There Are Still Lots Of Dreamers Until They Figure It Out When It Doesn’t Sell

A report from the Miami Herald in Florida. “A planned condo project just a few blocks from South Beach caught the attention of Jose Maria Carmona and his wife. Using most of their nest egg, the Argentine couple signed contracts with the Miami Beach project’s developer in 2022 and paid in full for two studio apartments — $351,900 for one and $358,000 for the other. But rather than celebrating their smart purchases, the Carmonas — along with many other similar condo buyers in the Miami Beach project — have been crushed by the downfall of its developer. The Miami Beach property is the next asset on the receiver’s auction block. ‘To be honest, we never thought this would happen here,’ Jose Carmona, 53, an information technology specialist, told the Miami Herald. ‘We put our life savings in this Miami Beach project. The worst part is, we are not getting anything. I can’t believe the judge would allow this to happen. … I don’t think that’s fair.'”

The Islander News. “Condominium owners in Florida are finding out that it’s getting a little tougher to enjoy a slice of paradise. Even on Key Biscayne. Jud Kurlancheek, a former 20-year Village Building, Zoning & Planning Director, has lived in The Sands for the past seven years. The choice is simple: pay the $50,000 total up front or pay the $1,100 (including interest) monthly, and that is on top of the regular condo association fee to maintain common areas. ‘You either pay it all or borrow it all. Either way, you’re going to pay,’ he said. Kurlancheek said he knew the increase was coming because of the state-mandated engineering reports for recertification. ‘No matter how many condo notices are sent out, people are not reading them,’ he said. ‘Our board has probably met 25 times in the last two years. Then, bang! Starting in January, they learn it’s another $50,000 or $1,100 a month. I’d say 90% of the condo (residents) don’t know what’s going on. People ignore emails and letters, and they’re shocked. But you’ve had plenty of time to participate.'”

The Sun Sentinel in Florida. “Increased costs for condo association insurance have already driven up monthly assessments, said Wendell Ensey, president of Century Village in Pembroke Pines. ‘Since 2020 to now, the unit owners in my association have seen fees go up $120 to $150 a month,’ Ensey said. ‘And people who are on fixed incomes — there could be a single lady sitting there drawing $1,200 a month in Social Security and all of a sudden she’s paying $700 a month or $800 a month in maintenance fees. She’s having a hard time eating.’ Ensey said he saw a $32,000 quote to inspect one association jump to $50,000 six months later. ‘That’s price gouging to me,’ he said.”

“Sen. Jason Pizzo, a Democrat from Miami and leading voice on condominium issues, said flatly, ‘There’s not going to be a special session.’ Pizzo criticized the notion that elderly condo owners can’t afford high special assessments. ‘Thirty, sometimes 40 years have passed and we’re seeing the same person when they weren’t 80 but they were 40, joined in and voting to waive reserves and never put any money away for any repairs or replacements, and never asked, and very often maybe served on the board or had a position and wanted all the economies of scale and benefits of multifamily living with zero of the burden,’ he said.”

Sarasota Magazine in Florida. “The real estate market in Sarasota and Manatee counties experienced a summer dip in sales and median prices, according to the latest data from the Realtor Association of Sarasota and Manatee. ‘Sellers are often over-listing, with some who bought five years ago asking for almost double today with investments made in the home,’ says Taylor McFadden of Coldwell Banker. ‘There are still lots of dreamers until they figure it out when it doesn’t sell. Folks who inherited or bought their condo 30 years ago and are on fixed incomes might get hit with a sudden assessment of $10,000 and the fees are driving them out,’ says McFadden. ‘The buyers are looking at these assessments and increasing HOA fees and don’t want to sign up for them. I’ve seen some go up by as much as 100 percent.'”

The Dallas Business Journal. “Homes in DFW are taking longer to sell and are on the market an average of 52 days — 11 days more than the same time last year, according to the Re/Max report. North Texas home prices were down 1.3% year-over-year to a median sale price of $395,000. New listings in DFW were up 16% from a year earlier, with 12,721 homes added to the inventory in August, the report found. ‘Home prices in the Dallas-Fort Worth area have stabilized, which has been good news for buyers,’ said Todd Luong, an agent with Re/Max DFW Associates. ‘In fact, many sellers [have been] reducing their listing prices in this market as inventory levels have soared tremendously compared to previous years.'”

