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It Is A Buyers’ Market And We Have The Bargaining Power

A report from Island News in Hawaii. “Even before the Lahaina fires, insurance rates had been spiking because of natural disasters, global instability and other risk factors driving up costs. And now, they’re going up even more. ‘Anywhere from up to a thousand percent’, said Sue Savio, owner of Insurance Associates. And with no end in sight, ‘there’s going to be enough trouble trying to even buy food for a family of three four kids because the money’s being spent on insurance,’ Savio said. ‘They don’t go out to restaurants. They don’t go out to shows. They don’t go out and do anything because they don’t have the funds.'”

The Los Angeles Times in California. “In a mostly quiet neighborhood of older homes and small apartment buildings, some residents have drawn their own no-go zones around what might sound like a crash pad for traveling backpackers: hostels. At least two of them have popped up on West View Street in Mid-City Heights in the past few years, with more in surrounding neighborhoods. Residents say they’ve seen strangers smoke marijuana and drink alcohol outside the newly built buildings. They say the properties draw drug deals and a frequent police presence. A few months ago, a woman ranted in the street outside one of the properties for hours, at times alleging someone stole something from her.”

“With more duplex developments underway, neighbors have concerns. They said they would welcome it if people looking for a permanent home moved into the buildings, but want temporary stays ended. ‘We are being oversaturated,’ said Roxana Brusso, who has owned a home in the neighborhood since 2008. ‘The city is asking us to sacrifice our safety, quality of life and property values.'”

The Dallas Morning News in Texas. “Dallas-Fort Worth ranked second in the nation for homes sold and active home listings last month, trailing only New York as the spring selling season heats up. The report also found that active housing inventory is up 49.4% year-over-year. ‘Compared to a couple of years ago, we are definitely seeing a slightly more balanced market, as homebuyers now have a much greater supply of inventory to pick from,’ Todd Luong, an agent with RE/MAX DFW Associates, said in a statement. ‘But more importantly, buyers are facing far less competition than before and bidding wars are no longer the norm.'”

RE Business Online on Texas. “The multifamily markets of Austin and San Antonio — two of the fastest-growing cities in the country over the last decade — are on pace to deliver above-average volumes of new apartments in 2024, causing some industry experts to express concerns of potential oversupply. Panelist Bryan Brown, managing partner at Cardinal Multifamily, immediately addressed his firm’s anticipated response to the growing oversupply of apartments in San Antonio. ‘We’ve got about 2,700 units that have either been completed or will be completed this year and another 300 units that we’ll start construction on in August, and then nothing until 2026 because we’re too scared,’ Brown said.”

“In the greater Austin area, CoStar estimates that there are approximately 35,000 apartments in various stages of development, which translates to about 11.7 percent of the total inventory. The market absorbed about 11,000 units in 2023 while posting a -5.6 percent rent decline — a testament to overbuilding already taking root in the state capital. ‘The building permit situation in San Antonio is far worse than in Austin in that it’s bad, which is good [for the supply-demand balance],’ Brown said. ‘You’re not going to see the type of overbuilding in the next year or so in San Antonio that you’ll continue to see in Austin. More crazy money will come into Austin, too soon [into the next development cycle], and it won’t come into San Antonio.'”

The Vermont Digger. “The University of Vermont is stopping plans for a new undergraduate housing complex that would have accommodated about 540 students, citing soaring construction costs and a lack of available labor. ‘With interest rates where they are, and the competition for labor in the Burlington area right now, the price tag was going to drive rents so it really wouldn’t have been affordable for students to live there,’ said Richard Cate, the university’s chief financial officer. ‘There’s no point in building when it’s not going to work for them.'”

WGN TV in Illinois. “It’s been four years since the COVID-19 outbreak led to a rise in remote work. Now, even though the public health crisis has diminished, the work from home trend shows no signs of slowing, pushing downtown office vacancies higher. ‘We just don’t have the same number of people working in the Loop as before,’ said Dan McMillen, a real estate professor at University of Illinois Chicago. ‘On a normal day, before [the COVID-19 pandemic], we had 700-to-800-thousand people come and work and thrive downtown in the Loop,’ said developer Michael Reschke. ‘Now, it’s probably half that level on Tuesday through Thursday. On Monday and Friday, maybe a quarter of that level. That vibrancy is missing.'”

