramento project. 'Is there a surprise? The building was delivered, and the values aren’t there.' Company leadership has previously said it’s working to reposition itself by getting rid of assets that aren’t performing as well as originally expected."

The Vancouver Sun in Canada. "This week, the B.C. government introduced the legislation enacting what is officially known as the 'residential property (short-term holding) profit tax act,' but more commonly known as the flipping tax. The B.C. NDP has said the tax will target profiteers whose speculative real estate activity makes real estate less affordable and attainable for regular British Columbians looking for homes. Experts disagree on what impact the tax will have, and many owners — and potential sellers — of B.C. homes have questions. The tax can apply to any properties zoned for residential use, as well as on income derived from reselling purchase contracts, such as those for presale condos."

"This isn’t a penalty that applies to all homes that are flipped quickly, but a tax specifically on profit generated by such sales. If a home is sold in less than two years at a loss or for no profit, the tax will not apply. Finance Minister Katrine Conroy has said the tax is 'taking action against investors who use the housing market as a stock market,' while Housing Minister Ravi Kahlon said: 'Homes are meant to be lived in by people in our communities, not used for speculation.' Condominium Homeowners Association of B.C. executive director Tony Gioventu, was quoted in the province’s news release saying it would 'slow the speculator frenzy that happens when a flippable property is listed for sale frequently, resulting in unauthorized, unpermitted rushed alterations, leaving communities with a legacy of building failures and conflict.'"

From Mises.org. "In The Price of Time, Edward Chancellor has given us a colorful and provocative review of the history, theory, and the profound effects of interest rates, the price that links the present and the future, which he argues is 'the most important price of all.' As for the vast effects of interest rates, a central theme of the book is that in recent years interest rates were held too low for too long, being kept 'negative in real terms for years on end,' with resulting massive financial distortions for which central banks are culpable."

"In Chancellor’s summary, 'Locke was the first writer to consider at length the potential damage produced by taking interest rates below their natural level.' Locke’s position in modern language includes these points: -Financiers would benefit at the expense of ‘widows and orphans’. -Wealth would be redistributed from savers to borrowers. -Too much borrowing would take place. -Asset price inflation would make the rich richer."

"Just so, over our recent years of too low interest rates, ordinary people have had the purchasing power of their savings expropriated by central bank policy, and leveraged speculators of various stripes made large profits from overly cheap borrowing, while debt boomed and asset prices inflated into the Everything Bubble. The central bankers knew what they were doing with respect to asset prices. Chancellor quotes a remarkably candid statement in a Federal Open Market Committee meeting in 2004, in which, as a Federal Reserve Governor clearly put it: '[Our] policy accommodation—and the expectation that it will persist—is distorting asset prices. Most of the distortion is deliberate and a desirable effect if the stance of policy. We have attempted to lower interest rates below long-term equilibrium rates and to boost asset prices in order to stimulate demand.'"

"That boosting asset prices was 'deliberate' is correct; that is was 'desirable' seems mistaken to Chancellor and to me. 'The records show that the Fed had used its considerable powers to boost the housing market,' he writes (I prefer the phrase, 'stoke the housing bubble'). What is worse, the Fed did it twice, and we had two housing bubbles in the brief 23 years of this century. In 2021, the Fed was inexcusably buying mortgage securities and suppressing mortgage rates while the country was experiencing a runaway house price inflation (now deflating)."