We Were Excited, We Were Trying To Provide A Future For Our Kids, Now We’re Just Hit With This

A report from the American Statesman in Texas. “Housing supply in Central Texas reached its highest level in 13 years in May, the Austin Board of Realtors said. The median closing price last month was $608,438, up 11.6% from the year-ago May. The all-time record for the median home-sales price in Austin was $667,000, set in May 2022, the board’s figures show. Across most price points in Austin right now, ‘the current market is exceptionally challenging, and even industry experts find it difficult to predict trends,’ said Keith Trigaci, an agent with the Compass real estate brokerage. ‘High interest rates have significantly reduced buyer activity at open houses, in-person showings and calls on listings. Many properties that failed to sell last year remain on the market, with sellers hoping for better conditions.'”

“‘After several years of demand far exceeding supply, which resulted in huge increases in home prices, the Austin housing market is now in a correction phase,’ Eldon Rude, a longtime housing market expert. Mark Sprague, a housing industry expert with Independence Title in Austin, recalls how crazy the housing market was in 2022. ‘Buyers were freaking out, and sellers got multiple offers over asking price,’ Sprague wrote in a recent newsletter. Sprague’s bottom line: ‘If you’re hoping for a housing market crash, you’ll be waiting for a while. Like, probably forever. That’s because for housing prices to totally plummet, inventory would have to go way up to exceed demand, and no one foresees that happening anytime soon.'”

From KXAN. “Central Texas is no longer leading the way in housing costs well above what’s expected. A study by Florida Atlantic University compares current housing costs to what you should expect to pay based on historical price data. FAU Housing Economist Ken H. Johnson talked with KXAN about the study and the reasons behind Austin’s pricing drop. Johnson: ‘Austin two years ago was the second most overpriced city in America. You topped out somewhere around $565,000 to $570,000. Prices have been moving down significantly for the last two years. Our new data shows you’re going to be down about 17 to 18% in terms of price.'”

The Spokesman Review in Washington. “Assessments from 2024 show the average Spokane County home saw a decrease in value year over year, the first decline in the region in more than a decade and a potential indication the market is leveling after years of stark increases. ‘It’s nice that we are returning to more of a normal Spokane market,’ said Spokane County Assessor Tom Konis. ‘Because what we have gone through the last three or four years before that was not normal.’ Spokane County home values have more than doubled in the last seven years, growing from an average of $209,659 in 2018 to around $430,000 for the past two tax years. In 2022, the median income of Spokane County households was about $69,000. That’s a jump of about $9,000 from 2019.”

Gulfshore Business in Florida. “Cape Coral saw the third-largest increase in active listings at 45.1% and had the largest drop in median sale prices at 2.7%. Just 8.6% of May sales in the Cape were above list price, the third lowest mark in the country.”

From NBC 2. “The city of Cape Coral has stopped taking applications for help paying late mortgages due to an ‘overwhelming’ amount of applicants. The city is pausing applications after announcing the program two weeks ago. Shelton Weeks, a professor of real estate at FGCU, said, ‘We probably have a lot more folks who are struggling today than we did this time last year.’ While there may not be many foreclosures in Cape Coral right now, Weeks thinks first-time homeowners could be in a difficult position, especially with rising insurance costs. ‘That’s hit pretty much everybody in southwest Florida, along with that. We’ve just gone through a very significant period of inflation, and wages generally lag overall prices in the market,’ Weeks said.”

Beat of Hawaii. “A recent study is generating strong new pushback against Maui Mayor Bissen’s proposal to significantly reduce vacation rentals. Your thousands of comments have spoken to these issues. ‘I am an owner at Kamaole Sands and it is not a goldmine like some people seem to think. These changes could devastate many of us who rely on this income.’ Beat of Hawaii reader, Erika L.”

Mansion Global. “Charlie Puth has sliced the price on his Beverly Hills, California, home once again. After beginning June with two separate price cuts—each $1 million—the pop star is now asking just under $11 million for his Mid-Century Modern pad, making the home nearly $6 million cheaper than it was when it hit the market in November, according to listing records. The first quarter of the year brought a couple of price adjustments to the property, which was eventually taken off the market and re-listed in April for $13.99 million. Puth, 32, bought the home in 2017 for $8.995 million using a trust.”

From NewJersey.com. “A New Jersey real estate investor admitted Monday that he was involved in a massive, far-reaching $54.7 million mortgage fraud scheme, federal prosecutors said. Aron Puretz, 53, pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution, according to a release from the U.S. Attorney’s Office District of New Jersey. Between 2016 and 2022, Puretz and others not identified by officials, tricked lenders into issuing multifamily and commercial mortgage loans by providing them with phony documents. The faked papers included purchase contracts with inflated purchase prices, fake financial statements, and other fraudulent documents, the office said.”

“Puretz was an employee of Apex Equity Group, a Newark-based real estate investment and advisory firm, as well as being one of the owners of Maple Lawn in Eureka, Illinois, and Big Country Chateau in Little Rock, Arkansas, both multifamily properties, and Troy Technology Park in Troy, Michigan, a commercial property, authorities said. conspirators from Apex Equity Group utilized the identity of a unidentified conspirator to present a lender and Freddie Mac with a purchase and sale contract for $5.8 million and other fake documents, officials said.”

