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Sellers Cut Prices As Their Listings Languish

A report from Mansion Global on New York. “Luxury home sellers in Manhattan are dishing out major discounts to get the deal done. They signed contracts for 21 homes priced at $4 million or more in the week ending Sunday, after having slashed asking prices by an average 17%, according to Olshan Realty. Sellers, including developers looking to unload their remaining units in new builds, have cut prices as their listing languished on the market, the data shows. The average home to find a buyer last week was on the market for 541 days.”

“The most expensive home to go into contract last week was a condo on the 58th floor of 252 East 57th St., which overlooks the East River in Sutton Place. The five-bedroom home was asking $13.875 million, cut from $14.875 million when developers first listed the unit last year, according to StreetEasy.”

The Buffalo News in New York. “The owner of the troubled Monarch 716 student-housing complex is finding himself on the outs after two Buffalo-based developers kicked him out of the partnership that developed a student dorm across the Genesee River from the University of Rochester campus.”

“John Yurtchuk of Matrix Development Corp. confirmed that he and David Huck of Regent Development Co. ‘removed’ Thomas Masaschi as a member of the limited-liability company that developed the Riverview Collegiate Apartments.”

“Masaschi had been a ‘passive’ investor and minority owner, but ‘he did some stuff with his ownership interest that we thought violated our agreement and the bank’s agreement,’ Yurtchuk said, without going into detail.”

“Masaschi is one of two partners in Rochester-based DHD Ventures, a commercial real estate developer that has mostly been active in Rochester, but has also broadened to student-housing and other projects in Buffalo, North Carolina, South Carolina, Tennessee and Massachusetts. However, the company has run into trouble more recently, particularly with its student-housing ventures – two of which are now in foreclosure.”

“In Buffalo, DHD developed the Monarch 716 complex at 100 Forest Ave. on the West Side, with 176 suites and 592 beds largely aimed at Buffalo State College and other nearby schools. The project, which features nine residential buildings and a one-story clubhouse, opened for tenants in late August 2017, but was quickly embroiled in controversy.”

“DHD and its first property management company, King Residential Group, had touted the benefits and features of what they portrayed as a luxury complex. They sought to fill the complex quickly with discounts and other incentives, while also taking in non-student tenants, so they could show better results to the project’s lender.”

“But some of those tenants proved troublesome for DHD and King. Complaints and even crime mounted, about 100 occupants were evicted and the property’s image nose-dived along with its occupancy and revenues.”

“Another student-housing project – the 576-bed Monarch 815 in Johnson City, Tenn. – is also now in foreclosure on a $31.9 million loan.And a third one, Monarch 544 in Conway, S.C., faces its own challenge, amid sporadic late payments and a drop in occupancy.”

“Yurtchuk said he and Huck were aware of Masaschi’s problems. ‘He’s in all kinds of trouble,’ Yurtchuk said. ‘We have similar issues with him… We think he did some things that were wrong.'”

The Miami Herald in Florida. “An international banker who catered to mega-rich Venezuelans was sentenced to 10 years in prison by a Miami federal judge Monday for his supporting role in a massive $1.2 billion money-laundering scheme involving stolen funds from Venezuela’s government.”

“Matthias Krull, 45, apologized profusely to U.S. District Judge Cecilia Altonaga before she imposed the maximum sentence for his guilty plea to a conspiracy conviction. But Altonaga also said she expected to see the banker in court again when federal prosecutors will likely recommend a sentence reduction for his assistance in the sprawling money-laundering case.”

“Krull was living the life of a Swiss banker and family man based in Panama when he and eight others were charged in July with conspiring to steal millions from Venezuela’s vast oil income. U.S. authorities say the stolen funds were washed through the Venezuelan government’s currency exchange to increase their value astronomically before being transferred to a European bank and invested in Miami-area luxury real estate and other assets.”

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This Post Has 15 Comments

  2. ‘after having slashed asking prices by an average 17%’

    Yes, the weekly sawin’ and a slashin’ report, into three years now. Still no bubble media? How many millions does it have to fall for how many YEARS!

  3. “Sellers, including developers looking to unload their remaining units in new builds, have cut prices as their listing languished on the market, the data shows.”

    I smell Case-Shiller Ebola ahead. It will take a couple of quarters, as it is a lagging indicator.

    1. PS I should point out that Case-Shiller is a repeat sales index which only directly reflects used home sales for homes that have sold at least twice. However, falling new home prices will have a spillover effect on used home sale prices.

  4. ‘He’s in all kinds of trouble,’ Yurtchuk said. ‘We have similar issues with him… We think he did some things that were wrong.’

    Some of you may not know I’ve been following this huge alleged fraud case in multi-family for a while. The WSJ made a mention that it was the biggest fraud case since blah, but dropped it like a rock after. Still it’s only the local media that seems to care even though it involves 35,000 units.

  5. Repeat for the weekday folks:

    Wanted to let folks know that I’ve ported over all the JoshuaTree extension functionality I intend to for now. A few things have been left out(speak up if you feel they’re necessary). Here’s the features that are available:

      * Displays the number of new/unread comments in each post summary
      * Hilights new comments so they’re easily identifiable
      * Adds a toolbar for jumping forward/backward to the next new comment
      * Ability to ignore(automatically collapse) posts from specified users
      * Adds text formatting buttons to the comment authoring environment (bold, italics, links, etc)
      * Auto-quote of selected text (select text in a comment, click ‘reply’ and the selected text automatically will be quoted in your comment
      * Checks for unclosed HTML tags when posting a comment

    Links:
    JoshuaTree Extension for Chrome
    JoshuaTree Extension for Firefox

    1. For those of you who are using/use the extension, please throw some coin Ben’s way to keep the blog up and running. I don’t charge for it — but it’s useless if this place doesn’t stick around!

      1. A list of emojis? 😀

        They used to all get replaced by inline images. I think that changed..haven’t yet had the time to dig in and get a sense of how it works in the new blog… (if anyone wanted to figure that out though, it’d make life easier!)

  7. How is your favorite emerging market country’s stock market faring in the market swoon?

    South Korean stock market sees biggest plunge since 2008 crisis amid US-China trade war
    Posted on : Oct.29,2018 17:46 KST Modified on : Oct.29,2018 17:46 KST
    – Additional risk factors include stagnant domestic economy and investor flight
    – Fluctuations in major global stock indexes

    The South Korean stock market is reeling from the shock waves of its “black October.” As if recreating the plunge in stock values that happened with the global financial crisis’s arrival in Oct. 2008, KOSPI experienced its biggest monthly drop in ten years. Future prospects also appear bleak: in addition to external risk factors like the US-China trade war and US interest hikes, the numerous potential drags of stock prices include a stagnant domestic economy, investor flight, and escalating panic. Many in the securities world see a drop below the 2000 line – widely viewed as a psychological “safety net” – as not too far away.

    US$228 billion disappears in Korean stock market
    …

  9. Many never recover from sub-prime, most homes are grossly over priced. Buyers not going to bail them out because they overpaid.
    This and other factors point to a massive recession in housing?

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