I’d Say, Let’s Sell This Pig, All We’re Doing Is Throwing Money Down The Drain

A report from the Indianapolis Star. “If projections hold true, 2024 could turn out to be only the second year since the Great Recession of 2008 that builders started more than 9,000 new single-family homes in central Indiana. Homebuilders struggle to keep down costs and build houses affordable to the median buyer, said BAGI Chief Operating Officer Drake Branda, a problem he attributed mainly to soaring land costs and expensive hurdles for developing that land into neighborhoods. ‘People always talk about how affordable Indiana is, but when you look at (central Indiana),’ Branda said, ‘an average new market home starts in the $500,000s.'”

WAFB in Louisiana. “The federal reserve rate cut has caused little change to the housing market, experts said. Brandon Richoux has been a realtor in the Baton Rouge area for the past 11 years. He explained that his real estate company, Smart Move, hasn’t seen a lift in people looking to buy since the rate cut. ‘All realtors were really hoping that news of the fed rate cut would just incentivize some buyers to come to the market. In our office, we really haven’t seen it just yet,’ Richoux said. He determined that with the seasonal slow of home sales in the fall, coupled with an election, homes are easy to come by, but hard to sell. ‘We’re really experiencing a shifting market where there’s more inventory, more homes for sale then we’ve had in a long time,’ Richoux said.”

Market Place. “For Nina Katsov, a real estate agent in Chicago, it was the hours. The nights and weekends showing houses. Always being on call. She recently had a baby, and on her husband’s first Father’s Day, she had to bail on brunch for a showing. ‘It was a little bit of a heartbreak,’ she said. ‘Coming out of a really slow spring and also having taken my maternity leave over the fall winter, I really couldn’t turn business down.’ Then came new rules from the National Association of Realtors that could reduce her commission on sales. ‘It was that last nail in the coffin where I was like, ‘You know what? There’s just way too much that’s outside of my control in this job,’ Katsov said.”

“In Boulder, Colorado, Eliza Wright recently quit after more than a decade as a real estate agent. In the first two years of the pandemic, when people were clamoring for more space and interest rates were low, business was great. ‘Houses just selling themselves, people just coming out of the woodwork,’ she said. Then the Fed started raising interest rates to fight inflation, and Wright saw too many families stretching every last dollar to buy. ‘Unfortunately, it’s not affordable, and it’s hard to tell people that it is,’ she said. ‘It just felt icky to me.’ She was already disillusioned when the settlement kicked in. Now, if home sellers opted not to cover her compensation from the proceeds of the sale, she would have to ask buyers to pay her out of pocket. ‘The buyers that I’ve seen in the past year and a half, they don’t have it,’ Wright said. ‘I just felt like it was a message that I’m done for sure.’ She bought a camper van, fixed it up, and is heading out on the road for at least a year.”

KHON2 in Hawaii. “Realtors said the rising insurance rates could be a factor in the softening of the market, but there are still opportunities out there if you’re smart. Debby Yokomizo is looking for her next home and most likely, it won’t be a condo. ‘I think it’s frustrating,’ said Yokomizo. ‘Because I love the condos I love the whole concept of condo living and there’s a lot of condos that I have bypassed because of the issue of it not being lendable.’ ‘We do have a lot more condos on the market than ever before,’ said Fran Gendrano, Honolulu Board of Realtors President. ‘And that makes me wonder if it is due to rising condo association insurance costs, possibly due to deferred maintenance and/or hurricane insurance.'”

“Realtors are the first to admit the market isn’t as simple or as hot as it was a few years ago during COVID. But they also said when one person sees a challenge, another sees an opportunity. ‘I think if a buyer is going to pay a couple hundred dollars more because a building may be a little deficient in insurance, as that building is working towards getting their insurance up to par, maybe ask the seller if there can be a meeting of the minds,’ said Kay Mukaigawa, Engel & Volkers President. ‘For sellers that are thinking ‘oh my gosh I could never sell,’ I think they just have to realize they gotta be able to help the buyer.'”

From CBS News. “A growing concern in South Florida centers on the condo market, which appears to be headed over a cliff. ‘Frustrating, and ultimately, the deal ended up dying,’ shared Diana, whose grandfather recently moved from his condo in Sunrise. ‘There were just so many requirements by the mortgage company.’ The family originally listed the two-bedroom Sunrise Lakes condo for $199,000. ‘We were under some pressure to sell, and we wanted it done,’ said Diana. The family ultimately settled for $50,000 less than the original listing price after nearly six months on the market. We checked Zillow two weeks ago and found nearly 500 condos currently for sale just in Sunrise.”

