If They’re Both Deflated, Then It’s Not A Big Loss

A report from WBTV. “A search of North Carolina court records reveals a long list of lawsuits filed in the last two years against many of the state’s biggest developers, contractors and subcontractors. The complaints allege construction defects that leave homeowners, HOAs and apartment owners on the hook. At Melwood in Lincoln County, most of those issues sound familiar. Last September during Hurricane Helene when neighbors were worried about a sinkhole that formed in Natisha Berry’s backyard after a massive retaining wall failed. ‘He said, ‘Mommy, there’s a hole in the yard,’ Berry said. ‘And to think that already, a brand-new build house, we were having those kinds of issues was very concerning. Because it makes you think, ‘What else.’”

“That’s what HOA board members Tom Burke, Kira Crisco and Robertson are trying to find out from the company that built their community – Lennar Carolinas. ‘We’re just two moms and a finance dad. So, we’re just your everyday people and I think the developer’s been taking advantage of that,’ Robertson said. The Melwood HOA shared a long checklist of items they say have been presented to Lennar but mostly neglected. That includes walking trails, drainage problems, landscaping and erosion. The concern for Melwood is that if these items aren’t complete or fixed that cost could get passed onto homeowners. ‘We don’t need million-dollar amenities,’ Robertson said. ‘That’s not what this community is, it’s not what this community can afford, it’s not what we’re asking for.'”

The Miami Herald in Florida. “Living in a community with an association requires abiding by the rules, obligations and restrictions found in its governing declaration, which is akin to a contract that is agreed upon by all prospective buyers prior to their becoming owners and members. Even with the potential uncertainties and negative repercussions that litigation can present for communities, boards of directors can find themselves with little other recourse when facing unruly and disruptive owners who refuse to adhere to their community’s rules and policies. Such appears to be the case with a recent lawsuit filed by the Imperial Royale at Boca Pointe Condominium Association against unit owners Murray and Margalit Feit.”

“According to the allegations in the lawsuit, the violations include ‘constant and repeated outbursts of yelling in the hallway common element areas by Defendant Murray Feit causing great disruption to the residents.’ Those disruptions are also allegedly exacerbated by the ‘constant and repeated slamming of their Unit door,’ which is now in need of repairs. ‘The Feits have made no effort to ensure that the door closes in a manner that doesn’t disturb the other residents,’ alleges the complaint. The unruly behavior has also allegedly included ‘various instances of abusive and improper comments to the Board of Directors and management staff rising to the level of harassment.'”

From Fox News. “A Malibu real estate agent warned California homeowners about the need to protect themselves after a serial squatter reportedly targeted the beachfront community for years, a problem she said could become worse after the Los Angeles wildfires. ‘I don’t know how she got away with it for so long in Malibu with the amount of people that she did,’ Liz Benichou, a Malibu real estate agent and lifelong resident of the area, explained to Fox News Digital about the accusations against Ellie Mae McNulty. California, known for being one of the most tenant-favorable states in the country, protects tenants from certain rent increases, and they may also be protected from certain types of evictions.”

“The wildfires weren’t the first crisis to expose the housing crisis in California, as Benichou said she really saw corruption and schemes come to light during the COVID-19 pandemic. ‘I think a lot of people took advantage during COVID of being able to stay in their places because of that moratorium. And I think now a lot of people are going to use this (the fires) as an excuse,’ she explained.”

NBC San Diego in California. “After three brush fires broke out in three days last week around San Diego, housing advocates said they saw the situation coming and even warned the city council about the potential for just such a situation before the encampment ban went into effect last year. ‘We said, ‘When you do this, this is where people are going to go, and fires are going to happen,’ said John Brady, Lived Experience Advisers’ executive director. Brady lived on the streets downtown and has lit a match or two himself. ‘I did use a candle in my tent, to stay warm,’ Brady said. ‘I made sure it was protected, but out there, you know, who knows what’s happening?'”

The Express News in Texas. “When it comes to paying homeowner insurance claims, USAA companies fare poorly, at least by one rating agency’s measure. In 2023, according to Weiss Ratings, United Services Automobile Association and three affiliate insurers closed nearly half of all claims nationwide without making a payment — among the highest rates in the country. It’s not a new phenomenon. Weiss data show the percentage rate of denials has been creeping up for nearly the past decade and a half. In 2010, the rejection rate was less than 38% for three of the four companies. USAA disputed the findings. ‘The data as presented will cause undue concern for consumers, including those who’ve lost a home in recent Southern California fires,’ the San Antonio-based insurer said in an emailed statement.”

“Weiss blames ‘deceptive or overzealous marketing’ for increasing claim denials. The details of policy contracts have become more cryptic and include more exclusions, he said. ‘The fine print whispers while the sales pitch screams,’ Weiss said. ‘Then, insurers blame the customer for filing claims without merit.’ ‘The total value of properties in high-risk areas has skyrocketed, while the impact of natural disasters has also grown beyond expectations,’ Weiss said. ‘This puts pressure on companies to reduce liability in any way they can, including finding ways, valid or not, to deny, postpone or whittle down the payment of claims.'”

