We’ve Invested In Paradise And Found That Paradise Has Got Some Problems

A report from Business Insider on Texas. “A couple of years into the COVID-19 pandemic, a California state flag appeared on a front porch near my parents’ home in suburban Austin. The flag is gone now, and so is the gold rush. Home prices and asking rents in Austin are down significantly from a year ago. Local Zillow listings are littered with price cuts. Real-estate agents who once doubled as bouncers at crowded open houses are now hiring ice-cream trucks to lure prospective buyers into properties. These days, ‘there’s no sense of urgency,’ Doreen Sidney, a local real-estate agent, told me. ‘There’s no rush. The home that you saw two weeks ago, it’ll still be there.’ Overall, Austin home prices are down more than 14% from the peak in 2022, according to Freddie Mac, and more than 18% according to Zillow. Some tech workers from places such as California, decided Austin wasn’t all it was cracked up to be and moved on. ‘Austin is where ambition goes to die,’ one disappointed founder and angel investor told Business Insider last year.”

WTKR in North Carolina. “One moment the house at 23039 GA Kohler Court was standing, the next it was scattered across the shoreline in Rodanthe on Tuesday. The house was nicknamed ‘Front Row Seats’ and that’s exactly what dozens of people had as it became the latest home to be claimed by the Atlantic Ocean. Rick Foreman and his family have owned a house on GA Kohler Court since 2021 that now sits in the water, but it hasn’t always been that way. Foreman and his family understood that their house might be in danger in the future, but the hope was that Dare County might fund a beach nourishment project for Rodanthe. ‘We weren’t completely in the dark about that, but we kind of figured well, they’re nourishing these other beaches. I mean, feet of sand have gone away versus prior to that. You lose three or four feet, now we’ve lost like eight or 10 feet. Nothing like this has really happened before,’ said Foreman.”

“Foreman shared some of the frustrations he has and how homeowners in the area feel this area is neglected. ‘Everybody’s mortgage or debt situation or financial situation is different. So I don’t think you could put a one size fits all on it by any stretch. Some people can afford to move them. Some people can’t,’ said Foreman. ‘One, the narrative kind of makes us sound like bad guys, and we really didn’t do anything wrong. Two, the way we’re treated in this area versus other parts of the Outer Banks where they get beach nourishment.’ ‘Front Row Seats’ was a foreclosed home that was expected to be demolished this week, but Mother Nature had other plans.”

11 Alive in Georgia. “It’s not a neighborhood squabble. It’s abuse of power. That’s the message from homeowners who spoke at a bipartisan Senate committee looking into the state’s laws around home and condo associations. Dave Bozone and his wife Jessica Navas reached out to State Sen. Matt Brass when they felt the board in Atlanta’s Belmont Park wasn’t operating properly. They tried to follow the covenant rules to replace the board with new members, leading to a power struggle that involved attorneys. The Bozones said their community does now have a new board and old questionable fines for community violations have been removed. So have the liens that threatened foreclosure, as the board works with homeowners to bring their accounts current. But to get to this point, they have received several threats, like a vulgar postcard in the mail calling them ‘pathetic pieces of sh*t.’ 11Alive blurred a photo of the postcard that is shared below. They will be in court on Wednesday for a hearing against a neighbor’s adult son, accused of roaming their backyard spreading a mysterious powder while holding a large knife. Bozone said his family lives in fear, all for trying to make his neighborhood better.”

7 News Miami. “Following the 2021 collapse of Champlain Towers South in Surfside, the Florida legislature passed a law, that the governor signed, which required all condominiums that were 30 years and older to undergo inspections by Dec. 31. But for the condo owners, like residents who live at Tara West in Fort Lauderdale, it’s too much money and too little time. ‘They want a special assessment,’ said condo owner Vicki LaRue. LaRue said the board suddenly doubled the monthly maintenance fee. ‘From $459 to $920,’ she said. Other residents told 7News they have had to find different ways to pay the costs. ‘OK. I have Stage 4 cancer, and so, I’m back working again in order to pay all this,’ said condo owner Jeanette Delegram.”

Observer Local News in Florida. “Desperate for relief, some Palm Coast residents have formed a coalition together to help push for better management of vacation rentals that have become their live-in nightmare. Roger Cressey said they moved to Palm Coast for paradise, like many others in their organization. ‘We’ve invested in paradise down here and found that paradise has got some problems,’ Roger Cressey said. He said he can hear the yelling and screaming of vacationers at the rental across the canal from him for hours on end in his office, even while he is in the middle of the work day. Despite the registration requirements, a search on AirBnB shows over 900 properties listed as vacation rentals in Flagler County, though some listed were from neighboring municipalities. A similar search on Vrbo turned up over 300 listings.”

The Los Angeles Times in California. “It’s quiet in Cayucos. Perhaps too quiet. In fact, on a cloudy fall day on the beach in Cayucos, you might not find any Cayucans at all. Short-term rentals and skyrocketing home prices are rattling the community’s identity, sending longtime locals packing in favor of Airbnb guests. The shift has been so severe that some residents no longer recognize the city where they’ve spent their entire lives. In a recent op-ed, resident Dell Franklin called the town a ‘lonely, empty place, a preying ground for our wealthiest investors.’ He wrote that homes sit empty for months or years, waiting for buyers or short-term renters, and the characters who once gave the place its personality have disappeared. A ghost town.”

