You’re Now Looking At A Mega Loss

It’s Friday desk clearing time for this blogger. “We continue to see a lot of sellers in Cape Coral and throughout Southwest Florida struggling to attract potential buyers and get their homes sold. Based on our personal experiences and from conversations with a number of Realtors, it is clear that the level of frustration is continuing to grow. The last time we had a month with median sales prices in the overall Cape Coral single-family home market in the $360,000s was back in August through October 2021. The number of homes listed for sale in the Cape continues its steady descent, largely driven by some sellers throwing in the towel because they have been unable to get the price they want or need. As a side note, 34.4% of the Cape’s current active listings in the MLS are for new and newer construction homes built in 2023 through 2025. As of Tuesday, Aug. 5, there were 565 Cape Coral homes under contract with buyers at prices ranging from $169,900 for a partially built home to $3.6 million.”

“Another buyer we have been working with has decided to buy a new construction home in a development in Estero. In a number of cases, you could sense the desperation of the seller and the Realtor to get any type of offer on some of these homes. And this was often after the sellers had already made sizable 20% plus price decreases. Ultimately, it took another two weeks for that developer to come back to us with more buyer concessions so we could hammer out a deal on the new construction home, which illustrates the competition sellers of existing homes are facing from new construction homes. The actual examples we could show you are nothing short of mind-boggling.”

“Coming back to Cape Coral, a recent email we received from an established local builder was touting a $20,000 price reduction on one of its move-in ready new construction homes. The information on the home shows it was completed in 2025, so we took a look at the listing information in the MLS. This home was first put on the market as a partially built spec home in June 2023, when it was advertised as having an expected completion date of November 2023. That listing was terminated in November 2023, and it came back on the market at a slightly higher price in September 2024 with a new expected completion date of in December of that year. The builder has just made another $10,000 price reduction on this ‘delayed’ spec home for a total price decrease of $65,000 or an 11.7% discount so far. The local ‘experts’ say this is a ‘normal correction,’ but it doesn’t feel that way to a lot of sellers.”

“Local real estate sales in the second quarter of this year fell 6% from the same time last year to 96 total sales. The drop was more evident in Albemarle County as a whole, where quarterly sales slid 14%. But to folks who follow real estate, these small drops aren’t the whole story. The market is cooling and drifting back to conditions existing prior to Covid. Re-sale homes are sitting on the market a little longer, builder spec homes are being incentivized with lower prices and/or bonus upgrades, and new home contracts have fallen off slightly. A deep breather after five go-go years may not be what is wanted by sellers, but it is finally a bit better for buyers, who now have some decision time and choice.”

“Sixty-nine of the transactions were re-sales, 52% of which sold at the list price or higher. That’s the lowest percentage since the start of the Covid epidemic. There were seven new construction sales during the period, four in Glenbrook, one in Old Trail, and two out in the county. The cost to build these homes quarter-to-quarter dropped 13% to $274 per sqft. The second quarter of 2024 was the first time that the construction cost of detached houses in our area exceeded $300sqft. Hopefully we can stay under this price!”

“Seattle-area high home prices continue to keep prospective buyers at bay, even as more listings and flexible sellers emerge. Last month saw notable jumps in newly listed single-family homes and condos across King, Snohomish and Pierce counties compared to a year ago, according to Northwest Multiple Listing Service. ‘This is peak inventory time right now,’ said David Palmer, Seattle agent at Redfin. ‘A studio or single bedroom condo is the toughest thing to sell right now. I mean condos in general, two and three-bedrooms could still be tough.'”

“‘All in all, it’s a very solid time for a buyer,’ said John Manning, an agent at REMAX Gateway. ‘They’re not rushed like they would have been, say, a few years ago, where other buyers were crawling over each other to snap up every home that came up.’ That means buyers have more room to negotiate, as well, said Jeff Tucker, an economist at Windermere. ‘Having more listings means buyers can play listings off each other,’ Tucker said. ‘Affordability remains the elephant in the room for the Seattle housing market.'”

“Seven years ago, Jefferson Union High School District was losing almost 1 in 4 employees every year, as teachers and other staff headed down the Peninsula to join districts with higher salaries than the small Daly City district could offer. Oakland was facing its own retention issues, losing 1 in 5 of its teachers each year, who could go a few minutes away to Hayward, Fremont, or San Leandro and earn thousands of dollars more. The city was also facing a housing crisis. The Oakland Unified School District designated two properties as future housing sites in 2021, guaranteeing that at least 50% of the new units would go to district employees. Four years later, no apartments have been built. Instead, the sites have languished, become blighted, and pose potentially expensive safety liabilities for the cash-strapped district. The city says it typically costs $800,000 to build a single unit of housing in Oakland.”

