We’re Waiting For The Shoe To Drop, And It’s Just Not Dropping

A report from the Telegraph. “The message from American voters is clear: four years under Joe Biden and Kamala Harris have made them feel poorer, not richer. The backlash from voters against Biden and Harris’s record stands in stark contrast to how their credentials are portrayed among economists. The Economist magazine last month ran a special report on America’s economy, describing it as ‘the envy of the world.’ ‘If you compare prices of everyday staples and housing today to four years ago, they’re significantly up. Voters don’t look at it like economists. They know how much they’re paying now versus how much they paid four years ago,’ says Stephen A. Myrow, the managing partner of Beacon Policy Advisors in Washington. ‘Kamala’s catchphrase was ‘We’re not going back’. But many people in the end preferred where they were to where they are now,’ adds Myrow. ‘You can’t convince people to feel differently than they do. Whatever they felt like about the economy and their own personal finances, no amount of messaging was going to change that.'”

From KSAT. “According to CNN exit polls, 45% of Latino voters nationwide chose Trump, a sharp increase from the 65% who supported President Joe Biden in the 2020 General Election. This trend was especially pronounced in Texas, particularly along the border. Bexar County voter Adam Salazar explained his vote, citing dissatisfaction with the current economy and rising housing costs. ‘Inflation, plus housing — right now, the rent is just sky-high,’ Salazar said. Another voter, Ruben Torres, also supported Trump, prioritizing economic stability. ‘The more money in your pockets, the better,’ Torres said. ‘If you don’t have any money, then everybody struggles. These past four years have been bad.’ Voter Rudy Cortinas echoed a sentiment: ‘He’s the only one that does what he says he’s going to do.'”

The Real Deal on California. “If the current vote leaders hold their positions, the Bay Area’s real estate industry is looking at a much friendlier political climate after Tuesday’s election. Levi’s scion Daniel Lurie had an early lead in the San Francisco mayor’s race, as did moderate challengers looking to unseat progressive incumbents in two hotly contested Board of Supervisors races. The next vote-count announcement from the city’s Department of Elections will come Thursday afternoon, but as it stands Lurie has about 108,000 votes to London Breed’s 84,000. Jay Cheng, executive director of moderate political group Neighbors for a Better San Francisco and a former deputy director of government affairs for the San Francisco Association of Realtors, called that a ‘dominant lead’ that ‘seems hard to overtake in any scenario.'”

The Review Journal in Nevada. “The Las Vegas market recently entered more ‘balanced territory,’ said Kara Ng, a senior economist with Zillow, noting this is the first time buyers and sellers have been on ‘neutral territory’ in years. Steven Poscente, a Las Vegas Realtor with Remax Advantage who has lived in the valley for close to 40 years, said the research data he’s seen shows a 3 percent decrease in home prices by the end of the year. He said any smart real estate agent should have been putting money away for a rainy day during the boom cycle during the pandemic. ‘Many of us were spoiled and have been unrealistically holding our breath,’ he said. ‘Leaving the meteor speed of appreciation behind, we are likely to experience continued growth, albeit at a snail’s pace for now.'”

The Washington Post. “Interest rates are going down — but aspiring homeowners waiting for lower mortgage rates aren’t feeling relief. People who bought houses at high rates are also eager for borrowing costs to simmer down so they can refinance and get lower payments. ‘We’re waiting for the shoe to drop, and it’s just not dropping,’ said Mike Kemp, who bought his roughly $700,000 home last November and is eager to refinance his 7.25 percent mortgage. Kemp is still waiting for lower rates in Phoenix. The general manager of an automotive repair facility bought a home last year thinking he would be able to refinance quickly once the Fed began to cut, to achieve some crucial financial wiggle room. Instead, he and his wife are ‘financially strangling’ themselves to pay $5,400 on their home every month, on top of groceries and other bills.”

The Sun Sentinel in Florida. “A group of seven owners at The Woods Condominium, a two-story 46-unit complex in Wilton Manors, successfully challenged $12,000 assessments that were approved by their governing board — without a vote by all unit owners — to replace the complex’s air-conditioning system. The $12,000 assessment to each unit owner for the AC replacement that was approved in May followed several other assessments that some of the residents say depleted their savings or drove them into debt. Randy McLoud, the deposed president, said he has received emails from would-be home purchasers ‘telling me, ‘I’m sorry, we can’t buy there because there’s an air-conditioning problem. The only solution would be busting up everybody’s floors and redoing all new plumbing, and you know, who can afford that?'”

