Nobody Wants To Buy Right Before A Sale

A report from the Review Journal in Nevada. “Jonathan Catalano, a real estate agent with ERA Brokers Consolidated in Las Vegas, said they have yet to see the translation of mortgage rates dropping close to a percentage point. ‘Even with the lower rates, buyers however, haven’t seemed to react. In fact, the market has become surprisingly sluggish in the last month or two with inventory at all price points struggling to get showings causing a high number of price reductions as seller push to get their homes sold,’ he said.”

Dallas Business Journal in Texas. “Matt Haley, managing principal, Apricus Realty Capital: ‘For commercial real estate, it’s helpful. If you go back to early 2022 … a 50 basis point reduction is nice but it’s not overwhelmingly meaningful with how much they raised them since early 2022. That [rate cut] will help valuations but it’s not a magic bullet helping people who are over-levered or have a high cost of debt from a purchase three years ago … It is definitely positive but in the scheme of what they’ve done since 2022, the cost of debt has increased significantly.'”

The Real Deal on Texas. “Tides Equities has been shedding its portfolio via forced sales since April, and it’s clear the bleeding hasn’t stopped, as two more properties are on the chopping block. Starwood Mortgage Capital is foreclosing on Tides on Trinity, at 3930 Accent Drive in Far North Dallas, and Tides on Chadwick, at 13900 Chadwick Parkway in the Fort Worth suburb Northlake, according to Roddy’s Foreclosure Listing Service. Both in Denton County, they are scheduled for auction Oct. 1. Tides borrowed $152.8 million — $200,000 per unit — from Starwood to purchase the properties. ‘We weren’t able to get enough of a concession from the lender via a loan modification to make the deal pencil,’ Tides co-founder Sean Kia said. Between 2021 and 2023, Tides took advantage of low interest rates and snapped up nearly 15,000 multifamily units across the state with plans to renovate the units and raise rents.”

The Los Angeles Times in California. “Some agents say they are noticing a pickup. Other agents aren’t seeing much of a boost. Real estate agent Jake Sullivan, who specializes in the South Bay and San Pedro, has a theory: Homes are still far more expensive than they were just a few years ago. Home insurance costs have risen as well. ‘The cost of living is just so high,’ Sullivan said.”

CBS Bay Area in California. “‘Realistically, I think we have still a ways to go before we get into the territory that really moves buyers in demand,’ Cameron Platt, broker and owner of Abio Properties, told CBS News Bay Area. He said while this is a good starting point for the economy, it did come with a price for home buyers in the market. ‘With this anticipated drop, I think it actually hurt the market a bit because people were sort of waiting on the sidelines and waiting for… nobody wants to buy any sort of good or services right before a sale. And so, there was some, ‘Let’s wait and see if it gets any better,’ Platt said.”

Silicon Valley in California. “As the November election approaches, a San Jose City Council candidate locked in a contentious race faces attacks about his past and present employment, including his ties to an unscrupulous developer and an unregulated home equity investment industry. George Casey, who is challenging District 10 Councilmember Arjun Batra, previously worked as a consultant for Foster City-based Z&L Properties, a subsidiary of Chinese developer Guangzhou R&F Properties, tied to human trafficking, wage theft, and several unfinished projects throughout the city. ‘Everything that was tawdry transpired years before I got there,’ Casey said. ‘When I came on board, it was because they wanted to get out (of the market). They knew the writing was on the wall and a lot of the banks were taking some of these projects back, but they needed somebody that had integrity and could represent them and reach out to the community and sell these products because they had failed.'”

The Wall Street Journal. “Postings for software development jobs are down more than 30% since February 2020, according to Indeed.com. Industry layoffs have continued this year with tech companies shedding around 137,000 jobs since January, according to Layoffs.fyi. Many tech workers, too young to have endured the dot-com bubble burst in the early 2000s, now face for the first time what it’s like to hustle to find work. ‘I’ve been doing this for a while. I kind of know the boom-bust cycle,’ says Chris Volz, 47, an engineering manager living in Oakland, Calif., who has been working in tech since the late 1990s and was laid off in August 2023 from a real-estate technology company. ‘This time felt very, very different.'”