“‘If no one is occupying an area, the neighborhood sees the degradation of the buildings,’ Robert Strong Jr., a manager in OUSD’s buildings and grounds department, told the committee. ‘We’ll close the gates and lock them, and it seems like on a daily basis, someone is going to break into it. They’re going to start pulling all the copper from the electrical. It becomes a haven for vandalism. They lit fires on multiple occasions. They mess it up.’ ‘We can’t continue to have years and years, sometimes decades, go by and these spaces not be touched,’ Valarie Bachelor, who chairs the facilities committee, told The Oaklandside. ‘I am very adamant that we do need to do something with our underutilized spaces. Not only do our kids see these everyday, when you’re surrounded by something that’s tagged, that’s breaking down, that’s littered with all kinds of broken objects or animals and things like that, it really takes a toll on you and I think our students deserve better than that.'”

“Affordable housing developers in Salt Lake City currently have an issue at hand: a large amount of recently delivered housing units are driving prices down to the point where market-rate units are now competing with affordable housing units. For Bill Knowlton, an affordable housing developer and real estate attorney, this inventory of available units is concerning. He told Building Salt Lake that in the past, it only took a matter of days to lease up a new LIHTC building, but that’s no longer the case given the large amount of units that have been delivered in recent months.”

“He believes the question will soon become whether the revenue from decreased rental rates will be enough to pay off debt. ‘That is where I think everyone is really nervous,’ Knowlton said. ‘Right now in downtown Salt Lake, you have developers that are currently paying debt service with their own money, meaning not with rental revenue, because there’s not enough rental revenue to pay it.’ Knowlton also believes it won’t be until 2027 that Salt Lake’s market works through all of this apartment supply. Until then, rent prices are going to drop, he said, which he described as a double-edged sword. ‘That’s good from the affordability standpoint, because rents going down means more affordable units,’ he said. ‘But if you build your pro forma off of capturing a certain rent band of income, and you can’t meet that, and you cannot meet your debt service-coverage ratio with your bank, there’s going to be some blood.'”

“At the start of 2022, the typical house in Australia and Canada was worth about $840,000 in each country’s local currency. Australian city prices have climbed by about A$85,000 over the subsequent three years, while Canadian prices have crashed by C$150,000, leaving the median Canadian home nearly 20% cheaper. Borrowers in both countries enjoyed low interest rates in 2020 and 2021, driving up prices. Australia’s most expensive city, Sydney, saw median values surge A$250,000 from 2020 to early 2022, reaching nearly A$1.2m. Overheated demand drove prices far higher in Toronto, Canada’s biggest city, up by A$400,000 to a peak of C$1.3m over the same period, according to the Canadian Real Estate Association (CREA). Toronto’s median price fell below C$1.1m and is yet to recover.”

“Tyson Erlick’s landlord clients at Property Management Toronto had been excited by surging home prices back in 2021. One investor paid C$1m for a sub-50 square metre flat in downtown Toronto’s Yorkville neighbourhood that’s now worth about C$700,000. ‘We’re seeing a lot of landlords panic,’ Erlick said. ‘You’re now looking at a mega loss.’ While Canada’s temporary price correction will not solve its affordability, it should remind Australians real estate is not immune to a drop, said Carolyn Whitzman, a housing researcher and adjunct professor at the University of Toronto. ‘Both Australia and Canada started to believe that it was impossible that house prices ever fall [but] at some point house prices have to fall,’ Whitzman said.”

“Property experts are warning of a surge in down valuations – with thousands and in some cases more than £1 million pounds wiped off a property’s value – as surveyors adopt caution amid stagnant house prices. One landlord said the mortgage valuation process has passed from a ‘professional service into a game of Russian roulette.’ Adam Stiles, managing director at London-based mortgage broker Helix Financial Partners, said he has had three properties downvalued by over £1 million in recent weeks against a backdrop of slowing house prices. ‘We’ve had some atrocious valuations of late,’ he said. In one example, a freehold house in prime London estimated at £3m was valued at £1.4m – less than half. ‘This is after previous valuers had agreed with the estimates of the borrower for their existing funding,’ said Stiles.”

“There is also a glut of supply, with 14% more homes on the market this time in 2024, according to property listing site Zoopla. A market flooded with options for discerning buyers keeps a tight grip on the rate of house price growth. This is particularly the case in expensive areas – in London and the South East and South West regions of England, the number of homes for sale is 16 to 19% higher than a year ago, according to Zoopla.”

“About nine months ago, when residents first moved into their new flats at Golf View Condos — a premium Delhi Development Authority (DDA) housing project in Dwarka — they expected the comfort and amenities promised as part of a luxury development. But within days, that promise gave way to leaking pipes, crumbling plaster, faulty wiring, and unfinished construction. Despite paying over ₹2 crore for these homes, buyers now say they are now spending lakhs more just to make their flats liveable. One resident, who moved in three months ago after purchasing a flat for ₹3 crore, said problems began the day he took possession. ‘The wiring was faulty, doors were missing, and there was seepage in walls. I had to spend ₹30 lakh more on repairs and renovations — just to make the house what it was supposed to be in the first place,’ he said. He also paid for private security cameras in his building, citing a complete lack of oversight.”

“Another resident said it’s nearly impossible to move in without spending at least ₹20 lakh extra, mainly because the wiring and plumbing have to be redone. ‘You have to break the walls and redo the basic fittings. We had no choice,’ he added. Another added, ‘We’ve paid such a high price for these homes. We can’t afford to leave. We have no option but to live with these problems.'”