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Property valuation increases reflect the beginning of the county’s real estate boom

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This home pictured on Friday, May 7, 2021 at 1144 Discovery Hill Drive was the most expensive home sale in March 2021. On average, home values ​​rose 11% over this revaluation cycle.
Photo by Jason Connolly / Jason Connolly Photography

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In early May, Summit County homeowners should have received a valuation notice from Summit County stating the value of their homes for the most recent revaluation cycle.

Some homeowners may have been shocked to see their ratings spike. According to a county press release, the average percentage change in residential property values ​​across the county, including single-family, semi-detached, and townhouses, averaged about 10.69%. Condos rose an average of 11.47%.

Unsurprisingly, this has a lot to do with the boom in the local real estate market, but not as much as residents suspect.

All Summit County residential properties are valued using the market approach. Summit County Assessor Frank Celico said that this means the county will use the sales of some properties to determine the value of all properties over a period of time. For the 2021 evaluation, this data collection period was July 1, 2015 to June 30, 2020, when the local property boom was only just beginning.

“Honestly, what has happened since June 30, 2020 has been really explosive sales,” said Celico. “It’s really been booming … since about that date.”

What does this mean for the next revaluation cycle? Celico said it was very likely that homeowners could see an even bigger spike in their property valuations next time around, especially if the current housing boom continues.

“The sales we have seen since then will be reflected in the 2023 values ​​as they are part of that data period,” said Celico. “And so it’s a good sign that this trend will continue for (if) significant increases in 2023.”

Celico said homeowners could expect even bigger gains than this year and potentially similar numbers to 2019.

“If you look at what happened in 2019, it was (plus) 21% for single-family homes and almost 30% (plus) for condominiums … that was two years ago. I wouldn’t be at all surprised if we saw such increases in 2023, but it’s purely speculative, ”said Celico. “On the one hand, there is a precedent for such an increase in value.”

Mike Peterson, senior data analyst with the Summit County’s appraisal office, said the state goes through its revaluation process every two years to keep fair values ​​in line with taxable values. This means that the current real estate boom that the district is currently experiencing will only be fully realized in 2023.

While some homeowners view rising property valuations as worrying for their wallets, others, like property owner Katie Schweitzer, are optimistic about the current property market.

Schweitzer bought her one-bedroom apartment in Summit Cove for $ 345,000 in August. She said her unit had been completely renovated and recently learned that another unit similar to her – that was not renovated – recently sold for $ 450,000. Schweitzer said this is what she is focusing on right now, the possibility of what the return on her investment might look like, rather than property taxes.

“I’m not very concerned about this, but I think it makes sense to distribute numbers between the professionals who can advise you,” said Schweitzer.

While valuations could continue to rise, that doesn’t necessarily mean property taxes will rise at the same rate, Peterson said.

“One of the most important things we need to emphasize here is that while your value changes, it may not result in the same increase in your property taxes, as the value is only part of how your property tax is calculated. “Said Peterson.

Peterson said other factors such as rating rates and rating values ​​also need to be included in the equation. For more information on calculating property taxes, visit the county assessor’s website.

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Genting Berhad to sell Miami real estate, seeking $1bln for New York investment, reports

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Genting Berhad is reportedly planning to sell part of its Miami real estate, seeking over $1 billion, which it plans to use to further other projects, such as a casino bid in New York.

According to Bloomberg, the group is auctioning off a 16-acre waterfront parcel, formerly home to the Miami Herald newspaper, directly across from Miami beach and nearby art and concert venues.

Resorts World Las Vegas Casino

In a statement from the group’s US subsidiary, Genting Americas East, it notes that the group will in coming months “be marshalling our resources with the goal of bringing a full commercial casino to our New York City property and expanding our already-tremendous offerings in Las Vegas”.

The company is aiming to get one of the three new casino licenses up for grabs in downstate New York, expected to be awarded next year. It currently operates a slot machine facility in Queens, with expected investment for an expanded hotel, resort and casino there – including table games – to top $1 billion, the publication notes.

The sale of the Miami property, which it acquired in 2011 for $236 million, would greatly help this move, as the company focuses further on the North American market amongst a downturn in some of its Asian segments.

Just last week, the Macau government announced Genting had been unsuccessful in its bid for a gaming concession in the territory.

The group, however, did note a narrowing of its third-quarter loss, to $1.84 million, as its Resorts World Genting property in Malaysia saw improvements and its $4.3 billion Resorts World Las Vegas property continued to ramp up after its opening last year.

