Buyers Who Overpaid Wildly In Bidding Wars Must Face The Music

A report from the Falls Church News Press. “There are 180,000 federal workers in this area whose jobs are at risk, and that includes up to 60,000 who work at the Pentagon that may lose their jobs, according to a report in the Virginian-Pilot newspaper, about a third of whom already have taken an early retirement offer from Trump. ‘Our job will be to try to convince Republicans here, working in conjunction with business owners and business associations like the Chambers of Commerce, not to go along with Trump on this. We have to make sure they all get the message: Don’t do this with Virginia,’ State Del. Marcus Simon emphasized. Simon and F.C.-based State Sen. Saddam Salim spoke to the monthly luncheon of the Falls Church Chamber of Commerce Tuesday and were light on new initiatives coming to deal with the potential ‘perfect storm’ for erasing revenues for Virginia jurisdictions and adding to new levels of need for basic services, like mortgage default mitigation and food banks.”

From Fox 4. “In Cape Coral alone, there’s a good chance you’ve seen a home on sale no matter what road you go down. Fox 4 Senior Reporter Kaitlin Knapp went to Adam Bartomeo, owner of Bartomeo Realty, to validate what seems to be a housing boom. ‘Now we have the highest inventory we ever had in Southwest Florida,’ Bartomeo said. ‘My opinion is that the sediment of folks was ‘hey, Trump’s going to come in and houses are going to sell like crazy,’ so there was an influx of inventory.’ So because of these reasons, how many homes do you think are on sale in Lee and Collier counties as of January? ‘12,000 homes for sale,’ Bartomeo said. That’s just single-family homes! He says condos are through the roof, too.”

“Adding to that number is what Bartomeo calls a ‘shadow home.’ It’s a partially built home that went under contract, but the builders ran out of money. ‘So now, these houses are starting to come to market,’ he said. ‘I think what has happened is they spent a lot of money on other things to keep the business running.’ Bartomeo believes the high inventory might stay that way for a while. Data from the Southwest Florida MLS shows there’s enough inventory to last 10 to 11 months, and that’s if no other homes are listed. ‘Buyers are not in a rush,’ Bartomeo said. ‘My number one customer is I can’t sell my home, can you please make it a rental?’ Bartomeo said. There’s a lot to choose from, but there’s a catch. ‘Interest rates do have to come down, because that prices are still too high,’ Bartomeo said. So if you’re a seller, Bartomeo suggests to hold on to the property if you can. If not, he says to make the house as nice as possible or stage it.”

From Toronto Life. “In 2021, my wife, Jenny, and I bought a townhouse in the Landings Yacht Club, a gated community outside of Fort Myers. We’re retired and in our 50s—I was a mechanic by trade, and Jenny was a nurse working in occupational health. This bit of Florida seemed to have everything we wanted. For four years, we loved it. But, two months ago, something started to feel strange. Then Trump started turning on Canadians—and Americans were following suit. The roads are busier these days, and drivers are angry. I’ve seen cars plastered with bumper stickers saying, ‘Florida is full, don’t come in.’ Last year, a woman pulled up next to us and screamed, ‘You people go back to where you came from!’ On another drive, a woman gave us the finger. I don’t know what her problem was, but she was screaming at us from her convertible.”

“I’d love to tell these people to go screw themselves, but Florida is a concealed carry state. Anybody could be packing a weapon, and they like to use them: we hear about shootings all the time in our neighbourhood. Even with all that, we still didn’t plan on leaving this year. But the tariffs were the last straw. The US was already an unsettling place to be. Now it feels like things are getting even worse. I was watching the real estate market soften, and one day Jenny said, ‘I think it’s time to get out of here.’ That sealed it. We put our house up for sale privately, listing for $450,000—$100,000 less than realtors told us we could get. I didn’t care. We were still making a profit, and we wanted out. Within three hours of the first open house, we had a buyer.”

NBC San Diego in California. “‘We only looked in Clairemont when we were looking for a home,’ Shawn Cox, who lives in the community with his wife and two sons, told NBC 7. ‘It’s basically the perfect neighborhood in San Diego.’ Cox moved into his home after purchasing it a decade ago. He said if they were looking to purchase the same home now, they would likely not be able to afford it because of rising real estate costs in the area. He also told NBC 7 that a lot has changed, including the addition of Accessory Dwelling Units, or ADUs. ‘At first, I was like, ‘OK, progress. We need homes. We need places for people to live,’ but now it is turning into this almost predatory thing where every time somebody moves on and the home is available, somebody comes in and buys it and puts up ADUs,’ Cox said.”

