November 30, 2017

For Sellers, It Can Be Frustrating

A report from the Orlando Sentinel in Florida. “Jonathan Barr thought living at the Paramount on Lake Eola would be a dream come true. He estimates spending about $200,000 in custom cabinets, lighting, flooring and other treatments for the downtown Orlando home he bought in 2006. But this past July, Barr was forced to sell because a majority owner is converting the entire building into apartments. Such a move, called a condo termination, has prompted a lot of anger since it became permissible in 2007 under a Florida law that has been tweaked several times in an effort to make it more fair.”

“Things could have been worse for Barr. Because he lived in the unit, he was guaranteed to receive at least what he paid for it, which was $500,000 at the peak of the housing market in 2006. But people who owned units at the Paramount as an investor or a landlord, such as Javier Camacho of Miami, didn’t have that guarantee. He had purchased the unit in 2008 for $449,857. But the value of the unit had plummeted, not just because of the recession, but also because the building went into foreclosure and became mostly apartments.”

“Camacho sold his unit for $309,000, a loss of $140,000, to Northland soon after it bought the building in May. Despite the lower price, Camacho said he understands the situation. ‘On my end, I think was treated well. It was the market forces that determined the sale price,’ Camacho said.”

From the Coloradoan. “New apartments appear to be easing vacancy rates, particularly in northwest Fort Collins, but the city is not out of its tight rental market just yet. The city’s overall multifamily vacancy rate improved to 3.7 percent in the third quarter of 2017. It’s the highest percentage of vacant rental units the city has seen in four years. Increasing apartment rents, a slowdown in the single-family rental market, and newly available options are pushing renters out of apartments and into townhomes, condos and single-family homes, said Greg Roeder, owner of Waypoint, a Fort Collins brokerage and property management company.”

“As rents for single-family homes start to decline, renting a home looks like a better deal than an apartment. ‘The three- to four-bedroom house that was getting $2,100 a month might now be getting $1,700,’ Roeder said.”

The Houston Chronicle in Texas. “Camden Property Trust’s stock has fluctuated in recent years, at times taking a hit from investor perceptions that Houston, where the company owns thousands of apartments, isn’t the best place to live compared with high-flying coastal cities. The latest energy bust didn’t help either. Then Hurricanes Harvey and Irma hit. ‘The stock shot up like a rocket,’ CEO Ric Campo said, noting that Camden’s local apartment portfolio saw occupancy jump nearly 5 percentage points after the storm.”

“Campo made a last-minute decision to issue new shares and the company raised $500 million in equity. ‘Folks in New York, Boston and elsewhere bought the stock.’ The company sold $1.2 billion worth of properties in the last year as historically low interest rates drove up prices. Camden is reinvesting some of the proceeds in new development, but it’s also making sure it has a financial cushion. ‘I’m not projecting a crisis or a crash,’ Campo said. ‘I’ve just been around long enough to know that the cycle changes when the cycle changes. When prices are at peak levels you sell and put cash on your balance sheet.’”

The News Journal in Delaware. “Delaware’s housing market, for buyers, is promising. For sellers, it can be frustrating. The slow growth has been driven by a large number of homes that are in foreclosure or otherwise being sold in distress at fire-sale prices, said Bruce Plummer, president of the Delaware Association of Realtors.”

“‘It is a problem that is statewide,’ he said. Delaware has been slower to rid itself of a large proportion of bank-owned homes, said Plummer, who also is a practicing real estate broker for Coldwell Banker in Rehoboth Beach. ‘For some reason, the problem is lingering in Delaware more than I expected,’ he said. ‘We have $800,000 homes that are in foreclosure at the beach.’”

From Mansion Global on New York. “Thanksgiving put a cramp in New York’s luxury market last week with only 15 homes finding buyers, according to a report by Olshan Realty. The deals cut on homes last week were worthy of Black Friday, as the average discount was a whopping 19%. For instance, the No. 1 contract last week was a four-bedroom condo at 15 Central Park West, asking $25 million—a 24% discount from the $33 million the owners originally wanted when it was first listed in June.”

“The price cut on last week’s No. 2 transaction was even greater. The triplex condo at 53 Leonard St. in Tribeca went into contract, asking just under $9 million, a 50% price cut from the $18 million price tag it had when it when it went on the market in May 2016.”