The Sellers Bought At The Absolute Peak Of The Market

It’s Friday desk clearing time for this blogger. “It’s hard to tell which developments might come to life and which might die. The process can begin with so much hope for a new building, subdivision or neighborhood. But hopes can quickly sour as reality hits full-force. Nearly a decade after it was first approved amid neighborhood resistance, the ax seems to have dropped on one such development in the Boise Foothills: The Reserve at Deer Valley. The land was foreclosed and listed for sale by the Idaho Land Brokerage for $7 million in September. Boise developer Ron Walsh says the development likely won’t see the light of day. ‘It has a lot of topography (issues), which causes the infrastructure costs to skyrocket,’ Walsh said by phone. ‘We think it’s too much of an uphill battle.'”

“When Ken Griffin decamped from Chicago, the billionaire financier left behind $94 million in ritzy condos and penthouses that once shattered price records and trumpeted his status as the richest man in town. The homes are now emblematic of something else. Real estate bargain hunters are descending on Chicago, after an exodus of a wealthy elite wiped out millions of dollars in value from the city’s most-expensive properties. Griffin sold two Chicago condos on Wednesday, one roughly 53% below what he originally paid. He’s so far offloaded four out of seven Chicago properties — all at a discount — and is trying to sell a fifth for $8.5 million. Other wealthy homeowners were also burned recently by declining prices. In September, Michael Jordan also found a buyer for the 32,000 square-foot suburban mansion he spent more than a decade trying to flip, after cutting its price by half.”

“‘We’ve lost at least 10 years of appreciation in a lot of the high-end markets,’ said Matt Laricy, managing partner of Americorp who specializes in luxury homes. Some of the high-end homes had far-fetched asking prices from the start and a lot of sellers were still ‘hanging onto pre-pandemic pricing,’ Laricy said.

“With many facing painful rebuilds that will cost thousands and take months, some homeowners are opting out by putting their storm-damaged homes up for sale ‘as is.’ A realtor in Redington Beach said don’t take low ball offers, because it will ultimately affect the entire neighborhood’s property values. ‘People are nervous about what their properties are worth, but believe it or not, their lot value is worth a lot of money so take that into consideration before selling it at a moment’s notice.'”

“Hankey Capital is claiming default on a Spanish Revival mansion in Brentwood, with a possible auction scheduled for the first week of January, The Real Deal has learned. The property, located at 306 North Cliffwood Avenue, comprises two lots measuring 18,570 square feet with frontage on Cliffwood Avenue, according to records from the Los Angeles Department of City Planning. The site contains a two-story mansion that was built in 1929. The owner is Logan Beitler, the president of commercial brokerage firm Beitler Commercial Realty Services, property records show. The list of distressed luxury properties in Los Angeles keeps growing. In August, Hankey Capital filed a default notice on Stella Nova, a Bel-Air mansion that sits on a 30-acre lot. The site comes with fully approved plans for a 40,000-square-foot estate, according to a listing on Zillow. The owner of the property, an entity managed by Juliana Kirlikovich, allegedly defaulted on a $14.8 million loan.”

“Nightingale Properties has lost control of another property, this time losing an office building a few blocks from Grand Central Terminal in Midtown Manhattan. In 2016, Nightingale bought the leasehold on the 15-story office for approximately $28M from Extell Development. But in 2023, Nightingale, engulfed in scandal, defaulted on its $30M loan from East West Bank. Nightingale CEO Elie Schwartz stopped making payments on the loan around the time when he was accused of misappropriating more than $50M from investors on the real estate crowdfunding platform CrowdStreet. Nightingale spent the years before the pandemic amassing a portfolio of buildings it claimed was valued at more than $10B, spanning 22M SF. Most of those investments were in office buildings, and the firm has lost control of large properties in Manhattan, Brooklyn and Philadelphia where it stopped making rent payments.”

“68 Balmoral Ave, Toronto. Asking price: $1,695,000 (June, 2024). Selling price: $1,690,000 (August, 2024). Previous selling prices: $1,699,000 (February, 2021). This updated townhouse backing onto St. Michael’s Cemetery was listed for $4,000 less than what the owners paid for it in 2021. Buyers were eager to look around none made an offer by the date in June set out by the sellers. Nonetheless, the property remained on the market at the same price until one buyer presented an offer $5,000 off the asking price, which the sellers accepted.”

“‘The [sellers] bought at the absolute peak of the market,’ said agent Andre Kutyan. ‘They did some improvements to the home – they redid the front elevation with all the stucco work and did some work on the inside as well – so they got, more or less, what they paid for because they improved it. If it was left as is, they would have gotten way less than what they paid in 2021.'”

“Two residential projects by Eskom, amounting to just under R1.1 billion, have been abandoned and left to waste. The Democratic Alliance (DA) is calling for the state-owned power utility to appear before Parliament to account for the abandoned R840-million Wilge residential development in Mpumalanga. This comes after 2023 reports about the R250 million squandered on housing project in Limpopo, which now stand vacant and neglected. he DA’s spokesperson for electricity and energy and MP, Kevin Mileham, said that his oversite visit to the development ‘revealed how the national electricity company wastes hundreds of millions of rands, while at the same time seeking to raise power prices for South Africans. After seeing this criminal waste, it is abundantly clear to the DA that Eskom has no regard for the public money it wastes, doing so with little to no accountability.'”

“New property listings are at a decade high in major cities, with PropTrack data revealing buyers are spoiled for choice and primed to bag a bargain in a number of markets across Australia. Senior analyst Karen Dellow said that at a national level, there had been a 21 per cent rise in listings from September to October, led by Melbourne, with a whopping 33 per cent increase seeing its busy spring market click up another gear. Adelaide was the next strongest with a 26 per cent monthly increase, followed by Brisbane (15 per cent) and Sydney (13 per cent). ‘October has proven to be a prime month for homebuyers, with new property listings reaching their highest level in over ten years, affording buyers more choice,’ Ms Dellow said. ‘Across the board, every capital city and regional market experienced a rise in new listings over the month (which) should help ease competition and allow buyers more time to make informed decisions.'”

“It could be a seven-year wait for people who bought a house at the peak of the market to not face a loss when they sell, Corelogic says. It has released its latest ‘Pain and Gain’ report, which shows 9.8 percent of people who sold an existing residential property in the third quarter of 2024 did so at a loss. In Auckland, it was more than 16 percent. Corelogic chief property economist Kelvin Davidson said the market had shifted in favour of buyers, which gave them more leverage in price negotation. ‘This follows a prolonged decline since the extended peak in 2021, when 99 percent of resales were profitable,’ he said. ‘Given the recent weakness in the wider housing market, it’s not surprising that both the frequency of profitable resales and the size of the gains have decreased.'”

“He said it was normal that shorter hold periods correlated with a higher chance of making a loss and that had been amplified in the past few years because prices were down about 20 percent from the peak in some paces. ‘After the GFC it took five years to get from peak to trough and back to the previous peak so six or seven this time is not totally unprecedented. It [might be] 2027, 2028 before we get back to the 2021 peak, It’s a bit of a slow grind.'”