Arizona’s Family. “If you’re looking to buy a home, experts say now may be the time as sales slump and inventory increases in the Valley. New data from ARMLS shows that sales dropped 7% and there was a near-6% jump in homes for sale in the Phoenix-area. Tina Tamboer, a Senior Housing Analyst with the Cromford Report, says there is some good news with data like that, including price cuts and incentives. ‘Sellers that are willing to supplement the buyer’s payments for a year or two and they call that a 2-1 buydown; that can give you an extra 20% off of your first year’s payment,’ said Tamboer. She says sellers are also doing more to stay competitive. ‘Many other sellers are doing repairs, doing the things to bring those not so perfect properties up to par so that they can compete with all of the other listing on the market today,’ she said. Real estate experts say the price of smaller family homes is actually decreasing here, while luxury homes in the Valley are increasing or holding steady, reflecting the stock market.”

KCRA in California. “A condo in San Francisco’s Millennium Tower sold for $400,000 less than its original purchase price. A one-bedroom unit sold for $615,000 last week, but the seller bought the condo back in 2014 for over $1 million. Millennium Tower has made numerous headlines over the years for its structural issues. The value of its units has dropped dramatically. ‘The price that you are seeing for the condos at The Millennium is a reflection of the unique situation that is happening to this building,’ said Steven Huang, the president-elect of the San Francisco Association of Realtors. The cost of repairs was over $100 million. The drop in value, however, might also signal other problems for San Francisco real estate. Huang said the pandemic still affects how buyers look for homes. He said not many are coming to San Francisco like they used to, so buyers are looking elsewhere for a home. ‘More people were able to work from home since the pandemic and that is why the demand for downtown condominium residences has dropped off,’ Huang said. Combine that with structural issues and it makes sense why the condo lost 45% of its value.”

The LAist in California. “Last month, FBI and IRS agents searched the family home of Orange County Supervisor Andrew Do in North Tustin. They also searched a nearby home purchased by his 23-year-old daughter, Rhiannon Do, and the homes of others with close ties to the supervisor and his daughter. The searches came nine months after LAist first reported county officials were asking serious questions about what happened to millions in taxpayer funds directed by Supervisor Do to a little-known nonprofit. LAist uncovered more than $13 million in public funds directed by Supervisor Do to Viet America Society (VAS), most awarded outside of public view and without Do disclosing that his daughter worked as a leader there. Most of that money came from federal COVID relief funds earmarked to help people during the pandemic.”

“Supervisor Do took home about $237,000 in pay and benefits for his role as county supervisor in 2023, according to public data on Transparent California’s website. The FBI and IRS aren’t saying why they searched the properties, citing a court seal on the search warrants. A pair of lawsuits, filed by county officials a few days before the searches, allege Rhiannon Do, and other defendants, ‘brazenly plundered’ public funds to purchase multiple homes in Orange County.”

ABC 7 in California. “An abandoned mansion littered with graffiti, garbage and broken glass is not what you envision when you think of prime real estate in the Hollywood Hills. Neighbors along Multiview and Mulholland drives describe the abandoned mansion as a headache and safety hazard. The home is now covered in graffiti from taggers, and squatters have been coming and going for more than two years. Karin Gideon said when there wasn’t a fence at the home, the home was broken into several times. ‘They cut the fence. There were a lot of very questionable people. Some were crazy, some actually became threatening,’ she said. Eyewitness News also learned a lien has been issued on the home and that the owner has defaulted on property taxes for several years. ‘It’s become a bit larger than it should be, and there doesn’t seem to be much concern for the safety and well-being of the neighbors,’ said neighbor Magnus Fiennes.”

