The Aberration In Human History Might Have Been The Period Between The Global Financial Crisis And The Pandemic

A report from CNN. “It’s a situation many California homeowners are finding themselves in as insurers have dumped millions of policies in the state since 2020. ‘They stopped renewing what they thought was sh*tty risk,’ Los Angeles insurance agent Carla Ramirez said of the big carriers. Jamie Lite, who lives about an hour outside LA in Acton, got word she would be dropped by her home insurance on the same day her husband and son, both firefighters, were battling the blazes on the frontlines. In the last three years before she was dropped, Lite says her premiums went from $1,750 to $7,000 a year, costs she expects to rise even further with a new carrier. She feels trapped. ‘I couldn’t sell my house anyway; someone coming in to buy probably can’t get insurance,’ she said. ‘Who’s going to buy it? It’s a catch-22. You’re stuck.'”

“Celeste Vander Ham, who lives further south in Rancho Capistrano, paid $1,000 a year for insurance for the first 15 years in her home, but, after the 2018 Holy Fire, she says she was told by her insurance broker that her area had become a ’10’ for fire risk and that ‘nobody’s going to insure you.’ She and her husband were dropped from their wildfire insurance and had to go to the FAIR plan for coverage. They now pay a total of $10,000 a year for the policies needed to insure their home. The costs are crippling on their limited income. With just eight years left on their mortgage, they had to refinance their home, taking on another 30-year loan to be able to afford insurance. She now expects they’ll need to sell their house and leave the state. ‘It’s really heartbreaking,’ she said. ‘We’re going to be forced out because of homeowner’s insurance.’”

From KXTV. “To understand the trajectory of the Sacramento real estate market in 2025, appraiser and housing analyst Ryan Lundquist reflects on the challenges of the past two years. ‘2023 was basically our lowest year ever,’ Lundquist said. ‘And so the good news for housing in 2024 is we saw about 3,500 more new listings, and we saw about 1,100 new buyers compared to the previous year. We’re still missing about 34 percent of the normal number of buyers,’ he noted. ‘One thing I noticed this year is that we’ve also seen insurance issues sort of creep into some normal tract subdivisions where they’re not fire areas, but insurers are being strict or sending cancellation notices,’ Lundquist said. ‘And so this is one of the red flags, I think, for the California housing market right now.’ For homeowners considering selling in 2025, Lundquist offered some advice. ‘My hope for 2025 is that sellers sort of get on the same page as the market, and they start pricing their properties more reasonably and meeting buyers where they’re at,’ he said.”

From Bisnow. “In a transaction environment that has largely crawled on its hands and knees over the past two years, dealmakers pushing sales across the finish line are still getting increasingly crafty about how to finance them. Enter an old tactic that is newly back in vogue. Seller financing is on a steep rise despite recent interest rate cuts. Some lenders are also engaging in seller financing, said Scott Sherman, founder of Miami-based Torose Equities. He said he is evaluating several opportunities, and a few are ‘effectively short sales.’ Sherman said he could see this trend continuing in 2025 if the market remains tight. ‘The lender wants to get [the asset] off the books, but they also don’t want to take as big of a loss, so we’re basically going to them and saying, ‘Well, look, you want to maximize your value here, or maybe reframe it as minimize your loss. I need you to take back paper. I need you to take back financing,’ Sherman said. ‘Technically it’s seller financing, but it’s actually a lender doing it at X, Y and Z terms.'”

The Seattle Times in Washington. “In King County, the number of condos listed for sale in 2024 surged 25% from 2023. As rents have held steady amid an influx of new apartment construction, would-be condo buyers may find the prospect of renting cheaper than taking on a mortgage and HOA dues. ‘Condos in the city are plentiful. In fact, I would even say it’s a buyer’s market with regard to condos,’ said Seattle Coldwell Banker Bain broker Blair Stacks.”

Boston.com in Massachusetts. “How did the city’s condo market fare in 2024? We asked Nick Warren, CEO of Berkshire Hathaway HomeServices Warren Residential. Most sales went for slightly under the asking price, inventory is up, and the demand is still there, according to Warren. ‘There are a lot of people who want to sell, but it would be financially irresponsible if they do,’ Warren said, but ‘some people have reached the point of needing to sell.’ And despite experiencing a net loss of nearly 55,000 residents to other states, the housing demand in the city is still there — in some neighborhoods more than others.”

The Charlotte Observer in North Carolina. “Jeffrey Baldwin paid his homeowners association dues on time for over 15 years. So when he went online to pay his annual $700 fee in January 2023, he was shocked to see a request for thousands of dollars. The money accumulated, he discovered, due to a $100 fine for having a vehicle parked in front of his house that allegedly violated his northeast Charlotte neighborhood’s rules. But because the HOA never notified him of this charge, Baldwin said, it continued to add $100 fines every few months for the same violation. He said the foreclosure process has ruined his and his husband’s credit, and he may file for bankruptcy if necessary in order to go through the process of arguing the validity of the debt. ‘The clerk was ready to sell our house for $100,’ Baldwin said. ‘It’s been stressful.'”

