skip to Main Content
thehousingbubble@gmail.com

The Value Of Their Biggest Asset Could Drop Through The Floor

A report from KTVB in Idaho. “‘I’ve seen the prices drop, I’ve seen some homes drop $75,000, $100,000, $50,000, just to get people to come in and get into that price range that people are looking for,’ said Garrett Stephenson, a buyer manager for Homie. Stephenson believes houses can no longer be overpriced like they were about six months ago. One of the reasons for this is growing inventory.”

From CandGnews on Michigan. “‘The market has definitely softened,’ said Caron Koteles Riha, a Realtor with Real Estate One in Rochester. Realtors feel bad that they can’t get homebuyers good deals, said Ben Rait, a Realtor with Century 21 Campbell Realty in Madison Heights. Even the past two or three years, he said, they could at least have a reasonable expectation that their buyers would be happy with the price they had to pay for their house, but ‘with the upcoming market, I’m not sure that’s going to be the case or not.'”

The Daily Advertiser on Louisiana. “Bill Bacque’s reports includes year-over-year and year-to-date numbers for Lafayette, St. Landry, St. Martin, Acadia, Iberia, Vermilion and Evangeline parishes. Bacque said, ‘It appears that any pent-up demand attributable to COVID influences is likely behind us.'”

The Williamson Homepage in Tennessee. “Almost half of the Ovation submarket — among Metro Nashville area’s most high-profile mixed-use developments — just sold for $35 million after development onsite unexpectedly stalled for several years. The transaction is the culmination of empty commitments, a foreclosure auction and years of stalling after the original developer of these 34 acres failed to produce results. An unofficial groundbreaking for the $700 million Ovation property involved an RSVP-only party of 140 invited guests — including American Pickers star Mike Wolfe — to celebrate the beginning of a project under general contractor, South Star.”

“Six years later when all 150 acres were expected to be complete and serve as the core of Cool Springs with a single hotel to account for 250 of its 450 rooms, then-owner Paramont Capital began angling to sell the 34 largely undeveloped acres. Days after Mars Petcare’s ribbon cutting, a lending group hosted a foreclosure auction for Thomas’s 34 acres despite Thomas still owning another 42 acres. The unusual auction landed on a bail bondsman casting a winning bid of $42 million, but failing to produce the money, so the group ate the cost of $40.5 million to take the property back.”

From Bloomberg on California. “The developers of two troubled Los Angeles mega-mansions are headed for a reckoning, with one home getting its price slashed in half and the other facing the wrecking ball after a court-ordered auction sale. The two projects in the exclusive Bel Air district, built on speculation that a billionaire would pay top dollar for a massive glass and marble villa, show how high-flyers can run into trouble by overreaching or crossing legal lines.”

“‘Bad ideas, just because they cost a lot of money, don’t become better ideas,’ said Fred Rosen, a Bel Air neighborhood activist. ‘To any future spec-home builder, use this as a lesson,’ said Ted Lanes, who was appointed in July to sell The One, a 100,000-square-foot house. ‘This wave of limitless spec homes has finally crescendoed.'”

The Real Deal on New York. “Invictus Real Estate Partners has swooped into a Brooklyn residential development, buying an $88 million non-performing note from Austin-based hedge fund Prophet Capital. The New York-based private equity firm then immediately took steps to foreclose on the property. The Kent House is located in a buzzy area of Williamsburg, close to two subway stations and numerous shopping and dining spots. The luxury mixed-use project features 96 apartments and 31,000 square feet of retail space, per Commercial Observer.”

The Sequim Gazette in Washington. “Owners of 415 homes and vacant parcels in Clallam and Jefferson counties are undergoing foreclosure proceedings as a statewide moratorium on evictions approaches an Oct. 31 deadline, a Port Angeles real estate broker said. Patti Morris, who manages properties for property management companies, said on Oct. 6 if and when Gov. Jay Inslee ends his COVID-19-related suspension of evictions on renters and homeowners, it will gradually lower prices and ease the pent-up demand being experienced by seekers of new homes.”

“Morris said property owners are often delinquent on reverse mortgages, a loan for seniors 62 and older that allows them to convert equity into cash income with no monthly payments and no interest on the owed lump sum. ‘We have reverse mortgages where we have elderly people who will borrow a lump sum on their home,’ she said. ‘I see a lot of reverse mortgages that foreclose, for whatever reason, whether one spouse dies or they both die, and the heirs do not want to take the opportunity to take the home back. I see that quite often.'”

“Morris has some properties that have been under foreclosure proceedings for two years, she said. Morris speculated that companies won’t list foreclosed properties en masse immediately once the moratorium ends, she added. ‘They want the most out of the property as well,’ she said.”

