A weekend topic starting with the Associated Press. "If Donald Trump wins the presidential election, Republicans hope he will fulfill a longstanding GOP goal of privatizing the mortgage giants Fannie Mae and Freddie Mac, which have been under government control since the Great Recession. Republicans contend the Federal Housing Finance Agency has been overseeing the two firms far too long, stymying competition in the housing finance market while putting taxpayers at risk should another bailout be necessary, like in 2008. President Donald Trump sought to free the two companies from government control when he was in office, but Joe Biden’s victory in 2020 prevented that from happening.The two firms guarantee roughly half of the $12 trillion U.S. home loan market."

"'I don’t think there should be any concerns that suddenly mortgages will become more or less expensive,' said economist Mark Calabria, who headed the FHFA during Trump’s presidency. 'If you want to be able to strengthen our mortgage financial system so that we make sure that people are in reasonable, responsible loans and that we don’t have to bail out the mortgage finance system again, we need to fix Fannie and Freddie.'"

"Calabria said there’s no need for a federal guarantee. Other huge firms the government bailed out during the 2008 recession, including Citibank, AIG and General Motors, remain public companies and haven’t needed a conservatorship, he said. 'The same set of law around Citibank exists for Fannie and Freddie — why are we treating them differently?' Calabria said. 'There were implied guarantees behind the auto companies. We bailed out GM. Are people who are against the conservatorship ending also suggesting the government take over GM?'"

From Mises.org. "The U.S. national housing finance market is uniquely dominated by two government mortgage companies, Fannie Mae and Freddie Mac. They do exactly the same thing, creating mortgage-backed securities that are de facto government-guaranteed. They are both completely dependent on the credit support of the U.S. Treasury, and thus dependent on American taxpayers. Both went broke in 2008, and both were bailed out by the Treasury, which still owns $193 billion of their senior preferred stock, sixteen years later. Both are in an unending conservatorship of a very political government bureaucracy, the Federal Housing Finance Agency. They are in effect a single huge market intervention and subsidy."

"They create a systemically risky concentration of national mortgage credit exposure in Washington DC. They are and always have been politicized. They are popular with many politicians because they can be used to create subsidies to favored political constituencies without Congress having to appropriate funds. They are highly popular with Wall Street firms because they create securities easy to sell to domestic and global investors by using the credit of the U.S. Treasury. Fannie/Freddie were central to causing the U.S. housing bubble of 1999-2006 and its subsequent collapse, and supported the explosive house price inflation of 2019-2022, which has made U.S. house prices widely unaffordable."

From Bisnow. "Regional banks are delaying disclosing the distress in their commercial real estate loan portfolios, creating greater fragility in the overall financial system, the Federal Reserve Bank of New York warned in a research paper published this week. 'The expansion of the maturity wall represents a financial stability risk as a sizable, and increasing, portion of bank regulatory capital is at risk should these CRE loans default,' authors Matteo Crosignani and Saketh Prazad wrote. 'The possibility of a large and sudden capital hit for banks becomes more likely as the maturity wall becomes taller.' The practice of not recognizing distress on their books may provide short-term relief from regulators and investors, but a large number of defaults occurring at the same time would result in a huge capital hit for banks. Solvency concerns could cause a bank run by depositors, along with a flood of property foreclosures and fire sales, the authors wrote."

Wall Street Journal. "The U.S. housing market is stuck. 'People are only moving if they have to,' said Nicole Dudley, a real-estate agent in the Phoenix area. 'We’ll go a week without a showing, which is a long time compared to even last year.' One bright spot this year has been the market for newly built homes, because home builders are offering incentives that lower buyers’ mortgage rates. 'Buydowns are the silver bullet right now,' said Michael Forsum, president of Dallas builder Landsea Homes."