“There is an ADU complex nearby his home where a single-family home was turned into a rental unit, the garage was turned into another and at least 10 additional units, or ADUs, replaced what was the backyard. He said it has exacerbated the pre-existing parking issue within the neighborhood’s narrow streets and he is concerned for what’s to come if more are added. ‘Are we going to have problems parking at our own house that we pay the mortgage and taxes for?’ he posed.”

“‘It’s really been tough on Clairemont,’ said San Diego Councilmember Jennifer Campbell, who represents District 2, which includes the neighborhood. ‘We don’t want to overbuild and over-densify, otherwise we’re going to become Los Angeles. For every ADU, you can have one bonus if you promise to rent it out in a middle-income type of affordable rent,. That has about a 15-year-limit on it and a lot of builders have used that as an excuse to build very high, small spaces, stack them on top of each other.'”

The Malibu Times in California. “The City of Malibu’s March 12 Town Hall for design professionals provided an overview of rebuilding procedures for homes destroyed in the Palisades Fire. City Hall’s large auditorium was almost filled to capacity. Many audience members walked away frustrated and concerned that the rebuilding process would be arduous and protracted, perhaps even worse than fire victims’ experiences after the Woolsey Fire. Architect Lester Tobias characterized the city’s mandates as ‘draconian requirements’ that will ‘have major negative impacts on Malibu.’ He opined that it is ‘pretty clear that across the board the city will be requiring the most costly, complicated, and time consuming requirement on any aspect of the rebuilds.'”

“Addressing the impacts of the city’s positions, he predicted that city officials ‘have ‘added at least one year to the rebuilding process,’ and ‘have increased the number of people that will sell and leave by 50%.’ In essence, he stated, the city has ‘opened the door to developers.’ Abe Roy, a contractor and a Big Rock resident expressed further frustration, saying, ‘We are adding cost and delay. Homeowners are already submitting their plans, realizing they have little choice but to comply and they are starting to spend money on all these redundancies. They will have so little left to build with. I am just distraught!'”

Bisnow Washington DC. “The mass cuts to federal agency footprints and contractor spending may make it seem like a risky time to put money into empty D.C. office space, but one investor is betting millions that there is enough demand out there — at least for certain buildings. Taicoon Property Partners last year paid $26.7M to acquire the office building at 1899 L St. NW, and it has begun renovations that are expected to cost close to $10M more. The owner has tapped Newmark Vice Chairman Doug Mueller, to lead the effort to fill that vacancy. DOGE is moving to terminate a series of federal office leases, many of which had upcoming expirations. But Mueller said the buildings the government leases are part of a lower segment that doesn’t directly compete with commercial buildings that lease to the private sector.”

“‘A lot of that product that is going to flood back to market doesn’t worry me,’ he said. ‘I’m a private sector leasing broker. I don’t think the private sector looks at those buildings as acceptable locations or buildings.’ And he expects there will be a ‘private sector tail’ from the administration’s cuts to the Department of Education. ‘And whatever the next DOGE shoe to drop is, there will undoubtedly be an impact as well,’ he said. ‘I can’t sugarcoat that. There will be a private sector impact.’ In today’s market for older buildings, the owners able to do that are the ones like Taicoon that bought properties at a discount. The firm’s $26.7M acquisition of 1899 L St. NW was well below the $43.7M that previous owner BlackRock paid for it in 2004.”

“‘This is one of those buildings that, given their basis, the previous owner couldn’t transact on it and couldn’t do deals that were accretive to the value of the building,’ Mueller said. Mueller said this will likely be one of many such situations in the D.C. office market. ‘There are a segment of buildings that just cannot transact right now,’ he said. ‘There are a tremendous number of buildings that have to go through either a basis reset or a conversion, all of which will be healthy for our market. That’s what we’re heading toward: You’re going to remove inventory from the market, which will flood the market with demand to other buildings that can transact. To me, this is the great reset of D.C. real estate.'”