The Globe and Mail in Canada. “1029 King St., W. No. 219, Toronto. Asking price: $799,000 (Mid-July, 2021). Previous asking price: $825,000 (Early July, 2021). Selling price: $786,000 (Mid-July, 2021). Agent Scott Hanton hoped a decent crowd would visit this one-bedroom-plus-den suite at the Electra Lofts building, but didn’t get a single tour request. ‘The spring rush of condo buyers dried up, putting the remaining July buyers in the driver’s seat,’ Mr. Hanton said.”

The Observer Uganda. “Edward Muyanja can easily summarize the last 12 months of business in downtown Kampala in one word – painful! Muyanja, a trader in Gwanda Arcade in downtown Kampala, compares the business fortune from the pre-Covid-19 times to the current situation as one which is simply worlds apart. ‘Business is not good,’ he says as a matter of fact. ‘People are no longer working as before due to Covid-19 effect. Here in Gwanda Arcade, some businesses closed.’ He explained that ‘people came and picked their merchandise and left the building.’ Those who tried to ride through the Covid storm, Muyanja added, reached a point and gave up.”

“Joel (not real name) quit his bank job in early 2020. After more than a decade working for one of the largest banks around town, he felt it was time to make the leap. He wanted to be his own boss. Joel opened up a money lending business. His location: the busy downtown Kampala area, where arcades such as Gwanda are located.”

“More than a year later, Joel’s voice breaks when he speaks of the ordeal he is going through. ‘When some of my clients default, they say: ‘look at my shop, it is closed. I have not been working. How do you want me to pay you back?’ Joel, who is battling a drop in sales and a spike in loan defaults, narrates, saying he usually understands the dilemma of his clients.Joel signs off by saying that the public should not be duped into thinking that the fair performance that the banks recorded for 2020 is a sign that economic recovery is on track.”

“‘Many of those banks only postponed the period that their clients should pay back the loans. On their books, the loan does not look like it is non-performing. But now, that one year grace period ended around June. Now wait for the worst!'”

The Daily Mail Australia. “The Chinese developer behind a massive Australian apartment project plagued by poor workmanship is struggling to repay debts, putting owners at risk of huge losses. Yunnan Metropolitan Construction Investment (YMCI) Australia’s ambitious $5billion Ovation Quarter project in western Sydney, which planned for 4,500 units, has come under ASIC scrutiny over company ‘deficits’ that have spiralled out to $83million.”

“Since 2018 sales struggled in the mega residential project, which envisioned a mini city spread over 19 hectares including a school for 1,000 students and retail areas near Sydney Olympic Park. Those who bought at Ovation have raised concerns about ‘chronic problems’ with leaking walls, flooding after rain, fire safety doors and security in a completed building.”

A building industry source told Daily Mail Australia owners who bought into the first stage are facing a collapse in the value of their biggest asset with so many problems now associated with the project. ‘The biggest issue is their value could drop through the floor. What was worth $1million could drop to $400,000. Nobody will want to buy them at market price.'”

“He added the owners could end up liable for increased strata fees and if residents agreed to try to seek the cost of repairs from YMCI they’d face huge legal bills.”

This Post Has 58 Comments
  1. ‘On their books, the loan does not look like it is non-performing. But now, that one year grace period ended around June. Now wait for the worst!’

    You tell em Joel! We got a version of that here in the US.

  2. Now wait for the worst!

    ‘China’s top 100 property developers witnessed a sharp drop in sales in September, adding to evidence that the government’s tightening policy restrictions on the market have taken effect.’

    ‘The 100 developers reported a combined 759.6 billion yuan ($118 billion) in sales last month, down 36.2% year-on-year, widening from a 20.7% slide in August (link in Chinese), according to a report (link in Chinese) released Tuesday by real estate data collector China Real Estate Information Corp. (CRIC). Traditionally, September is a high season for property sales.’

    ‘Multiple leading players posted declines in sales. Country Garden Holdings Co. Ltd., the country’s largest developer by sales, booked 56.7 billion yuan in sales in September, the report showed. The sales fell 34.1% year-on-year and dropped 5.2% from the previous month. China Vanke Co. Ltd. (000002.SZ) reported a plunge of 30.3% year-on-year to 38 billion yuan in September. Sales of Sunac China Holdings Ltd. fell 32.7% to 46.4 billion yuan last month.’

    https://www.caixinglobal.com/2021-10-08/already-starved-of-funding-chinas-top-developers-see-sales-slide-101784200.html

  3. ‘What was worth $1million could drop to $400,000. Nobody will want to buy them at market price’

    That’s the spirit, kick em while they’re down!

