At A Time When More People Have Been Confident About Selling Their Homes, Buyers Have Really Had Enough Of High Prices

A report from the Sopris Sun in Colorado. “In the Sept. 26 Forbes article, ‘Cities where home values have grown the most over the last 20 years,’ Carbondale ranked number one. Notably, Rifle and Glenwood Springs also made the list, ranking 13 and 19, respectively. According to the article, the median home value in Carbondale in 2004 was $256,998 compared to today at $1,440,404. Data for the article was sourced from Zillow. Since he was elected as the County Assessor in 2010, Jim Yellico has seen the housing market recover from the price drops of the recession and then exponentially trend higher. Looking back, he noted an approximate 35-50% drop in home values during the mortgage crisis and subsequent recession.”

“‘By the time it was all said and done, from those two events, values were at their lowest,’ Yellico told The Sopris Sun. ‘By the 2013 assessment year … values had gone down from their highs by 50%’ — a ballpark figure, he acknowledged. ‘Since then, we’ve recovered back to those prices, plus another 10-25%.’ The following year, 2014, is when the market started steadily increasing year over year. ‘Values have almost doubled since the low point in 2013,’ stated Yellico. Between 2019 and 2021, values increased by 15% in Carbondale. From 2021 to 2023, Carbondale values increased again by 33%. Also touched upon in the article is that there is an increasing number of second, third and fourth homes in Carbondale.”

From Chalkbeat. “Construction workers in hardhats and safety vests bustled around the 7,000-square-foot Loveland building, installing fixtures and painting. It was late October, and they had two months to go before the grand opening. Soon, the former Thompson School District preschool would become ‘The Landing,’ the first shelter for homeless youth in northern Colorado. The $9 million project is just one example of how Colorado school districts are repurposing shuttered schools. Colorado’s school-age population peaked around 2019 and has been decreasing ever since, according to State Demographer Elizabeth Garner.”

“Jefferson County Public Schools has a bumper crop of empty school buildings. They don’t want to sell buildings they may need to reopen if enrollment jumps, but they don’t want to sink money into mothballed buildings that sit vacant for years and hurt the vibrancy of neighborhoods. The relatively low purchase price for Zerger, in Westminster, raised some eyebrows among Jeffco school board members. If all goes to plan, the district would be paid $1.26 million for the site, or $45,000 per housing lot for a minimum of 28 lots. ‘I will admit that when I saw the Zerger offer … my feeling was, ‘Oh no. I don’t want to sell any of our properties that low,’ school board President Mary Parker said at a board meeting in June. ‘But then there’s also the considerations of the cost to maintain the buildings, however long and the community feelings about leaving the properties there.'”

The Associated Press. “Owners of vacation homes in Northern California’s South Lake Tahoe could face a significant tax increase if voters in the mountain resort town approve a measure on Tuesday’s ballot. South Lake Tahoe, which sits on the shores of the iconic alpine lake, has about 7,000 vacant homes — 44% of the city’s estimated housing units — according to the 2022 American Community Survey. Measure N would levy a flat $3,000 tax on homes that are vacant 182 days within a calendar year. The tax would increase to $6,000 for every subsequent year the home remains empty for half the year. The California Association of Realtors and the National Association of Realtors have contributed a combined $1 million to defeat the measure in a town with only 12,000 registered voters.”

“‘I think there’s a similar argument to be made here, that people consuming multiple homes and not living in them in communities like South Lake Tahoe … it’s actually doing harm to other people,’ said Shane Phillips, who manages the Randall Lewis Housing Initiative at the University of California, Los Angeles. The city has a median household income of $68,000, lower than the $95,000 median in California. The median sales price of a home was $750,000 in September — up from $427,000 five years ago, according to Redfin.”

The San Jose Spotlight in California. “Downtown San Jose could see an economic boost if city officials adopt a potential initiative for fast-tracking large developments. San Jose Downtown Association CEO Alex Stettinski said he agrees downtown needs more investment to cut down on the close to 30% office vacancy rate and create a more vibrant ecosystem. Land use consultant Erik Schoennauer, said the pathway program could be beneficial citywide. ‘We have 36 projects citywide, that are either approved or near approval, which can’t get financing to start construction,’ Schoennauer told San Jose Spotlight. There are at least 13 housing projects totaling more than 1,500 new homes stuck in limbo waiting for city funding. Without future affordable housing dollars from funding sources like Measure E to kickstart the rest of the projects in the pipeline, these proposals could remain on hold.”

