Real Estate Crash thread

[Toadman]

Santa was doing a lot of building in December.

https://finance.yahoo.com/news/u-con...152554612.html

U.S. construction spending raced to a record high in December as historically low mortgage rates powered outlays on private projects.

The Commerce Department said on Monday that construction spending increased 1.0% to $1.490 trillion, the highest level since the government started tracking the series in 2002. Data for November was revised higher to show construction outlays surging 1.1% instead of 0.9% as previously reported.

[54-46]

We’ll see how long I keep this place on the golf course. Probably about 5-6 years.

[Benny Profane]

Here's some schadenfreude for all those that hate the rich, but, more importantly, cant stand what these pencil towers have done to the Manhattan skyline.


https://nyti.ms/3toIoRe

The Down Side to Life in a Supertall Tower: Leaks, Creaks, Breaks

432 Park, one of the wealthiest addresses in the world, faces some significant design problems, and other luxury high-rises may share its fate.


The nearly 1,400-foot tower at 432 Park Avenue, briefly the tallest residential building in the world, was the pinnacle of New York’s luxury condo boom half a decade ago, fueled largely by foreign buyers seeking discretion and big returns.

Six years later, residents of the exclusive tower are now at odds with the developers, and each other, making clear that even multimillion-dollar price tags do not guarantee problem-free living. The claims include: millions of dollars of water damage from plumbing and mechanical issues; frequent elevator malfunctions; and walls that creak like the galley of a ship — all of which may be connected to the building’s main selling point: its immense height, according to homeowners, engineers and documents obtained by The New York Times.

Less than a decade after a spate of record-breaking condo towers reached new heights in New York, the first reports of defects and complaints are beginning to emerge, raising concerns that some of the construction methods and materials used have not lived up to the engineering breakthroughs that only recently enabled 1,000-foot-high trophy apartments. Engineers privy to some of the disputes say many of the same issues are occurring quietly in other new towers.

The building, a slender tower that critics have likened to a middle finger because of its contentious height, is mostly sold out, with a projected value of $3.1 billion. The 96th floor penthouse at the top of the building sold in 2016 for nearly $88 million to a company representing the Saudi retail magnate Fawaz Alhokair. Jennifer Lopez and Alex Rodriguez bought a 4,000-square-foot apartment there for $15.3 million in 2018, and sold about a year later.

“I was convinced it would be the best building in New York,” said Sarina Abramovich, one of the earliest residents of 432 Park. “They’re still billing it as God’s gift to the world, and it’s not.”

CIM Group, one of the developers, said in a statement that the building “is a successfully designed, constructed and virtually sold-out project,” and that they are “working collaboratively” with the condo board, which was run by the developers until January when residents were elected and took control. (Developers typically control condo boards in the first few years of operation.) “Like all new construction, there were maintenance and close-out items during that period,” they said. Macklowe Properties, the other developer, declined to comment.

The construction manager, Lendlease, said in a statement that they “have been in contact” with the developers, “regarding some comments from tenants, which we are currently evaluating.”

Ms. Abramovich and her husband, Mikhail, retired business owners who worked in the oil and gas business, bought a high-floor, 3,500-square-foot apartment at the tower for nearly $17 million in 2016, to have a secondary home near their adult children.


She was disappointed with her purchase on day one, she said, when she left her home in London in early 2016 to move into what she expected to be a completed apartment, and found that both her unit and the building were still under construction.

“They put me in a freight elevator surrounded by steel plates and plywood, with a hard-hat operator,” she said. “That’s how I went up to my hoity-toity apartment before closing.”

Problems escalated from there, she said. There have been a number of floods in the building, including two leaks in November 2018 that the general manager of the building, Len Czarnecki, acknowledged in emails to residents. The first leak, on Nov. 22, was caused by a “blown” flange, a ribbed collar that connects piping, around a high-pressure water feed on the 60th floor. Four days later, a “water line failure” on the 74th floor caused water to enter elevator shafts, removing two of the four residential elevators from service for weeks.