Bisnow Boston in Massachusetts. “The developer of Assembly Row is asking for an extension on a new lab development due to economic conditions and lack of demand. Federal Realty Investment Trust executives filed a request with the Somerville Planning Board for an extension on its special permit for its 350 Assembly Row lab project. The company said it is seeking a two-year extension on its permit because of challenges that have delayed its timeline, according to the May 19 filing. ‘The Applicant has faced hardship in pursuing the project in the form of difficulties associated with the rise in interest rates, increase in construction costs, and an oversaturation of lab product in the region,’ Federal Realty Senior Director of Development Sarah Rogers wrote in the filing.”

The London Free Press in Canada. “A regulatory agency’s allegations of wrongdoing by a well established London mortgage brokerage raise larger questions about the industry, including how many other mortgages arranged by the company may have allegedly been compromised, an industry expert says. The authority said Forest City Funding, a London mortgage brokerage, gave ‘false or deceptive information and documents when dealing in mortgages,’ contrary to the the Mortgage Brokerages, Lenders and Administrators Act. The company also is alleged to have acted ‘when it ought to have known that by acting it was being used by a borrower to facilitate dishonesty,’ the authority said.”

“Chirag Mehta, director of operations at True North Mortgage, said his Calgary-based agency has seen dozens of fraudulent applications for mortgages. ‘Right after the pandemic when housing markets started to boom we saw an influx of those types of deals which we stopped all of them or most of them,’ he said. There are two different fraudulent documents borrowers can forge, Mehta said. ‘One is letter of employment, the company doesn’t exist or people don’t work there,” he said “The other one is bank statement fraud – showing money is in there but they are borrowing money from friends or family.'”

“Carl Davies, head of fraud and identity at Equifax Canada, said Ontario has the highest mortgage fraud rate among all provinces. ‘Rates are 30 to 40 per cent higher than other provinces,’ he said. Mortgage fraud becomes more of an issue when people aren’t getting mortgages due to obstacles such as high interest rates, Davies said. A few years ago a CBC investigation found mortgage agents in the GTA manufacturing forged documents so their clients could get mortgages, he said. ‘It is a problem especially in a time where volume was dropping very low,’ Davies said. ‘Now you’ve got lots of brokers fighting for a small number of transactions.'”

ABC News in Australia. “A Queensland landlord says he has been left thousands of dollars out of pocket trying to evict renters who refused to leave after their contract was up, delaying the sale of the house. Adam Le Fevre told the ABC he was hit with “12 interest rate increases in a row” and found his Mackay investment property stopped covering its cost. ‘The decision was made to bail out … before we end up down the tubes,’ he said. Mr Le Fevre said he has spent more than $2,000 on legal representation, QCAT fees, and flights to Mackay for the tribunal, and is now being sued by the new home owners over the delayed sale. ‘I feel for the tenants, [but] I wonder if they understand the carnage they have caused,’ he said. ‘I’m just mentally, emotionally, and physically exhausted.'”

Radio New Zealand. “Interest rates might have peaked but the mortgage pain is not over yet, and there is likely more of an impact felt in the housing market, commentators say. While the market drop has now largely stopped, prices are still well down on their peak – about 15 percent by the Real Estate Institute’s (REINZ) measure. That is putting pressure on people who bought in recent years and now face both higher interest rates and softer values. Corelogic data showed that 7.1 percent of homes that changed hands in the first quarter of this year sold for less than they had been bought for. The median hold period of those that made a loss was 2.4 years. The median loss was $50,000.”

“Infometrics chief forecaster Gareth Kiernan said there were signs of increased stress in the housing market. The number of houses for sale on Realestate.co.nz was up 23 percent since July last year, to its highest level since 2015. ‘The biggest lifts have been in Wellington and Wairarapa – up 43 percent and 35 percent respectively, as the spectre of public sector job cuts has hung over the lower North Island. Other regions with increases of 30 percent or more over the same period are Auckland, Bay of Plenty, and Coromandel – areas where affordability metrics remain highly stretched given the current combination of house prices and mortgage rates.'”

“Property investor and coach Steve Goodey said he had seen a number of people buying houses from people taking a big loss. ‘Some are really feeling the interest rates.’ He said some developers were probably under pressure because it was possible to buy new-build homes at prices below what it would cost to build them.”

