People Who Are Not Pricing Right Are Finding It Out Fairly Quickly

A report from ABC Action News. “As state leaders grapple with solutions to the looming condo crisis in Florida, several people wrote in to ABC Action News over rising fees and special assessments they’re facing. It’s hard to beat the picture-perfect views from Al Winsser’s home. He’s owned his family’s condo in Tierra Verde for about four years with the idea to simplify life and start traveling. ‘But now things have just been going up and up and up, so we’re kinda thinking was it the right decision or not?’ said Winsser. ‘Just with the insurance things that happened, when we looked at buying this, it was $450 a month for the condo fee,. First month we moved in here, it went to $550. After a year, it went to $750. Now it’s at $950, and with the new reserve requirements, they’re talking about it going to $1,100- $1,200 a month. If it keeps going up at the rate it’s gone up, we’re not going to be able to afford to live here ‘”

WCTV in Florida. “The new law is painting a broad brush, sweeping up condo owners who live in places with as few as five units. For example, condos on South Calhoun in Tallahassee are technically three stories, but residents say it’s more like two-and-a-half when you include the basement. This building is subject to milestone inspections, and one condo association president said it will cost about $7,500. That expense is just for phase one, a ‘visual inspection.’ If there are any issues, then the price increases. The state legislature requires condo associations to pay for these inspections, but for the condos on South Calhoun, just five people own the condos and will have to pay for the inspections out of pocket. ‘Nobody can get any answers,’ Denise Bishop, a condo owner said. ‘So we have our small unit. I mean a small building. We basically the five of us get together and say, what do we do now?'”

Orange County Register in California. “Kerry McCalmont’s insurance company told her to cut down the majestic oak tree towering over her Glendale house if she wants to renew her homeowner’s policy. But there’s a catch. A city ordinance declares that indigenous trees are ‘natural aesthetic resources’ that add ‘distinction and character’ to its neighborhoods. They cannot be damaged or destroyed. McCalmont spent $3,200 to remove bushes and trim her trees, clearing the limbs within 10 feet of her roof. The fire department inspected and said the tree wasn’t a hazard, she said. To no avail. On Tuesday, Sept. 17, the insurance company informed McCalmont it won’t renew her policy. ‘I feel like I’m stuck between a rock and a hard spot. I can’t comply,’ said McCalmont, 60. ‘Talk about stress and being a little angry. It’s beyond my control.'”

“Laguna Village resident Patti Casas was hoping to move to Oregon in about two years to be closer to her family. Now that’s in doubt. The community levied two special assessments for maintenance because so much of its revenue has been going for insurance, she said. ‘For the people who have tried to sell, it’s been difficult. Think about it. We have practically no homeowner’s insurance,’ said Casas, 66. ‘It’s not getting better with all these current wildfires. … We’re always watching where fires are around us. You always live with this fear. Could we lose everything?'”

Silicon Valley in California. “Home prices in the Bay Area fell for the first time in 13 months. Across the Bay Area, inventory was at its highest level since February 2023, as falling rates motivated some sellers to finally list their homes after waiting for months. ‘With more homes on the market, buyers have more choices,’ said Barbara Clemons, president of the Bay East Association of Realtors. ‘Sellers may have to make some adjustments and be sure that they’re pricing their homes accordingly.’ ‘A lot of sellers realized, ‘I’m not going to wait if I want to make a move. Let’s do something now,’ said David Stark, director of government affairs for the Bay East real estate agents group.”

“With homes taking longer to sell, ‘pricing is everything,’ said Tim Yee, a San Jose-based real estate agent. ‘It’s been enough of an uptick in inventory that people who are not pricing right are finding it out fairly quickly,’ Yee said. ‘We’re seeing less of people saying, ‘My neighbor sold his place for $2 million, so I should be able to get that.'”

Willamette Week in Oregon. “Las Vegas developer Max Sass makes frequent appearances in our vacant-property files. He popped up in Northeast Portland four years ago, promising to build affordable housing at an abandoned car wash. (State funding dried up and Sass dropped out.) The next year he promised to turn a historic Alphabet District church into a luxury hotel. (The deal stalled.) Meanwhile, he’s been snatching up properties in North Portland with plans to turn them into condos. Surprise, surprise: There have been a few hiccups. In 2020, Sass purchased a pair of homes in the Overlook neighborhood. One is vacant and the subject of neighbors’ complaints. The other, the subject of this week’s inquiry, is a two-bedroom house on a dead-end road overlooking Interstate 5. It has since attracted so much attention from firefighters and city inspectors that it’s now in foreclosure.”

“Meanwhile, the property was left to rot. Shortly after Sass bought it, someone complained of foul-smelling water leaking into the basement. City inspectors arrived to find that the garage had been converted into an unpermitted living space. The home’s tenants had left. Squatters moved in. Firefighters responded to a pair of blazes in early 2022, one in an SUV out front and the second inside the home, which was ‘full of trash needles and other drug items,’ according to a state fire marshal report.”