“For most of his prior jobs, Volz was either contacted by a recruiter or landed a role through a referral. This time, he discovered that virtually everyone in his network had also been laid off, and he had to blast his résumé out for the first time in his career. ‘Contacts dried up,’ he says. ‘I applied to, I want to say, about 120 different positions, and I got three call backs.’ He worried about his mortgage payments. He finally landed a job in the spring, but it required him to take a 5% pay cut.”

Imperial Valley Press. “Calif. Attorney General Rob Bonta announced Tuesday the sentencing of the final 4 of a total of 12 individuals now sentenced for their roles in perpetrating a large-scale mortgage fraud scheme involving identity theft and money laundering, among other crimes. The scheme resulted in a loss of approximately $15 million over the course of several years. The April 2021 indictment included charges of conspiracy, mortgage fraud, grand theft, identity theft, forgery, filing a false or forged document, and money laundering, as well as a special allegation for aggravated white-collar crime, the California DOJ said in a press release. The ringleaders of the scheme, Tamara Dadyan and Richard Ayvazyan, were sentenced to 12 and 10 years in prison, respectively. Dadyan’s husband, Arthur Ayvazyan, was sentenced to 7 years in prison.”

WPTV in Florida. “Since early August, WPTV has been following residents at the Villa Del Sol Condos being evacuated out of their homesafter an inspection showed structural damage in 3 buildings. Now, residents are fearful repair costs could be too much to afford, pricing them out of their homes. Erick Johnson, one of the residents told to evacuate, told WPTV he was given an estimate of $9.2 million in costs from the property’s management. That number would be split between 72 units on the property. ‘We cannot (afford this), and most of the people we talk to in this community cannot either,’ said Johnson.”

The Taunton Daily Gazette in Massachusetts. “For the second time in as many months a neighborhood has come together to tell the city of Taunton to leave land alone. In this case, the residents of Powderhorn Drive and adjacent streets are pleading with the city not to sell or develop the 36 acres that comprise the triangular-shaped parcel known as 745 John Hancock Road, which separates the neighborhood from the noise and activities of the industrial park. ‘Neighborhoods deserve appropriate buffers between them and industry. Wildlife deserve to be protected and undisturbed,’ Jennifer Elzinger of nearby Fremont Street told a packed room of residents at the Sept. 10 City Council meeting. Elzinger said she’s worried Powderhorn Drive will turn into an ‘industrial dystopia.'”

Bisnow Washington DC. “D.C.’s top local lawmaker says legislative reform is needed to alleviate the crisis that has put housing providers at risk of shutting down as their tenants accrue tens of millions of dollars of unpaid rent. Council Chairman Phil Mendelson addressed the issue publicly for the first time Monday morning during a regular media briefing. He confirmed Bisnow’s report last week that he is seeking co-sponsors for draft legislation to reform D.C.’s Emergency Rental Assistance Program, which industry leaders say has been used by tenants to delay eviction proceedings while not paying rent. ‘I’m not surprised by the opposition because the idea of eviction is not a desirable goal,’ Mendelson said. ‘However, we are not going to improve the housing situation in this city if we are strangling the provider market by preventing evictions.'”

“Jim Campbell, principal at affordable housing developer Somerset, said in an email that the bill is a ‘critical step’ to begin addressing the crisis of rent delinquencies that ‘virtually all’ affordable housing communities in the District face. ‘The delinquency crisis is seriously threatening the ability of affordable housing operators to meet basic operating expenses such as maintenance and mortgage payments,’ he said. ‘Obviously, if mortgage payments are not met then there is a risk of foreclosure, which many, many affordable properties are facing.'”