South China Morning Post. “Sentiment in China’s property market is improving, with homebuyers in some of the biggest cities rushing to sales offices to scout for deals, days after Beijing rolled out the strongest stimulus measures yet to rescue the troubled sector. Ma Yunman, a sales agent at 5i5j Real Estate Brokerage based in Beijing’s suburban Fangshan district, said some 100 people visited its regional showrooms to view projects and consider purchases last weekend. ‘The overall volume of inquiries has increased noticeably since the new support measures came out last Friday,’ Ma said in an interview. ‘This is helped by the fact that prices for both new and pre-owned homes in our area have declined by 20 to 30 per cent from last year.'”

“In Shanghai, more prospective homebuyers are asking sellers for more generous discounts. Weng Lingjie, a 40-year-old entrepreneur, said he would only buy a lived-in home in the eastern Pudong district on a further 15 per cent price cut. ‘It is a buyers’ market and we have the bargaining power,’ said Wang, who is not alone in angling for bigger discounts. Local real estate agencies said a growing number of clients have also started hunting for bargains after last week’s major incentives.”

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  1. ‘And with no end in sight, ‘there’s going to be enough trouble trying to even buy food for a family of three four kids because the money’s being spent on insurance,’ Savio said. ‘They don’t go out to restaurants. They don’t go out to shows. They don’t go out and do anything because they don’t have the funds’

    Winnahs! don’t spend on expensive food Sue. They have priorities you bitter renters wouldn’t understand.

    1. “…because the money’s being spent on insurance…”

      Another Wednesday, another out of control REIConplex holding costs story.

      Warnings from the HBB and its readers have been in place for over a decade.

      1. So what do you suggest these folks do? Rent? I’m sure the LLs are getting hit too and passing on the cost to renters.

        1. What LLs can charge isn’t based on what their costs are. It’s limited by competition with other LLs.

          1. Exactly. Which is why “in-the-red” or even break-even landlords are gonna start bailing and list their properties. Let’s face it, of these types the only reason they exist is they’re banking on appreciation. Those who still pencil positive cash flow will have decide whether the skinnier margins are worth it. In most regions rents are dropping regardless of the additional holding costs that keep piling on daily. What does this point to? Mucho inventory coming in the way of new listings and foreclosures.

    2. I can’t grok if Sue is feeling smug or sorry for all of the newly poors unable to temporarily escape their mundane existence . . . !?

  2. ‘he had seen a number of people buying houses from people taking a big loss. ‘Some are really feeling the interest rates.’ He said some developers were probably under pressure because it was possible to buy new-build homes at prices below what it would cost to build them’

    That would mean any poor bashtard who bought a new shack in the past few years is fooked coach Steve.

  3. ‘The Applicant has faced hardship in pursuing the project in the form of difficulties associated with the rise in interest rates, increase in construction costs, and an oversaturation of lab product in the region’

    It was a no brainer at the time Sarah.

    1. What is “lab product?” I guess it really is science lab space, especially in Boston, which is a hub for bioscience.

  4. ‘On a normal day, before [the COVID-19 pandemic], we had 700-to-800-thousand people come and work and thrive downtown in the Loop…Now, it’s probably half that level on Tuesday through Thursday. On Monday and Friday, maybe a quarter of that level. That vibrancy is missing’

    We had to destroy all these giant sh$tholes cuz minor respiratory illness Mike. Sux to be you.

    1. “minor respiratory illness”

      How’s that Doom Loop working out for all you vaxxtards and masktards?

      We’re all in this together.

      1. The tech capability for w@h was already 90% ready-to-go even before the pandemic. But what the lockdowns did was force everyone to try it. And too many people liked it.

        1. Soft, soft hands. Soft, suburbia girl hands.

          Still waiting for that remote control robot that does commercial service and tenant finish work, so I can stay home and not put on pants and shoes all day.

          1. Or you could go back to your gov contracting jobs, where you could remove your pants with your soft hands.

            That said, I’m happy that you found something better suited to you. Every contractor that works on my house gets a tip.

    1. The last bear on Wall Street: Why JPMorgan’s Marko Kolanovic is sticking by his forecast for a 20% market sell-off
      Matthew Fox
      May 21, 2024, 8:58 AM PDT
      Marko Kolanovic Top 100
      Hollis Johnson/Insider

      – JPMorgan’s Marko Kolanovic sees no reason to turn bullish on the stock market despite record highs.