From Bisnow. “In the first half of 2022, as interest rates remained at all-time lows and the economic impacts of the pandemic faded, buyers flocked to the market. In New York City, $11.7B was spent on investment properties. But as rates and uncertainty rose, buyers and sellers went into hibernation. Just $5.8B of properties traded hands in the first six months of 2024. This week’s Fed announcement has already begun melting the ice and waking the players. Compass Vice Chair Adelaide Polsinelli took aim at the energy this week, calling it ‘momentary optimism.’ ‘No one has confidence in the Fed, so I think that’s why those of us who are ho-hum about it are saying, ‘Yeah, OK, a little too much, too little, too late,’ Polsinelli said. ‘It brings people back to the table, but we don’t know what table we’re at. Are we at a table for a lender? A borrower? A buyer?'”

The Globe and Mail in Canada. “From a downtown Ottawa sidewalk, Kevin Aubin has been watching what he describes as alarming changes in the city’s downtown, several blocks south of Parliament Hill. The veteran panhandler says that he is seeing an influx of troubling newcomers on Bank Street in Ottawa’s core. ‘There is too much violence down here – and drugs,’ says 47-year-old Mr. Aubin, who on a good day makes about $60 from strangers passing by his spot. When confrontations arise, he says he stands his ground. ‘I just tell them to keep walking.’ Mr. Aubin, who lives in government housing and receives income assistance, says he regularly sees agitated and aggressive people who need help. ‘Get them into homes or rehab centres or something like that. I don’t like seeing people out here doing what they’re doing. It’s ruining their lives.'”

“Brenda Knight, a member of the board of the Centretown Community Association, says while homelessness has long been a reality of the area, her organization has been getting complaints from residents concerned about the presence of needles from drug use and people using compost bins for their possessions. People are sleeping in the planters near her condo, which is about three blocks from Parliament Hill. ‘People are going, `What’s going on?’ she says.”

The Miami Herald. “Behind the bar of a once derelict warehouse turned boutique hotel, Georges Boursiquot is dressed in his signature Brooks Brothers shirt. Across the room, a birthday celebration is underway in what’s a rare busy night at L’auberge Du Vieux Port hotel as diners enjoy meals. Ten years ago, Boursiquot and his wife Marguerite Baril-Boursiquot, both Haitian, did what many in the country’s burgeoning diaspora long dreamed of: They permanently moved back to Haiti. With personal savings from the sale of their Brooklyn brownstone and loans from banks and the U.S. Agency for International Development to encourage investments in a post-quake Haiti, they bought a former coffee warehouse along Jacmel’s famous Rue du Commerce. Over three years, they worked at transforming its centuries old French-style architecture into a modern-day boutique hotel with 12 rooms.”

“But what began as a mission to “come back home and do the right thing,” after spending most of his life outside of Haiti after fleeing under the brutal Duvalier dictatorship regime, has since turned into ‘an economic disaster,’ says Boursiquot, 71. He now finds himself questioning the decision amid frustrating gang-controlled roadblocks, closed local government offices and the disappearance of vacationers who once poured into this seaside town on Haiti’s south coast. ‘For the last five years, generally, I could spend the whole week here without selling a hot plate of food or I can spend a month not renting a room,’ he said. ‘Even if I would be occupied 60% of the time I still won’t be able to repay the loan,’ said Boursiquot, complaining about the lack of grace that has come from the banking sector.”

From Bloomberg. “Valeriy Shevchenko was getting ready to move into a new three-room apartment in Berlin’s upscale Prenzlauer Berg district before disaster struck. More than a year later, it’s still unfolding as part of the turmoil in German housing. Project Immobilien-Gruppe, the developer of the multi-family residential building where Shevchenko had bought a unit, went bankrupt, leading to a halt in construction just a few months before the family of three was supposed to move in. The site still sat abandoned a year later, leaving the Shevchenkos in limbo.”

“Not only are they stuck in their rental indefinitely, but their €250,000 or about US$279,000 initial payment – about half of the apartment’s total cost – is tied up in the insolvency process. Now, on top of their rent, they’re covering interest on the loan they took out to finance the down payment. ‘I didn’t think something like this was possible in Germany,’ he said. Half-finished shells of would-be homes have become a regular sight across the country. Ambitious acquisitions at high prices were fuelled by plentiful cheap debt from both bond markets and banks. Unlike most other European countries, German developments could be undertaken with ‘little or (almost) no equity,’ according to a presentation from PwC. This high leverage meant they were particularly vulnerable when construction costs surged and financing dried up.”

“‘We’ve seen a lot of situations where people had basically borrowed against the land from banks to get planning but haven’t done anything,’ said Zach Vaughan, chief investment officer of real estate at Arrow Global, an investor in distressed assets. ‘Banks are sitting on a large loan and you can’t even pre-sell the apartments because the development company is essentially gone,’ he said. That means little prospect for relief for would-be home buyers like the Shevchenkos. Their project was picked up by a new contractor in spring, but construction didn’t restart this summer as hoped. ‘I’m really worried that they will drop out too as soon as they realise that finishing this isn’t as profitable as they want it to be,’ Shevchenko said.”

