What If I Buy A Home Now And The Home Value Goes Down?

A report from Marketplace. “Last spring, the National Association of Realtors reached a settlement in a big class-action lawsuit. But it turns out, very little has changed. Buyers’ agents are still making about the same amount on commissions now as they were before the new rules went into effect, according to a new study from Redfin. And most are still being paid the same way: by the seller. Plus, the market is just slow right now. Tiffany Russell, a broker in Austin, Texas, said that benefits buyers. ‘Now, if we were in a different market, say, back in COVID, where we didn’t even have to put a sign in the yard, I think we’d be having a different conversation about that compensation piece,’ said Russell. During the height of the pandemic, almost every house was getting multiple offers over asking. ‘So in that scenario, we could tell the buyer the buyer would have to cover their agent compensation,’ said Russell. But, she said, that’s not the market we’re in.”

Houston Agent Magazine in Texas. “The Houston housing market showed signs of ‘continued stability’ in April, the Houston Association of REALTORS® said in its latest Housing Market Update. Active listings jumped 30.3% year over year, with 54,978 homes on the market in April. Houston townhome and condominium sales decreased 15.2% year over year, with 451 units sold. The average price decreased 4% to $267,507, and the median fell 6.5% to $215,000. The city has a 7.4-month supply of townhomes and condos.”

The Washington Post. “Storm victims and insurance adjusters appeared before a congressional committee Tuesday, where they detailed what they said are aggressive tactics used by the insurance industry to limit payouts to policyholders after Hurricanes Helene and Milton struck the Southeast this past year. ‘Frequently, these alterations and deletions are simply false,’ Pilot property adjuster Clifford Millikan said. ‘There is no room for discussion. If an adjuster resists, the claim is reassigned to someone who complies.’ The eastern half of Georgia was also hard-hit. Natalia Migal, a homeowner in Sandy Springs, a suburb of Atlanta, testified Tuesday that after Helene sent a 70-foot oak tree crashing on top of her house, Allstate gave her a ‘lowball’ estimate of $46,000 to repair the damage. Migal hired a public adjuster who reassessed the damage to her home and found it was much greater, upward of $500,000. Allstate responded, she said, by bringing in another adjuster who produced a much lower quote for the damage, this time around $100,000. Migal said that when she contacted this last adjuster to ask for an explanation, he said that Allstate had rejected his initial submission and instructed him ‘to remove numerous line items — not once but twice — until the amount was reduced to a fraction of the actual loss.’ Ultimately, Migal settled the claim for $100,000.”

“Allegations against insurers caught the attention of the homeland security subcommittee chairman, Sen. Josh Hawley (R-Missouri), in the aftermath of Helene, when President Donald Trump highlighted North Carolina residents’ insurance concerns during a visit to the state in January. During one public exchange, a man told the president that the third-party adjuster assigned to his claim had been fired after he had given the homeowner a high damage estimate. ‘And he got fired?’ Trump asked. ‘Yeah, he got fired,’ the man said. ‘So, then they brought in another third-party adjuster to come in and lowball us.'”

The Los Angeles Times. “Insurance Commissioner Ricardo Lara adopted an administrative law judge’s ruling Tuesday and granted State Farm General an emergency 17% hike in its homeowner rates. In making the ruling, the judge said that California’s largest home insurer was already in a weakened financial state at the time of the Los Angeles wildfires — and that the emergency rate hike would carry it over until the state considers the prior rate request. Lara’s decision is bound to be controversial amid unhappiness among many Palisades and Eaton fire victims over how State Farm has handled claims for properties that were damaged or destroyed. ‘We are deeply disappointed by Commissioner Lara’s decision to approve a rate hike for State Farm — without even investigating the hundreds of firsthand reports we submitted of illegal delays, denials and lowball offers,’ said Joy Chen, a leader of the Eaton Fire Survivors Network.”

The Wall Street Journal. “After Digital Trends moved out of the U.S. Bancorp Tower in Portland, Ore., the technology publisher didn’t hold back about why it left. The property, once a premier address in the city, was afflicted with ‘vagrants sleeping in hallways of vacant office floors.’ They were ‘starting fires in stairwells, smoking fentanyl and defecating in common areas,’ according to papers the company filed in a lease-termination lawsuit. The 42-story tower was recently put up for sale. The building affectionately known as Big Pink because of its pink-hued Spanish granite and pink glazed glass has an asking price of about $70 million, according to brokers. That is more than 80% below what the owners paid for it a decade ago. Even investors like Jordan Menashe who seek out distressed properties are steering clear of this one. He says any turnaround looks years away. ‘I don’t see a way to get it into the green in the next five to seven years,’ Menashe said. The troubles at Big Pink offer a potent symbol of what ails downtown Portland. They also serve as a warning for what can happen to once-bustling downtowns if they get caught in the doom loop of losing businesses.”