Scraped dreams

Global Dream, cruise ship, Genting, Hong KongGlobal dream cruise ship

Regarding Genting’s Hong Kong operations, the winding up of its HK Dream Cruises segment could have proven to be a significant boon for Disney, who announced it was acquiring the under-construction Global Dream cruise ship.

According to WDWNT, Disney reportedly paid less than 3 percent of the value of the unfinished ship – or just $41 million, which it says was around 75 percent completed.

The original estimate for the ship’s cost was $1.8 billion.

The publication notes that Disney is expecting to spend another $1 billion converting and finishing the ship, but that the total costs are “anticipated to be less than our recent fleet additions”. The ship is expected to make its maiden voyage in 2025, with a passenger capacity of 6,000.

Genting World DreamGenting World Dream

The efforts to sell the ship come as another Genting ship, the World Dream, built in 2017, is reportedly to be auctioned. The cruise ship stopped sailing in March of 2022, after Dream Cruises sought bankruptcy protection.

According to Maritime Executive, bids for the cruise are being accepted by Singapore’s Sheriff’s Office by December 21st, with bidding to remain open for three months.

Currently, only one Genting ship has yet to be resolved, the Explorer Dream, currently anchored in Malaysia. This comes after early this week two Star Cruises ships arrived in India for scrapping.

ASEAN Gaming Summit

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Rising interest rates are having a mixed impact on real estate and construction in Vermont

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The doubling of interest rates over the past year is affecting construction and the real estate market across Vermont in different ways.

Some observers say the spike is scaring potential buyers away from purchasing homes.

Joe Carelli is among those observers. Carelli, president of Citizens Bank for New Hampshire and Vermont, said applications for mortgages and refinancings have slowed down significantly. But the economy, he added, is still robust.

“We’re continuing to see very strong employment numbers,” Carelli said. “The indicators today don’t point to a recession.”

Demand for housing remains very strong, according to David White, founder of White and Burke, a Burlington real estate management company. White said builders can still build single-family homes and sell them at a profit.

The construction of multifamily housing is harder, White said, because the costs of building have gone up dramatically, with rising interest rates partly to blame. And while rents have gone up, he said, outside of Chittenden County, developers cannot charge rents high enough to recover the cost of construction.

“Elsewhere in the state, it’s darn near impossible right now to make those numbers work,” White said.

He predicts that, with high interest rates, construction will slow down.

“As interest rates go up, it makes it harder to finance a project,” White said.

Average interest rates on a 30-year mortgage have risen from 3.1% a year ago to 6.6% now, according to the Federal Home Loan Mortgage Corp., which calculates the rates based on thousands of applications it receives from lenders across the country when borrowers apply for a mortgage.

Steve Kendall, the senior residential loan officer at Morrisville-based Union Bank, said he cannot remember a time when interest rates rose as quickly in a single year, but he does not see higher interest rates as having much of an impact. He said he has seen a slowdown in residential construction, but he attributes that to the fact that winter is coming, and not to interest rates.

According to Kendall, builders and remodelers are moving forward with residential and commercial projects.

“Since there’s such limited inventory, I don’t think the rates are going to bring developers and projects to a screeching halt, because there’s still the demand,” Kendall said.

In northwestern Vermont, the number of new homes on the market in October dropped from the previous year by 9.2% for single-family homes and 2.1% for townhouses and condos, according to the Northwest Vermont Realtor Association.

Sales of single-family homes fell during that time, too, by 20.7% for single-family homes and 4.5% for condos and townhouses.

Homes are still selling fast. The average single-family home in northwestern Vermont was on the market for 28 days and the average condo or townhouse for 13 days, according to the Northwest Vermont Realtor Association.

Prices also appear to keep rising. The median sales price for a single-family home rose by 9.8% in that year, to $435,000. The median sales price for a condo or townhouse rose by 16.3%, to $330,000.

The doubling of interest rates has had an effect on how much of a home first-time buyers can afford to purchase in central Vermont, according to Tim Heney, a real estate agent in Montpelier. Heney noted a decline in the number of buyers in the last two months, but he is not certain whether to attribute that decline to interest rates or to the annual dropoff in buyers toward the end of the year.

In Rutland, real estate agent Joshua Lemieux said he is no longer seeing offers of 30% to 35% above the asking price, as he did last year. Because of that, he said, even though people have to pay a higher interest rate on their mortgage, they are paying more or less the same as they would have at the lower interest rates that accompanied higher prices last year.

