We’ve Become A Community Of Busboys And Billionaires, They’re Selling $25 Sandwiches

A report from Fast Company. “Canada has the largest number of distinct investments in U.S. property, representing 13% of foreign buyers. There have been some sell-offs in the past year due to both the declining value of Canadian currency in relation to the U.S. dollar, as well as the increasing cost of U.S. homeownership. But U.S.-based brokers who specialize in selling to Canadians, especially in Sun Belt markets popular with snowbirds and second home owners, have seen a significant increase in Canadians selling their property. ‘Within the first two weeks of tariffs talks, I had sellers calling and saying, ‘we’re out of here, Trump has irrevocably damaged the relationship between Canada and the United States,’ said Sheri Dettman, who has been selling properties in Palm Springs, California, since 2007. ‘They were very, very emotional. I had a couple this morning call and say they were afraid Trump would put some executive order on their property.'”

“Laurie Levine, a dual Canadian-American citizen who sells homes in the Greater Phoenix area, typically handles two or three listings for sale at this time of year. Now he’s juggling 18 Canadian sellers at once and getting calls every day from owners who have had enough. He said Canadians have already started heading home earlier in the season, leading to less crowded and less profitable local businesses. He thinks Canadians may start looking more toward Mexico and the Dominican Republic. With many Canadians owning in seasonal markets like Florida and Phoenix, sales will likely stop soon, take a break during the summer, and restart in the fall, so real figures won’t show themselves until later in the year. But anecdotal evidence suggests a shift will take place. ‘My clients are saying we might come back, but not in the next four years, or not,’ said Levine.”

The Valdosta Daily Times. “For some retirees, the costs and risks of Florida living have become unsustainable. Take, for example, a widowed client near Fort Lauderdale who saw her annual homeowner’s insurance premium jump from $8,950 to $18,500 in 2023 – despite never filing a claim. The following year, it rose again to $20,000, forcing her to switch carriers for a slightly lower, yet still staggering, $13,900 premium. This is not an isolated case. According to Bankrate, the average annual premium for a $300,000 home in Florida is now $5,488 – more than double the national average of $2,258.”

“Costs vary significantly based on location, with coastal properties facing even higher premiums. Additionally, flood insurance – required in many areas – is not included in standard homeowner’s policies, adding another financial burden. For some retirees, these escalating costs are a deal-breaker. One of my clients is leaving Siesta Key, citing skyrocketing insurance rates and frequent hurricane evacuations. ‘This isn’t how we want to spend our retirement years or our savings,’ they told me. Many retirees prefer the flexibility of renting, as it makes relocating easier if conditions worsen.”

The Los Angeles Times in California. “Dear Liz: My house was burned down in the Palisades fire. I lived in the house for 25 years and lost everything. I thought there may be a silver lining with tax deductions. Much to my surprise, I am supposed to use the purchase price from 25 years ago as my adjusted cost basis. The insurance settlement is not going to be enough to rebuild but is more than my cost basis. I will end up with ‘casualty gain’ instead. Is this possible?”

“Answer: After losing your home and finding out you were underinsured, the news that you might have a taxable gain must have been a gut punch. The IRS calls it an ‘involuntary conversion’ when your property is destroyed and you receive insurance proceeds. If the insurance payment exceeds your tax basis in the property, that’s known as a casualty gain. You can defer tax on this gain if you use the insurance payout to rebuild or buy a replacement property, says Mark Luscombe, a principal analyst with Wolters Kluwer Tax & Accounting. Normally you’d have two years to use the insurance proceeds, but in a federally declared disaster such as the Los Angeles fires, the deadline is extended to four years. The IRS may be willing to further extend the deadline under some circumstances, such as contractor delays, Luscombe says. But don’t count on an extension if you’re simply unable to find a replacement property.”

San Jose Spotlight. “California is requiring two West Valley communities to build thousands of homes, while the state is ringing alarm bells over increasing fire risk where some of these homes might be constructed. Cal Fire released updated fire hazard severity maps for the first time since 2011 last month — and Los Gatos and Cupertino are in the crosshairs. Los Gatos and Cupertino‘s fire risk has spiked since 2011, with more than 1,000 acres in the red. Some of the proposed projects in the very high risk zone are using builder’s remedy, a state law exempting developers from local zoning standards enacted when municipalities are late earning state approval on mandated housing plans.”