    1. Buyers may even be scarce even after the price drops to $400,000. Once a falling knife is in motion, it is very hard to predict how far it will drop. Oil futures below $0 last spring comes to mind: nobody saw it coming!

  4. ‘allows them to convert equity into cash income with no monthly payments and no interest on the owed lump sum’

    The winnahs!

    ‘I see a lot of reverse mortgages that foreclose, for whatever reason, whether one spouse dies or they both die, and the heirs do not want to take the opportunity to take the home back. I see that quite often’

    This means they loaned more than the shack was worth!

  5. ‘An unofficial groundbreaking for the $700 million Ovation property involved an RSVP-only party of 140 invited guests — including American Pickers star Mike Wolfe — to celebrate the beginning of a project’

    But Mike was there, how could it go wrong?

    BTW I’ve seen bits of this stupid show. People will watch anything. It’s almost as dumb as that pawn shop crap.

  6. ‘I’ve seen some homes drop $75,000, $100,000, $50,000, just to get people to come in and get into that price range that people are looking for’

    I’d bet Boise UHS still insist the days on market is less than a week. Wa happened to my red hotcakes Boise and Nashville?

  7. ‘It appears that any pent-up demand attributable to COVID influences is likely behind us.’

    When people make obtuse comments about ‘COVID influences’, do they literally mean that they believe the pandemic situation somehow increased housing demand? Or is this an indirect reference to the Fed’s Unlimited Quantitative Easing measures?

  8. Downtown Denver, kiss those businesses and jobs and tax revenue GOODBYE:

    “The Denver-based fast-casual Asian chain, which serves rice bowls with proteins and vegetables, closed its only corporate-owned store at 1920 17th St. in downtown Denver in June. It opened in 2019.

    “Things like protests and lack of office traffic really caused a lot of business disruption,” said CEO Michael Haith. “The homeless issue down in that area was unsafe. We had a terrible time operating the restaurant, and we didn’t see any end in sight. I will not mince words.”

    https://www.thedenverchannel.com/news/local-news/restaurant-chain-cites-homelessness-for-downtown-closure

  9. ‘Third World’ NYC drug store shelves empty amid shoplifting surge (10/9/2021):

    “Thanks to a citywide shoplifting tsunami, bare necessities are now rare luxuries on drug-store shelves across New York City.

    “It looks like the Third World,” bemoaned one Manhattan resident, after eyeing the aisles of a CVS on Sixth Avenue in Soho desperately low of toothpaste, face wash and hand sanitizer, among a long list of other items.

    “They’ve all been stolen,” a CVS employee told The Post.

    State bail reform laws make shoplifting a promising career option for some New York City crooks. One man, Isaac Rodriguez, 22, of Queens, was arrested for shoplifting 46 times this year alone, The Post exclusively reported last week.

    The blame goes straight to the halls of power in Albany, said New York City top cop Dermot Shea.

    “Insanity,” the police commissioner tweeted last week in response to The Post report. “No other way to describe the resulting crime that has flowed from disastrous bail reform law.”

    https://nypost.com/2021/10/09/nyc-drug-store-shelves-empty-amid-shoplifting-surge/

    1. File this under “Libtards reaping what they voted.” Gosh, I hope the rampant vibrancy doesn’t have an adverse impact on CRE or luxury skybox valuations.

  10. President Donald J. Trump, Des Moines, Iowa (10/9/2021):

    “Could you imagine if I were president and had these numbers? And I mean, some people thought — First of all he didn’t get elected. OK, forget that. And some people say, oh sir, it was COVID. Incredible. You know, they’re allowed to say that about me. They called it illegitmate. They called it everything in the book. It was fine. When I say it, now here’s the difference. Hillary conceded. I never conceded.”

    He didn’t get elected? Everybody here already knew that, but it’s nice to be reminded of it, from the actual winner of the 2020 election.

    1. Yes, Trump has some justification for serving crow. But that’s not the best use of his time. The country is in trouble. If he wants to get any traction, he needs to come with solutions.

      1. If he wants to get any traction, he needs to come with solutions.

        He came with solutions before – close the border, end offshoring and bring jobs back to the USA, etc. – and they kneecapped him.

    2. He sure looked good yesterday.

      I want him back but another part of me wants someone like him (if possible) who checks some boxes like race, gender, or identity. Just to throw off the enemy and show how far off the MSM was about the core concepts of MAGA.

      By the way, I recently saw a UK documentary that included a section on Bloody Sunday. Now that’s what an actual riot looks like.

