The Days Of Making A Quick Buck From Speculative Property Purchases Have Gone

It’s Friday desk clearing time for this blogger. “Thousands of people in Los Angeles County have lost their homes. Beverly Allen’s condominium, Dove Creek Condos, located across the street from Eaton Canyon, was one of the many properties destroyed in the blaze. As Allen and many others in the community assess the damage, they’re discovering a difficult reality: many homeowners are underinsured. ‘A lot of us are learning we are sorely underinsured,’ she said. ‘We’re concerned whether the money we’re getting from insurance will last the two years it’s supposed to. If it doesn’t, we’ll have to pay mortgage and insurance.'”

“One year ago, ABC Action News committed to covering the State of Insurance in Florida, helping you navigate rising rates, dropping policies, and denied claims. We first spoke to Pinellas Park single mom Marisa Borgia in January 2024. Then she told us she had to get two part-time jobs to afford her rising property insurance costs. Then, she told us from 2020 until 2023, her insurance rates doubled not once, but twice. Almost exactly one year later, we came back to Marisa to see if, despite insurance leaders’ claims that the market is improving, her rates are still rising. ‘This year it went up to $3595,’ she said. ‘Another $600 in 2024. So not that we doubled again, but it’s still a huge increase.’ Borgia relying on savings to now get by. ‘It’s stressful when you try to figure it out. Alright, where do I need to cut down? Less internet? Do I need to cut food budget? Where can I cut? Where can I decrease expenses to make things work?'”

“A Lowcountry-area attorney says dwindling building quality is leading to hundreds of lawsuits annually. Over the past year, multiple stories have come to light about complaints against giant home building companies like Lennar, Stanley Martin and D.R. Horton. It’s something Mac Deford, a Mount Pleasant homeowner, knows firsthand. ‘The initial issues with the home builder — they had very inconsistent responses, delayed responses,’ Deford says. ‘They were really trying to sway just by telling us this is completely normal.’ ‘It’s been a frustration,’ Amanda Schroeder, who lives in that same complex and is also a part of the lawsuits, says. ‘This is my first home and it’s supposed to be a period of excitement and it has really just been nothing but stress and frustration. Fogel and Lennar have been very slow to respond.'”

“‘One of the things that we’re running into is what I like to call the perfect house trap,’ says John Hayes, an attorney who specializes in construction defects. ‘Instead of the mouse trap, it’s a house trap. We have a lot of owners who have bought houses, have put basically all their savings are the biggest purchase they’ve ever had in their life and they have houses that have structural problems or construction defects and they can’t sell them and that presents a really bad problem because they don’t have the money to fix them.'”

“While visiting their family out of state for the holidays, Daniel and Jocelyn Medrano offered their home in Omaha, Nebraska, as a vacation rental on Airbnb. The couple kept a close eye on their home through surveillance cameras they had installed outside a month prior. Once the guest arrived, trouble soon followed. ‘All of a sudden, he brings two or three other men to the house that are not on the reservation,’ Jocelyn Medrano said. ‘So, then I have to message him, and I am like, ‘Hey you cannot do that. That is against Airbnb policy.’ But their worst fear became a reality – the guests were turning their home into a meth lab, which police later confirmed. The Medranos were relieved when the suspects were arrested, but unfortunately, their nightmare wasn’t over. Their house was trashed, and it’s going to cost them a fortune to clean up. The couple said their home is unlivable and requires a deep clean, leaving them with a massive cleaning bill. ‘Our very first preliminary estimate they gave us – without replacing furniture, without replacing paint or anything – would be over $26,000,’ Jocelyn Medrano said.”

“Just over six months after businessman Don Vaccaro signed the paperwork on his new property on Nantucket’s coast, the beach house is no longer. On Tuesday, the three-bedroom home was demolished after being condemned by the town after the coast eroded to within five feet of the structure, according to a filing by the town’s conservation commission. Just last year, the property was valued at nearly $2 million by the town’s assessor. Vaccaro spent only $200,000 on it, but its upkeep cost several hundred thousand more. Vaccaro says that in hindsight his purchase of 28 Sheep Pond ‘Road was a ‘terrible investment.’ ‘Not only the $400,000, but the time suck of having to deal with it,’ Vaccaro wrote in an email to Business Insider.”