The Globe and Mail in Canada. “72 Consecon Main St., Consecon, Ont. Asking price: $264,900 (June, 2024). Previous asking price: $299,900 (February, 2024). Selling price: $187,500 (August, 2024). Previous selling price: $330,000 (August, 2021). A first-time buyer wanting a property to personalize within 30 kilometres of Carrying Place, a small community between Toronto and Kingston, only found 10 properties that fell within their $300,000 budget this summer. The standout was this 144-year-old house on a quarter-acre lot with a newly reduced price of $264,900, an incredibly good bargain compared to nearby properties that sold for $525,000 and $385,000 months prior.”

“An inspection flagged some unexpected issues – beyond the fact the main floor was demolished – so the buyer petitioned for an even lower price of $187,500. The seller – a mortgage lending company that repossessed the property from the last owner who paid $330,000 in 2021 – agreed to their terms. ‘When you’re dealing with a company, it tends to be more about the numbers and less about emotions, so it’s easier to negotiate,’ said agent Ken Ramsay. ‘This is the lowest sold price of a detached house in all of Prince Edward County since November 2020.'”

From Blog TO. “Despite national home sales increasing earlier this summer following the Bank of Canada’s first interest rate cut since 2020, the bigger picture shows that Canada’s housing market appears to be mostly ‘stuck in a holding pattern,’ according to the Canadian Real Estate Association’s (CREA) latest report. As a result, many buyers have benefitted from increased choice in the market and better negotiating power on prices, leading many properties — including this Toronto home — to be sold well below their original price tags. According to its listing, this four-bedroom, five-bathroom home in Toronto’s Bedford Park neighbourhood boasts over 4,200 square feet of living space.”

“The property first sold for $6.8 million back in January 2022, at a time when cheaper interest rates shot up demand in the GTA’s housing market and contributed to sky-high prices. In August 2024, the home was put back on the market for $6.45 million, and eventually sold for just over $5.9 million — representing a loss of nearly $900,000 when compared to its price just two years earlier. Plenty of other Ontario homes have sold well below their original prices this year.”

Radio New Zealand. “Data shows there may be some good news for tenants. Corelogic chief property economist Kelvin Davidson said monthly movements in data could be affected by seasonal factors. Year-on-year, Auckland rents were down slightly and Wellington was up, he said, but overall the rental market had slowed ‘quite dramatically.’ ‘The heat has definitely come out. There’s a switch from a landlord’s market in 2023 to a tenant’s market in 2024.’ He said first-home buyers were still moving into owning homes and freeing up rental properties, and people were leaving the country, which could also mean houses became available. ‘The fact that a lot of the departures at the moment are New Zealand citizens, they’re probably young and living one or two per house, so they’re probably freeing up more houses than the typical renting family.’ Some people might also be choosing to rent their homes rather than sell them while the housing market was soft, he said. There were also new builds coming into the market being bought by investors to be rented out.”

From Domain News. “Australian home sellers were more likely to make a profit in the June quarter than they were three months earlier, but in pockets of high-density development owners risked selling at a loss. In some apartment-heavy neighbourhoods at least one in five sellers lost money over the June quarter as a high supply of homes available gave buyers more choice. Outside the Northern Territory, Melbourne recorded the highest share of loss-making sales at 9.5 per cent during the quarter, increasing for two quarters in a row. Among Sydney sellers, 8 per cent lost money over the June quarter. In the apartment-dense City of Melbourne, 39 per cent of properties sold traded at a loss in the three months to June, while Stonnington hit 25.8 per cent and Port Phillip 21.6 per cent after years of new development – often designed for investors – that has exceeded demand from buyers.”

“In Sydney, Parramatta recorded the most loss-making sales at 25.9 per cent, followed by Ryde (21.5 per cent) and Strathfield (19.2 per cent). CoreLogic head of Australian research Eliza Owen noted Melbourne home values have been declining for six months in a row. ‘It’s fair to say the downturn there is becoming more entrenched, and it’s been compounded by a spring selling season where a lot of people are looking to sell,’ she said. ‘This is a really good example of where the market is going to be tested in terms of how much people can shell out to make homes as profitable for sellers as they were during the spring of 2021.'”