There Can Be Several Reasons Behind A Price Reduction

A report from KFSY in South Dakota. “As the Sioux Falls area continues to grow, finding a home can be a challenge. There is an opportunity, though, to get into the housing market due to an oversupply of a specific niche of housing. Realtor Daniel Brunz sees a trend that could help those who want to buy, or downsize. ‘The twin home and townhome market, because builders built so many of both of those, we’re now seeing an influx of inventory, and that’s driving prices down,’ said Brunz. With the new townhome prices being reduced, the existing townhomes are fighting to get buyers’ attention. ‘And they’re getting many discounts on concessions, allowances for upgrades, and some cash allowances to help with closing costs,’ said Brunz.”

Masslive in Massachusetts. “Skyrocketing property tax bills spurred some Boston residents to demand relief as they struggle to survive the city’s high cost of living. An 80-year-old woman, Ben McGuire, told councilors she and her husband bought their home 61 years ago when they came to Boston. She has a mortgage and said because her tax bill went up, her monthly payments will, too, on top of her $6,000 bill for home insurance. McGuire said that at her age, she is worried about being able to stay in her home in the future. ‘It’s not fair for me to be anxious about this kind of thing,’ she said. Laurie Baird, a Jamaica Plain resident, said within her condo complex, where most of the units are the same age and size there was a $269,000 difference between the units with the highest and lowest valuations. ‘It doesn’t make any sense. They’re on the same lot of land, and they’re basically exactly the same,’ she said. ‘It seems like this was all done arbitrarily.'”

WFLA in Florida. “Special assessments and rising association dues continue to hammer condo owners and a group of residents in St. Petersburg are taking a stand. ‘Insurance goes up every year,’ said Diana Smith. ‘However, we don’t know what insurance is going to pay for. I’ve been here for about three years and my assessments have doubled. I’ve paid about $20,000 in additional assessments.’ Many people in the Point Brittany community say they’re getting priced out of their condos and their dollars aren’t going far enough to fix the damage inside a building on the property. ‘I can buy food and a tank of gas for my car and that’s pretty much it,’ said another resident. ‘I’m pretty much housebound.'”

The Globe and Mail. “Heather Dodok, a real estate broker licensed in both Florida and Ontario, says she’s personally seen property values in the Sunshine State surge 50 per cent in the past five years on sales she’s been involved in. So it can make sense for some snowbirds to sell. But Ms. Dodok is also seeing homeowners moving too quickly out of a sense of urgency. ‘Many Canadian sellers have to sell because of affordability issues with the rising insurance, condo fees, property taxes and general inflation of the cost to vacation in Florida,’ she said. The rush to sell can lead to losses, too. One of Ms. Dodok’s clients in West Palm Beach let go of a 2,100-square-foot luxury unit for about US$200,000 less than the selling price of similar units in the same building because they didn’t want to wait.”

“The seller had inherited the unit and could not afford the carrying costs of US$2,000 a month in condo fees and an assessment for US$120,000. ‘[They] also had to wait for an all-cash buyer because banks are not financing condos that are affected by assessments and major repairs,’ she said in an e-mail. It’s also a buyer’s market in many parts of Florida, and if more snowbirds start putting their properties up for sale, it may exacerbate this. Even though many snowbirds turn a profit, a lot of properties are selling for less than the asking price, Ms. Dodok said.”

The Star Tribune in Minnesota. “Like many of her clients, insurance agent LuAnn Paulet has wished for a bad hailstorm. Property owners have ‘forever’ viewed their policies as maintenance contracts, she said, keeping fingers crossed for just enough damage to win cheap repairs on aging homes. But rates are rising so quickly as coverage diminishes, ‘it’s a disaster, quite frankly,’ she said. ‘Roofs are through-the-roof expensive,’ said Paulet, pointing to price tags climbing between $20,000 and $40,000. ‘But that never, ever was the intention of homeowner insurance.'”

“Aaron Cocking, president of the Insurance Federation of Minnesota, said 2024 marked the first time in the past six years when carriers actually made money in the state. Losses reached a high-water mark in 2022, when carriers paid about $1.92 in claims for every $1 collected in premiums, Cocking said, with weather disasters a key driver. California has witnessed a mass exodus of insurance companies. Cocking said that happened because the companies were unable to get the rate they needed — a problem Minnesota has also seen to some extent. ‘I think California felt, as they were doing that, that they were protecting consumers,’ Cocking said, adding: ‘Do you think that those consumers now feel protected from what happened? Or would they have rather paid a little more in premium and still have their insurance now?'”