San Antonio Current. "Three big Texas metros, including San Antonio, reported declines in home values over the 12 months, suggesting the state's market bubble may have burst, according to ResiClub. San Antonio experienced the third-steepest decline in home values over that time, with prices slipping 2.7% since September of last year. The Alamo City metro, which includes New Braunfels, also posted a nearly 7% reduction in home values since their peak in summer of 2022. Even so, values in San Antonio are still 32.3% higher on average than they were in March 2020 at the onset of the COVID-19 pandemic, according to the data."

"San Antonio’s neighbor to the north, Austin, tied with New Orleans for having the largest home value declines. Both metros reported a 4% drop in home values from September 2023. What’s more, home values in Austin are down a dramatic 20.4% since their 2022 peak."

Bisnow South Florida. "A wave of aging condos are flooding the market amid looming year-end regulations that could prompt six-figure special assessments. Condo listings rose 60% in Miami-Dade, Broward and Palm Beach counties in the third quarter, and 85% of all listings are condos 30 years or older, according to a new study by real estate brokerage ISG World. In just two years, the value of the average condo 30 years and older has fallen more than $100K, from $325K in 2022 to $218K at the end of September, according to ISG. Founder and CEO Craig Studnicky told Bisnow in an interview Friday that he thinks prices of older units will continue to dip but that segment of the market is 'pretty close to the bottom.'"

"Starting Dec. 31, Florida lawmakers made it so condo associations can no longer waive reserves. They required condo associations to conduct structural integrity inspections by a licensed architect or engineer to evaluate walls, primary structures and systems. The condos then must fund reserves to cover the cost of any needed structural repairs, which could lead to special assessments on unit owners that can cost upwards of $175K, CBS News reported, a fee many owners are struggling to pay. A significant issue facing these condos is the lack of buyer interest. Between September 2023 and February 2024, more than 72% of existing Miami condos remained unsold and eventually were pulled from the market after an average of 111 days, Bisnow previously reported."

From WFLA. "Florida condo owners are already facing higher fees to keep up with new safety regulations. However, many are starting to question whether Florida’s fragile property insurance market can handle back-to-back hurricane damage. 'This year, with these two big hurricanes, we’re anticipating a big increase,' said Pat Hutson, a condo owner in Tampa. 'I’m very worried that our monthly dues will not cover the new insurance premium.' 'Condo fees are going up and insurance is going up,' Joe Todd said. 'We did have a huge insurance premium increase. It was like a $300,000 increase that we hadn’t budgeted for.'"

"'They’re about to get hit with all kinds of financial issues,' said Eric Glazer, a board-certified attorney. Glazer specializes in condominium and planned development law. 'Some people are scrambling with special assessments,' Glazer said. 'All of this, in addition to the insurance, everything’s coming together exactly at the same time. So, for condominium owners, it’s a perfect storm. For those condos that waived reserves for years, if not decades, and didn’t take good care of their building, they’re in big trouble.'"

The Miami Herald. "A seventh person was arrested and charged with stealing from Hammocks homeowners, billing them $172,000 over five months for work that was never performed, including cleanup after a hurricane during a period when there were no hurricanes or tropical storms, building a haunted house for Halloween, putting up Christmas lights, repairing a roof, painting a pergola and changing a swimming pool filter, according to Miami-Dade State Attorney Katherine Fernandez Rundle, who also announced two guilty pleas Thursday in her office’s investigation of fraud by board members of Florida’s largest HOA."

"Ivan Dario Diez, 58, charged with grand theft, organized scheme to defraud, fabricating evidence and perjury, participated in a plot to divert homeowners’ maintenance fees at the 3,800-acre West Kendall community to fake companies run by the relatives of ex- HOA president Marglli Gallego, 'who was head of this criminal enterprise,' Fernandez Rundle said. Gallego and five others, including her husband, a cousin and three board officers, were previously charged in the scheme, which a court-appointed receiver estimates drained $6 million from HOA bank accounts with checks written to sham vendors — as well as through wasteful spending and mismanagement."