        1. I would love to see David Stockman run for president. He’s Jewish, brilliant, an extremely capable administrator, and understands the importance of sound money and sane fiscal policies.

      1. I’m guessing you didn’t follow the California recall election? The leading GOP candidate was Larry Elder. The MSM called him the “black face of white supremacy”. Ben Carson was called an Uncle Tom. You can’t be conservative and check any of the boxes for the ones who need boxes to be checked.

        1. I did follow it, and MSM looked ridiculous (even though in this commie state of course he didn’t win). I’d like to see more!

  11. Australia is the template the globalists and their Quislings intend to impose on America. Once they confiscated the guns from the citizenry, it was only a matter of time before the internment camps started going up. After firing Aussies who refused to take the vaxx shot, they are “temporarily” importing low-paid 3rd World replacements to fill those positions. Forward, Soviet!

    Stunning Pictures: Toowoomba’s Wellcamp Revealed

    https://xyz.net.au/2021/10/stunning-pictures-toowoombas-wellcamp-revealed/

    This is normal.

    The first glimpse of what the 1,000-bed quarantine facility at Wellcamp Airport outside Toowoomba will look like has been revealed.

    Isn’t she beautiful?

  12. Libtards reaping what they voted: NYC edition.

    ‘Third World’ NYC drug store shelves empty amid shoplifting surge

    https://nypost.com/2021/10/09/nyc-drug-store-shelves-empty-amid-shoplifting-surge/

    Thanks to a citywide shoplifting tsunami, bare necessities are now rare luxuries on drug-store shelves across New York City.

    “It looks like the Third World,” bemoaned one Manhattan resident, after eyeing the aisles of a CVS on Sixth Avenue in Soho desperately low of toothpaste, face wash and hand sanitizer, among a long list of other items.

  13. ‘The biggest issue is their value could drop through the floor. What was worth $1million could drop to $400,000. Nobody will want to buy them at market price.’”

    Watching true price discovery lay waste to the bubbles created by all the Yellen Bux hot money flows sloshing around the globe is going to be glorious.

  14. I have an idea. Let’s just cut all the prices by half, effective immediately. It’s easy math, and will help everyone skip the next two years of misery and get to the recovery part.

    Remember, California values dropped 59% in 23 months (source: NAR), so I’m being generous.

    1. On top of being in on 10 IPOs with the ability to create law benefiting those companies, having the ability to take 200 million in Federal $ and have a light rail train station built by a building you and your spouse own doubling the building’s value must be really cool.

    2. Twitter (for as long as he lasts):
      Nancy Pelosi Portfolio Tracker
      @NancyTracker
      We track Nancy Pelosi’s stock picks. Nancy is the greatest investor to ever do it. She is the next Warren Buffett. DM me tips.

    1. (a snip from the article)

      “‘We need to stop stigmatizing what’s acceptable for certain genders and just let kids be kids,’ Low said.

      “‘My hope is this bill encourages more businesses across California and the US to avoid reinforcing harmful and outdated stereotypes,’ he added.”

      Q. What items now sold in stores are off limits to girls? I can’t think of anything.

      1. I screwed up my snip, I left out this part:

        “Low said he was inspired by the 10-year-old girl daughter of one of his staffers who asked her mom why certain items in the store were ‘off limits’ to her because she was a girl.”

        1. If I had a daughter that asked such a stupid question when she can buy anything she pleases in the store, I’d head straight from the store to the orphanage to drop her off.

  15. Report: Southwest Airlines Cancels 1000s of Flights Due To Air Traffic Control Walkouts Over Vaccine Mandate

    by Jamie White
    October 10th 2021, 11:36 am

    Southwest Airlines cancelled thousands of flights over the weekend, citing air traffic control issues and “disruptive weather.”

    Alan Kasher, who oversees daily flight operations, told staff in a note on Saturday: “We experienced significant impact in the Florida airports [Friday] evening after an FAA-imposed air traffic management program was implemented due to weather and resulted in a large number of cancellations.”

    But some on social media are claiming the mass flight cancellations were due to air traffic controllers walking out en masse to protest the vaccine mandate.

    “Southwest is trying to cover up over 800 flights being cancelled today, including my connecting flight home from Chicago. They are officially claiming ATC issues and inclement weather, while it is sunny throughout the north east,” one user claimed.