Texas Monthly. “Homeowners are belly flopping into debt—and filing lawsuits—to fix swimming pools afflicted with spiderweb-like cracks that can turn a six-figure investment into a useless hole in the ground. Janell Gregerson’s toenails are painted hot pink, a tropical color that evokes the joys of lounging by the water, margarita in hand. But as the single mother of four walks out her back door in Cedar Park, a suburb northwest of Austin, to ‘show off’ her swimming pool—which she installed in 2021 for $120,000, after saving for six years—it’s clear she hasn’t been enjoying much aquatic R&R. After less than three years of use, her pool has become a gaping, dangerous hole. ‘This was my ‘I’ve made it through my divorce, I am woman, hear me roar’ project,’ she says. ‘It was something I’ve dreamed about since I was a kid.’ Instead, ‘no one comes in my backyard’ anymore. ‘It’s a graveyard.'”

“The wealthiest owners have spent more than $1 million constructing, demolishing, and then rebuilding individual pools, with the cost for replacement running anywhere from $200,000 to $500,000, on average. But not everyone has that kind of money, and some pool builders’ insurance companies have denied claims. Paolo Benedetti, a pool builder, educator, and consultant in California, says some builders in Texas, who aren’t required to be licensed to construct pools, have ‘always been kind of flying by the seat of their pants. The problem we have is that nobody is holding the pool contractors or any contractor responsible for their workmanship,’ Benedetti says. ‘There’s this whole lineage of unaccountability, so the perfect storm hit, and there weren’t any checks and balances in place, and the whole house of cards fell. And who’s holding the bag? The homeowners.'”

“Gregerson found work as a home-sales representative and can barely afford the $11,000 she spent to have core samples of the concrete drilled so she can prove her pool has ASR, much less the $40,000 she’s been quoted to rip the concrete out. Meanwhile, Gregerson continues writing a $700 monthly check to pay off her home equity loan, which has seven years left on it. She’s now contemplating simply filling in the pool with sandbags and grass. ‘It’s like a breakup. You just move on,’ she says.”

The Palm Beach Post in Florida. “Question: I live in a villa which is attached to another villa, of which there are six on my street. The whole subdivision has attached villas which total about 190. All are single story with a garage. I have lived in the development for over 20 years and own my home free and clear with no mortgage. Recently I received an email, as we all did, from the management company who handles the property stating that every unit must have homeowners’ insurance. They did not require proof of insurance, but just stated that it was required by the HOA. Since insurance is getting out of hand, I was thinking about canceling my homeowner’s insurance if it got to that point. I just wondered if this is legal that they can require you to carry homeowners’ insurance, as I am sure there are some in the development who do not have it. Signed, P.L.”

“Dear P.L., My guess is that your declaration of covenants contains a provision requiring all homeowners to carry insurance. As I’ve discussed before, covenants are given a broad presumption of validity and are rarely unenforceable, so if my suspicion is correct, either your association or any of your neighbors could technically get a court order forcing a homeowner to carry whatever insurance it says is required (presumably, casualty and liability). There are no statutory requirements that you carry insurance, and so the only realistic possibility is a provision in the declaration.”

“With that said, I would be very careful about cancelling your insurance. You don’t say whether you are living in a condominium or a community governed by an HOA, but depending on how your community is structured you could be the primary insurance holder for your entire villa. If your villa is destroyed in a storm and you are uninsured, you may lack the financial ability to rebuild. It would be a shame to have a fully paid off home only to lose it completely and be unable to recover.”

Bisnow in Georgia. “A New England-based REIT has sold its last Atlanta building, accepting a price $11M below what it paid for the property. Franklin Street Properties Corp. sold Pershing Park Plaza for $34M this month, the company announced in its third-quarter earnings report Wednesday. The sale price is 25% less than the $45.5M Franklin Street paid for the 160K SF office building in 2016, according to Fulton County property records. It is far from the only owner swallowing a loss on an Atlanta office building. Manulife Financial Corp. sold The Proscenium in August for $83.2M, 30% less than it paid for the tower in 2004. Atlanta Property Group sold the 534K SF Ameris Center for $81M in June, 10% less than it paid nine years prior.”

“Marcus & Millichap associate Michael Nolen said discounts are expected with the amount of vacancy and overall concerns about tenant demand with hybrid work models now etched in stone. ‘The fundamentals just aren’t there. What supported office 10, 15 years ago isn’t there anymore. We haven’t come back from what changed in Covid,’ Nolen said. ‘Office lease space is just so abundant. It’s like walking in grass — it’s everywhere.'”