From ABC 7 News. “Our team analyzed thousands of records from the California Department of Insurance to show which Bay Area neighborhoods saw the highest percentage of policyholders non-renewed or forced to the FAIR plan in 2023. For ZIP codes that have more than 50 total policies, the highest non-renewal rate is the Rio Nido neighborhood in Sonoma County, where more than a quarter of policies were non-renewed in 2023. ‘State Farm’s motto, what is it? ‘Like a good neighbor, State Farm is there…’ Huh, what a JOKE that is!’ said Judith Gage, a long-time State Farm customer whose house is roughly 20 miles from Rio Nido. After 50 years of never missing a payment with State Farm, Gage got dropped.”

“‘If the rates had been adequate… I don’t think we’d have seen these non-renewals,’ said Tom Quirk, a 40-year veteran insurance broker based in San Jose. ‘You know, right now it’s really a disaster. When we talk to insurance companies, they tell us that the rate increases they’re getting, they requested them years ago, long before inflation started to really eat up the dollar.’ Enrollment in the FAIR Plan has doubled in recent years, now accounting for roughly a half a million policyholders across the state as of September 2024, according to the California FAIR Plan Association. ‘The FAIR Plan was never intended to pick up that much,’ Quirk said.”

KPBS in California. “Tarbox Street in Encanto is noisy with roosters and dogs. A few lots from the end, sits a small home with a big backyard. A yellow sign hangs on the fence: ‘Encanto Says No.’ Thiago Batista lives next door. He noticed people moving large appliances, so he pulled the permits for the lot. ‘And he’ll tell you himself that he nearly fell to the floor,’ his wife Rebecca said. The designs show 43 Accessory Dwelling Units, or ADUs planned for a yard smaller than half a football field. That’s more homes than the rest of the street combined.”

“Batista’s neighbors, Eric and Lisa Becerra, helped spread the word to neighbors. ‘They’re like, ‘No, we’re not zoned for that,’ Eric Becerra said. ‘And then I’ll send them the plans, and they’re like, ‘Oh my god.’ ‘They had no idea how this could happen without public notice, without a public hearing, without it adhering to a community plan, without following the planning process,’ Lisa Becerra said. That’s by design. ADU developers are not required to do any of that. It’s part of what makes ADUs cheaper and faster to build — about $250 per square foot compared to $700 per square foot for a typical single-family home, one report found.”

“Under state law, ADU developers don’t have to provide parking. Standing on Tarbox Street, it’s hard to imagine where more cars would go. The road isn’t maintained by the city; it’s up to residents. It’s riddled with potholes and cracks. There are no sidewalks or storm drains. There are only two street lights. Overgrown trees and parked cars jut into the road. Often, there is room for just one car to pass. ‘How are they going to feed the need of those people when they can’t even feed the need of the community?’ Eric Becerra asked, gesturing at the empty lot that would soon house 44 new neighbors.”

The Baltimore Banner in Maryland. “Two seemingly contradictory ideas appear to be true in the Baltimore region. There is a housing shortage, and many apartments — especially the nicer, newer ones — are sitting empty. These vacancies mirror a national trend, where an apartment building construction boom has glutted the market in a variety of cities. The Wall Street Journal reported the overall apartment vacancy rate in Austin, Texas, is hovering at 15%. ‘A new building costs what a new building costs. You can’t build a building and get a return if the rents are middle rents,’ said Doug Schmidt, founding principal at Workshop Development in Baltimore. ‘And that’s not a Baltimore phenomenon. That’s everywhere.'”

“To make a project financially feasible, developers have to charge ‘luxury’ rents, Schmidt said, though he added that the word has virtually lost its meaning. ‘Essentially everything that’s new has the word ‘luxury’ on it,’ Schmidt said. One of Baltimore’s most aggressive developers of apartment buildings, Chasen Cos., is facing a raft of lawsuits related to its finances. Contractors claim they are owed millions of dollars in unpaid bills. Banks have foreclosed on two properties. And residents have complained about Chasen falsely advertising its properties as ‘luxury.'”