Both events occurred on mechanical floors that have been criticized for being excessively tall — a design feature that allowed the developers to build higher than would otherwise have been permitted, because mechanical floors do not count against the building’s allowable size.

Reached by phone, Mr. Czarnecki said he was “not at liberty to comment.”

After the first incident, water seeped into Ms. Abramovich’s apartment several floors below the leak, causing an estimated $500,000 in damage, she said.

Others have made similar claims. The anonymous buyer of unit 84B cited a “catastrophic water flood” that caused major damage to the 83rd to 86th floors in 2016 as grounds to back out of the deal. The would-be buyer, who was in contract for a $46.25 million apartment, was a member of the Beckmann family, the owners of the Jose Cuervo tequila brand, according to sources familiar with the suit. The case was settled quietly the next year.

Many of the mechanical issues cited at 432 Park are occurring at other supertall residential towers, according to several engineers who have worked on the buildings.

All buildings sway in the wind, but at exceptional heights, those forces are stronger. A management email explained that “a high-wind condition” stopped an elevator and caused a resident to be “entrapped” on the evening of Oct. 31, 2019 for 1 hour and 25 minutes. Wind sway can cause the cables in the elevator shaft to slap around and lead to slowdowns or shutdowns, according to an engineer who asked not to be named, because he has worked on other towers in New York with similar issues.

One of the most common complaints in supertall buildings is noise, said Luke Leung, a director at the architectural firm Skidmore, Owings and Merrill. He has heard metal partitions between walls groan as buildings sway, and the ghostly whistle of rushing air in doorways and elevator shafts.

Residents at 432 Park complained of creaking, banging and clicking noises in their apartments, and a trash chute “that sounds like a bomb” when garbage is tossed, according to notes from a 2019 owners’ meeting.

Problems at the building were coupled with significant new expenses. Annual common charges jumped nearly 40 percent in 2019, according to management emails that cited rising insurance premiums and repairs, among other costs.

Eduard Slinin, a resident who was elected to the condo board late last year, wrote a letter to neighbors in 2020 reporting that the building’s insurance costs had increased 300 percent in two years. The insurance hike was partly because of a sprinkler discharge and two “water related incidents” in 2018 that cost the building about $9.7 million in covered losses, according to a letter from the residential board of managers.

Some residents also railed against surging fees at the building’s private restaurant, overseen by the Michelin-star chef, Shaun Hergatt. When the building opened in late 2015, homeowners were required to spend $1,200 a year on the service; in 2021, that requirement jumps to $15,000, despite limited hours of operation because of the pandemic. And breakfast is no longer free.

[Skidog]

Here's some schadenfreude for all those that hate the rich, but, more importantly, cant stand what these pencil towers have done to the Manhattan skyline.


https://nyti.ms/3toIoRe

The Down Side to Life in a Supertall Tower: Leaks, Creaks, Breaks

432 Park, one of the wealthiest addresses in the world, faces some significant design problems, and other luxury high-rises may share its fate.


The nearly 1,400-foot tower at 432 Park Avenue, briefly the tallest residential building in the world, was the pinnacle of New York’s luxury condo boom half a decade ago, fueled largely by foreign buyers seeking discretion and big returns.

Six years later, residents of the exclusive tower are now at odds with the developers, and each other, making clear that even multimillion-dollar price tags do not guarantee problem-free living. The claims include: millions of dollars of water damage from plumbing and mechanical issues; frequent elevator malfunctions; and walls that creak like the galley of a ship — all of which may be connected to the building’s main selling point: its immense height, according to homeowners, engineers and documents obtained by The New York Times.

Less than a decade after a spate of record-breaking condo towers reached new heights in New York, the first reports of defects and complaints are beginning to emerge, raising concerns that some of the construction methods and materials used have not lived up to the engineering breakthroughs that only recently enabled 1,000-foot-high trophy apartments. Engineers privy to some of the disputes say many of the same issues are occurring quietly in other new towers.

The building, a slender tower that critics have likened to a middle finger because of its contentious height, is mostly sold out, with a projected value of $3.1 billion. The 96th floor penthouse at the top of the building sold in 2016 for nearly $88 million to a company representing the Saudi retail magnate Fawaz Alhokair. Jennifer Lopez and Alex Rodriguez bought a 4,000-square-foot apartment there for $15.3 million in 2018, and sold about a year later.

