Sellers Need To Cut Out Wishful Thinking And Get Realistic

A report from the Washingtonian. “‘Since about the third week of September 2023, the market is what the market is and we’re just here for the ride,’ says Brett West, an agent with McEnearney Associates. ‘Houses that were expected to sell fast sometimes sit on the market for ten days or two weeks, and sellers get worried. I tell them to take a breath and don’t rush to reduce the price if it seems appropriate. Right now, a home that receives multiple offers in DC is an exception.’ The weakest part of the housing market is condos, particularly in the District. Even newly built condos are slow to sell, says Ericka S. Black, an agent with Coldwell Banker Realty. One in Brentwood, near the Rhode Island Avenue Metro station, took seven months to find a buyer, and another in Columbia Heights took nine. Some sellers give up and rent their condos to avoid losing money.”

“‘Everyone just needs to get used to changes in the market,’ says Corey Burr, a senior vice president at TTR Sotheby’s International Realty. ‘Sellers need to cut out wishful thinking and get realistic,’ Burr says. ‘Instead of adding 5 percent to their price, they need to list at a reasonable price and hope for more buyers.'”

The Miami Herald in Florida. “The surge on Fort Myers Beach, according to the National Weather Service, was almost six feet. Some on the little island an hour north of Naples questioning whether it’s time to just move on. ‘After Ian and this, I’m not staying here, I’m done. I lost two cars and lots of other things,’ said Nir Cohen, owner of the beachware clothing store H2O. ‘It’s difficult to come back and face the reality.’ On Fifth Street in the town’s business district, Carlos Sanchez, 57, and his two nephews were cleaning out his two stores. He said the last two years have just been too painful to keep on going. ‘I’m just not evacuating anymore,’ he said. ‘For now, I have to clean up and re-open. But my plan is to sell.'”

USA Today on Florida. “When Hurricane Helene hit two weeks ago, James Sowards knew his home near Charlotte Harbor would flood. As day broke Thursday morning, he drove back to Punta Gorda to find his home blocked by floodwater. He had insurance, but it was getting more and more expensive. ‘I’m thinking about just getting rid of it,’ he said, looking across the water at his home. ‘And just get out of here.'”

CBS News on Florida. “Diana Nguyen was reduced to tears when speaking about the damage to her parents’ home near Palm Beach Gardens. ‘We had the tornado landing on the roof and taking out winds and destroying everything in our yard. They grew trees here for the last 25 years and now everything is gone,’ she told CBS News Miami. ‘We didn’t have insurance on the home and this is really devastating. There is so much work to be done and I am not sure what we are going to do.’ She said her parents had decided to cancel their homeowner’s insurance. ‘It got so expensive,’ she said. ‘And they wouldn’t insure us because of our roof.'”

Hollywood Reporter in California. “Casa Encantada is considered by many to be the finest residence in the United States. Currently on the market for an eye-watering $195 million, the storied estate, lording over the Bel-Air Country Club on a stunning 8.4 acres. But since 2019, Casa Encantada has repeatedly been listed only to be pulled back off the market, its price slashed from $250 million to $195 million. The estate, at 10644 Bellagio Road, has broken records as the most expensive home sold in the United State twice before. It was built for Hilda Boldt Weber, a former nurse turned fabulously wealthy widow of a glass bottle mogul, who had scandalized society by marrying her butler.”

“Weber’s profligacy would bleed her dry. So expensive was the upkeep, she put it on the market for $1.5 million in 1948. With no takers, desperate for cash, and shunned by the snobs of Bel-Air, she sold it in 1950 to hotelier Conrad Hilton for only $225,000 ($3 million in 2024 dollars). Broke and disenchanted, Weber died by suicide shortly after the sale. Westside Estate Agency’s Kurt Rappaport, Drew Fenton of Carolwood Estates, and Million Dollar Listing’s Josh Flagg of Compass – are dreaming of the large commission that will come their way if they are able to finally sell the mega-estate, even as the luxury market sags. Flagg believes that the time is finally right for the property to sell. ‘The market has been in a very strange place for the last couple of years,’ he says. ‘If this was 2017 or even during the height of COVID the house would be sold by now. Someone is going to get an incredible deal since it is now appropriately priced at $195 million.'”