In Bennington, interest rates appear to be having an impact, according to real estate agent Lilli West.

“It definitely has slowed things down, and that is what the feds wanted to do,” West said. She said she sees this especially with regard to investors, who had made Bennington the focus of tremendous real estate activity in 2021.

“It’s really dried up the investors,” West said. Because they are being scared away by rising interest rates, they are no longer competing against first-time home buyers, and those buyers have an easier time now, West said.

“Now they’re finally able to not be in as many multiple-offer situations,” West said, though she was stressed that the real estate market is still strong.

“I would say it’s comparable to 2018 and 2019,” periods of strong economic growth nationwide, West said. It’s just not as strong as it was in the first two years of the Covid-19 pandemic.

She is noticing that the rising interest rates are leading sellers to rethink their decisions to sell.

“When you’re at a 30-year mortgage at 3%, you don’t want to lose that and go to a 7% mortgage,” West said. Interest rates hit 7% last month before easing to 6.6%, according to the Federal Home Loan Mortgage Corp.

In the Bennington area, West said, high interest rates have meant fewer cash buyers. She attributes that to the fact that cash buyers often pull money out of the stock market when they want to buy real estate, and with the stock market driven down by high interest rates, people are reluctant to pull their money out of the market at a loess.

But in Montpelier, Rutland and parts of southern Vermont, cash buyers are still showing up, real estate agents told VTDigger. Cash buyers can drive other buyers out because sellers do not have to wait for the buyer to come up with financing, and they can also drive bidding wars that leave first-time local buyers out of the picture.

‘We’re still seeing some cash sales,’ said Claudia Harris, a Weston-based real estate agent who also covers Ludlow, Winhall, Londonderry, Jamaica and Peru.

Want to stay on top of the latest business news? Sign up here to get a weekly email on all of VTDigger’s reporting on local companies and economic trends. And check out our new Business section here.

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Advice today on leasing commercial real estate might surprise you – Orange County Register

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Like the strong weather patterns of late, much can be said for the headwinds in our commercial real estate market this year.

Shaking off the cobwebs of a post-pandemic hangover, 2022 started with great momentum only to be cooled mid-year.

We received some decent economic news of late with the consumer price index not increasing as fast and some major retailers posting better earnings than expected. But our path forward still remains murky.

So what advice are we giving to tenants, investors and occupants who own? Allow me to categorize each.

tenants

Faced with a lease expiration at the end of this year, we recently recommended a client of ours renew for a short period of time, just six months, to gauge the market trajectory.

We’ve been watching what property has become available for several months. His options to relocate were limited and we’d even created a Plan B to stay put if we didn’t see some loosening in the market.

Lo and behold, we noticed a trick of new buildings hitting the market in October. Now it’s running about three a week. If you’re looking for space, this is a vast improvement vs. six months ago when we were lucky to see one every three weeks.

Another interesting metric is the asking rates have declined. Gone are the days when a newly available property was swept up before it was widely marketed. Every new deal was a new high. Not anymore.

Our advice centers around the belief in a future market softening. Tenants are becoming valuable again, especially if they pay on time and are easy on the building.

What’s causing the increase in supply? Some businesses faced with the new rent structure are headed out of state or out of business. What’s left in their wake are vacancies.

Investors

We see two sets of motivations these days: to defer taxes or not. Unless motivated by tax reasons, it might be wise to put your money in short-term treasuries—say, two years—and wait for the right opportunity to come along.

Institutional capital is largely sidelined and occupants are priced out. Private investors rule. If rents are softening in the face of rising interest rates, values ​​can only decline. Will there be better deals in mid-2023 vs. today? Our opinion is yes.

Certainly, if your investment is dictated by tax-deferred timeframes, you either transact or pay the capital gains taxes. But remember, the impetus of those buys was a sale. Our sense is they’ll be fewer equity sales as values ​​have declined or the market’s evaporated, leading to fewer tax-fueled purchases.

Occupants who own

We saw a voracious appetite from institutional capital targeting properties. Their pitch was a sky-high purchase price in return for a leaseback of two-10 years. This activity peaked in June.

With the uncertainty of recession, inflation and rising rates, these deals weren’t as attractive.

With more lease deals hitting, our prediction is some of these owners will need to sell, especially if faced with a refinance bullet or a shortage of dollars necessary to refurbish the building into rent-ready condition.

Once again, patience is key.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.

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