“Peter Zalewski, who has studied the South Florida condo market for three decades, examined condo listings across Palm Beach, Broward, and Miami-Dade counties. He reports there is at least a nine-month supply of condos over 25 years old, with more than 16,000 available. When these condos sell, Zalewski said they go for roughly $45,000 less than the original listing price. ‘There’s a lack of confidence and urgency on behalf of the buyers,’ shared Zalewski. ‘Old buildings where people need to get out because they’re on a fixed income, and the cost to maintain it and make it viable and safe. There’s nobody to take them out. There’s no backstop. So this is a freefall, and this is where the cliff comes in. We could have buildings that are effectively zombie buildings that are just barely getting by.'”

Florida Realtors. “An aging condo on Fort Lauderdale’s barrier island ordered to evacuate because of an unsafe foundation could be among the first of a long line of condos in desperate need of long-delayed repairs, experts say. Nearly two weeks ago, unit owners at Springbrook Gardens – a former hospital turned condo building in 1947 – were told they had to be out by noon Friday after the building’s engineer determined the building was unsafe. Now some who live in the 18-unit building with a view of the Intracoastal Waterway are wondering whether they can afford what might turn into a special assessment of $55,000 or more for each individual owner. ‘I don’t want to spend any more money to fix up the building if it’s going to cost $1 million or $2 million,’ unit owner Warren Sackler told the South Florida Sun Sentinel. A retired New Yorker, Sackler owns two units at the condo and would end up paying a double assessment. ‘I’d love to sell it. And we’ve had offers to buy the building. You just have to get everyone to agree to it.'”

“But the state has sent a long overdue message to condo dwellers across Florida: Time to pay the piper. ‘I would say termites, spit and the grace of God are holding up most of these buildings,’ said Dan Kennedy, a real estate agent who lives on Hollywood beach. ‘No one wants to pay the money to fix the problems. They want to do it next year. But there’s no more next year.’ The condo units on their own are never going to sell for as much as the entire building, said Chris Williams, a Fort Lauderdale real estate agent. Some of these older units have old wiring, low ceilings. They’re hard to sell. And you’re not going to find a buyer because they don’t want to get stuck with a giant bill for repairs. The only option would be to sell the building, knock it down and build a new one.'”

“Williams knows what he’d do if he lived at Springbrook Gardens. ‘I’d say, ‘Let’s sell this pig. It’s almost 80 years old. All we’re doing is throwing money down the drain.’ Whenever you put a safety factor in there and it’s not going to get any better, the only choice is to sell it.'”

National Post on California. “As the NHL season begins, Edmonton Oilers owner Daryl Katz is unquestionably watching earnestly to see if Connor McDavid and company can bring a Stanley Cup home this season. But the pharma mogul no doubt also has a watchful eye on the sale of his historic western Los Angeles home, The Manor , a lavish 56,500-square-foot home first built by Holywood royalty that’s been sitting on the market for close to two years, as per the listing on Zillow . This April, Katz, the largely self-made billionaire , dropped the price on the 4.6-acre Beverly Hills estate to a tidy US$137.5 million. It had been listed at $155 million as of January 2023, a reduction from the original asking price of $165 million when it first appeared on the market in February 2022, only to be removed that December.”

“The Manor isn’t the only property Katz is looking to offload in L.A. According to the Los Angeles Times , in 2015 an LLC linked to Katz paid $34.5 million for a 4.6-acre property that once belonged to Canadian-American TV personality Art Linkletter. The lot, which features an unfinished mansion project, was returned to the market in July 2022 at an ask of $38.5 million and dropped to $35 million in October. The price was reduced to just under $30 million this April.”

Silicon Valley in California. “A new Bay Area poll by the Bay Area News Group and Joint Venture Silicon Valley found the tech industry is widely mistrusted, with hefty majorities of respondents believing major Silicon Valley companies wield too much power, are largely responsible for the region’s sky-high costs of housing and have lost their ability to tell right from wrong. 80% of those responding to the poll blamed Silicon Valley’s tech industry for driving up housing and living costs, and 75% said the industry had too much power and influence. Sixty-nine percent said Silicon Valley had lost its moral compass.”

“Additionally, Silicon Valley’s Next Big Thing, artificial intelligence, is broadly viewed with concern and skepticism. ‘I don’t feel comfortable about it,’ said Ladasha Wheeler, an MRI scheduler from Pittsburg. ‘We’re playing with things like we’re playing God. Sometimes I think we just need to lay off a little bit.’ ‘People have finally woken up and are saying, ‘This doesn’t feel like something that contributes to the region and my personal life.’ And it doesn’t — it mostly contributes to people who have invested, or run the companies,’ said Steve Blank, a long-time Silicon Valley startup guru at Stanford University, of the poll findings.”