Silicon Valley in California. “A big San Jose housing complex with hundreds of units is in default on a loan that tops a quarter-billion dollars, a setback that could lead to a foreclosure of the property’s delinquent financing. The $264 million construction loan for the double-tower housing highrise at 188 West St. James Street, formerly known as Silvery Towers, is in default, documents filed on Oct. 10 with the Santa Clara County Recorder’s Office show. FPP MB, which is affiliated with China-based real estate firm Z&L Properties, owns the two residential towers, which are in the lively San Pedro Square neighborhood. Flawed construction, development delays, lawsuits, failed payments to subcontractors and even a suicide have haunted the double-tower project in recent years.”

“‘This default almost seems inevitable, considering all the problems the project has had,’ said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy. The complex totals slightly over 600 units with about 300 units in each of the 22-story towers. The loan default suggests the housing complex could become the latest in a growing string of development failures for the once-impressive real estate empire that Z&L Properties had fashioned in San Jose. ‘Z&L has botched every project in which they have become involved,’ Staedler said.”

Westword in Colorado. “The office vacancy rate in downtown Denver spiked this August at around 34 percent, according to real estate research, and a new market report isn’t any brighter. The River North Arts District (RiNo) has Denver’s highest vacancy rate for offices. RiNo used to be filled with warehouses, but over the past few decades has shifted to more new builds dedicated to nightlife and luxury living. RiNo comes in with a whopping 49 percent office vacancy rate in the third quarter of 2024. Over 1.2 million square feet of the nearly 2.8 million square feet of office property are vacant in the growing district right now, according to Cushman & Wakefield, and that number could grow.”

“The River North Arts District (RiNo) has Denver’s highest vacancy rate for offices. RiNo used to be filled with warehouses, but over the past few decades has shifted to more new builds dedicated to nightlife and luxury living. Large buildings like One River North and Mica RiNo are working to attract residents to the area while the Industry building at 3001 Brighton Boulevard was recently transformed into a co-working office space. But despite the nightlife and residential housing, RiNo’s office-space boom has been more of a bust so far.”

Multi-Housing News. “More than one in five professionally managed apartment units across the nation offered concessions in the second quarter of this year. This marks a sharp year-over-year increase. Excelsa Properties Managing Director David Fletcher told Multi-Housing News that high construction loan interest rates have curtailed new multifamily starts in all markets, including those that are oversupplied. ‘Heavy concessions remain where desperate developers struggle to stabilize the market by undercutting it,’ Fletcher said. ‘Because the oversupply wave is ending, developers in lease-ups are becoming more rational, so heavy concessions and undercutting in the Class A space are growing less frequent.'”

“For operators who overpaid and financed acquisitions with risky high-yield debt, pricing tactics like concessions have been popular. But Fletcher said that as lenders step in and force sales or rationalize operations, operators are less able to offer these high concessions. Brian P. Hourigan, senior managing director at BOND New York Properties, LLC. noted that some concessions, including the landlord covering the brokerage fee and or waiving a combination of free rent and building amenity fees, etc., become a bit more common. ‘Disproportionately, the highest percentage of concessions are offered in the full-service luxury market and new development sectors, where management companies are eager to lease up a comparative glut of inventory to a financially specific, and limited, target audience at the most aspirational prices to achieve rent rolls that meet or exceed the lofty projections shared with banks and investors before a new development launch,’ he said.”

Global News in Canada. “The real estate market across much of the Greater Toronto Area and beyond continues to remain soft. Prices have also fallen in other areas around the city, according to a realtor in Durham Region. ‘In Ajax, I think they were floating just over a million at that time in terms of average price, and that’s dropped to just over ($900,000.) So we’re close to a 10-per cent reduction,’ Ajax realtor Doug Gordon said. Many realtors in Toronto use a product called Broker Bay to book showings, according to Gordon. He noted that it also allows realtors to notify their counterparts when an offer has been made in an effort to drum up interest. ‘It’s definitely much quieter since the beginning of this year,’ he explained. ‘So the number of offers dropped in half since the spring.'”