“Pam Nolan, one of the primary dissenters who has served as board treasurer on and off over 10 years since 1996, says she used her home equity to finance the $12,000 air conditioning bill after using a different loan to pay off previous assessments. She contends that the air-conditioning system does not need to be replaced. ‘The current system just needs regular quarterly maintenance and everyone needs to take ownership of their own heat pumps and have them properly maintained,’ she said.”

WINK in Florida. “The bullet holes left behind by shots heard in a normally quiet Cape Coral neighborhood scared one woman into buying security cameras for her home. It happened at a short-term rental home located on Southwest 14th Place. Neighbors told WINK News reporter Asha Patel that they have seen and heard parties and people coming and going at all times of night, which is uncommon for the area. Ashley McNaughton has lived on Southwest 14 Place in Cape Coral for six years and has never woken up to gunshots until the shooting that morning. ‘About 2:45 in the morning, we both awoke to pop, pop, pop, pop,’ McNaughton said to WINK. ‘A few minutes went by, and I heard another pop, pop, pop, pop, and that wasn’t fireworks, and then I knew that that was gunfire.'”

The Real Deal on Illinois. “A Gold Coast condo recently changed hands for a fraction of what it commanded over three decades ago, highlighting depreciation in the downtown residential market. The three-bedroom unit on the 59th floor of the 66-story Bloomingdale’s building, at 900 North Michigan Avenue, sold for about $378 per square foot, a sharp decline from the $596 per square foot it fetched in 1989 — a value equivalent to $1,500 when adjusted for inflation. ‘The buyer got a great deal,’ said Harry Maisel, the @properties Christie’s International Real Estate agent representing the seller, Gerardo Madrigal. Madrigal, who had purchased the 2,700-square-foot condo in 2000 for $1.8 million, about $667 per square foot, did not comment on the transaction. The unit was listed at just under $1.4 million in July before going under contract for $1.02 million in September.”

Bisnow Washington DC. “Donald Trump achieved a resounding electoral win Wednesday morning, giving the former president a second term. The change in power could have long-lasting implications on the nation’s capital and the surrounding region. The federal government is D.C.’s largest office occupier and employer. Cutting federal agencies or moving them out of the capital could have dramatic effects on D.C.’s already struggling office sector. The market was 22.7% vacant as of the third quarter, according to CBRE, and office buildings in the District’s downtown are plummeting in value.”

“‘Everyone in this business that deals with federal government real estate is terrified,’ one federal leasing broker who declined to be identified due to the nature of their work told Bisnow. ‘Every office building owner in D.C., Maryland, Virginia that leases space to the federal government is nervous, very nervous, about what may happen,’ the source said.”

The Globe and Mail in Canada. “3 McAlpine St., No. 401, Toronto. Asking price: $799,000 (July, 2024). Selling price: $760,000 (September, 2024). The listing for this two-bedroom unit instructed interested buyers to make an offer on a specific date in July. None met the deadline, a result the agent chalked up to the unit’s hefty monthly fees and the potential detrimental effects from an impending development next door. ‘The major hurdle we faced was the high maintenance fee of $1,481, which only covered water,’ said agent Belinda Lelli. ‘What also didn’t help was a placard in the front saying there was going to be a new build, so they would lose their view.'”

“Around Labour Day, one buyer made an offer and subsequent negotiations brought the sale price to $760,000 – $39,000 under asking. The buyer took possession about two weeks later. ‘We kept working it, and in the interim, I saw other properties expiring and terminated,’ said Ms. Lelli. ‘We were the only one that sold. Sellers are having a hard time wrapping their heads around the price declines. However, if we looked at what these sellers purchased it at to what they sold for, they’ve done very well.'”

Windsor Star in Canada. “Prices remained stable in October in the Windsor area’s real estate market last month. ‘With more inventory on the market, buyers have more options,’ Windsor Essex County Association of Realtors’ president Maggie Chen. said. ‘There’s not many investors. There’s less fear of losing out on something. That’s why they are taking longer to make decisions.'”

