This Sounds Like A Diabolical Financial Position To Be In

A report from Mansion Global on New York. “Moneyed Manhattanites returned from their Labor Day breaks with a voracious appetite for real estate, according to the weekly report Monday from Olshan Realty. The townhouse on East 74th Street was asking $23.8 million. The seller paid $26 million for the house in 2013.”

From ABC Action News. “Lives are changed yearly in Florida as hurricanes and rising water continues to threaten local communities. On a typical Tuesday at the end of August, heavy rain drenched the Shore Acres neighborhood, and 24 hours later, several storm drains remained at capacity, overflowing back into the street. For sale signs are everywhere. Sean Appelbaum bought his home in 2021, knowing it had flooded in 2019. Appelbaum moved back to St. Louis in April. He’s had his house on the market ever since with no luck. He’s even bumped the price below what he bought it for. ‘The owner had lived there since the early 90s, and that was the only time it had ever flooded, so I was like, oh, I’ll take my chances,’ he said. ‘It got about six inches in the house,’ he said, pointing out where the water hit in his garage. ‘People are fed up for sure,’ he said.”

10 Tampa Bay in Florida. “Gov. Ron DeSantis said Monday that lawmakers should act before the 2025 regular legislative session to address problems facing condominium associations and owners, including soaring costs. Condo owners like Celeste Noren of St. Pete is among those paying more in HOA fees. That’s amid her home insurance also increasing. ‘It’s frightening,’ Noren said. ‘It doesn’t matter how rich or poor you are. I mean, even people that have money are concerned about this.’ Local realtors like Ashley Gajdosz said inventory is up for condos locally, but prices in the market are decreasing. Sellers appear to be having a longer time having their condos sold. ‘Unfortunately, what they’re seeing is that it’s not that easy to sell, because when you try to sell that unit, and you do your seller’s disclosure, you have to disclose these assessments and the repairs that are required,’ said Rep. Tom Fabricio, R-Miami Lakes. ‘So, that’s causing issues with the market throughout. So, it’s causing a problem for these seniors.'”

The Coeur d’Alene Press in Idaho. “The median price of a single-family home in Kootenai County was $527,860 in August, up slightly from one year ago, but down slightly from July, according to the Coeur d’Alene Regional Realtors. In Shoshone County, the median home price was $281,200 in August, down nearly 8% from $305,000 a year ago, and a drop from $289,000 in July.”

The New York Post. “According to new findings from Realtor.com, homeownership recently got a tad more affordable in Kansas City, San Diego and Miami, where residential real estate prices went down more than in any other city year-over-year. Nationwide, the median price of homes for sale last month decreased by 1.3%, to $429,990. In Miami, Realtor.com analysts found that, year-over-year, the median listing price dropped 11.7%, to $530,000, the biggest reduction in the country. In second place came San Diego with a 9.1% reduction, bringing median listing prices to $999,000. And in third, Kansas City, with an 8.5% reduction, for a new median of $398,050.”

KRON in California. “Women were flown from New York City to San Jose with promises of legitimate jobs before they were victimized in brothels operated in residential neighborhoods, according to a police report filed in court. The San Jose Police Department Human Trafficking Task Force’s report, obtained by KRON4 on Monday, describes how neighbors in San Jose were confronted by men seeking prostitutes. One tip to SJPD stated, ‘My mother’s home … continues to have solicitors asking for women and have shown my mother pics of Asian women whom they are looking for. Several men have tried to force themselves into my mother’s home. It is dangerous.’ Another tip stated, ‘People knocking at our home … saying they are there for a massage. Many unidentified men trying to force themselves into our (home) and then running away.’ Neighbors told police that suspicious activities had been happening for nearly a year.”

KVIA in Texas. “El Paso police officers have been called out nearly 700 times over two years to investigate criminal activity at a condemned hotel in downtown El Paso. That’s just one bombshell in the County Attorney’s lawsuit against the owner of the Gateway Hotel, which is on S. Stanton Street, one block west of the El Paso County Courthouse. Other allegations include operating without proper licenses and harboring members of a dangerous Venezuelan gang known as the Tren de Aragua. A video, according to the County Attorney, shows, ‘people partying, drinking, smoking and dancing provocatively while children are present … at least one gun being shot, … men holding knives and another man with a hatchet assaulting people and causing damage to the hotel in front of a security guard.’ One El Paso police officer said, “There should be concern due to the establishment and rise of the Venezuelan Criminal Organization ‘Tren de Aragua’ at the Gateway Hotel. We discovered several Venezuelans have the tattoo identifiers of Tren de Aragua.'”