    “The truth is that pilots are on strike due to vaccine mandates placed by Southwest requiring pilots to be vaccinated or risk being fired.”

    https://youtu.be/2e0i6sZ8Tb0

  16. Went to an open house in my San Diego hood today. A flip for 840k$. Smallish -1100 sq ft house on a small lot. I’m in a middle/upper middle tier type of neighborhood nowhere near the water. Foot traffic to the open house seemed ok. This flip wasn’t even finished yet, the base boards in the kitchen weren’t complete and there were wires hanging out of the wall.

    This house is listed for about 300-350k more then it would have sold for at the peak of the last bubble. If I had to guess where this going, I’d say the Fed will do another round of interest rate slashing and MBS buying. If they can get mortgage rates below 2%, we’ll see another buying spree in real estate and even higher prices.

    People just don’t care anymore what a house costs. The only limitation on the market is what people can borrow. As long as people can borrow greater amounts of money, this is going to continue. Difficult to accept for people who are value minded, but it’s upside down world. If you are a saver and value minded, your government and central bank hate you and are going to do every thing they can to destroy you financially.

    1. your government and central bank hate you and are going to do every thing they can to destroy you financially

      l don’t disagree with you, but the majority of Americans will be crushed before people like me are even inconvenienced. Not because I am personally anything special, but because I refused to pay too much for shelter, I refused to borrow a penny, I live simply and near important things, and I don’t need much that I don’t already have.

      1. Agree with this. Asset prices have no room to move higher, and debt junkies without the benefit of house appreciation will get slaughtered. I fail to see how myself and my brethren who have no debt will be the ones to get ruined. Quite the contrary.

        1. If the Fed made a determined, protracted, successful effort to ignite double digit inflation, as they did in the 1970s, savers with no debt could get wiped out while debt donkeys enjoy shrinkage of the real value of what they have to repay on their mortgages.

          Maybe that’s why so many people are eager to become debt donkeys, even at what objectively seem like insanely overvalued prices?

          The other thing is that we already saw the Fed use Quantitative Easing to put a plunge protection trampoline under housing prices in 2012 then again in 2020. It’s starting to seem like part of the Fed’s de facto policy mandate to support U.S. housing prices from decline.

  17. Some good news for a Sunday:

    “Meet Grace. She’s a 16 year old girl who’s showing more courage than most men right now. She’s refusing to comply with the mask mandate her Wyoming school board is trying to force. She was fined and arrested. Here’s her arrest. She’s a hero.”

    https://www.thegatewaypundit.com/2021/10/watch-16-year-old-wyoming-student-arrested-not-wearing-mask-entire-school-placed-lockdown/

    In other breaking news, Scientists™ have confirmed that any male who supports lockdowns and wearing masks is incapable of achieving arousal without watching his wife / girlfriend get plowed by another man, because Lockdown Lovers are cucks…

  18. Australia: Police Harass Resident For Going To Anti-Lockdown Protest ‘Six Months Ago’

    OCT 10, 2021

    Footage shows two officers confronting a man with printed copies of his Facebook posts indicating he may have attended an anti-COVID lockdown protest — six months ago.

    “So, what are you here for? Are you here to serve me, or?” the man asked the officers.

    The second officer appears to candidly reply: “It’s intimidation.”

    The exasperated resident then sounded off on the officers’ blatant authoritarianism.

    “Yeah, I know. It’s ludicrous, it’s like, sad,” the resident said, laughing in disbelief. “Where are we going in life? You’ve got the cops coming around here to tell me that I’ve been at a protest six months ago!”

    “To ask you if you have been,” the first cop affirmed.

    “Who gives a f#ck?” the resident argued. “Why are you guys here? Why are you on my doorstep about a protest? Why? What the f#ck do you want from me?”

    “Because it’s illegal,” the officer claimed.

    But the resident reminded her that Black Lives Matter protests occurred just “two weeks before that.”

    “Was that illegal? You going off knocking on their doors? No, you’re not. Why are you working for this corrupt government? What are you guys doing? Who are you serving? Are you serving us, or are you serving the corrupt government and health officials who want no good for you? They aren’t there for you.

    The officers ignored the man’s questions and again asked if he had attended a protest.

    https://www.infowars.com/

  19. Crunch time.

    Hundreds of thousands of U.S. service members remain unvaccinated or are only partially vaccinated against COVID with deadline to have shots now less than eight weeks away

    https://www.dailymail.co.uk/news/article-10078079/Hundreds-thousands-U-S-service-members-remain-unvaccinated-against-COVID-deadline-nears.html

    Hundreds of thousands of United States servicemembers remain unvaccinated or are only partially vaccinated against the coronavirus, as the deadline to have the shot draws closer.

    The vaccination rates vary between military branches, according to data obtained by the Washington Post, with 98 percent of the active duty Navy fully vaccinated.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top