CBC News in Canada. “As the City of Brampton works to address unsafe and illegal housing, CBC Toronto has learned that a local councillor co-owns a property with an unregistered basement apartment, contravening municipal bylaws. Coun. Gurpartap Singh Toor, who sits on both Brampton city council and Peel regional council, denies owning the house on Gardenbrooke Trail, in the northeast of the city. But property records show he has been on the title since 2021, and information obtained through a freedom-of-information request reveals the basement has been rented out illegally that entire time.”

“The inspection followed a complaint filed by Azad Goyat. Goyat is the founder of the Brampton Housing Providers Association, a non-profit representing landlords, founded in response to a pilot project aimed at curbing illegal housing. He also ran for regional council in the same wards as Toor in the last municipal election. He says neighbours noticed two families were living in the house, but there was no secondary unit registered with the city. ‘Coun. Toor is representing the people. He’s the lawmaker at the City Hall. How [can he] dare to … have the illegal dwellings?’ said Goyat. Illegal renting has been top of mind for Brampton council, with the mayor previously calling unregistered rentals ‘fire traps.’ Last year, Brampton had nearly 100 house fires and five deaths, the city told CBC Toronto earlier this month.”

From the Connexion. “Most areas of France recorded a fall in house prices at the start of 2024, however the level of decrease is slowing, new notaire data shows. Prices fell in all areas and all regions, and across all city sizes. Only one city, Nantes, recorded a double digit price drop at this time, -10.4%, data for the beginning of 2024 saw many cities record drops of this magnitude. The highest falls after Nantes were: Corse-du-Sud and Limoges (-9.8%). Châteauroux (-9%). Reims (-8.6%).”

From ABC News. “Australia’s property market is showing further signs of a slowdown. It is the first time Sydney’s property prices have declined since January 2023, with a lack of affordable housing options driving would-be buyers out of the market. CoreLogic’s head of research Eliza Owen said the market is cooling, and part of that has been due to the ‘strong spring selling season’ and increase in the number of properties being listed for sale. ‘We’ve seen listing volumes rise about 13 per cent since the end of winter, and yet, in the past three months, actual sales volumes have dropped 7.5 per cent,’ she said. ‘So at a time when more people have been confident about selling their homes, buyers have really had enough … of high prices, [being] limited in what they can borrow, and also high cost-of-living pressures have probably pulled some people out of the market as well.'”

South China Morning Post. “When Zhu Yufei came across reports that suggested a turnaround of mainland China’s property market was imminent, she felt a surge of optimism. Verbal assurance from top officials and fresh interest-rate cuts have suddenly drowned years of misery among homeowners like her. So far, that optimism has been fleeting. The 41-year-old office clerk in Shanghai has been eager to sell her three-bedroom flat in the city’s southwestern Gubei district, only to find the market still in a spiral. Her agent has recommended cutting the asking price further.”

“‘A package of policies will at least fuel a market rebound and I will take the opportunity to cash out,’ Zhu said. ‘Taking a long view, I bet home prices will continue to decline, since the national economy is unlikely to grow rapidly again over the next decade.'”

“Some property brokers are worried that the post-stimulus euphoria could be a false dawn. Most homebuyers like Zhao are still spooked by fears of a market relapse, property agents said. Ian Zhang, who supplied electrical equipment to several property developers including the Zendai Group for almost two decades, liquidated his business recently after failing to secure a single contract over the past 12 months. ‘The business climate is chilly,’ said the 46-year old Shanghai-based entrepreneur, who has since ventured into a restaurant business. ‘I’m still owed several million yuan by the developers. It seems I will never be able to get the money back, since most of them are already insolvent. My guess is that the market will not recover in the next three to five years because sentiment is awfully weak despite the favourable policies by the governments.'”

“China had 3.5 billion square metres of pre-sold but uncompleted homes at the end of 2023, analysts at Goldman Sachs estimated. By another estimate, 20 million pre-sold homes were uncompleted. This remains a sore point in the industry as trust in the financial health of home builders is eroded or broken. ‘It is a chicken-and-egg issue,’ said Yan Zhancai, a sales consultant at real estate brokerage Lianjia in Shanghai. ‘Policymakers are trying to inject confidence in homebuyers, while buyers desire heavy price cuts because they believe the property crisis has not come to an end.'”

“Zhu in Shanghai is aiming to sell her flat in Gubei for 12 million yuan. She has been told by her brokers that the property will not find a buyer unless she drops her asking price by more than 1 million yuan. ‘I may consider slashing the price to get the deal done, now that the buying interest will not return to the level seen in 2022,’ she said. ‘My take is that the once-booming property market will not grow at a rapid pace again like in the past.'”