Boston.com in Massachusetts. “Boston’s rental market is experiencing slowing momentum, according to ApartmentAdvisor. In the beginning of September, about 2,200 apartments in Boston were vacant and available. ‘As of the end of August, a much greater number of apartments with 9/1 move-in dates were still on the market, and that’s unusual,’ Lilly Milman reported on the site. ‘In fact, last year the amount of available inventory on our site dropped by about 29% from June 25 to August 25 (the period which we defined as ‘peak renting season’ for this report).’ Rents fell in eight major cities, including Boston, according to Zillow’s rental market report.”

“There may be more apartments available because ‘priced out’ renters are leaving Massachusetts. ‘You can’t really say exactly why people are leaving, but trends do show that people are leaving, especially in the age group of 25 to 44,’ Milman told Boston.com. In the report she noted that ‘nearly every group has more out-migration than in-migration.'”

Bisnow Washington DC. “Ballston’s Two Liberty Center office building has traded hands for $27.6M, well below its previous sale price. Brookfield and Hines sold the nearly half-empty building at 4075 Wilson Blvd. to Rithm Capital, the Washington Business Journal reported. FarmViewVentures and GreenBarn Management LLC are also partners in the deal, but Rithm is the majority investor. The sale hasn’t yet been posted in Arlington property records. The price was less than 30% of the 2019 sale, which was for $91.2M. ‘The price of a NYC townhouse i like to joke,’ FarmViewVentures Founder John Wolf wrote in a LinkedIn post.”

The Globe and Mail in Canada. “4310 Hastings St., No. 414, Burnaby, B.C. Asking price: $588,800 (May 21). Selling price: $588,800 (June 2). Burnaby is known for its oppressive skyscrapers, but the buyer in this case got a bright unit in a solid concrete building in an old part of Burnaby. The 639-square-foot, one-bedroom faces north, with a lot of windows, ensuite laundry, contemporary kitchen with stone countertops and stainless-steel appliances, in-floor heating, laminate floors and a small balcony. Listing agent Ian Watt’s client had bought the unit as a presale and lived in the unit for several years, then moved out when he started a family. The unit had been tenanted but the tenant moved out. They received one offer for the listing price within an hour of showing it, and the seller accepted it. Mr. Watt received another potential offer later that night, but it was too late. ‘When priced right, it sells. The problem is, in Vancouver most listings are overpriced.'”

“‘I think the biggest obstacle in selling right now is buyers are looking for today’s market and sellers are holding on to yesteryear’s market,’ says Mr. Watt. ‘If priced appropriately, it will go. Sellers are always a little bit behind because they won’t listen. According to the real estate board, it’s a balanced market, but I think it’s a buyer’s market. Any buyer going in with a strong offer can pick and choose and bully the seller a little bit. There are so many listings right now, especially for condos.'”

The Manchester Evening News in the UK. “A rogue builder swindled his customers out of nearly £150,000 by accepting deposits but failing to complete any work. His actions led one customer to contemplate suicide and left others in financial distress while he indulged in foreign holidays and golf trips. Paul Atkinson, 45, pocketed the funds sent to him by clients who hired him to construct extensions and orangeries at their homes. However, once the funds were transferred, he became elusive, ignored refund requests, and subtly threatened customers who posted negative reviews. Prosecutor David Elias KC stated that Atkinson initially appeared ‘open, professional, and knowledgeable about what he was going to do’ when meeting his customers and communication would be ‘prompt.’ However, after deposits were transferred, the defendant rarely responded to messages and made excuses for work delays.”

“The work that was completed was of poor quality, and in many instances, had to be removed and corrected at significant cost. When customers demanded refunds, he made excuses and offered to repay in instalments – promises that were never fulfilled. Protecta Design and Build Ltd went into liquidation in 2022, yet Atkinson continued to take deposits without informing his clients of the company’s status. Another couple lamented their squandered inheritance earmarked for a home extension. One partner shared the harrowing toll it took on them: ‘This has left us financially and emotionally drained. I felt upset and stupid for falling for a conman’s tricks and my mental health has been affected.’ Some victims found themselves forced to remortgage their properties to provide Atkinson with deposits, and ultimately had nothing to demonstrate for their investments.”