“A dozen realtors have filed suit against a Marshfield man who abruptly closed his real estate company last month and allegedly withheld nearly $500,000 in commissions and loan repayments from them, according to legal filings. The lawsuits were filed Dec. 30 in Plymouth Superior Court against Stephen D. Webster, 62, and his now-defunct company, Success Real Estate, which he closed Dec. 14, announcing the move to his staff by email. Some plaintiffs also allege that Webster and his company induced them to make personal loans based on false pretenses. One plaintiff wrote to a client on Dec. 17 that Webster had closed his company, saying ‘I believe he is gonna end up in jail and I have been told there is no money,’ records show.”

“It’s a bittersweet day for Barbara Quintero-Bailey and her sister, Brenda, after a judge sentenced Mark Diamond to 17 years in prison for scamming their mother, Etta Quintero, and other elderly African American homeowners out of millions of dollars, causing them, in many cases, to lose their homes. The now-68-year old Diamond pleaded guilty in May to several counts of federal wire fraud. Prosecutors say Diamond targeted Black homeowners on the Chicago’s West Side, who were often seniors or disabled. They say he ran a massive home repair scheme by first gaining the trust of his victims to trick them into reverse home mortgages. Lawyers representing nearly 50 of the victims say the families may never be made whole. ‘None of the lenders have been held responsible. The entire system has broken down,’ said Sam Tenenbaum, with Bluhm Legal Clinic. Diamond’s four co-conspirators have also been charged, and have pleaded guilty to fraud.”

“Preconstruction condo prices fell 15 per cent in the Toronto region in the final quarter of 2024, as sales plunged to their lowest level in nearly three decades and a glut of unsold units hit a record high. It was the worst year since the late 1990s for the preconstruction condo market, with investors souring on buying new units because they are no longer profitable. In the city of Toronto, the average asking price was $1,153 per square foot in the fourth quarter compared with $1,407 a year earlier. If the pace of sales remains at 2024 levels, Urbanation said it would take more than five years to clear the glut of inventory. The new condo market just experienced its toughest year in three decades,’ said Shaun Hildebrand, president of Urbanation.’ Mr. Hildebrand predicted that this year will be another tough period for the preconstruction condo market as investors continue to bleed cash on their investments.”

“Spain’s real estate market is experiencing a major boom. In the first nine months of 2024, property prices rose by an average of 9%, according to the House Price Index. In response, Prime Minister Pedro Sanchez has proposed a controversial measure: a 100% tax on property purchases by non-EU nationals without residency in Spain. Mark Stücklin, who runs the Spanish Property Insight website, says there are ‘no speculators in the Spanish property market.’ Citing high transaction costs, red tape and other obstacles facing property buyers, Stücklin told DW: ‘You can’t make money on property in Spain — it’s a mug’s game.'”

“Switzerland has annual quotas on how many homes can be sold to foreign nonresidents. Before buying in Denmark, foreigners need government approval, which is usually given only for primary residences or properties for business purposes. ‘The days of making a quick buck from speculative property purchases have gone because of the regulations and the restrictions that are in place in many of these markets,’ Kate Everett‑Allen, head of European residential research at the London-based real estate consultancy Knight Frank, told DW.”

“The owners of apartments inside a troubled high-rise in Western Sydney are on the brink of ruin, unable to cover an $18 million bill to replace the building’s highly flammable and potentially deadly cladding. And the developer behind the complex at 29 Hunter Street in Parramatta is long gone, with NSW Police having issued a warrant for his arrest in 2023. Ankit Gupta is leading a coalition of owners in seeking a lifeline from the New South Wales Government, saying ‘we did everything right’ in trying to fix the building’s serious defects over the past several years. ‘He handed over a building that did not comply with Australian law and left owners with a nightmare scenario,’ Mr Gupta told news.com.au.”

“Owners have coughed up about $1 million in expenses for lawyers and consultants over the years, depleting the strata committee’s sinking fund. Its dire financial position, as well as eye-watering ongoing costs related to maintenance, special levies every few months and hefty insurance premiums, has seen almost two dozen owners default on their bills. ‘We’re getting strata bills for thousands and thousands of dollars every quarter,’ Mr Gupta said. ‘It’s a nightmare. The mental stress has taken a toll and we have no way out.’”

“The values of properties in the building have plummeted in the wake of the saga and those who’ve tried to sell face difficulty finding a buyer willing to take on the risk. ‘The government told us we could volunteer for Project Remediate, which would give us a 10-year, interest-free loan, but the problem is that many people simply can’t afford to pay the repayments,’ Mr Gupta said. ‘Some people have simply run out of money. The loan isn’t an option. We need a lifeline from the NSW Government but they won’t come to the table. It’s been two years since Toplace went into administration and we’re still in limbo. We’re talking about single mums, retirees, young people, families, immigrants … the level of distress is very high.'”