“Toronto realtor Melanie Piche noted that since houses are spending more time on the market, they are slower to get bodies through. When things were overheated in 2021, and a house would sell in a week, they would get five people through in a day but that is no longer the case. The slow sales in 2024 has created a glut of inventory in Toronto, according to numbers provided by Piche’s agency, the BREL Team. ‘People are taking longer to make those decisions because they’re not feeling rush to make offers on properties,’ Gordon said. ‘You know that the pressure is not there and the number of offers have dropped.'”

“The slower pace of sales has forced realtors to adjust how the are handling the sales end of things as well. Open houses have returned while realtors are also forced to pay closer attention to every aspect of their job. Hamilton realtor Rob Golfi said that some realtors are leaving the business while others are struggling with the new realities. ‘It is a lot tougher now, too. In this business, there’s no doubt,’ he said.”

The Globe and Mail in Canada. “Failures to stop money laundering in Toronto-Dominion Bank’s U.S. division were egregious, pervasive and well known even at senior levels of the bank, marking TD as a place where low-level employees joked openly about the bank being an easy target for bad actors, while senior executives failed to act on warnings, according to top U.S. Justice Department officials. Two of TD’s U.S. subsidiaries pleaded guilty to multiple felony charges on Thursday, agreed to settlements and restrictions on the bank’s American retail banking operations, and agreed to pay more than US$3-billion in penalties.”

“The Justice Department found that senior executive managers, including TD’s chief anti-money-laundering officer and the officer in charge of complying with the U.S. Bank Secrecy Act, “knew there were long-term, pervasive, and systemic deficiencies in the Defendants’ U.S. AML policies, procedures and controls,” according to court documents filed in New Jersey as part of TD’s guilty plea. In one UTR filed in September, 2020, an employee bluntly reported to the bank’s U.S. anti-money-laundering program that ‘EVERY DAY CUSTOMER DEPOSIT A LOT OF CASH.'”

Nine News in Australia. “Embattled home builder Nicheliving has reached a deal with the Western Australian government after leaving hundreds of customers with unfinished homes. Under the agreement, Nicheliving will end its legal fight and surrender its building licence for ten years. Directors Ronnie Michel-Elhaj and Paul Bitdorf are now barred from re-registering under any name. Customers have spent the past few years displaced and living in alternate housing waiting for the saga to come to an end. ‘We were displaced for two to three years, couch surfing, you know staying at a friend’s house for two to three weeks because we just had nowhere else to go,’ Sarah Munro said.”

“Customer Kathy Ellis said what was supposed to be a little family adventure turned into a nightmare. ‘I sat my kids down, we had a family meeting and I said ‘look four months in a camper trailer, we’re going to be fine its going to be fun,’ Ellis said. ‘Twenty months later we are still in our camper trailer.'”

The New Indian Express. “Residents of the 2BHK Dignity Housing Colony in Muralidhar Bagh, located close to the Gandhi Bhavan Metro station, are raising serious concerns about the quality of construction and the lack of basic amenities. The colony, which houses 120 units, was inaugurated in May 2023 and falls under the Goshamahal Assembly constituency. However, residents claim that substandard materials were used in the construction, leading to cracks in the walls, peeling cement and inadequate infrastructure, including water tanks.”

“K Anil, one of the residents, pointed out several issues in the construction. ‘Cracks have appeared in the walls of almost every building. The doors are either partially or completely damaged, and there’s leakage through the water pipes,’ he stated. Pointing to a vacant space, he added, ‘A community hall and a medical centre were supposed to be built, but they remain incomplete, with carts and garbage strewn around the area. There is also leakage from the water pipes.'”

“K Chanda, a homemaker living in Block C, complained about the dampness in the walls. ‘Even though we moved here just a year ago, there’s seelan (dampness) in the walls. When I touch the walls, the paint flakes off. Even drilling causes the paint to peel,’ she said. Reflecting on their earlier living conditions, she added, ‘We were better off in the basti (slum), where there was peace.'”