Sky News in Australia. “Varaich Homes went under on September 18, leaving dozens of customers in a precarious position, with a string of scathing accusations being hurled at the builder. Multiple customers have been left with no or half-built projects, and significantly out of pocket, with the company now in liquidation. The business has been accused by multiple paying customers of pressuring clients to pay large sums of money in advance, even sending aggressive emails demanding payment, without completing the work. Tradesmen who were contracted to work on the builds were also reportedly left with nothing.”

“Another victim, Vijay Bhusal, told news.com.au he signed on with Varaich Homes to build a $836,000 home for his young family and has now lost more than $100,000. ‘We signed contracts in August 2021, filled with excitement and anticipation. However, instead of joy, we have been met with endless delays … and broken promises,’ he told the outlet. ‘The company repeatedly missed deadlines, starting construction six months later than agreed upon and failing to complete our homes even after the promised time frame. Our houses remain unfinished, a constant reminder of our shattered dreams.'”

South China Morning Post. “Hong Kong luxury property market grapples with high interest rates and falling valuations, forcing wealthy owners to sell at big losses. In the rarefied air up on The Peak, the owner of the penthouse in the Opus Hong Kong development – which has been called the city’s most expensive apartment building – unexpectedly put his unit up for sale. Some of the city’s wealthiest residents rub shoulders here. But it is rare that a unit in the 12-floor building, which twists upwards toward the clouds and was designed by the famed architect Frank Gehry – his first residential project in Asia – would come on the market for a second-hand sale. The penthouse belongs to tycoon Chen Changwei, chairman of Hengli Investments, who developed residential and commercial projects in China and managed properties in Hong Kong, London and on the mainland.”

“The 5,444 sq ft unit, which changed hands for HK$509 million (US$65.3 million) in 2015, was offered with another asset that Chen wanted to offload, some ground floor shops at Pearl City Mansion in Causeway Bay. He bought them from New World Development in 2021 for HK$1.1 billion, according to people familiar with the matter. This is illustrative of a broader trend. All across Hong Kong – from The Peak to South Island and elsewhere – high-net-worth individuals have found themselves caught in a tight spot between their ritzy, overleveraged properties and a quickly draining pool of liquidity. This is because their businesses are slowing, borrowing costs are high and their financial strains are becoming more severe.”

“On top of that, creditors are becoming more demanding and their terms are more rigid when it comes to repayments as property values plummet. Banks here are reluctant to grant new mortgages, and this year’s outlook for luxury home prices is on a downswing. As a result, the high-end fire sales are likely to continue. ‘Most distressed asset owners are in an urgency to sell due to liquidity issues,’ said Lucia Leung, director of research and consultancy in Greater China for Knight Frank. The number of distressed luxury residential assets has risen, consultants say, in areas like The Peak, Tai Tam and Southern district, and prices on some of these trophies have fallen by at least 30 per cent from their highs.”

“Just a year ago, Chen’s neighbour at the Opus ran into trouble. Chinese tycoon Chen Hongtian’s fifth-floor unit was sold by receivers in September 2023 for HK$418 million – 39 per cent below market prices – after he defaulted on a HK$500 million mortgage on the property. It was one of three of his assets seized by banks. Owners who are pressured by flagging valuations and onerous interest rates are often forced to slash prices so they can quickly offload their property assets. The chairman of distressed mainland developer Agile Group Holdings sold a property last month in the city’s Kowloon Tong neighbourhood for less than half of what he paid six years ago. This was after the Guangzhou-based developer – strapped for cash – failed in May to pay interest on a US$483 million bond maturing in 2025.”

“In a filing to Hong Kong’s stock exchange, Agile said it ‘will not be able to fulfil all payment obligations under its offshore debts’ due to the liquidity pressure. ‘Luxury properties that have good locations are not immune to valuation adjustments. In fact, they are often at the forefront of enduring the sharpest adjustments,’ said said Francis Ng, managing director at real estate private credit firm Pacific Aegis Capital Management Group.”