      – In a Monday note, Kolanovic reiterated his view that the S&P 500 could fall 20% to 4,200.

      – “We do not see equities as attractive investments at the moment and we don’t see a reason to change our stance,” Kolanovic said.
      …
      https://markets.businessinsider.com/news/stocks/stock-market-outlook-last-bear-on-wall-street-crash-decline-2024-5

      1. 20 percent?

        “You gotta pump those numbers up. Those are rookie numbers in this racket”

      1. Hmmmm, I think the lack of Bears, is a Bearish indicator.

        That’s where my mind went immediately.

    1. That place is a tear-down, no question. The houses around it look better kept, so maybe it *was* beginning to gentrify… circa 2018 or so.

      But things have really been going downhill since the pandemic, when all the homeless — and fentanyl and tranq — came out of the woodwork, it seems. It’s hard to keep that kind of thing down, even in red Florida.

      The land is not worth $129K for sure. $30K for the land, $100K for a small prefab, and $15K for security. Even that might not be good enough.

  8. Thomas Massie won his primary in Kentucky with 75.9% of the vote yesterday.

    Putting Kentucky first, no more money for the war pigs.

  9. [Here is another non-housing related article generated from Down Under. There may be hope for us yet.]

    Tell the world, the Dutch tractor protests and a War on Net Zero won.

    https://www.joannenova.com.au/2024/05/tell-the-world-the-dutch-tractor-protests-and-a-war-on-net-zero-won/

    Six months after Geert Wilders won the Dutch election he has finally negotiated an agreement with a few minor parties to form government and the unthinkable has happened. The centre-of-the-road conservatives (referred to as “far right extremists”) got elected to unwind the worst excesses of the totalitarian left. Henceforth, the forced farm reclamations will stop, mandated heat pumps are out, electric car subsidies are going and in a brave scientific move, no one will be culling livestock to change the weather. The Netherlands won’t have to pursue stronger environmental policies than the rest of the EU so their leaders can show off at cocktail parties and get jobs with the UN. The Netherlands will still be tied to crazy EU rules, but those elections are coming next month. And official government ministers are so much harder to ignore in EU negotiations. The landscape has changed.

    The Telegraph in the UK gets the message: The Tories should go to war on Net Zero. This applies everywhere else too. Tony Abbott didn’t win a 90 seat landslide victory in Australia by trying to do half a carbon tax. He won because he said he would Axe the Tax. (And Stop the Boats.)

    The political candidate who goes to war on Stupid Plans has the freedom to point out the all the stupidity. The weaker man with a halfway plan is still agreeing with the witchcraft, he’s just suggesting a different spell. No wonder it doesn’t sell.

    To arrange the deal Wilders gave up the Prime Ministership (a win no doubt for the namecalling mud slingers), but he appears to be the one in charge nonetheless. We hope he gets his day…

    h/t to NetZeroWatch

    Dutch farmers force heat pumps about-turn
    Meike Eijsberg London and James Crisp, The Telegraph

    The Netherlands will tear up rules forcing homeowners to buy heat pumps as part of a war on net zero by Geert Wilders and the Dutch farmers’ party.

    Six months after his shock election victory, Mr Wilders this week struck an agreement to usher in a Right-wing coalition government of four parties. “We are writing history,” he said as he announced the programme for the new government.

    The new coalition marks the first time that a party focused on the interests of the agricultural sector has got into power in the Netherlands. Earlier this year, mass farmers’ protests swept Europe.

    The coalition pact includes pledges to reverse green policies introduced under the previous government to hit EU climate targets, including compulsory buyouts of polluting farms. It also plans to end subsidies for electric cars in 2025 and rejects an EU demand that the Dutch reduce livestock numbers to cut pollution.

    The Tories should go to war on net zero excess
    Editorial, The Telegraph

    But now even Western countries are starting to turn against the worst excesses of the green movement. The new Dutch coalition has released its programme for government, and at the heart of it are a swathe of pro-consumer, pro-energy security policies, reversing some of the bizarre environmental schemes introduced by its predecessors.

