These Premium Locations Are Now Seeing The Deepest Falls

A report from Reuters on California. “Deisy Suarez-Giles lost the four-bedroom Altadena home she bought in 2021. She and her husband, Keith Giles, have secured a hotel room in downtown Los Angeles near their spa business at about $170 a night, a sort of employee discount because the hotel uses their masseurs. On Friday, they shifted to a free rental apartment donated by Airbnb for 10 days. After that, they do not know where they will end up. She and her husband still have to pay the mortgage every month on their destroyed home, on which they still owe $850,000. Mortgage payments are more difficult now because they had partly relied on the rent paid by a tenant living in a studio at the back of the house. And their spa business is suddenly slow. ‘We’ve been struggling and now with the fire it just feels like a ghost town,’ she said. ‘Nobody’s mindset right now is ‘spa’. She is waiting to hear from the insurer on how much of their expenses over the next 12 months it will reimburse.”

From NBC News. “When a massive wildfire tore through Sarah Mapel’s Northern California neighborhood in the late summer of 2020, she considered herself lucky. Firefighters saved her historic home, built in 1898, using water from a nearby creek. But making her ash- and toxin-filled home safe to live in again turned into an epic, yearslong legal battle with her insurer: the California FAIR Plan Association. Mapel’s problems with FAIR Plan began when her insurer sent her a $1,151 check for a repair estimate on her home that exceeded $50,000, documents show. For months, other challenges and frustrations followed. More than 3,600 policyholders in Altadena, Pacific Palisades and other parts of greater Los Angeles have submitted claims to the FAIR Plan to try to recover some of what they’ve lost, it said in a Friday update. Mapel has some advice for them: Get ready for a fight. As the process dragged, the FAIR Plan cut the allowance it gave Mapel for rent payments while her home awaited remediation. Meanwhile, her neighbors with private insurance were receiving help, she said.”

“Mapel eventually sold her Santa Cruz County home during her insurance battle and now lives in San Francisco. She is no longer a FAIR Plan customer because she rents. Her advice to those beginning the claims process with the FAIR Plan: ‘Stay resilient and stay strong and stand up for yourself.’ The most important thing to understand about the FAIR Plan, she added: ‘They’re not actually there for you.'”

WLRN in Florida. “‘The problems in condos has been a slowly unfolding crisis. It did not start with Surfside. For years, owners did not … require any inspection of these aging buildings,’ said Sen. Jennifer Bradley, R-Fleming Island. ‘It’s a reality that no one wanted to exist, but it certainly was one that the system undeniably allowed to exist.’ Insurance and banking expert Tara Stone, CEO of Stone Building Solutions, said her company was finding more ‘wear and tear due to lack of maintenance’ than design flaws or structural integrity issues in the condos it evaluated. Stone said the underfunding of reserves kept by condo associations might explain such poor maintenance decisions. ‘I would say the primary factor all has to do with delayed maintenance, because the money is not in the bank,’ Stone said.”

From McClatchy News. “A man accused of repeatedly threatening officials in Utah over the foreclosure of his home, including saying he’d ‘open fire’ on and ‘spit hot lead’ at people who showed up to evict him, will spend five years behind bars, federal prosecutors said. Ryan Gregory Bracken, 44, of West Valley City, also was sentenced to three years of supervised release, the U.S. Attorney’s Office for the District of Utah said in a news release. Bracken represented himself in court and couldn’t immediately be reached by McClatchy News on Jan. 16. In one phone call to the Salt Lake County Sheriff’s Office, Bracken said he’d ‘open fire on’ officials who showed up to serve eviction notices, the court filing said. ‘I will spit hot lead, 7.62 at their (expletive) faces. And I am a crack shot,’ he said during the call, according to the filing.”

The Sun News in South Carolina. “The average price of a one-bedroom apartment in Myrtle Beach in December 2023 dropped to under $1,000, a price that may seem too low to be true. Apartment List released its average rent prices for hundreds of areas across the country. For Myrtle Beach, the average one-bedroom is $974 a month and Horry County is $930. Chris Walker, a Booe Realty long-term property manager, said Apartment List’s average seemed low. She sees one-bedrooms rent for $1,000 to $1,300 in the Myrtle Beach area. Recently, she’s also seen an oversupply in higher end apartments.”

The Philadelphia Inquirer in Pennsylvania. “They call themselves Speed to Market, a group of life sciences and real estate professionals who find, build and sell manufacturing space for biotech employers around Philadelphia. By 2022, ‘we were tracking more than 2 million square feet of potential life science facilities’ in the area, says one of the group’s leaders, Tim Kelly, a partner in Malvern builder Norwood Co. But more than half those projects have since been canceled or delayed, ‘and we’re not sure how many of those [remaining] will come to fruition,’ Kelly says. ‘There’s overcapacity,’ said Eric Hacherl, a biopharma start-up executive. ‘In the early 2020s, a lot of these [start-up gene and cell therapy] companies were getting money thrown at them,’ Hacherl recalled. ‘Contract manufacturers wanted to make products for them — they saw green everywhere.'”