“Baldwin’s situation is not uncommon in North Carolina. Reporting by The Charlotte Observer found in 2023 HOAs filed to foreclose on over 5,500 properties since 2018. In the state, HOAs have the power to force foreclosures on homes for any amount of unpaid debt, according to Sharon Bey-Christopher, a managing attorney with Legal Aid NC. ‘The North Carolina statute has holes big enough to drive Mack Trucks through it in terms of homeowner protection, and it gives the associations a lot of leeway,’ she said. ‘People can potentially lose their homes for a couple thousand dollars.'”

CBS Chicago in Illinois. “Imagine needing urgent repairs for a home that’s been in your family for generations after being duped by a man now serving time in federal prison. That’s the reality for one North Lawndale man who is now hoping that proposed legislation can help him renovate his beloved home. David Herron’s home in North Lawndale has been in his family for more than six decades. Among other repairs, it needs a new roof and a new heating system. His late mother, Effie Herron, had dementia when she signed what she thought was paperwork for home improvements by a man named Mark Diamond. What Effie signed was actually a reverse mortgage. On Thursday, Diamond was sentenced to more than 17 years in federal prison for defrauding seniors like Effie in a reverse mortgage and home repair scheme. David said the reverse mortgage his mother signed has since been sold, but he’s still getting letters in his mother’s name, saying nearly $300,000 is owed. Effie never saw a dime of the money from the reverse mortgage she signed. ‘Never. Not one penny,’ David said. And no repairs were ever done.”

The New Haven Independent in Connecticut. “A Fair Haven foreclosure auction brought out no new bidders — leaving the property to fall into the hands of the federal government, and the current tenant bracing to find a new place to live. That zero-participant auction took place at noon on Saturday on the sidewalk in front of the three-family house at 52 Perkins St. The house had been owned since 1976 by Anthony and Josephine Grillo, both of whom are now deceased. The only bid entered in the auction was the opening bid, of $327,000, by the Secretary of the federal Department of Housing and Urban Development (HUD). The federal agency first filed a foreclosure lawsuit for this property in December 2023.”

“City land records show that the Grillos bought the house for $38,000 in 1976, about $210,000 in today’s money. In 2005, they took out a reverse mortgage for $382,500 with a company called Financial Freedom Senior Funding Corporation. That mortgage was taken over by HUD in 2009. As of October 2024, per the foreclosure lawsuit’s court records, the total remaining debt on that loan was $323,000.”

Bisnow on Georgia. “Brazilian retail mogul Michael Klein’s grip on an Atlanta office building could be loosening after falling into delinquency on the building’s mortgage. By the end of 2022, The Landing’s net cash flow was in the red by more than $1.2M, according to Morningstar. As of September, the net cash flow was tracking at negative $664K. According to Fulton County records, the building’s appraised value dropped 72% to $11.75M between 2023 and 2024.”

Tech Crunch. “Many proptech startups, born and funded during the low-interest-rate heydays, are in the throes of struggle. With investments into U.S.-based real estate startups falling from $11.1 billion in 2021 to $3.7 billion last year, according to PitchBook data, some are selling themselves off, while others are closing shop. Rent-to-own proptech startup Divvy Homes is being acquired in a fire sale by Charleston, South Carolina-based Maymont Homes, Fast Company reported last week. Maymont is a division of Brookfield Properties. EasyKnock abruptly shut down, NPR reported last month. This closure followed several lawsuits filed against the proptech company and an FTC consumer alert about its controversial sale-leaseback models, which involved buying homes from the owners and simultaneously leasing the homes back to them.”

“For companies like Divvy Homes, which purchased homes as part of its business model, high rates were devastating, limiting its ability to purchase homes and make money off those buys. EasyKnock’s business model also involved buying homes and renting them. But its arrangement attracted homeowners with poor credit scores because it gave them access to quick cash, along with the option to repurchase the home at a future date. High interest rates also hurt it, as it took on debt to finance its operations, sources familiar with the company told TechCrunch. But EasyKnock had additional problems. More than two dozen lawsuits were filed against EasyKnocks, and Michigan attorney general alleged that the company used ‘deceptive practices’ by purchasing homes from those in financial stress at low prices and then charging them high rents.”