    Among them was a programme to compulsorily purchase farms to meet EU climate targets. The result was a farmers’ revolt and a new insurgent political party. The coalition agreement tears up rules forcing homeowners to buy heat pumps, and scraps an obligation that the Netherlands should pursue a “more ambitious environment policy” than the rest of Europe.

    Young voters are shifting right and breaking “taboos”
    Geert Wilders party did better among 18 – 35 year olds than among some older groups. If all ages matched the younger vote his party would have won four more seats.

    At Politico writers are worried that trends like this, which are also seen in Portugul and France mean the “taboos against voting for populist anti-immigration parties is fading”. Which begs the question of who decided that was taboo in the first place?

    Their biggest fear is that even young voters are breaking out of their educational pens. They paint this as a devious “far right” opportunity, instead of what it really is, the young rebelling against a lifetime of propaganda. The old jargon and namecalling formula to bully the workers into submission isn’t working any more.

    Geert Wilders turned all corners of Dutch Society into far right voters

    By Hanne Cokelaere and Eva Hartog, Politico

    Across Europe, far right parties are advancing with support from young — and first time — voters. Despite being one of the EU’s wealthiest countries, the Netherlands’ shortage of affordable housing has become a key concern. Amid rising prices, many have an increasingly cynical outlook on life. Unlike their parents and grandparents, this generation feels less restricted by party loyalties, making them more of a wild card and therefore an attractive pool of new voters for anti-establishment candidates.

    “The older voter, who was still loyal, is dying; younger voters are going in all directions,” said Josse de Voogd, a Dutch researcher who has made electoral geography his specialty.

    For far-right parties, that presents an opportunity.

    Wilders’ success took many by surprise, but it is indicative of a broader trend: The taboo of voting for populist, anti-immigration parties is fading. In the June EU election, the European Parliament’s Identity and Democracy group is projected to reap the electoral benefits of increasingly broad support; also among young voters.

    In Portugal, exit polls from the March election suggested that under-30s accounted for approximately 25 percent of those who voted for the far-right Chega party.

    Young voters are looking for a strong leader and few men are as strong as Geert Wilders — the man who received countless death threats and lives under permanent guard, but keeps going.

    It is easy to imagine the new Prime Minister (whoever that is) living in the shadow of the real leader, the man who takes risks.

    1. “who decided that was taboo in the first place?”

      Jonathan Greenblatt could not be reached for comment.

  11. Enthusiastic Bronx residents ready to welcome Trump for first NYC campaign rally in 8 years: ‘I really hope he wins’ (5/21/2024):

    “Everybody was working, the prices were lower and the economy was great,” Randazzo said of the Trump administration, before addressing the possibility of voting for Biden: “Not on my deathbed.”

    Artist and entrepreneur Cherie Corso said she “went through the fire for Trump,” with neighbors in her left-leaning Westchester suburb calling her “racist” and cutting her out of social gatherings after she went public with her support in 2016.

    Corso said she was hopeful Trump might become the first Republican to win New York since Ronald Reagan in 1984 and added that many of her closest friends are closet Trump supporters who don’t want to endure the same backlash she did.

    “So many people will talk a show [that they] like Joe Biden, then they get me behind closed doors and they are like ‘[I’m] voting for Trump, too but I can’t say anything.’ And I’m like, ‘Girl, your secret’s safe with me,’” she explained.

    For twins John and James, retired city workers from Westchester, a Bronx Trump rally is an exciting prospect and they both plan to attend.

    “I think people are waking up. I really think people are waking up. They’re seeing Biden is lying about everything,” James said.

    “No, say the whole [Democratic] party,” John chimed in. “The whole party is lying about everything.”

    Like Randazzo, the twins are nostalgic for the Trump economy and are frustrated with the direction the country is heading in under the Biden administration.

    “Everything is sky high. The prices, everything is sky high,” said James. “It’s so sad, I hear everybody complaining.”

    https://nypost.com/2024/05/21/us-news/enthusiastic-bronx-residents-welcome-trump-rally-i-really-hope-he-wins/

  13. CNBC — We’re in a ‘vibecession,’ experts say. Here’s how to invest accordingly (5/22/2024):

    “Though the data on the economy continues to be really strong, the consumer is not feeling that and it’s really showing,” said Courtney Garcia, senior wealth advisor at Payne Capital Management.