City News in Canada. “The push for more housing in Metro Vancouver has not prevented a rise in empty condos. ‘It is a very slow market we are seeing, along with the broad environment, what I would call almost a housing market recession,’ said chief economist of Central 1 Credit Union Bryan Yu. ‘Some developers are sitting on 1,500 doors, and the burn rate for that is crippling,’ said Allan DeGenova, a real estate agent. ‘This is probably the most difficult cycle that I have been through. Not economically so much. It is truly uncertainty: government change, now federally, and the tariff does not help either.'”

The Canadian Press. “The Canadian Real Estate Association says home sales in April fell 9.8 per cent compared with the same month last year, as the national housing market has returned “to the quiet markets we’ve experienced since 2022. Tim Hill, a real estate agent with Re/Max All Points Realty, said many buyers are waiting for certainty as to what Canada’s trade relationship with the U.S. will look like — and any potential trickle-down effects on their employment status — before making their move. ‘When it does come to the tariff side of it, I think it’s just people being scared of, ‘What if I buy a home now and the home value goes down?’ he said. ‘I think a lot of people get hesitant whenever they think the market could go down. Even if we get certainty … could something change anyways down south?’ Hill, who is based in Vancouver, said supply has been accumulating in that market and ‘it’s just not selling as quickly’ in the current economic environment. ‘We’re seeing increased inventory with very stagnant demand,’ he said.”

The Independent. “Spain has launched a crackdown on thousands of Airbnb properties, ordering the platform to remove over 65,000 holiday rental listings in the country for breaching regulations. The Spanish consumer rights ministry cited missing licence numbers, unclear ownership records, and discrepancies between listed and official records as reasons for the mass delisting. Last year, Barcelona unveiled an ambitious plan to phase out all 10,000 licensed short-term rental apartments by 2028, aiming to prioritise housing for permanent residents. This latest nationwide crackdown targets listings in Madrid, Andalusia, and Catalonia, whose capital is Barcelona. Consumer Minister Pablo Bustinduy said his goal was to end the general ‘lack of control’ and ‘illegality’ in the holiday rental business. ‘No more excuses. Enough with protecting those who make a business out of the right to housing in our country,’ he told reporters.”

Perth Now in Australia.”Cottesloe may have been the epicentre of the recent boom but it is in the throes of a price correction which has wiped hundreds of thousands of dollars off the value of houses. The entire suburb has seen a median house price drop of 11.8 per cent to $3,087,500, over the past 12 months, according to the Real Estate Institute of WA. That means the median Cottesloe home has lost $364,325 in value over the past 12 months and is now sitting back at 2023 levels. But there won’t be too many local homeowners crying into their silk pillowcases, given prices are still up 55 per cent since 2020, which is more than $1 million. Rental prices have also slumped by 18.3 per cent, dropping the median rent by about $225 to $1225 a week. Nearby Peppermint Grove has also had steam come out of the market, dropping 18.3 per cent — which is worth $870,000.”

Maeil Business Newspaper in Korea. “The so-called ‘guarantee accident’ business, which remains unfinished apartments, is being completely shunned by the public auction market as the construction company is in financial difficulty and construction stops. Critics point out that the system needs to be improved as some workplaces that have not been sold for years are repeatedly coming out at the same public sale price even though they have already been auctioned dozens of times. Among the sites that HUG has sold at public sale this time is Lake Shire, Jocheon-eup, Jeju, which is an unfinished building. Although the guarantee accident occurred in 2020, the public sale was auctioned 27 times. Repeated short selling prices are the background of repeated bidding. Lake Shire failed to find its owner last month, halving its public sale price to 5.78 billion won. However, this month’s public sale price was restored to its original level of 11.56995 billion won. This is because HUG internal regulations require that if the public sale price falls by less than half, the re-public sale will proceed again to the initial public sale price. HUG explained, ‘It is to prevent excessive low-priced sales.'”

“HUG recently changed its bylaws to allow businesses with senior bonds to fall by less than half of the sale price. Yoo Eun Centum City, a private rental apartment in Jungang-dong, Iksan-si, Jeollabuk-do, benefited from last year’s guarantee accident. This is where Woori Bank has senior bonds. Yoo Eun Centum City’s initial public sale price was about 24.2 billion won, but the current public sale price has fallen to 10.4 billion won, which is about 43%. As small and medium-sized construction companies are collapsing one after another due to the economic downturn in local real estate, the number of workplaces that will be put up for public sale is expected to continue to increase. The Korea Development Institute said, ‘The downturn in the construction industry is more structured and recovery conditions are limited than during the 2008 global financial crisis.'”