Northwich & Winsford Guardian in the UK. “One year has passed since Craig Dentith came to the Northwich & Winsford Guardian to raise concerns about the Wharton Green development in Winsford. A lack of street lighting, an out-of-bounds playground, unfinished roads and an abundance of weeds are just some of the issues residents have been faced with. Craig said:’The progress in the last 12 months, or should I say non-progress, has been nothing short of embarrassing. It is an absolute disgrace. For an estate that is less than three years old it’s looking tired. The estate has the feel of something that’s been abandoned and has not been maintained in any way, shape or form.'”

“Meanwhile, the playground remains fenced off and weeds have started taking over the roads and footpaths. Craig adds that the majority of streetlighting doesn’t work, which he says is ‘extremely dangerous’ with some areas of the estate left in total darkness. ‘I’m so frustrated and upset about this situation, it’s a complete disregard to the residents of the estate that have invested large sums of money in purchasing their homes and been totally let down by false promises,’ Craig said.”

The Citizen in South Africa. “When Paul and Terri Bigge decided to rent out two cottages on their property in Golf Club Terrace, they were convinced the additional income would go a long way toward making their lives a little easier. They could not have been more wrong. For nearly a year, everything went well until, in November 2022, their tenant simply stopped paying. ‘We found ourselves going through financial difficulty, to the extent that our electricity was disconnected,’ says Terri. One late night in March, Paul and Terri awoke to the sound of shouting. Paul went to investigate, taking with him an unloaded gas pellet pistol in the hopes that if there were intruders, he could try and scare them off. The next day, police showed up and promptly arrested Paul for pointing a firearm. He was handcuffed, stuffed into a police bakkie, and taken to Florida Police Station. He ended up spending seven days behind bars in the Krugersdorp prison before he was finally released on bail.”

“Meanwhile, the situation with the tenant became worse. She would scream and shout obscenities every time Paul or Terri would dare go outside. By October 2023, they decided to serve a new eviction order, which she once again ignored. The couple decided to take her to court, but she eventually moved out just a week before the court date, leaving the cottage in a terrible state. ‘The place was filthy,’ says Terri. ‘There were plastic bags filled with faeces everywhere, the walls were covered in grime, the sliding door was smashed, and many of the floor tiles were broken.’ ‘This whole ordeal has made us very distrustful of people,’ says Paul. ‘It is a situation I would not wish on my worst enemy. I would urge landlords to take extra care before approving a potential tenant. Once they are in, getting them out is a complete nightmare.'”

Radio New Zealand. “You might think that if you bought a house in Auckland 20 years ago and sold it this year, you would be guaranteed to make money. But in a couple of recent sales, owners have lost money – and more than $100,000 in one case. The reason? They were leasehold properties. These are the kind of properties that often capture first-home buyers’ attention, because they stand out among ‘for sale’ listings due to their prices. Another property in Parnell sold for $87,000 last week with a CV of $970,000. ‘It was previously bought for $205,235 back in June 2000. So over 24 years the property has gone down in value by 58 percent,’ said Ed McKnight, economist at Opes Partners. ‘Over the same period property values in Parnell have gone up by 335 percent. The property sold 91 percent below CV. But that’s not a sign that the property was a good deal.'”

From Reuters. “A threat by Donald Trump, who has been elected as the next U.S. president, to impose 60% tariffs on U.S. imports of Chinese goods poses major growth risks for the world’s second-largest economy. Not only are the tariff rates much higher than the 7.5%-25% levied on China during his first term, the economy is also in a much more vulnerable position. In 2018, the property market was strong, driving about a quarter of China’s economic activity. That meant local government finances, heavily reliant on auctioning land for residential projects, were not questioned so forcefully.”

“This helped China absorb the tariff shock. But since 2021, real estate has been in a severe downturn and local government revenues have plunged. Housing oversupply means this sector may never return to the driving seat of Chinese economic growth. The property sector’s downturn has saddled local governments with unsustainable debt. While Beijing is lining up fiscal help for them to curb their liabilities, the burden is huge, limiting China’s ability to respond to any external growth shocks.”