“I was convinced it would be the best building in New York,” said Sarina Abramovich, one of the earliest residents of 432 Park. “They’re still billing it as God’s gift to the world, and it’s not.”

CIM Group, one of the developers, said in a statement that the building “is a successfully designed, constructed and virtually sold-out project,” and that they are “working collaboratively” with the condo board, which was run by the developers until January when residents were elected and took control. (Developers typically control condo boards in the first few years of operation.) “Like all new construction, there were maintenance and close-out items during that period,” they said. Macklowe Properties, the other developer, declined to comment.

The construction manager, Lendlease, said in a statement that they “have been in contact” with the developers, “regarding some comments from tenants, which we are currently evaluating.”

Ms. Abramovich and her husband, Mikhail, retired business owners who worked in the oil and gas business, bought a high-floor, 3,500-square-foot apartment at the tower for nearly $17 million in 2016, to have a secondary home near their adult children.


She was disappointed with her purchase on day one, she said, when she left her home in London in early 2016 to move into what she expected to be a completed apartment, and found that both her unit and the building were still under construction.

“They put me in a freight elevator surrounded by steel plates and plywood, with a hard-hat operator,” she said. “That’s how I went up to my hoity-toity apartment before closing.”

Problems escalated from there, she said. There have been a number of floods in the building, including two leaks in November 2018 that the general manager of the building, Len Czarnecki, acknowledged in emails to residents. The first leak, on Nov. 22, was caused by a “blown” flange, a ribbed collar that connects piping, around a high-pressure water feed on the 60th floor. Four days later, a “water line failure” on the 74th floor caused water to enter elevator shafts, removing two of the four residential elevators from service for weeks.

Both events occurred on mechanical floors that have been criticized for being excessively tall — a design feature that allowed the developers to build higher than would otherwise have been permitted, because mechanical floors do not count against the building’s allowable size.

Reached by phone, Mr. Czarnecki said he was “not at liberty to comment.”

After the first incident, water seeped into Ms. Abramovich’s apartment several floors below the leak, causing an estimated $500,000 in damage, she said.

Others have made similar claims. The anonymous buyer of unit 84B cited a “catastrophic water flood” that caused major damage to the 83rd to 86th floors in 2016 as grounds to back out of the deal. The would-be buyer, who was in contract for a $46.25 million apartment, was a member of the Beckmann family, the owners of the Jose Cuervo tequila brand, according to sources familiar with the suit. The case was settled quietly the next year.

Many of the mechanical issues cited at 432 Park are occurring at other supertall residential towers, according to several engineers who have worked on the buildings.

All buildings sway in the wind, but at exceptional heights, those forces are stronger. A management email explained that “a high-wind condition” stopped an elevator and caused a resident to be “entrapped” on the evening of Oct. 31, 2019 for 1 hour and 25 minutes. Wind sway can cause the cables in the elevator shaft to slap around and lead to slowdowns or shutdowns, according to an engineer who asked not to be named, because he has worked on other towers in New York with similar issues.

One of the most common complaints in supertall buildings is noise, said Luke Leung, a director at the architectural firm Skidmore, Owings and Merrill. He has heard metal partitions between walls groan as buildings sway, and the ghostly whistle of rushing air in doorways and elevator shafts.

Residents at 432 Park complained of creaking, banging and clicking noises in their apartments, and a trash chute “that sounds like a bomb” when garbage is tossed, according to notes from a 2019 owners’ meeting.

Problems at the building were coupled with significant new expenses. Annual common charges jumped nearly 40 percent in 2019, according to management emails that cited rising insurance premiums and repairs, among other costs.

Eduard Slinin, a resident who was elected to the condo board late last year, wrote a letter to neighbors in 2020 reporting that the building’s insurance costs had increased 300 percent in two years. The insurance hike was partly because of a sprinkler discharge and two “water related incidents” in 2018 that cost the building about $9.7 million in covered losses, according to a letter from the residential board of managers.

