Bottom Line: Buying The Home Was A Disaster

A report from Fox 13. “Homebuyers in Utah continue to navigate a challenging real estate market. Brian Thompson, a new homeowner, says while there were numerous options available, many were ‘way overpriced.’ To stand out in the crowded housing market, Thompson crafted a personal letter to the sellers. ‘I told them how I was a teacher, and my wife works in education and her parents had worked in education, so that’s kind of why they chose our offer out of the six,’ he explained. Prospective home buyers also have to worry about the Federal Reserve. The Federal Reserve has signaled that rates will largely remain unchanged into 2025. Utahns like Thompson persist in their home-buying journeys, holding onto hope for relief in the future. ‘I don’t know if we necessarily want prices to drop too much, because that’s a downturn in the economy,’ Thompson said. ‘And a lot of people will be in trouble. But if interest rates drop, it would help everybody.'”

Boston 25 in Massachusetts. “Just over two weeks after Success Real Estate suddenly shut its doors on December 14th, three lawsuits have been filed against the agency with offices in Marshfield and Braintree. They claim the agency’s owner, Stephen Webster, stole and/or embezzled hundreds of thousands of dollars that were supposed to be in escrow. According to attorney Bob Ahearn, who is representing the plaintiffs, there are three different categories of why they’re owed money: 1) realtors who never received commission checks after closings, 2). bounced commission checks dating back to September, and 3). people who’ve loaned money to Success Real Estate Owner Stephen Webster. ‘I’ve got one client who has 15 commission checks that have bounced, and they total over $100,000,’ Ahearn explained.”

“He believes the money owed is just the tip of the iceberg, they’ve heard from realtors who have closings coming up in the next few weeks where there’s supposed to be money held in escrow at Success Real Estate to be brought to the closing. At this point, the closings aren’t going to happen unless something drastic does. ‘It’s going to affect not only just the agents themselves for their commissions, but other innocent buyers and sellers of their homes,’ Ahearn says. ‘It’s going to get really ugly; I think.’ Ahearn isn’t optimistic that the plaintiffs will get paid 100 percent of the money they’re owed because Webster likely doesn’t have it.”

The Denver Post. “Although some national surveys show residential real estate commissions may be dropping, agents in metro Denver describe few changes, with sellers still covering the full tab for the other side most of the time. Agents representing buyers were required to have a written agreement in place stating the terms of compensation, something Colorado has long required. ‘Three years ago, homes often went under contract in a matter of days, resulting in a very sparse inventory,’ said Bret Weinstein, CEO of Guide Real Estate. ‘When sellers are so in control, they don’t feel obligated to offer any compensation to a buyer agent.’ Right now, if they want to find a buyer, sellers need to offer to cover the buyer agent commissions, he said. One reason the lawsuits even came about was that there were a lot of agents who didn’t know what they were doing, he said. ‘The focus shouldn’t be on buyers and sellers making more money, but on real estate agents being worth the money they are being paid,’ he said. ‘There’s been zero conversation on that.'”

The Daily Montanan. “In front of a standing-room only crowd, the Flathead County Commissioners voted Tuesday to turn down a $9 million investment in affordable housing provided by the state and private entities, one of just three counties to vote against the homebuyer assistance program. Montana Rep. Tanner Smith, a Republican from Lakeside, voted against HB 819 during the session and said it was ‘rammed through at the governor’s request.’ ‘A lot of people say, ‘This isn’t politics,’ but this is politics. This is Democrat policies in California that created the exodus to Montana,’ Smith said. ‘As Republicans, what we can’t do is have a knee-jerk reaction to fix a Democrat policy problem by more Democrat policies.'”

The Mercury News. “Developers who have reaped millions of dollars from an affordable housing program for middle-income renters with sometimes little-to-no discounts from market rents have spent hundreds of thousands on lobbying and campaign donations in recent years in a bid to keep lawmakers from imposing regulations. Since 2021, two developers of these projects, Catalyst Housing of Larkspur and Waterford Property Co. of Newport Beach, have spent $610,000 on lobbying legislators and government officials about the value of their ‘essential housing’ strategy in addressing California’s affordable housing shortage. About half of the units at the 13 Northern California essential housing properties charge higher rents than comparable nearby market-rate buildings, the Bay Area News Group previously reported. Assemblyman Chris Ward, a San Diego Democrat, introduced a bill, AB 1850, to establish stricter affordability standards and cap developers’ fees on the essential housing deals — what he hoped would prevent ‘abuse’ by some for-profit players that ‘snookered’ cities into giving up property taxes without delivering on middle-income housing promised.”

The Fresno Bee. “As we turn the calendar into a new year, my unsolicited advice for Democratic leaders in Sacramento is to print up some hats with this slogan emblazoned on them: Make California Affordable Again. Yes, it is a blatant rip-off of MAGA sloganeering. But putting such a mantra atop the foreheads of Democrats in the Assembly, state Senate and even the governor’s mansion (though Gov. Newsom has moved his family to Marin County) might get the political leaders to actually work on this defining issue. And it might just keep them in office longer than ignoring or avoiding the elephant in the room, namely how it costs too much to live in California.”