The Palm Springs Post in California. “The Palm Springs housing market continues to cool, with declining prices and slower sales as part of a broader slowdown in the Coachella Valley region. According to the August 2024 Desert Housing Report, the median price of detached homes in Palm Springs has dropped 6.1% compared to last year, now standing at $1,198,338. This increase in inventory has resulted in a ‘months of sales’ ratio of 5.0 months, the highest in the region, indicating a market leaning toward buyers. Buyers are also seeing larger discounts, with detached homes selling at an average discount of 3.4%, up from 1.5% last year.”

Bisnow New York. “The CEO of the Related Cos. says he and his family have been the victim of a targeted harassment and intimidation campaign from investors in the largest private development in U.S. history, Hudson Yards. Jeff Blau filed a lawsuit on Friday against seven people who invested $500K each in the $25B megaproject, asking a New York County Supreme Court judge to issue an emergency injunction that would bar the individuals from continuing to protest outside his Upper East Side home. But the EB-5 investors, who have been reading headlines of Hudson Yards’ success for half a decade, have not been repaid. Blau claims they aren’t eligible to be paid out ahead of other investors, and the EB-5 program requires capital to be ‘at risk,’ meaning the payments aren’t overdue.”

“That response has frustrated the investors. Jingxu He wrote in an email to Bisnow the firm that collected the investments from immigrants on behalf of Related promised ‘risk-free’ returns and guaranteed that their capital would be returned within five years. ‘Our investment funds have not been returned, and we have lost normal contact with the immigration company,’ she wrote. ‘Through communication with other investors, I learned that there may be problems with the project, which made our $500,000 unable to be recovered.'”

CBC News in Canada. “Their house is four years old, but a Fort Erie, Ont., couple say it was so badly constructed that they have no choice but to spend hundreds of thousands of dollars to tear it down. ‘I can’t stress how much our life is ruined, literally ruined, right now,’ Carolynn Mayers, 53, told CBC Hamilton. ‘Every day we have to look at how hard we worked to get nothing.’ They purchased the house in July 2021 from the original buyer, a year after it had been built as part of a 100-home subdivision by Marina Homes. They said they had no other option but to sue Marina Homes, house designer Sandy Gull Zone and the Town of Fort Erie for $3 million. The couple filed the civil lawsuit over a year ago.”

“Mayers and her husband, James Durban, 51, say they shouldn’t be living there for their own health and safety, but can’t afford to rent another place as the bills pile up and their house remains unsellable. ‘At times it’s, ‘Do we eat or pay the bills?’ Mayers said. ‘It’s embarrassing, but we are praying and hoping this will create some awareness.'”

The Scottish Sun. “A Scots couple fear their dream home will be left unfinished after the housebuilder went into liquidation. Dean and Kerry Clark, from Nairn, face huge uncertainty and have ‘no idea’ what to do following the collapse of Morlich Homes. Employees at the company have been made redundant and it is unclear what will happen to unfinished developments. Rising construction costs and ‘worsening’ market conditions have led to the developer going bust. Dean and Kerry signed a contract with Morlich Homes last year after doing a lot of research into the company following a previous bad experience with another housebuilder, The Press and Journal reports. But they claim they have not heard back from the company since making their last stage payment.”

“Dean added that all work on his plot stopped around six weeks ago and claimed the home is only 65 per cent complete despite 80 per cent of the cost being paid. ‘We’ve been left out of pocket here. Where has our money gone?'”

From Marketplace. “After years of delay, the Qifu City condo project in Zhengzhou city, in China’s central Henan province, started handing over keys to homebuyers this summer. Staff on the property attempted to create a festive mood by decorating the entrance with a red balloon banner and a flimsy red carpet held down by loose bricks. Lively Chinese music blasted from a lone speaker. This month, Chen Peng, a folksinger and songwriter, was finally called in to get his key. He had been waiting nine years. ‘I feel a mix of happiness and sadness. I am glad that I finally got my condo, but I am sad that I must resume mortgage payments. I can’t continue my mortgage boycott,’ he said.”

“At first, he felt lucky to have found the Qifu City project because he was offered a discount through a friend. The only catch was he had to put up a higher deposit. Chen used his life savings, a chunk of his parents’ money plus credit cards to make the down payment of just over 50% on a 580,000 yuan (about $82,000) condo in 2015. The developer, Zhongsheng, ran out of money and stopped construction at the Qifu City site in 2019, according to Chen. He petitioned local officials, protested and then was detained for ‘illegal gathering.'”

“‘When I was detained by police, a policeman told me that my situation is better than his,’ Chen said. The officer ‘also bought a condo in a rotten tail project.’ A ‘rotten tail’ building is a common term for abandoned construction projects. Chen released a song about the injustices homebuyers face, but his song was censored on Chinese music platforms and nothing changed. All the while, he was still paying off the mortgage, maxing out credit cards and at one point subsisting on potatoes for 72 days straight just to make the payments.”

“‘Evergrande was famous throughout the country,’ said Zhang Fenglian, who bought one of the company’s homes in Chongqing city. He bought a condo for nearly 1 million yuan, or about $140,000, in 2018, when, Zhang said, prices in the area were at their peak. He made the purchase for his son, to help him attract a wife. Evergrande’s downfall left all its condo projects in limbo, despite the fact that buyers like Zhang had paid for the property in full, or at the very least shelled out a huge down payment and were already making mortgage payments. The local government invited Evergrande to lease the Chongqing land tax-free without supervision, Zhang said. ‘The money we paid [already] was not supervised by government financial institutions.'”

“Zhang said the Chongqing government took over the abandoned project, and his unit was delivered in 2022. ‘When I bought the unit, I was told there would be a basketball court, a cinema, a soccer field and a swimming pool in the condo complex. But now there is nothing there except for a few trees,’ Zhang said.”