From Soo Today in Canada. “The City of Sault Ste. Marie plans on taxing owners of vacant, neglected homes in the city beginning next year — and now, it’s looking to the public for input. Over the past two years, SooToday has written extensively about vacant, derelict properties in Sault Ste. Marie owned by out-of-town landlords that scooped up dozens of homes — many of them in the city’s downtown core — as housing prices plunged during the COVID-19 pandemic. Earlier this year, a group of out-of-town landlords filed for creditor protection in Ontario Superior Court, claiming $144 million in debt and less than $100,000 cash on hand.”

“Meanwhile, another out-of-town landlord with a grandiose vision of using the Sault’s housing stock in order to create a real estate empire in Ontario is in some hot water of their own. CPM Properties — a property management company based in southern Ontario that rents out properties in Hamilton, Sudbury and Sault Ste. Marie — has been facing rampant criticism from tenants over substandard living conditions and unpaid utility bills since buying up homes locally. The company’s co-director, Nels Moxness, used 31 numbered companies to buy up at least 130 properties in Sault Ste. Marie, many of which remain boarded up in the city’s downtown core. Last December, two people died in a fire at a boarded-up house on Huron Street owned by one of those numbered companies.”

“This week, SooToday reported that Nels Moxness and his numbered companies have been hit with a dozen lawsuits from lenders — totalling more than $2.4 million — since 2022, seeking both repayment of mortgages and repossession of the properties in many instances. The bulk of those allegations have not been proven in court.”

CTV News in Canada. “In 2022, Tanya Frisk-Welburn and her husband bought what they hoped would be a dream home in Mexico. The seller was a company called Caban Condos whose website described it as ‘two guys from Saskatchewan’ building condominiums near idyllic seaside locations in the Yucatan peninsula. ‘We put down a whole ton of money,’ Frisk-Welburn said. ‘It’s my retirement fund.’ Frisk-Welburn still has no condo. She’s out nearly US$170,000 and is suing Caban Condos. And she’s not alone. An investigation by the Investigative Journalism Foundation (IJF) and CTV Saskatoon has found Caban Condos repeatedly failed to return promised money to buyers in its Mexican real estate projects, most of which are years behind schedule. And in one of the company’s only completed developments, residents say they never received legal title to their property.”

“In many cases, the 11 groups of buyers identified by the IJF and CTV Saskatoon say they spent their life savings or retirement funds on a Caban condo deposit. Frisk-Welburn says she never would have bought property in Mexico if the builder hadn’t been local. ‘We’re just two guys from Saskatchewan’ — we’re just — that means, ‘trust us.’ And that’s what I did. I put my full trust in these people, and now I don’t have a condo,’ she said.”

“Caban Condos Mexico, incorporated in Saskatchewan as Regal Property Developments Ltd., is owned by Corman Park, Sask. resident Mike Delaire. Delaire partnered with Parrish Kondra, a fellow Saskatonian he met at a jet ski rally. William Ambery, a former New York City detective, bought a penthouse condo in an upcoming development after connecting with Kondra in 2020. Ambery sent Delaire more than US$164,000, half the price of the unit. Ambery’s contract said he would have his condo by July 2022. Ambery referred to Kondra as a ‘used car salesman.’ ‘But in this case, you’re not even getting a car,’ he said.”

I News in the UK. “For a successful life, Paul Afshar thought he needed to achieve the following: get a job, buy a home in London. and have a happy relationship. So when he got on the property ladder aged 24, he felt optimistic about his future. Afshar, now 41, used Southern Housing’s shared ownership scheme to buy 25 per cent of a one-bedroom flat in London in 2007, with the hope of continuously saving money and buying more of the property until he owned it outright. But in the years that followed, he discovered the drawbacks of shared ownership. Under these agreements, touted as an ‘affordable’ way for people to own a home without a deposit, tenants take out a mortgage on their share of the property and pay rent to a housing association on the remainder.”