    “Every client we’ve been talking to over the last several months has brought up the concern of, they’re worried about inflation, worried they can’t spend money,” Garcia said. “That’s regardless of whether the data is coming in good or bad,”

    Further, “that consumer sentiment is absolutely fitting into how they’re investing — that’s absolutely why you’re seeing so much cash on the sidelines,” Garcia added.

    https://www.cnbc.com/2024/05/22/were-in-a-vibecession-experts-say-heres-how-to-invest.html

    Cash earning almost 5% now.

    Stonks are gonna tank 80%.

  14. CNBC (5/22/2024):

    “Fed officials at the meeting noted several upside risks to inflation, particularly from geopolitical events, and noted the pressure that inflation was having on consumers, particularly those on the lower end of the wage scale. Some participants said the early year increase in inflation could have come from seasonal distortions, though others argued that the “broad-based” nature of the moves means they shouldn’t be “overly discounted.”

    Committee members also expressed worry that consumers were resorting to riskier forms of financing to make ends meet as inflation pressures persist.

    “Many participants noted signs that the finances of low- and moderate-income households were increasingly coming under pressure, which these participants saw as a downside risk to the outlook for consumption,” the minutes said. “They pointed to increased usage of credit cards and buy-now-pay-later services, as well as increased delinquency rates for some types of consumer loans.”

    https://www.cnbc.com/2024/05/22/fed-minutes-may-2024-.html

    Are you any better off now than you were in January 2021?

  15. Lately all these people that pushed the Covid Panademic, and the harm from their solutions are now trying to rewrite history.
    They are saying that everything like lockdowns, masks, and vaccines were voluntary.
    We all know that mandates were made, businesses were shut down, tickets and arrests were issued, you were denied right to commerce, and you were fired if you didn’t comply.
    With a straight face they are trying to say everything was done under a volunteer basis.

  16. ‘With more duplex developments underway, neighbors have concerns. They said they would welcome it if people looking for a permanent home moved into the buildings, but want temporary stays ended. ‘We are being oversaturated…The city is asking us to sacrifice our safety, quality of life and property values’

    Do what you have to, Roxana but don’t screw up the comps!

  17. ‘We’ve got about 2,700 units that have either been completed or will be completed this year and another 300 units that we’ll start construction on in August, and then nothing until 2026 because we’re too scared’

    via GIPHY

  18. ‘the price tag was going to drive rents so it really wouldn’t have been affordable for students to live there…There’s no point in building when it’s not going to work for them’

    Yer right Dick. People in Vermont and New Hampshire have struck me as having common sense.

  19. Things Are Getting So Much Worse For Condo’s (GTA Condo Real Estate Market Update)
    Team Sessa Real Estate

    31 minutes ago TORONTO

    In this episode we take a look at the current GTA Condo Markets – Toronto, York Region & Peel Region for week ending May 15, 2024. We also discuss what feels like a massive problem with the types of condo’s that are currently sitting on the market.

    https://www.youtube.com/watch?v=OovYVvrdXAY

    15:19.

  20. ‘Right after the pandemic when housing markets started to boom we saw an influx of those types of deals’

    Booms attract criminals Chirag.

  21. ‘he was hit with “12 interest rate increases in a row’ and found his Mackay investment property stopped covering its cost. ‘The decision was made to bail out … before we end up down the tubes,’ he said. Mr Le Fevre said he has spent more than $2,000 on legal representation, QCAT fees, and flights to Mackay for the tribunal, and is now being sued by the new home owners over the delayed sale. ‘I feel for the tenants, [but] I wonder if they understand the carnage they have caused,’ he said. ‘I’m just mentally, emotionally, and physically exhausted’

    You don’t know it today Adam, and maybe not tomorrow or the next day Adam, but you are a winnah!

  22. ‘he would only buy a lived-in home in the eastern Pudong district on a further 15 per cent price cut. ‘It is a buyers’ market and we have the bargaining power,’ said Wang, who is not alone in angling for bigger discounts’

    That’s the spirit Weng, keep up the good work!

  23. A bunch of people were exempt from taking Covid
    Vaccines.
    Congress and Senate
    The White House and Staff
    Post office employees
    The Vaccine Companies Employees
    The CDC, FDA, NIH, Employees
    Illegals crossing the border
    And homeless.

    There might of been more,

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