“The region’s tech industry attracts ambitious people and generates substantial tax revenue for cities, but because housing prices have skyrocketed from the influx and not enough new housing has been built, companies face public ire, said survey respondent Tyler Cooper, 35, a San Francisco marketing manager. ‘We’ve created a zero-sum fight when you don’t build apartments and you don’t build homes,’ Cooper said. Cooper sees AI causing ‘a lot of risk from the misinformation.’ ‘When I try to do a Google image search, a lot of the images that come back are fake,’ Cooper said. ‘By giving you information that is inaccurate it makes you not believe the accurate information. It makes it feel like we lost something that we used to have. That makes me sad.'”

The Globe and Mail in Canada. “42 Camden St., No. 203, Toronto. Asking price: $1,398,000 (August, 2024). Previous asking prices: $1.45-million (February, 2024); $1.495-million (March, 2023). Selling price: $1.335-million (August 2024). Previous selling price: $1.38-million (June, 2021). This two-bedroom suite was listed for sale in the spring of 2023 with an asking price of nearly $1.5-million based on its premium upgrades and a 791-square-foot terrace, an attribute possessed by few other units in other buildings in the neighbourhood around Queen Street West and Spadina Avenue. The seller rejected one early offer and held its price at $1.495-million for months. ‘[As for] most unit owners listing in the last year, it’s been a tricky time,’ said listing agent Christopher Bibby.”

“With the market showing no signs of an uptick, the price was reduced to $1.45-million this year, and then again to $1.398-million. Finally, an offer came in and negotiations ended with a $1.335-million sale. ‘[The plan was,] if we hit a certain number, we’d sell. But if we were unsuccessful, we were going to rent it out,’ Mr. Bibby said. ‘This one took a little longer than we hoped, so the price change in the end is what helped facilitate the sale.'”

Arab Finance. “Egypt’s real estate market has witnessed significant growth in recent years, driven by urbanization, economic development, and government policies. While this growth has brought economic benefits, it raises concerns about the possibility of a real estate bubble. A real estate bubble occurs when property prices increase rapidly without a corresponding rise in demand. ‘This imbalance often leads to market instability and a subsequent crash when prices become unsustainable,’ Ahmed Fawzy Hussein, a Ph.D. holder and an assistant professor of economics, tells Arab Finance.”

“‘The 150% price increases of the last two years have stopped. The resale market peaked last February; however, it fell by 10% in March but has since returned to and exceeded February’s levels now,’ Youssef ElZohairy from Property Sorted says. ‘Once currency stabilized, developers realized they had overvalued their properties,’ he notes, adding, ‘Consequently, many markets extended payment plans from six or seven years to 10 years, effectively slashing prices by about 25%.’ Hussein points out that Egypt’s focus has largely been on high-end and luxury developments, which creates a mismatch between supply and demand. ‘The demand for affordable housing far outstrips that for luxury properties. This oversupply of luxury units, combined with a lack of demand, could lead to a market correction,’ Hussein suggests.”

The New Indian Express. “Time slumbers at Kumbanad, a tiny town in the Pathanamthitta district of Kerala. The streets here are quiet, the narrow lanes lined with coconut trees whose leaves rustle in the wind. A two-storeyed house comes into view – its rusting gates chained and locked, shrouded in an air of abandonment. Nearby, are several grand homes and a few single-storeyed structures: these too stand marooned in a riot of unruly vegetation, showing signs of neglect, with weeds creeping up the walls and dust settling thick on the windowsills. Some display ‘For Sale’ boards.”

“‘Today, you go to any place in Kerala, you can see houses lying locked up for months, and after a point, you don’t even recognise whose home it is. Many first-generation NRIs, particularly those who migrated to the Gulf, envisioned retiring in the homes they built with their hard-earned money, expecting their children to use the space later,’ says S Irudaya Rajan, chairperson of International Institute of Migration and Development (IIMAD.) ‘However, as children chose to stay abroad, the houses became dead money after the parents pass,’ He added. The major contributing factor is migration.”

“As Malayalis leave for jobs abroad, especially in the Middle East, the state is now dotted with over 11 lakh vacant or ‘ghost’ houses. The abandoned properties aren’t left behind by migrating Keralites, but also include homes deserted due to owners impacted by natural calamities, like floods, and now lie overtaken by marshes and creepers. According to Rajan, the first-generation NRIs considered houses as symbols of status and prosperity. ‘They built more houses than needed, driven by a desire for social status. This pursuit of social status didn’t bring anyone back – some elderly parents were taken abroad as babysitters and others moved with their children,’ he says.”