“Kurt Anderson, principal at Anderson Architects which is working on the plans for 101 S. Santa Cruz Ave., said his firm follows the wildland urban interface building code requiring developers to reduce wildfire risk. ‘You got to be prepared to be proactive and aggressive and go the extra mile to save your building right? Because insurance is sure not gonna replace it,’ he told San José Spotlight.”

From KSL.com. “Few cities in Utah have seen explosive growth over the past two decades quite like Ivins. Founded as a small farming community and suburb of St. George, Ivins is surrounded by red rock mountains and is now home to some of the largest resorts in the state: Black Desert, Red Mountain and the Retreat, among others. But between massive development in southern Utah generally, a growing housing shortage across the state and the rise of local tourism, Ivins is pricing out — and angering — some locals. The outskirts of Ivins were rezoned for touristic development approximately 20 years ago in hopes of creating a commercial tax base to generate city revenue instead of relying on property taxes from residents, Ivins Mayor Chris Hart told KSL.com. ‘We’ve gone from being probably the lowest property value on average for a community in southern Utah 40 or 50 years ago to being now the highest,’ Hart said.”

“‘Everyone knows that short-term rentals do nothing to help affordable housing. It is our understanding that they do quite the opposite, taking up space and limiting supply, therefore driving up prices,’ said Mike Cook, a representative of Defenders of Greater Ivins, a community group that opposes what some residents consider to be irresponsible development. Originally, Rize Capital confirmed it planned to build 1,035 units of resort and short-term rental rooms in multiple-story buildings, but Hart said the idea caused significant community uproar. ‘On any given night, Ivins may have more transient occupants in short-term rentals than permanent residents,’ said Cook.”

The Star Tribune in Minnesota. “The return of state employees to their offices in June, joining St. Paul city staff, could bring thousands of government workers back to downtown St. Paul. But will that turn around the city’s fortunes? Mayor Melvin Carter said he hopes a more regular flow of office workers will help downtown St. Paul and its struggling small businesses. But some downtowners wonder if the workers will be enough to bring vitality back to downtown. Nearly a third of downtown space was vacant as of the end of last year, according to a quarterly report from the brokerage firm Colliers. Some of the most troubled properties have changed hands through foreclosures. Mike Tekeste, who owns the Red Sea Market convenience store near City Hall, is not sure office workers will come back in enough numbers to help him stay open. ‘Downtown is like a ghost town.'”

From Bisnow. “A former executive of the Appraisal Institute, one of the primary agencies that oversees mandatory testing for appraiser certifications, sued the nonprofit, alleging widespread fraud stretching back to at least 2020. Alissa Akins, the former director of education and publications at the agency, alleged in a civil case that the nonprofit knowingly misrepresented test results for mandatory continuing education to state regulators. Akins said she identified the problem and suggested an action plan to fix it, but she alleges leadership tried to force her out of the agency before ultimately firing her.”

“‘Plaintiff was terminated from her job for reporting and refusing to participate in an ongoing fraud being committed by her employer,’ Akins’ attorneys wrote in the suit, filed in Chicago civil court Friday. ‘The fraud was occurring against both individual consumers and multiple state regulatory authorities, including the Illinois Department of Financial and Professional Regulation.’ ‘My client’s initial research found that there are people who got licensed by states based on the test results provided by AI,’ said Jordan Matyas, an attorney at 1818 Legal representing Akins. ‘Had AI reported the results properly, these individuals would likely not have gotten licensed.'”