“On Feb. 17, 2017, a Lakewood-based title and settlement company, which was not identified by authorities, performed two closings, one for the true $4.1 million sales price and another for the fraudulent $5.8 million price presented to the lender, investigators said.”

CBC News in Canada. “As their real estate business was failing, a group of Ontario landlords spent millions of dollars of investors’ money on ‘extravagant’ expenses, ranging from renting a luxury vacation home in Hawaii, to footing a $5,000 Miami strip club bill to flying on private jets. Those are among the findings of KSV Advisory, a court-appointed monitor given special powers by Superior Court to investigate the web of corporations linked to four landlords: Former YTV actor Robbie Clark. Hamilton-area real estate agent Dylan Suitor. Burlington business owners Aruba Butt and Ryan Molony. Their 11 corporations currently have bankruptcy protection from over 30 lawsuits after they failed to pay back over $144 million borrowed from investors.”

“In a 92-page report released this week, KSV said the landlords appear to have ‘diverted, misused or misappropriated funds that were borrowed from investors. Funds were improperly used for their personal benefits or extravagant expenses … without any discernible benefit to the business,’ it says. The landlords had used first and second mortgages and unsecured promissory notes from private lenders to buy up 800 properties, mostly in small Ontario cities, to renovate and rent out at a higher cost or sell them.”

“The business was fuelled by over 1,300 loans, the vast majority of which came from Hamilton mortgage broker Claire Drage and her company, the Windrose Group, which closed down earlier this year. KSV reviewed presentations Windrose made to convince people to invest with Suitor, Butt and Molony, and found them to be ‘misleading.’ The presentations didn’t convey the amount of debt they’d taken on and how much they were paying to service that debt — which was substantial. Even when it was clear the business was operating at a ‘significant loss’ with no ‘exit strategy’ and they wouldn’t be able to pay back all investors, the landlords renewed loans. This practice continued into January 2024, shortly before they applied for bankruptcy protection.”

From Reuters. “Building permits for apartments in Germany fell 17% in April from a year earlier, government data showed on Tuesday, underscoring a continued downturn in demand in the construction and real estate industry. Germany has been jolted by the most severe slump in the property sector in decades. ‘Since May 2022, the number of building permits for apartments in Germany has only gone in one direction: downwards,’ said Tim-Oliver Mueller, head of the German Construction Industry Federation. That boom ended when rampant inflation forced the European Central Bank to swiftly raise borrowing costs. Real-estate financing dried up, projects stalled, major developers went bust, and some banks teetered.”

The New Zealand Herald. “House sales and listings were up in May but economists say the market is flat. ‘With a continued flow of new options coming to the market adding to a large level of stock, this does provide a lot of choice for buyers and a sense that they can take their time to make decisions,’ REINZ said. Westpac said separate data from realestate.co.nz showed a fall in new listings in May, suggesting property owners were starting to get the message about the current slow patch in the market. ‘Even so, sales are still falling behind new listings, with the stock of unsold homes on the market reaching its highest level since 2015.'”

News.com.au in Australia. “A building company that straddled two different states and territories has collapsed, leading to a ‘domino effect’ impacting 130 projects and 80 staff members. On Friday, creditors voted to place Cubitt’s Granny Flats and Home Extensions into liquidation. The builder worked in both NSW and the ACT and been in business for 30 years. The collapse has left 130 projects at various stages of completion in limbo and 80 staff members have lost their jobs. News.com.au previously reported on a customer who was left absolutely floored to learn of the collapse of Cubitt’s, as just 12 days earlier they had forked out a $23,000 deposit. Vince*, who did not want to share his last name, and his wife Katherine, 49, were toying with the idea of building a granny flat in their backyard as another stream of income.”

“After months of umming and ahhing and back and forth with their preferred builder, Cubitt’s, the Sydney couple finally transferred a $23,000 deposit to the business. But less than two weeks later, the business went under. Vince, a dad of three, has now been left wondering how the business was able to take his money at such a late stage if the company had known it was in financial strife. ‘It came as a shock,’ he told news.com.au. Based on his interactions with staff, he said it appeared to have been a surprise to them, too.”

“Vince said he only found out about the collapse of Cubitt’s because site surveyors were supposed to visit his backyard this Tuesday, the same day the builder went into external administration. He said the surveyors called him before they arrived asking if he’d be willing to pay them directly. When he asked why, they said it was because Cubitt’s had gone under. ‘We looked at their display homes, we were excited, we were trying to provide a future for our kids,’ he said. ‘Now we’re just hit with this.'”

From NPR. “Morning Edition got a first-hand look at China when we traveled to Beijing and Shanghai for a week this spring. Our travels produced big stories and insights — and a hundred little observations about a dynamic nation. When it was over, I talked about our experience with NPR’s John Ruwitch, who has covered China for decades. When I think about a China with fewer people, I get stuck on all sorts of questions. For example, what does it mean for real estate when they build so many apartments and there are going to be fewer and fewer people to fill them?”

“Ruwitch: The real estate issues, the government is trying to work through now. They introduced several years ago various policies that induced a sharp downturn. Sales of new houses have collapsed, home values have fallen. The government has since unveiled a sort of string of steps, a rescue package, to try to prop up the sector just because so many families’ wealth is tied up in it.”