Mortgage rates hit all-time low

The 30-year fixed-rate mortgage averaged 3.07 percent for the week ending July 2 (iStock)

The 30-year fixed-rate mortgage averaged 3.07 percent for the week ending July 2 (iStock)

The downward slide in mortgage rates produced a new milestone this week, according to Freddie Mac’s latest primary mortgage market survey.

The 30-year fixed-rate mortgage averaged 3.07 percent for the week ending July 2, down 0.06 percentage points from the week before and down 0.68 points year-over-year. It is the lowest rate on record since the survey began in 1971.

“Mortgage rates continue to slowly drift downward with a distinct possibility that the average 30-year fixed-rate mortgage could dip below 3 percent later this year,” Freddie Mac chief economist Sam Khater said in a statement.

“On the economic front, incoming data suggest the rebound in economic activity has paused in the last couple of weeks with modest declines in consumer spending and a pullback in purchase activity,” he added.

The 15-year fixed-rate mortgage declined slightly to 2.56 percent, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3 percent.

The 30-year and 15-year fixed-rate mortgages both had an average 0.8 point for the week, meaning consumers on average paid 0.8 percent of the loan amount in discount and origination fees.

Since the Federal Reserve slashed its benchmark interest rate to near zero in mid-March, the gap between the 10-year Treasury yield and the 30-year fixed-rate mortgage average has been historically large. Economists have attributed this to challenges facing the retail mortgage market, which are expected to fade in the coming months.

Falling rates have led to a boom in home loan applications in recent months, reaching an 11-year high in mid-June before falling off amid doubts about the economic recovery.

Major key: DJ Khaled sells waterfront Aventura home for 40% discount

DJ Khaled, Julian Johnston, and Cat Gomez, with 3914 Island Estates Drive in Aventura (Credit: Life Style Production Group for One Sotheby’s)

DJ Khaled, Julian Johnston, and Caterine Gomez, with 3914 Island Estates Drive in Aventura (Credit: Life Style Production Group for One Sotheby’s, and C Flanigan/FilmMagic)

UPDATED, June 30, 11:45 p.m.: DJ Khaled is handing over the keys to his waterfront Aventura mansion.

The DJ and record producer, whose real name is Khaled Mohamed Khaled, is selling his five-bedroom, 6,697-square-foot home at 3914 Island Estates Drive for $4.8 million. The price marks a 40 percent discount from the nearly $8 million asking price in December 2018.

Janet Ben Zvi

Listing agent Janet Ben Zvi

It’s expected to close imminently, Corcoran Group’s Julian Johnston said. Caterine Gomez and Johnston represented the buyers.

Canadian businessman Simon Librati and his business partner Nahim Jorge Bonilla purchased the property, Gomez said. Librati and Bonilla founded PrimeMed Corp and also own Mandrake, a restaurant in Miami Beach. Johnston said he’s seeing an increase in Canadian buyers in the Miami market.

Librati, a former trader, was temporarily suspended from the U.S brokerage industry after individual traders working under his company allegedly manipulated the market, according to a Wall Street Journal article in 2018.

The New York Post first reported DJ Khaled’s sale.

The listing agent was Janet Ben Zvi of One Sotheby’s International Realty.

The four-story estate, built in 2001, features 14-karat gold chandeliers with Swarovski crystals, a granite staircase, wine room, chef’s kitchen, pool and Jacuzzi. It also has a media room and a master suite with a walk-in closet, and featured a separate closet for Khaled’s shoes.

Khaled currently lives in Miami Beach. In 2018, months before he listed his Aventura home for sale, he paid about $22 million for a nearly 13,000-square-foot waterfront mansion on Pine Tree Drive in Miami Beach, a property that features a safe room, gazebo, home theater and a four-bedroom guest house.

Khaled bought the Aventura property in 2014 for $3.84 million. It sits on a roughly 25,000-square-foot lot on Island Estates, near Privé at Island Estates.

Developers pivot from broker happy hours to drive-thrus, virtual sales launch events and more

Ana-Marie Codina Barlick, Louise Sunshine, and Matt Barry

Ana-Marie Codina Barlick, Louise Sunshine, and Matt Barry

Warehouse drive-thrus. Virtual video launches. Zoom open houses.

Gone are the days (at least for now) of the broker happy hour or sales launch event, forcing residential and commercial developers to come up with creative ways to pique agents’ interest.

Codina Partners and USAA Real Estate, along with their leasing team at Fairchild Partners, organized an event in mid-June: a caravan tour of a new industrial development in Hialeah called Beacon Logistics Park. About 50 brokers attended the tour — without leaving their cars.

Photos from the tour

Photos from the tour

Ana-Marie Codina Barlick, CEO of Codina Partners, said the idea stemmed from parents driving their kids to birthday caravans during the lockdown. “If the kids can do it, why can’t we do that?” Codina Barlick said. “[Brokers] are actually interacting more with the product this way because an event turns into happy hour.”

Developers who have typically lured real estate agents into their sales galleries and projects with open bars, charcuterie boards and presentations are now shifting gears in the face of a pandemic that discourages large gatherings of people, handshakes and the standard Miami kiss on the cheek.

