Expensive Has Been Getting Less Expensive Lately
A report from the Real Deal on California. “Analysts say Downtown Los Angeles is at risk of being oversupplied with luxury apartments — a theory which will be tested as more projects open for leasing. Carmel Partners’ 33-story, 363-unit glass tower is up next. The development, which is rising at Eighth and Olive Street in South Park, will begin pre-leasing in early December. Dubbed Atelier, the project follows Carmel’s 700-unit Eighth & Grand project above Whole Foods, which is ‘over 50 percent leased,’ according to a spokesperson for Carmel. CoStar analyst Steve Basham has cited rent and parking concessions Carmel offered at Eighth & Grand as evidence DTLA’s luxury sector is slowing.”
The Midland Reporter Telegram in Texas. “The watch continues for the end of the Midland-Odessa economic contraction. Karr Ingham, the Amarillo economist who prepares the Midland-Odessa Regional Economic Index, said that area workers may continue to endure a slow labor market, which has seen thousands of jobs lost and a surging unemployment rate. Housing continued to defy expectations in the low oil price environment, but the housing markets in Midland and Odessa painted different pictures. Sales of existing homes in Midland-Odessa fell 10.1 percent in the third quarter from last year and 8.9 percent in September from last September.”
“But in Midland, sales grew 1.6 percent in September, while falling 7.5 percent in the third quarter from last year’s third quarter. The sales price in Midland-Odessa averaged $250,631 in the third quarter, up 4.5 percent, and $245,831 in September, up 6.2 percent from last September. In Midland, the third quarter average sales price was $284,031, up 8.2 percent. The September average was $270,408, up 6.8 percent from last September. In Midland, 32 new housing permits were issued in September, down 54.9 percent from 71 the previous September.”
“Ingham said it’s not that Odessa’s housing market has ‘fallen off a cliff,’ but that Midland is experiencing such a strong market. ‘I’m not sure who’s looking for housing at those prices,’ he said.”
From Bloomberg on New York. “The first apartment tower at Forest City Ratner Cos.’s mega-development in Brooklyn — planned for a decade and under construction since 2012 — will open for leasing this month, just as the borough’s run-up in rents is beginning to cool. At 320 feet (98 meters), the building at 461 Dean St. has the distinction of being the world’s tallest property whose units are stitched together from prefabricated modular blocks, according to the developer, a unit of Forest City Realty Trust Inc. Less unusual is the timing of its arrival, with thousands of other newly built rentals also coming to the Brooklyn market.”
“The glut of competition is already pushing Brooklyn landlords to cut deals to fill apartments. Property owners gave concessions, such as a month’s free rent or payment of a broker’s fee. ‘Brooklyn needs time to absorb the new supply,’ David LaRue, chief executive officer of Forest City Realty Trust, said on its Nov. 4 earnings call. Citing challenging market conditions in Brooklyn, the company wrote down the value of its real estate investments by $307.6 million, with much of that reduction related to the Pacific Park development, formerly known as Atlantic Yards.”
The Tampa Bay Times in Florida. “There will be no ‘free houses’ for Floridians who have defaulted on their mortgages but continue to live in their homes without paying. In a major opinion, the Florida Supreme Court has ruled that lenders can resume foreclosing at any time, even if they have taken no action in years. Previously, they had to act within five years of when the borrower first defaulted.”
“‘This case resolves an important issue for Florida, one of the states hardest hit by the foreclosure crisis,’ said Michele Stocker, a Fort Lauderdale lawyer who represents lenders. ‘The decision effectively removes the unfair notion that people can live in a home for free after an extended period of time. It could help clear out the backlog of cases that have been sitting around for a while.’”
“At the heart of the case was the issue of ‘mortgage acceleration.’ Most mortgages have an acceleration clause that allows the lender to sue for the entire loan amount immediately, starting a five-year clock on the foreclosure process. In their ruling, the justices agreed. They said the statute of limitations for banks to file a foreclosure suit resets each month that the borrower defaults on a mortgage payment. That means a bank can file suit more than five years after the borrower first defaulted. It also means borrowers can’t stay in their homes forever without paying.”
“‘The decision finally brings some clarity to the issue and will allow judges who have been reluctant to rule on foreclosure cases to move forward with ones that have been pending for years,’ Stocker said. ‘Now everyone knows what is and what isn’t permissible.’”
From WTOP in Virginia. “Northern Virginia’s most expensive county has been getting less expensive lately, at least based on the median price of what’s been selling. The median price of a house or a condo that sold in Arlington County in October fell below $500,000, the first time that has happened in 2 1/2 years. Long & Foster Real Estate says the median price last month was $497,000, down 9 percent from a year earlier. Just four months ago, the median price of a sale in Arlington County reached $627,000.”
“Arlington County’s year-over-year median price has declined for three consecutive months now. These are median sales price figures, and it may be Arlington’s high-end that’s dragging those numbers down. ‘The number of sales in the upper-bracket end, at $1 million or $1.5 million and up, has dropped off much more rapidly than the number of sales in the entry level house and condo market, so that affects the median number,’ Bob Adamson, with real estate firm McEnearney Associates, told WTOP.”
“‘I’m looking at numbers across the board in different price ranges year to year, and if you average it out it’s not nearly that big of a drop,’ said Adamson, who is also chairman-elect of the Northern Virginia Association of Realtors.”
