Project shows well-off borrowers also hurt by easy-loan climate

Project shows well-off borrowers also hurt by easy-loan climate

On a crisp fall afternoon in 2002, a crowd gathered under a big tent near the Penland School of Crafts, an artists’ colony tucked in the Blue Ridge Mountains. While a harpist played, real-estate developer Tony Porter described his vision for a 2,000-lot residential and retail development called the Village of Penland.

The developer and others at his company, Peerless Real Estate Services Inc., said they needed investors to launch the project in time to catch the real-estate wave. They promised to help people borrow as much as $2 million, according to people who heard Porter’s pitch and a Wall Street Journal review of promotional documents.

Over the next several years, investigators say, nearly 200 investors — mostly well-heeled professionals including real estate lawyers, doctors and Air Force officers — borrowed more than $100 million with Porter’s help from a handful of banks, including Charlotte-based First Charter Corp.

Miami Condo Glut Pushes Florida’s Economy to Brink of Recession [South Florida]

Miami Condo Glut Pushes Florida’s Economy to Brink of Recession [South Florida]

In the middle of the biggest glut of condominiums in more than 30 years, Miami developers keep on building.

The oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida’s economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody’s Economy.com, who owns a home in Vero Beach, Florida.

“Florida is the epicenter for all the problems that exist in the housing industry,” said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. “The problems we have now are unprecedented and a lot of people will get burnt.”

Thirty-seven new high-rise condos and 20,000 new units are being built in Miami’s 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research & Consulting LLC in Deerfield Beach, Florida. That’s the most unsold units since McCabe began tracking sales in 2002.

Renters win in slow market [South Florida]

Renters win in slow market [South Florida]

Now that Palm Beach County’s boom-time home-sales market is settling down … guess what? It’s become a renters’ market, according to a report released Wednesday.

While that’s good for renters, it isn’t welcome news to landlords or home sellers.

Home sellers competing for buyers in the county’s volatile market now have a glut of rental apartments to worry about, according to RealFacts, a multifamily research firm in Novato, Calif.

The average rent in the county from April through June was $1,156, according to RealFacts. That is an average of all bedroom and bathroom combinations.

Silicon Valley home market squeezing buyers and sellers [Silicon Valley]

Silicon Valley home market squeezing buyers and sellers [Silicon Valley]

Statistically high median home prices in Silicon Valley’s housing market continue to belie soft market conditions, including falling prices, swollen inventories and tight mortgage money in some areas.

Real estate agents on the street say an “inverse” market has emerged, forcing sellers to cut prices for buyers who are having a tough time finding financing.

The median price of single-family homes in closed sales in June, $867,500, was only slightly off the record-high median $868,406 set back in April, according to the Bay Area Real Estate Market Newsletter.

The current median is nearly $50,000 more than it was a year ago, but that doesn’t mean Silicon Valley’s housing market is booming.

The Cost of Borrowing Moves Up

The Cost of Borrowing Moves Up

When Metropolitan Real Estate Investors of Los Angeles and its Israeli financial partners agreed in April to buy 885 Third Avenue, a Midtown Manhattan office tower that is known as the Lipstick Building because of its elliptical shape, there seemed to be little doubt about how the deal would be financed.

Wachovia, one of the most active lenders in commercial real estate, had tentatively agreed to finance 90 percent of the deal, with generous terms that were typical for loans in Manhattan and other cities where the prices being paid for office buildings have skyrocketed in recent years.

But Metropolitan’s timing was unfortunate. Just after it entered into contract for the 34-story Lipstick Building, its first foray into New York, the lending market tightened. Wachovia, whose loan offer was nonbinding, wanted new terms with less leverage and a higher interest rate.

Islamorada developer faces lawsuit

Islamorada developer faces lawsuit

Robert Falor, the embattled condo-hotel developer, faces a new lawsuit over his ownership interest in Islamorada’s Cheeca Lodge.

The Chicago developer who has feuded with partners in several hotel projects in South Florida now must fight a lawsuit in Monroe County from investors claiming mismanagement and breach of contract.

At issue is Falor and partners’ 15 percent stake in the posh Islamorada resort, an investment that marked his entry in South Florida’s then-surging market for condo-hotels four years ago. A string of projects followed, but each eventually put Falor in conflict with business associates.

A spokeswoman for Cheeca’s majority owner, Johnson Resort Properties in Jackson, Wyo., said the dispute will not affect operations ”in any way” at the resort and that Johnson and Falor remain ”amicable” partners.