“Two recent news reports highlight why the famous James Carville line of the Clinton-era — ‘It’s the economy, stupid’ — must become the top priority of California’s leaders, even more than opposing whatever policies soon-to-be President Trump puts in place. The San Jose Mercury News analyzed the Bay Area’s voting patterns in the November presidential election. What the analysis showed was that the lowest-income cities in the Bay Area — San Pablo, Richmond, Antioch, Oakland, San Leandro, Pittsburg and East Palo Alto — ‘all tallied at least 50% more Trump votes in 2024, while the highest-income cities and towns showed the least change overall.’ As reported by Sacramento Bee staff writer Andrew Sheeler, Madrid and Binder surveyed 600 Latino California voters, in English and Spanish, by phone and online, between Nov. 18-21. The findings? Affordability was a top issue for California Latino voters. They were either extremely or very concerned about the price of housing (86%), groceries (87%), gas (75%), and electricity and utilities (80%). Another 74% were extremely or very concerned about high taxes in California.”

The Miami Herald. “When Miguel Zablah bought his five-bedroom home in Miami’s leafy Shenandoah neighborhood in June of 2020, he said he paid $7,000 a year for homeowner’s insurance. The house, built in 1923, sits on high ground and has survived a century of famously volatile South Florida weather. But in just four short years, Zablah said his homeowner’s insurance premium has more than doubled to $15,000 a year. Quotes for next year’s premiums are looking even worse. ‘Some insurance companies are now quoting me at $20,000, $25,000 on my house, which is ridiculous,’ said Zablah, who works in private equity. Using a dataset that links insurance policies with mortgages for 6.7 million borrowers, Shan Ge, an assistant professor of finance at New York University and two other researchers established that spikes in insurance premiums led a significant number of borrowers to either pay off their mortgages early or fall behind. Obviously, many homeowners can’t afford to accelerate their mortgage payoff. The researchers found that the effect of premium increases on mortgage delinquency is twice as large for borrowers with a high loan-to-value ratio, meaning they owe a lot of money on their homes compared to the home’s value.”

The Arizona Republic. “Question: My sister and I paid $270,000 for our first investment home. It’s far north of the Valley, off of Interstate 17. The mortgage from a private lender was $240,000 with 12% interest. To save costs, we never hired a property manager. The plan was that my sister and I would rotate monthly as property managers. The problem is that my sister is lazier than I am, and neither of us was good at driving to show the home to prospective tenants or meet repair contractors. One time, I drove to the house to meet a prospective tenant who didn’t show up or even answer texts. Bottom line: Buying the home was a disaster, and we lost the home to foreclosure by our private mortgage lender. The problem now is that we are receiving bills from the Maricopa County Assessor’s Office for delinquent property taxes. Are we obligated to pay these delinquent property taxes?”

“Answer: No. Property taxes are obligations of the property and are not personal obligations of the owner of the property. If property taxes are not paid, however, the property will go into foreclosure by the County Assessor’s Office.”

Storeys in Canada. “As far as year-ahead predictions go, industry observers say not much will change from this year to next in the Vancouver housing market, despite interest rate drops. Realtor and investor Bryan Yan, who has a solid record of market forecasts, expects a buyers’ market to continue. ‘Most places are selling at or below assessment, about 5% below assessed value right now,’ said Yan. ‘So, if your listing agent sells above assessment, you should buy them lunch, because that’s not happening.’ Developer and consultant Michael Geller said that the experienced players in the development industry will target end-users such as first-time buyers, move-up buyers, and empty-nesters. The investor is no longer the focus of a presale program, he said. The glut of purpose-built rental units coming online, combined with restrictions around foreign buyers and short-term rental platforms has taken the steam out of the investor-driven presale condo market.”

The Herald Sun in Australia. “The Mornington Peninsula is back on buyers’ radar while the market slumbers during summer, with plunging prices, limited competition, and a lifestyle that is ‘impossible to resist. ‘In Sorrento, median prices have softened from $2.2m to between $1.6m and $1.9m, opening up some incredible buying opportunities,’ said Fletchers Mornington Peninsula’s Nick Callander. ‘Buyers have plenty of choice, which is unusual for the area.'”

Wall Street Journal. “China’s go-go days are behind it as the world’s second-largest economy struggles with the bursting of the biggest real-estate bubble ever. Now, China’s goal of overtaking the U.S. as the world’s largest economy might take decades longer than Beijing expected—if it happens at all. China’s economy today is burdened with excess: Millions of empty or unfinished apartment blocks, trillions of dollars in debt straining local governments and ballooning industrial production driving an export surge that is igniting trade tensions worldwide.”

“China’s property meltdown has since 2021 destroyed around $18 trillion of Chinese household wealth, according to an estimate by Barclays, eclipsing the losses suffered by Americans in the financial crash of 2008-09. That hit, along with the trauma of Beijing’s heavy-handed response to the Covid-19 pandemic, helps explain why Chinese consumers aren’t spending freely. China’s economy has for decades been powered by heady levels of investment. At first, that yielded modern infrastructure and propelled the expansion of China’s manufacturing engine and its megacities. But sticking with that strategy year after year has meant China today is beset by colossal debts, unneeded apartments and industrial overcapacity.”

“China’s real-estate boom was unprecedented—and so is the ongoing bust. New construction and sales have cratered since the government took steps to rein in the bubble in 2020. It has struggled to stabilize the market, despite measures to ease purchase restrictions and offer cheap credit to would-be buyers. One sign of the boom’s excesses: There are as many as around 80 million vacant units in China, according to the latest estimates at the end of November, equivalent to half the total housing stock of the entire U.S.”