The Financial Post. “Remember the ‘new normal’ after the great financial crisis? One analyst thinks it’s over and we’re heading back to the ‘old normal,’ which means a world with more volatility, higher interest rates, a lower Canadian dollar, but with some silver linings, suggests Karl Schamotta, chief market strategist at Corpay Inc. ‘The excess global liquidity that was previously suppressing interest rates and raising asset values is now beginning to shrink, and so that means that interest rates should settle closer to their long-term averages’ in the range of about 4.82 per cent, he said, basing that number on 10-year United States Treasury yield data going back to 1790.”

“‘The reality is that although the Bank of Canada does set benchmark policy rates in Canada, the global cost of borrowing is set in the United States,’ he said. ‘It wouldn’t be a shock if we were to oscillate around the long-term average for 10-year Treasury yields.’ So, what was the new normal and should we be sad that it’s over? The term, resurrected from the early 1900s by McKinsey & Co., was reportedly popularized by famous bond investor Bill Gross of Pacific Investment Management Co. Schamotta also said higher interest rates are more likely, meaning ‘asset prices are not outstripping’ economic growth, so, for example, the cost of housing is not wildly outpacing the increase in people’s pay. ‘I’m not going to sing Kumbaya here and say that it’s all brighter days,’ he said. ‘But the broad point is that the aberration in human history might have been the period between the global financial crisis and the pandemic. I see what we might be getting back to is much more normal.'”

The Daily Post in the UK. “Wales has reached market saturation for holiday lets, operators have claimed. As more are opened, it’s becoming harder to turn a profit in a sector already battling rising costs and, in 2024, poor weather. Overshadowing everything is the sector’s new 182-day occupancy rule which, if not met, can mean punitive extra costs. The 182-day rule, rising costs and a glut of holiday let owners piling into the Welsh market, were the biggest challenges being felt. One operator told the survey: ‘Our occupancy was well down in 2024. One major contributor is the 10 new self catering units/properties that opened this year within a mile of us.’ Another wrote: ‘The self-catering market is saturated with and an over-supply (of lets). The sector has been allowed to run out of control by the government for far too long. Now it’s in a bad state.'”

“One business wrote: ‘People seem to be booking later, and many are wanting short breaks. It’s very stressful trying to decide whether to accept them, or hold out for more nights. With every short break I take or decline, I’m gambling losing half my profits on the council tax fine.’ Another added: ‘Guests want short breaks. We can’t afford to offer them because we’d fail 182 days. The Welsh Government has applied general purpose weedkiller to the whole sector rather than target the properties they would like to free up for housing.'”

The Daily Mail. “A building company has gone bust in South Australia leaving multiple homeowners with half finished properties they had already handed over large sums of cash for. JAC Homes was placed into liquidation this week, according to documents filed to the Australian Securities and Investments Commission, with clients left unsure if they will receive any of their money back after assets are sold off to pay debts. Some of JAC’s customers had been complaining for months that their properties were left unfinished or had building defects that were not rectified. First homeowners Ahmed Tayba, 32, and his partner Kelly moved into their four bedroom JAC home last year and claim they quickly found it was riddled with problems that they estimate will cost $50,000 to repair.”

“‘It’s a nightmare, it makes you not want to do it again,’ Mr Tayba told The Adelaide Advertiser. They said the issues included the house had no garage door or driveway, had damaged bricks, cracked tiles, gaps in the walls and no insulation. The couple added they were having trouble getting contractors to even look at the issues because they ‘don’t want to touch another builder’s home.’Another customer Simon Wilden said his house also had no driveway or fences and a rainwater tank had been left unconnected in the backyard. He added that he had ‘chased the site supervisor for weeks’ after his family’s move in date kept getting pushed back. The builder is understood to have about 10 homes under construction.”

The Daily Post. “You may associate Mongolia for its glittering lakes and vast expanses of hilly terrain, but once upon a time, a section south of Ordos was carved out for China’s next big mega city. Once envisioned to house over a million inhabitants, the new town of Kangbashi in northern China is now home to merely a tenth of its projected population. In the early 2000s, Chinese government officials invested £819 million into the city’s development in Inner Mongolia. Empty high-rise buildings loom over silent streets, creating an atmosphere that many visitors have called ‘post-apocalyptic.’ The outcome, as per French photographer Raphael Olivier, is a ‘very beautiful city, full of contradictions.'”

“‘There’s the super-modern edgy Ordos Museum [by MAD Architects], the more boring, modern Chinese residential blocks, unfinished projects from Ordos 100 [a project by Swiss firm Herzog & de Meuron and Chinese artist Ai Weiwei to invite 100 architects from 27 countries to design for Ordos] as well as the influence of Soviet-style architecture,’ Olivier added. ‘This mix is only really possible in China because it’s the only country that is both communist and has the money and power to attract so many architects from abroad.’ Olivier argued the ‘ghost town’ label doesn’t capture the ongoing growth of the city. ‘Foreigners consider the city to be abandoned,’ he said. ‘Chinese consider the city to be still developing.'”