The Globe and Mail in Canada. “In early March, real estate agent Alex Beauregard received notice that two rival buyers were preparing bids for a sparkling three-bedroom house in the Christie Pits neighbourhood. Mr. Beauregard’s concern grew as the promised offers failed to arrive. By early evening both agents had confirmed that their respective clients were going to take a break. ‘Between 4 p.m. and 6 p.m. there was a complete reversal,’ says Mr. Beauregard of Sutton Group-Associates Realty. Later the same evening, Prime Minister Justin Trudeau announced that Canada would be imposing countertariffs. ‘The words ‘trade war’ were a defining moment,’ Mr. Beauregard says. ‘It’s like a big block of ice.’ Now the market is frozen in the area around Bloor Street West and Bathurst Street where he does much of his business.”

“With so much uncertainty, Mr. Beauregard says, some prospective sellers are deciding to pull their listings and lease the property instead. He recommends that those who want to sell this spring wait until April or May if they are able. ‘We’re trying to convince sellers to hold off a month.’ He notes that the recent stock market gyrations are also unsettling one cohort of buyers: those who are relying on the ‘bank of mom and dad.’ When their investments are losing ground, the older generation is also more inclined to hit pause, he points out. Matthew Regan, a broker with Re/Max Escarpment Realty, says some people are taking advantage of the decrease in rival buyers to negotiate a deal in areas of Oakville, Mississauga and Burlington, where he does much of his business. ‘There’s an awful lot of inventory out there – some of it is overpriced,’ he says. One property that had been sitting on the market for three years sold in March for $9.5-million, or 13.6 per cent below the most recent asking price of $11-million. ‘If a buyer sees value in it, it’s going to sell,’ he says of properties across all price ranges. Mr. Regan says that investors will not be able to make a quick buck on flipping a property as they did in the early part of this decade, but he believes buyers who have a longer time horizon will have a solid asset. ‘There are blips on the radar when prices come down and we’re in one of those.'”

The Telegraph. “During the stamp duty holiday-fuelled frenzy of the pandemic, the property market went into overdrive. In predominantly rural areas, house prices surged by 12pc in 2021, according to Nationwide. In North Devon, they jumped 24pc that year, while in Pembrokeshire values rose by 19pc. Five years on, Britain’s property market is still reeling. In many areas, these gains have unravelled. And now buyers who overpaid wildly in bidding wars must face the music as their huge mortgage deals have come to an end while rates have soared. The effects of the pandemic – and the events thereafter – have caused a lingering hangover in the housing market.”

“‘The dash to the countryside was facilitated by low interest rates,’ says Lucian Cook, of estate agent Savills. ‘People had the impetus to make those changes and it was affordable to do so. There was the added catalyst of a stamp duty holiday, [which created] an urgency to act among buyers, likely resulting in a degree of irrational exuberance.’ Jennie Hancock, a West Sussex buying agent, recalls how a client in the summer of 2020 bought a house near West Wittering for over the odds. ‘It had a guide price of £2m, and went to telephone bids. We suggested that they pay a maximum of £2.3m or £2.4m. They bought it for £2.7m [35pc over the asking price].'”

“But during the years that followed, those conditions evaporated. Many people caught up in the frenzy overpaid for their homes. ‘Lots of people’s houses just aren’t worth what they were in 2022. It’s been very costly to move during the past couple of years, with rising interest rates, a hike in stamp duty,’ says Aneisha Beveridge of estate agent Hamptons. ‘Coastal areas became really popular post-pandemic – people wanted a bit of space but within commuting distance of London. Prices did get a bit too overheated in that time, in real terms especially [taking inflation into account]. These homes will have seen a significant loss of value in recent years.'”

“‘Buyers who were granted big loans they could afford when rates were low – and ended up in bidding wars for properties – now find themselves on new mortgage deals that are much more expensive. If they try to sell up now, they may not recover what they paid,’ says Beveridge. The picture is even bleaker in London, where the property market has underperformed compared to the rest of the country since 2016, according to Cook. The capital recorded the worst dip in property transactions and one of the largest falls in demand across all UK regions in the year to February, according to the Rics report. Agents expect London home values to fall more over the next three months than anywhere else across the country.”

“‘If people are losing money on their sale, and moving back to somewhere like London where that can happen again, that is a huge decision. That is absolutely one of the reasons we’re not seeing house prices grow in the capital,’ says Jeremy Leaf, a north London estate agent.”