My Joy Online. “Accra’s affluent neighbourhoods, such as East Legon, Cantonments, Trasacco and Airport Residential, are known for their stunning homes and opulent lifestyles. But amidst the grandeur, an unusual trend has emerged: large, fully furnished houses sitting vacant for months or even years. For Kwame Mensah, a seasoned real estate agent with over 15 years in the industry, the sight of empty mansions is not a new phenomenon. According to him, the boom in Accra’s real estate market has led to an oversupply of luxury homes. ‘Many of these properties are built by wealthy Ghanaians living abroad or foreign investors who want to tap into the growing demand for high-end homes in Accra. But the truth is, the demand isn’t growing as fast as the supply. The upper class in Ghana is not large enough to fill all these homes, and many expatriates prefer renting rather than buying.'”

“He points out that the value of land in these prime areas continues to rise, making it a good investment for those who can afford it. ‘They don’t mind leaving these houses unoccupied because the value appreciates over time. They see it as a long-term investment. To them, it’s better than putting the money in the bank.’ Akua Nyarko, a resident of East Legon for over 20 years, finds the trend of unoccupied houses puzzling and, in some ways, unsettling. ‘Every morning, I pass by these huge, beautiful homes that nobody lives in. Some of them have perfectly manicured gardens and state-of-the-art security systems, but not a soul inside. It’s strange. I remember when I moved here, these neighbourhoods were full of life. Now, it’s almost like a ghost town in certain areas.'”

From Leadership. “An industry analyst Victor Akaa from Lugbe, Abuja, has stressed that the Nigerian real estate market, which has experienced unprecedented growth due to increased demand for housing and commercial spaces, is now facing an alarming surge in fraudulent schemes perpetrated by unscrupulous developers, Akaa highlights how the promise of homeownership has turned into a nightmare for many Nigerians, with countless victims losing their life savings, loans, and inheritances. Many of these developers market non-existent or incomplete projects, using fake documents and persuasive marketing materials to attract investors. In some cases, they sell properties in developments that are either significantly delayed or completely abandoned, leaving investors stranded.”

“One notorious scheme, known as the ‘Buy Back’ arrangement, is frequently used to trap buyers. Developers promise readymade homes with a buy-back option if terms are not met within a specified period, only to abscond, often relocating abroad—most commonly to the UK—while flaunting political connections to avoid accountability. ‘The consequences are devastating,’ Akaa noted, highlighting the emotional trauma, financial ruin, and mental health issues many victims experience. ‘Many Nigerians who have fallen prey to these scams are left in financial distress, with little chance of recovering their investments.'”

From Benar News. “Malaysia is doubling down on reviving Johor state’s Forest City, an area that is host to a troubled Chinese housing megaproject, by offering a slew of incentives it hopes will attract foreign investment to the region and foster its development. Real estate analysts and developers, though, have mixed feelings about how successful these incentives will prove in growing the region’s economy and enabling a turnaround of the fortunes of the housing project. The debt-laden Chinese developer Country Garden’s U.S. $100 billion project, once pitched as a luxury residential enclave for mainland investors has now been dubbed a ‘ghost town.'”

“Country Garden wanted to capitalize on China’s then-booming property market to offer Forest City as an investment opportunity for Chinese buyers. Samuel Tan, chief executive of Olive Tree Property Consultants, noted that the appeal to Chinese buyers made sense at the time. ‘They were attractive to the Chinese buyers because they were familiar with [the developer],’ he told BenarNews. ‘And China was experiencing an upsurge in wealth creation and property prices were spiking. Malaysia was a preferred investment destination as our property prices were relatively low.'”

“But as of August 2023, the venture was only 15% developed, Khalil Adis, founder of Singapore-based Khalil Adis Consultancy, had told BenarNews. A Bloomberg News report that same month said that according to Country Garden, 9,000 people lived in Forest City. Local and regional news reports referred to the development as a ‘ghost town,’ because even with just 15% of it completed, few residences were occupied and the deserted streets and empty malls made it look like a post-apocalyptic township.”

“The company’s woes came to a head in the middle of 2023, when it failed to pay tens of millions of dollars in interest due on debt securities. Soon, the former powerhouse in China’s real estate market announced it would undergo offshore debt restructuring after defaulting on $11 billion in offshore bonds, several media reported. Carmelo Ferlito, of the consulting firm Center for Market Education, doesn’t believe Forest City can morph into an industrial area. ‘Forest City was built with a different purpose in mind and therefore, while I think that the Special Financial Zone is a good project … it is important that it evolves into something different. A financial hub is something very different from a residential hub,’ he said. ‘While the SFZ is a good idea, I doubt it can fully heal the previous scars.'”