"Homeowners rebelled after years of what they called totalitarian rule and tried to oust a board of directors that quadrupled monthly fees, neglected maintenance, harassed residents with foreclosure warnings and code violation fines, held secret meetings and conducted rigged elections. Fernandez Rundle said since they arrested Hammocks board members, her office has received 400-500 complaints from homeowners across the state who believe they are being deceived by their HOAs. Half of Florida’s population lives in a condominium or HOA. 'They ask, ‘Could you do something for us like you did for the Hammocks?’ Fernandez Rundle said. ’I don’t think our elections are fair. I can’t get records. I think our assessments are fraudulent. Our message is we’re coming to get you so it’s better to cooperate with us.'"

KCRA in California. "South Lake Tahoe residents are set to vote on a controversial measure in the November election. Measure N would create a tax for homes that are unoccupied for more than half of the year. According to the 2022 U.S. census, 44% of homes in South Lake Tahoe sit vacant the majority of the year. Under Measure N, the homeowner would have to pay a $3,000 tax for the first year. The tax would increase to $6,000 or more in the following years. Steve Teshara, co-chair of the group Stop the Tahoe Vacancy Tax said South Lake Tahoe has been a second home community for years and owners shouldn’t be forced to rent their homes. He argues some owners could be inclined to sell their homes due to this tax. 'The fees pile up,' said Teshara. 'A lot of the people here, you know, are people that we know, just regular folks, are not wealthy people.'"

Economic Times on California. "One hundred days after listing their expansive Beverly Hills marital home for sale, Hollywood celebrities Ben Affleck and Jennifer Lopez have yet to sell it. The couple, who are currently going through a divorce, paid $60.8 million for the house in May 2023, but they are now asking $68 million for it because of renovations. The estimated $283,666 the homeowner would probably spend each month on taxes, security, and homeowners association dues is another important consideration. According to Jason Oppenheim, a well-known real estate broker, Lopez and Affleck are expected to face a financial loss when their $58 million to $60 million mansion sells. The estate's location makes selling more difficult, as they will have to pay a mansion tax of over $3 million. The tax has devastated luxury sales in Los Angeles, with sales over $5 million down over 60% since it took effect in 2023."

Los Angeles Times in California. "Poll after poll shows that just about everyone in Los Angeles believes homelessness is one of the biggest problems facing the region. But a key factor determining what Angelenos believe needs to be done about it is whether they’re homeowners, according to a new USC survey. The results reflect homeowners' and renters’ divergent interests, said Kyla Thomas, a USC sociologist and director of the university’s LABarometer survey. Homeowners, she said, are concerned about property values and are resistant to policies they believe might adversely affect them, while tenants want to see rents decrease and have more affordable housing available."

"'There are a lot of homeowners in L.A. who lean left, are sympathetic to the problem of homelessness and are generally supportive of these solutions,' Thomas said. 'But on a neighborhood block, they’re incentivized quite differently.'"

From CTV News. "The Canadian government's plan to reduce the number of immigrants entering the country could impact B.C.'s housing affordability. Prime Minister Justin Trudeau announced on Thursday that the federal government is cutting its immigration target to below 400,000 for the next three years. According to Tom Davidoff, a housing expert and UBC associate professor at the Sauder School of Business, the provincial housing supply has been unable to match population growth. 'The reason we've seen prices rising in the last decade is not only a very rapid increase in immigration, but also housing supply failing to keep up,' said Davidoff."

"The province says a record 137,393 non-permanent residents arrived in B.C. over the previous year, increasing the total number of non-permanent residents currently living in the province to 501,050. Trudeau explained that the level of immigration was in response to the challenges the pandemic posed, allowing for labour needs to be addressed and maintaining population growth. 'We didn't get the balance quite right,' said Trudeau. Consultant and owner Chris Brown believes the new targets will create a more competitive environment. 'The majority are going to Vancouver, and that poses a problem because we don’t have enough jobs to support all of these people,' said Brown."