“But now, amid rising mortgage costs and bills, and with many shared ownership properties caught up in the building safety scandal, they are turning out to be a disastrously bad deal for some. They find themselves trapped in unsellable homes, with all the downsides and none of the benefits of homeownership. Afshar put a 5 per cent deposit of £2,500 on his share of the flat at the time and entered a 35-year mortgage on a standard variable rate. Over the last 17 years, his monthly payments have increased drastically – his mortgage alone has risen 48 per cent from £268.65 to £400.28. Looking back, he wishes that the increase in service charge and mortgage rate, as well as selling protocols, had been explained fully. ‘I was hoping for a quick sale. Not only did that not happen – we discovered it was unsellable and I was potentially going to have a massive bill to pay. I got into something I didn’t fully understand. I was sold a dream of homeownership and it’s come back to bite me years later. It’s heartbreaking.'”

From News.com.au. “Millions of Australians are sitting on ticking time bombs that could detonate at any moment and those meant to prevent disaster are almost powerless to help. New research from the Australian Housing and Urban Research Institute has revealed 70 per cent of the estimated 10.9 million homes across the country have some kind of major building defect. Zeher Khalil is a building inspector who checks the quality of new and recently constructed homes across the country. Mr Khalil said it’s ‘pretty much a guarantee’ he’ll find at least one serious defect in every dwelling he checks. And he’s not talking about a patchy paint job or some missing silicon. ‘I’m talking about really serious issues that require the roof to be stripped out or an entire bathroom to be demolished,’ he said.”

“Given around 150,000 to 170,000 new homes are built each year, that’s a lot of ‘ticking time bombs’ that will go off sooner rather than later, he said. ‘This country now builds homes that don’t even last for 10 years,’ Mr Khalil said. ‘You get to year seven or eight and they’re falling apart.’ While he’s seen it all over the years, Mr Khalil still finds it hard to believe the sheer extent of problems given how much Australians pay for their homes. ‘Last week, I was in Sydney and I inspected a home that was selling for $2.5 million,’ he said. ‘Essentially the whole thing was noncompliance. Roofing, waterproofing, water going into the kitchen, guttering, leaks … you name it. That’s a minimum of $100,000 to correct. Someone will have to allow for that. It’s a huge problem.'”

Radio New Zealand. “A Wellington real estate salesperson who lost about $200,000 on a new build townhouse says a similar situation is being played out around the country. Mike Robbers of Lowe & Co Realty told clients last week that he and partner Socheata had signed a contract for a three-bedroom Wellington investment property which was not yet built in 2020. At the time, ASB was offering a 1.9 percent interest rate for new builds and the expected rent would cover repayments. ‘The market was booming, our incomes were solid and we expected that by the time it was built, our townhouse would be worth considerably more than what we agreed to pay for it.'”

“But by the time the house was built and ready for settlement, almost everything had changed. ‘Interest rates hadn’t just doubled, they’d quadrupled. Rents had tanked by more than 30 percent – unprecedented. The townhouse was no longer a viable investment and completely unaffordable for us to consider keeping. But property prices had dropped so much, that the property was now worth less than the remaining balance required to settle.’ He said, with their incomes also down, he was not able to get bank finance to settle. ‘Whilst this sounds like a diabolical financial position to be in, it is one that many, many people found themselves in, caught by an unprecedented change in circumstances on multiple fronts. We ended up using a second tier lender to settle on the townhouse, then did some painting and styling and got it sold within four weeks for around a $200,000 loss.'”

“He said the end result was that they had a bigger mortgage. ‘This is such a common story at the moment, but you don’t see it mentioned much, or the actual impact discussed. If 5000 New Zealanders did something similar to us – perhaps a conservative estimate – that’s a billion dollars in equity wiped out over the last 24 months – if the properties have now been sold again at a loss, none of this is recoverable. I think the effects of these losses will linger on for decades, retirement plans altered, investment plans reconsidered. We’ll probably never know the true impact to be honest, but a billion dollars or more is a significant sum for a small country.'”