From CNBC. “Rental affordability is improving in part because of a ‘construction boom’ of new apartment buildings during the pandemic, according to Daryl Fairweather, chief economist at Redfin. ‘There are still units coming online now from projects that were started back in 2021, 2022,’ she said. By way of example, Austin, Texas, where the median rent is $1,394 as of December, saw some of the highest levels of multifamily housing construction over the past few years, according to Redfin. That figure is down from $1,482 in August when the median price fell 17.6% from a year prior. ‘If your property manager is trying to raise your rent, you can come to them with information to show them that your rent shouldn’t be increased,’ she said. ‘In some markets, it should even go down.'”

Bisnow on Colorado. “Urban Renaissance Group has handed over a downtown Denver office building and its nearby parking lot to the property’s lender, marking the latest in a string of office owners relinquishing properties in the city. The Seattle-based real estate firm executed a deed-in-lieu of foreclosure, the Denver Business Journal reported, citing public records. URG is just the latest firm to relinquish a Denver office property amid shifting market conditions. Rising Realty Partners walked away from Civic Center Plaza, a 599K SF office tower at 1560 Broadway, in late November. The next month, a lender foreclosed on Novel Coworking’s Trinity Place, which promised 70K SF of coworking space, at 1801 Broadway. In July, RRA Capital took control of Novel’s 124K SF 1630 Welton St. building to prevent foreclosure.”

“The latest handover adds to ongoing struggles in Denver’s office market, where rising vacancies, remote work trends and financial pressures are reshaping the city’s commercial real estate landscape. The trouble isn’t confined to office, however. The high-end X Denver 2 high-rise apartment community, also near Coors Field, was purchased by the development’s California-based senior lender for $102M in November.”

The Globe and Mail in Canada. “Some hotels in Niagara Falls, Ont., are unusually full for the middle of the winter off-season, when many visitors stay home. Normally that would make the mayor of a tourist city happy – but not Jim Diodati. His community, which says it has more asylum seekers per capita than any other municipality in the country, is ground-zero in Canada’s efforts to house thousands of refugee claimants in hotels while they wait for their claims to be processed. The mayor, who can see the United States from his perch at city hall, is worried it’s about to get a lot worse. ‘We’re already bursting at the seams,’ the mayor said. ‘Trump is talking about deporting 11 million people. If they show up on our borders, we can’t handle that.'”

“The federal government says it’s now spending tens of millions of dollars housing and feeding asylum seekers in Niagara Falls alone – sometimes for as long as a year. The total cost across the country was not available. ‘They said this was supposed to be a temporary solution,’ Mr. Diodati said. ‘This feels pretty permanent now.’ Multiple asylum seekers told The Globe and Mail that’s proving more difficult than they expected. Some have turned to local homeless shelters or churches for help. ‘They told us to look for housing,’ said Vanessa Kasega, a 25-year-old Ugandan refugee who flew to Canada in August and has been living at a hotel in Niagara Falls ever since. ‘But it’s been very difficult. I need a job first so I can pay for it.'”

The Financial Post. “Recent optimism in the housing market from interest rate cuts could soon fade away if Canada enters a trade war with the United States, according to one expert. Ron Butler, a broker with Butler Mortgage, said the outcome of tariffs on both sides of the border could change the current buying sentiment in Canada. One factor that could affect homebuyers is the downside risk of unemployment. ‘Bad economic news is bad for housing,’ Butler said in a recent interview with the Financial Post’s Larysa Harapyn. ‘People are always going to be cautious about buying a house if they think their jobs could be in jeopardy.'”

“The outlook for the condominium market for the next 12 months also appears to be lacklustre, particularly in Southern Ontario. The main reason for that, according to Butler, is that people who bought condos five or six years ago that are coming into completion now are all overpriced. ‘It’s just going to get worse. It’s very clear that it gets a little bit worse every day,’ he said. Butler said the story is not much different south of the border where high interest rates are holding down U.S. home sales. ‘Their new home sales have kid of collapsed in the same way that parts of Canada have collapsed,’ he said.”

Domain News in Australia. “The number of homes for sale in inner Melbourne has surged in the last 12 months, creating an ideal market for buyers amid weakening property values. Listings are up 23 per cent in inner Melbourne, relative to 12 months ago, CoreLogic data shows. Ted Adair, 36, and partner Courteney Boulter, 36, are selling their one-bedroom home in Port Melbourne and hoping to upsize to a larger house in the same area, but have been waiting for the right time – and the right price. While there are more homes for sale than a year ago, Adair is aware that a weak market which favours buyers will affect his sale price.”

“‘Realistically, what we’re going to sell the house for is going to be less than what it was worth even just a couple of years ago,’ he said. ‘But as long as we’re buying in the same market, it’s not that big of a deal. You’re kind of just trading one asset for another, and if they’re both deflated, then it’s not a big loss.'”

“Their real estate agent Fraser Lack, of Biggin & Scott Port Melbourne, said the rise in property listings across inner Melbourne has been bolstered by investor selling and the high turnover rates of apartments. ‘A lot of the properties that we are selling at the moment were previous investment properties,’ Lack said. PRD Real Estate chief economist Dr Diaswati Mardiasmo agreed that a drop-off in investor activity combined with mortgage stress has pushed up listing numbers, but it’s not only restricted to inner Melbourne. The Mornington Peninsula has recorded a 19 per cent increase in listings relative to the five-year average, CoreLogic data shows. ‘We have had an increase in people who used to have holiday homes or have Airbnbs in Melbourne who decided to let go of their property because of the extra [costs],’ Mardiasmo said. ‘Places like Mornington Peninsula still has that tourism aspect, but it hasn’t really received the kind of buyer attention as it did during COVID times.'”