The Canadian Dimension. "Despite recent tremors in some corners of the housing market, prices remain far too high for both renters and buyers. This persistent lack of affordability is pushing families into precarity and homelessness, and it could cost the Liberals the next election. None of this is news, of course. Housing prices and rents have been outpacing inflation and squeezing Canadian households for decades. This protracted disaster begs the question, why is nothing being done?"

"The answer goes beyond simple neglect. Ottawa has been actively trying to solve this problem. Their solutions are just making things worse. In 2017, the Trudeau government launched the National Housing Strategy (NHS), a massive 10-year, $72 billion program to restore housing affordability and eliminate homelessness by the end of the decade. By 2023, funding for the program ballooned to $89 billion, and even more money was earmarked in Budget 2024. The official NHS website describes these commitments as 'a 10+ year, $115+ billion plan.'"

"We are now seven years and tens of billions of dollars into that plan and things are worse than ever. Affordable housing is harder to come by than it was a decade ago, and homelessness is reaching historic highs. At its core, the NHS treats the housing crisis as a problem chiefly of supply. According to the CMHC’s website, NHS funds are given to homebuilders in the form of low-interest loans, forgivable loans, and direct contributions. There is no disclosure about how low the interest rates attached to these loans are, and access to information requests related to forgiven and forgivable loans were denied by the CMHC 'due to their sensitive nature.' At this point, it is impossible to say how much money has simply been transferred directly to developers under the program."

"The NHS has proved itself incapable of solving or even softening this crisis. Funneling money from government coffers to developers and billion-dollar trusts empowers rentiers to seize a greater share of the market and expand the housing bubble. By providing loans to the private sector to build and own housing, the government is heating up investor demand and pushing prices up even further. This price-lending spiral is actively encouraging the formation of local housing oligopolies. The NHS is effectively ushering in an era of neoliberal feudalism under a new class of finance aristocrats. This messy, opaque, counter-productive strategy must be brought to an end as soon as possible."

From Agence France-Presse. "After over a decade of snapping up Bordeaux wine estates, buying into a dream of elegant living in France and good earnings in their home market, many Chinese investors are now selling up. Capital controls back home, softening Asian demand for wine and the underestimated costs of running French estates have combined to push the once-enthusiastic buyers from China towards the exit. Many other chateaux are up for sale for peanuts, explained Li Lijuan, an estate agent and Asian market specialist at Vineyards-Bordeaux. She said Beijing's decision to impose strict controls on capital had dealt a blow to a market already undermined by an overproduction of Bordeaux wine. 'Chinese people can't invest abroad any more because their money is stuck in China,' said Li. About 50 Bordeaux chateaux are currently up for sale, she said."

"Other disappointed owners are waiting for the market to pick up so they can offload their investments. Buyers are so scarce that some chateaux are selling for less than half their purchase price. False expectations have also scuppered the Chinese dream. 'Some investors bought into the French art of living,' said Li. 'They bought a beautiful building, way cheaper than a flat in Hong Kong or Shanghai. But they didn't think about the financial stability of the estates or investments for the future.'"

"Some Chinese investors, more used to family-run vineyards back home, 'underestimated the costs' of running a big French estate and 'overestimated the possibilities' of selling expensive-to-produce wines in China's already crowded domestic market. 'Their economic model was to buy bottom-of-the-range estates, hoping for an immediate return by producing wine at less than five euros and selling via their own distribution networks for 20, 40 or even 100 euros a throw,' surmised Benoit Lechenault, head of BNP Paribas subsidiary Agrifrance."

"While that tactic may have worked for some in the past, it is no longer the case. Since Covid, China's domestic wine consumption has nosedived, falling by a quarter in 2023 alone, according to the International Organisation of Vine and Wine. One technical manager, who preferred not to give his name, told AFP that he had only met his former boss 'once in the space of four years' and had been bombarded with 'impossible demands' that 'didn't take into account the lifecycle of the vine.'"