Some residents also railed against surging fees at the building’s private restaurant, overseen by the Michelin-star chef, Shaun Hergatt. When the building opened in late 2015, homeowners were required to spend $1,200 a year on the service; in 2021, that requirement jumps to $15,000, despite limited hours of operation because of the pandemic. And breakfast is no longer free.

$15K/year on the same fucking food? What a fucking scam.

[Benny Profane]

And no free breakfast. The horror.

[Danno]

And no free breakfast. The horror.

That breakfast was never free.

[Timberridge]

Unless you know how to work a breakfast buffet into a free lunch.

[jackstraw]

Exactly - without municipal or above intervention - developers are not going to build small houses. Leaves too much money on the table.

Most developers I know have too much money and building 5k sq ft houses is a fucking waste of resources unless you have a bunch of kids and actually need the space. And we won't go down the road of having a bunch of kids...

[Stu Gotz]

I guess that dropping garbage down a 1000 foot chute would create some noise.

[Choss Jonger, Sr.]

"just by being a TA."

LOL

[Toadman]

No surprise. Relatives in CT were finally able to sell a house last year that they had been renting for 8 years as it was underwater that whole time until the COVID came along.

https://finance.yahoo.com/news/u-hom...150016170.html

(Bloomberg) -- U.S. home prices, fueled by the lowest mortgage rates in history, rose at the fastest pace on record, surpassing the peak from the last property boom in 2005.

The median price of a single-family home climbed 14.9% to $315,000 in the fourth quarter. That was the biggest surge in data going back to 1990, according to the National Association of Realtors.

The Northeast led the way with a 21% gain as buyers rushed to the suburbs. Fairfield County, Connecticut, home to Greenwich and other tony towns, rose 39% for the biggest increase in the U.S.

[Benny Profane]

I wish I was looking at 39%.

[liv2ski]

Who cares if your not selling? I wish prices in CA would tank 50%, but it will never happen.

[Stu Gotz]

I wish I was looking at 39%.

I don’t think there have been any price increases, just that there is a market now. Good for the real estate agents though, as it’s been a decade of drought.

[Benny Profane]

Yeah, funny, the market for my complex has increased pretty dramatically, i.e., fast sales, but, prices? Meh.

[Name Redacted]

Who cares if your not selling? I wish prices in CA would tank 50%, but it will never happen.

When it falls into the ocean any day now?

[ötzi]

I guess that dropping garbage down a 1000 foot chute would create some noise.

No shit, right? Was thinking the same thing. It's gotta be nutty.

[Stu Gotz]

Yeah, funny, the market for my complex has increased pretty dramatically, i.e., fast sales, but, prices? Meh.

Get an offer, take it.

Maybe along the coast things are better, but things are selling under offer here. But they are selling.

[4matic]

We’ll see how long I keep this place on the golf course. Probably about 5-6 years.

Looks like Old Del Monte

[4matic]

When it falls into the ocean any day now?

The faults move horizontal to the ocean.

[Kevo]

https://www.whitehouse.gov/briefing-...or-homeowners/

How far are we going to kick the can down the road? This will keep inventory at record low levels and keep house prices climbing.

We're screwing over an entire generation of would be homeowners by protecting current homeowners.

[mcphee]

https://www.whitehouse.gov/briefing-...or-homeowners/

How far are we going to kick the can down the road? This will keep inventory at record low levels and keep house prices climbing.

We're screwing over an entire generation of would be homeowners by protecting current homeowners.

hot take, guy!

[Mazderati]

I wonder how '10 million homeowners behind on mortgage payments' translates to number of mortgages that are behind. And, of the mortgages that are behind, what portion are truly behind and what portion are behind voluntarily.

[Foggy_Goggles]

The social safety net entailing mortgage forbearance does seem like it puts pain in the wrong place but what can you expect when federally guaranteed low down mortgages are the norm.

[CascadeLuke]

I know people who took forbearance and have been basically earning the whole time. One of them is super close to me and they’re probably 275k in household income - living in that hot town of NB. Not my bIz but something is awry