Bisnow Houston in Texas. “Lincoln Property Co. is marketing two vacant, renovated Class-A office buildings to be sold at auction next month, according to online listings. The properties, CityNorth 1 and CityNorth 6, are both part of the former Exxon Mobil campus in the Greenspoint submarket. Dallas-based Lincoln Property Co. acquired the six-building complex in 2017, two years after Exxon moved out, when it had the highest office vacancy rate in the city. Lincoln Property Co. pumped $80M into renovating the office complex. It is now inviting bids to start at $7 per SF, The Real Deal reported.”

“David Carter, a principal for Colliers, is the broker for the properties. CityNorth 1 and 6 are ‘extremely nice properties,’ and Lincoln Property Co. has done an excellent job renovating them, Carter said. ‘We have a lot of people interested in them, just not a lot of people willing to bid on them,’ he said. The market has not turned enough to get the properties the attention they deserve, Carter said. ‘I’m not sure next month is going to make it happen,’ he said. ‘We have a lot of people interested in them, it’s just hard to carry vacant office buildings of these statures. It’s very, very expensive.'”

The Windsor Star in Canada. “The relentless upward trend in housing costs in Windsor and Essex County has eased a bit, according to new figures looking back at 2024. The only regions below Windsor in descending order are Edmonton, Saskatoon and Regina. Rents in Ontario fell 6.4 per cent in 2024. ‘The condo market is now more saturated,’ said Manor Realty general manager Rob Agnew of why rents steadily declined in 2024. ‘Units are popping up everywhere. Most of those condos are rental units, so the increased supply is bringing down rental prices.’ Local demand has also fallen with fewer international students competing for accommodation, particularly around the University of Windsor and St. Clair College campuses.”

“‘It’s possible for between $360,000 and $400,000 to get a nice starter home,’ Agnew told the Star. ‘In Windsor, LaSalle and Tecumseh and Amherstburg there are 31 homes for sale between $325,000 and $375,000. I don’t think we ever had that many in our boom market.'”

The NL Times. “Signs of cooling in housing market: Less overbidding, asking price lowered more often. The Dutch housing market is showing signs of cooling down, according to Huispedia. The asking price for homes is being lowered more often, and people are overbidding less. The housing market information site warns that these effects are likely temporary. Sellers also lowered their asking price more often in the past quarter, particularly people selling their apartments. One in seven apartments were put up for sale again at a lower price in the fourth quarter of 2024, compared to one in nine the quarter before. This is happening in all price segments for apartments. On average, sellers took approximately 37,000 euros off the price. The largest price reduction occurred in Hilversum, where a villa dropped by more than 845,000 euros in asking price.”

“‘There can be several reasons behind a price reduction,’ said Huispedia CEO Maxim Bours. ‘The seller may find that the home is not being sold quickly enough, the initial asking price may simply have been too high, or the sale ultimately fell through the previous time.'”

The Malay Mail. “Singapore’s luxury condominium resale market has slowed significantly in 2024, with property agents struggling to find buyers despite a high number of listings. The decline in transactions is largely attributed to the 60 per cent additional buyer’s stamp duty (ABSD) imposed on foreign buyers in April 2023, along with a limited new supply of high-end condominiums. Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said: ‘The decrease in (the number of) transactions can primarily be attributed to a decline in demand from foreign buyers, who have been significantly affected by the 60 per cent ABSD.'”

“Property agents do not anticipate a market rebound in the near future. Nicole Teo, deputy branch associate director of OrangeTee & Tie, said: ‘Foreign buyers had always been the main group buying luxury condominiums, followed by PRs, and then the few Singaporeans. A Singaporean with S$20 million to invest in a property would rather buy a good landed property than a condo.’ Luxury condos remain a market largely driven by investors, but arranging property viewings is challenging, according to Stefanie Wong of Singapore Realtors Inc. ‘With tenants in place, arranging viewings can take weeks. Sometimes (it takes) three to six months, or even up to a year, to sell a unit,’ she said.”

“Alex Low of PropNex Realty, who specialises in Sentosa Cove homes, noted that many luxury condo listings on the mainland, particularly those above S$10 million, have remained unsold for months. ‘Owners of such high-value properties typically have strong holding power and are not in a rush to sell. However, the pool of high-net-worth investors is limited, especially since rental yields are not particularly attractive,’ he said. ‘Potential buyers also hesitate because these properties could be challenging to sell in the future.'”