“Old factory sites from Princeton to Wilmington were proposed as biotech lab, manufacturing and office centers. ‘Then funding dried up,’ Hacherl said. ‘A lot of start-ups went out of business or shrunk their pipelines. A lot of really good products got shelved. So the contract manufacturers are now starving for business until money starts flowing again.’ Hacherl said biotech boosters are trying to keep their courage up. ‘We told each other interest rates had to drop, or that we had to get through the election — whoever wins — so the uncertainty would go away.’ ‘A lot of landlords aren’t lending anymore for improvements,’ said Tim Conrey, managing principal of the Philadelphia office of Scheer Partners, who arranges real estate leases and purchases for life-science companies. ‘Why give a tenant $500 a square foot for improvements on a building that right now is worth maybe $100 a square foot?'”

The Globe and Mail in Canada. “11 Forestgrove Dr., Ottawa. Asking price: $1,490,000 (September, 2024). Previous asking prices: $1.55-million (July, 2024); $1.675-million (May, 2024). Selling price: $1.45-million (October, 2024). Previous selling price: $69,900 (July, 1997). This three-bedroom house on a two-acre lot roughly 30 kilometres southwest of Parliament Hill barely had few visitors when it was listed for $1.675-million initially and then for $1.55-million over the summer. There were two offers, but the sellers reached an impasse in negotiations both times. The price was dropped again this fall and one of the previous bidders circled back to clinch a deal at $1.45-million. ‘We did a price adjustment, and a buyer came back for another viewing, then they submitted an offer,’ said agent Raymond Chin. ‘It tells you buyers are really sensitive about prices, regardless of how much they love the home.'”

From GMA News. “The oversupply of condominium units in Metro Manila, which has surged to an equivalent of 34 months, can be attributed to a ‘mismatch’ between inventory and demand in the Philippine real estate market, according to realtor and Filipino Homes founder Anthony Leuterio. Leuterio said the country’s real estate sector is facing a ‘significant challenge of a persistent mismatch between developer inventories and buyer demands.’ The realtor pointed to an ‘oversupply of real estate inventory,’ particularly in Metro Manila.”

“However, he said the problem lies not in the lack of buyers, but rather in the fact that the products being developed do not align with what buyers actually need. One major issue the realtor identified was the industry’s reliance on flawed market studies. Developers often base their decisions on data analysis that is skewed toward their perspective, rather than considering the broader market, he said. ‘The problem in the whole country is that they are not looking at the marketing side—the unmet demands,’ he added. ‘The studies are focused on developers, not on the actual needs of the market.’ Leuterio said that such an approach led to developers producing high-cost properties in locations that do not match the needs or purchasing power of buyers.”

Domain News in Australia. “House prices fell or moved sideways in a string of premium Melbourne suburbs in 2024, resulting in a buyer’s market. The median house price in Toorak dropped by 26.4 per cent to $4.2 million last year, the Domain House Price Report for the December quarter. In South Yarra and Clifton Hill, house prices fell by more than 14 per cent, while houses in Armadale recorded declines of 12.4 per cent in the 12 months to December. The prestigious Mornington Peninsula town of Sorrento dropped 16.4 per cent to $1.88 million. Blairgowrie posted a drop of 9.8 per cent. Domain head of research and economics Nicola Powell said softening house prices created a buyer’s market in 2024. Powell said there was still a high level of housing stock available to Melbourne buyers broadly, even though many upper-market vendors were hesitant to sell amid the oversupply and softening prices.”

“‘You don’t want to sell your home for less than you pay for it,’ she said. ‘When we really do start to see price rises, we will see it in areas like these premium locations that are now seeing the deepest falls. What you tend to find in markets like Melbourne is the premium end of the housing market does lead price cycles, and what that means is it tends to see greater rates of growth during an upswing, but it does appear more vulnerable when we see softer market conditions.'”

“Sam Nottle, 33, upsized from his unit in St Kilda East to a house in Albert Park at the end of 2024 and says the purchase was all about timing. ‘It was a decent time to buy,’ Nottle said. ‘I think it’s fair to say we were able to get a better price at the time.’ Nottle, a lawyer, said while he wasn’t waiting around for significant price drops, he knew that softening house prices around Melbourne meant he could be paying less than if he had bought a year ago. He said buying after the COVID-19 housing boom meant he wasn’t overpaying for the property.”