January 25, 2017

Getting Nervous Because They’re Losing So Much Money

A report from Curbed Chicago in Illinois. “While Chicago’s new condo market continues its slow thaw out of the deep freeze of the Great Recession, an ambitious project planned for the northwest corner of Chicago and Wells appears to have hit serious trouble. Known by its address of 808 Wells, the luxury development from Smithfield Properties and Berkelhamer Architects was set to rise 24 stories and contain just 45 well-appointed residences priced from just under $1 million up to $4.5 million. Units in the building first hit the MLS last summer as a one-story temporary sales center was erected at the site of the future residential high-rise.”

“In the months since sales reportedly began, all online listings have disappeared. The brick-and-mortar sales center has not been open during the indicated hours and a large billboard advertising 808 outside Chicago’s East Bank Club has been removed. Perhaps most indicative of trouble is a notification of an expired domain when trying to reach the project’s once functional website at 808wells.com. A call to the number listed on the sales center window was not immediately returned.”

The Business Observer in Florida. “The Naples residential real estate market, normally a high performer in the region, took a hit last year. The Naples Beach region posted the largest decrease in overall closed sales for the year among the entire market. Total sales there dropped 21%, from 1,922 in 2015 to 1,525 last year. On the flip side, inventory rose dramatically. Single-family inventory is up 24% year-over-year, while condo inventory is up 47%.”

“John R. Wood Properties Managing Broker Coco Waldenmayer cites competition from new home developments as one factor in fewer sales of existing homes in 2016 compared to 2015, which was a strong year, he adds. ‘The report showed the highest number of closed sales in 2016 occurred in the North Naples area, which is also where a rash of new home development is taking place,’ Waldenmayer says in the release.”

“‘With a surge in inventory from new construction, buyers had more options in 2016,’ adds Adam Vellano, West Coast Sales Manager for BEX Realty Florida, in the statement.”

The Silicon Beat in California. “For the fourth consecutive month, rents have fallen around the Bay Area. That’s according to a new analysis by the Axiometrics research firm, which shows rents sliding across the region, from San Jose to San Francisco and Oakland. Last year, as rents began softening elsewhere in the region, Oakland rents continued to appreciate. But over the past few months, Oakland rents have softened, too.”

“‘The rental market has pretty much stopped,’ said Ron Stern, CEO of Bay Rentals, a housing relocation service. ‘I don’t know if it’s just a rainy January. But a lot of people’ — landlords, property managers — ‘are getting nervous, because properties are sitting unfilled. They’re losing so much money, it doesn’t make sense. So they rent it out cheaper — drop it a couple of hundred bucks — and get on with it.’”

The Real Deal on New York. “There’s no place like home — a price-reduced home. Here’s a look at the biggest chops in New York City for the week. 1 West 72nd Street, Apt 77 - This three-bedroom, 4,700-square-foot co-op in the iconic Dakota first hit the market back in January last year asking $16.7 million. It was owned by the late Jacqueline Bikoff, said to be an Iranian pianist, ballerina and Studio 54 regular. Property records show she paid $13 million for it back in 2010. It was reduced to $15.9 million in August, and is now asking $12.5 million, a reduction of 22 percent.”

“In total, 14 properties priced over $10 million received reductions of more than 5 percent in the period between Jan. 17 through Jan. 23, according to data from StreetEasy. Out of that 14, five were units at Extell Development’s Carlton House.”