CBC News in Canada. “The small, tidy Hamilton bungalow where Verica Grgic once raised her kids is destroyed. The hardwood floors are coated with dog feces, with some of the excrement growing mould in the kitchen. The living room is strewn with belongings and garbage, dog toys and a mangled cat stand. The front wall and window are sprayed and streaked with what looks like blood. A pungent ammonia-like odour permeates the home. Grgic and her husband, Marinko Vrbanic, showed CBC Hamilton the state of their Stoney Creek house a day after they got permission from Ontario’s Landlord and Tenant Board (LTB) to evict the tenant for not paying over $24,000 in rent. ‘I’m not exaggerating — this was the worst year of my life,’ said Grgic. ‘I am so disgusted. I would never believe this is the real system, but I learned the reality.’ Grgic said a contractor has determined the drywall, flooring and subflooring, and appliances will all need to be replaced, in part to get rid of the smell, exceeding an estimated $100,000.”

The Globe and Mail in Canada. “After the last ship left the drydock and splashed into the big lake in 1986, people in Collingwood, Ont., lined the town’s main street wearing black armbands, mourning what they thought was the end of work on their once-bustling waterfront. They could never have imagined the scene here today. The old shipyard lands are once again crawling with welders, electricians and painters – but instead of ships, they’re building luxury condominiums, for buyers willing to pay seven figures for views of the water. All along the waterfront, developers have snapped up land, selling a piece of the picturesque Georgian Bay town for Toronto prices.”

“‘We’ve become a community of busboys and billionaires,’ said Marg Scheben-Edey, a retired real estate agent and advocate for affordable housing. ‘Our locals are really struggling, particularly young people, people that are renting. And then we have people with $3- and $4-million chalets they use two weekends a year. That change in demographics has been the single biggest challenge we’re facing.’ When construction began on the ski resort in neighbouring Blue Mountain in the late 1990s, the average rent in Collingwood hovered around $600. Today, it’s about $2,600. Ms. Scheben-Edey says the increasing wealth gap between locals and newcomers buying up properties is making the town unaffordable for many people who have spent their whole lives here. ‘We’re approaching GTA-level rent. It’s horrible,’ she said. ‘The vast majority of new businesses are geared at a much higher income bracket than the local income earners can support. They’re selling $25 sandwiches.'”

From Reuters. “On Sydney’s urban fringe, a perfect storm of living cost and geopolitical pressures is brewing for Australia’s Prime Minister Anthony Albanese and the electoral chances of his centre-left Labor government. Maria Markovic, 50, sees renewable energy as driving up prices, and wants politicians to ‘make Australia great again and affordable.’ Her home in western Sydney is ‘packed to the rafters’ with three adult children she says can’t afford to move out because of home rental costs. ‘We both have steady jobs, but are we living the same way we did a few years ago? Absolutely not,’ said the IT professional, shopping with her husband in Casula.”

“The pursuit of the ‘Great Australian Dream’ of home ownership is hurting families saddled with high mortgage payments, as Australia’s Reserve Bank had raised interest rates 13 times since 2022 before last month’s rate cut. ‘If somebody has a mortgage, there’s not much left,’ said Bill Regan, 60, who said he sees people queuing for food from charities in Liverpool. ‘Are people angry enough to make a change? How far does loyalty to the Labor party go?'”

South China Morning Post. “Plum properties sell for songs, but bargains may not last as demand for upscale homes is up 50 per cent from last year, agents say. Celebrities, tycoons and other wealthy investors have been snapping up luxury homes in Hong Kong on the cheap, as the prices of these exclusive abodes have plunged by as much as 45 per cent from their peaks amid high interest rates. For example, Cantopop singer Gloria Tang Tze-kei this month acquired two flats in Wan Chai at a 35 per cent discount off of the peak price three years ago. A property at 6 Stanley Beach Road sold this month for HK$116 million, 45 per cent lower than the peak price of HK$212 million in 2011, according to Victoria Allan, founder and managing director of Habitat Property.”

“In Tuen Mun, a 3,348 sq ft home in Seaside Castle went for HK$59 million, having lost 31 per cent of its value since it sold for HK$85 million in July 2022. In February, developer Samsbury Investments sold 19 units at Jessville Tower in Pok Fu Lam at an average of HK$19,000 per square foot, 24 per cent lower than the HK$25,000 a couple of units in the property attracted in the first quarter of 2024. ‘Buyers with strong financial capabilities are increasingly seizing the opportunity to enter the market at lower prices,’ said Derek Chan, head of research at Ricacorp Properties.”