At Beacon Logistics Park, brokers were greeted in their cars by a welcoming committee that handed out a branded bag with a large hand sanitizer and disposable masks. Later, they were given croissants from Bachour Bakery – a Codina Partners tenant at Downtown Doral. Inside the warehouse, stops were guided by signage and posters. The developers ended the tour by giving out gift certificates.

The event gave Codina Partners and USAA the chance to showcase the finished development to prospective brokers. Future tenants include Cargill, which signed a lease for 70,000 square feet at the project earlier this year, before coronavirus hit. Compared to other asset classes, “industrial really lends itself to a drive-thru,” Codina Barlick said.

Unlike industrial, residential developers can’t invite brokers to drive through their sales galleries.

One project, Monaco Yacht Club & Residences in Miami Beach, launched a “global virtual sales gallery” last week by sending out an e-blast video on Friday to Worldwide PR Affiliates, a partnership of public relations firms around the world that shared the video with their clients.

Fredrik Eklund during a recent webinar

Matt Barry, managing director of Optimum Asset Management USA, which is developing the luxury condo project, said the “virtual launch” allowed the developer to begin marketing the units again after a quiet period in March and April. The video was translated and sent out in different languages.

Prior to the pandemic, Optimum planned to host events in the Hamptons this summer and summer retreats in Europe to appeal to buyers. The sales center in Miami Beach is open by appointments only, and the developer plans to come up with more virtual events this summer, including virtual tours.

Similarly, CC Homes — a partnership between Armando Codina and Jim Carr — went from hosting events in Washington, D.C., New York and Connecticut to promote a single-family home community in Doral, to presenting online open houses.

Now, the Canarias at Downtown Doral sales team is hosting Zoom open houses to groups of brokers, according to Diana Ibarria, senior vice president of CC Homes.

“Our sales surprisingly have increased during the pandemic,” Ibarria said, pointing to less new inventory of single-family homes, due in part to owners’ hesitation to list their houses for sale.

More than 300 homes remain for sale out of 520 at Canarias, Ibarria said. Prices range from $590,000 to over $1.5 million.

Louise Sunshine, a strategic adviser for Fort Partners, who is working on Four Seasons-branded developments in Surfside and in Fort Lauderdale, said her advice to developers is “to just stop and rethink what they’re doing.”

Sunshine, a sales, marketing and development expert, began co-hosting a webinar series with Haute Living on art and design, bringing on Fredrik Eklund to a webinar in order to expand the project’s reach to the broker community.

“Fredrik commands a lot of attention and we have given him the exclusives for the penthouse,” she said. “In new development, you usually don’t give an exclusive to anybody. He’s able to draw a lot of attention to the building through his social media efforts.”

One aspect of new development is that agents are selling a project that hasn’t been completed yet, Sunshine said. Construction on the Four Seasons development in Fort Lauderdale is reaching the ninth floor. “In new development, really, what do they see? Everything they’re going to see when they get to a sales office,” she said.

Fort Partners has hit pause on all in-person events, only allowing appointment-only visits to the sales center.

Though it’s too early to know if the new tactics will result in closed deals, Sunshine is optimistic.

“The world has changed. Marketing and sales have gone digital,” Sunshine said. “We are finding that one out of four buyers will buy virtually.”

Tri-State brokers are busier than ever as buyers warm to suburban living

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The coronavirus has dramatically reshaped the luxury real estate market in the Tri-State area, and while the pandemic upended much of the economy, industry veterans say they’ve never been as busy as they are now.

While the early days of the crisis were marked by a mad rush for a limited supply of rental properties on Long Island and Upstate, transplants from New York City are starting to warm to the idea of staying in the suburbs for the long haul, brokers said Wednesday during the latest installment of TRD Talks.

“One of the really interesting things is that people are doing the opposite of what they usually do,” said Deirdre O’Connell, CEO of Daniel Gale Sotheby’s International Realty on Long Island.

“They’re buying in the secondary home market for their primary residence, and they’re rethinking Manhattan as their second place to live,” she said, noting that some buyers no longer expect to be in their Manhattan offices five days a week even after reopening.

O’Connell was joined by Compass’ Heather Harrison, who covers Westchester County; and Paul Breunich, president and CEO of William Pitt – Julia B. Fee Sotheby’s International Realty in Connecticut. The three spoke with The Real Deal managing web editor James Kleimann.

“Overnight it went from a buyers market to a sellers market, and also overnight it went from people migrating to the city to people escaping to the suburbs,” said Breunich, adding that many buyers no longer expect the New York City school system to open up on time in the fall.

Given New York’s massive population, “just a very small percentage of them have to move and it’s going to flood our markets, and that’s what’s happening now,” he said. “That’s why I think there’s permanence in this whole movement.”

While young families moving out of New York City have always been a mainstay of the Tri-State real estate business, the pandemic appears to be pushing some to move even earlier than usual.

“One of the trends we are seeing is families with no children moving to the suburbs,” Harrison said. “Newly married, not pregnant yet, and some not even married, moving and buying homes in the suburbs.”

At the same time, the archetypal sellers in these markets — empty-nesters looking to downsize to a Manhattan apartment or a Florida home — are also staying put more. This has even led to sellers cancelling contracts, paying a premium just to not move.

“So many of my potential sellers … have now decided that they’ve enjoyed quarantine in their home, and are very glad that they didn’t move and didn’t downsize to an apartment necessarily, and now those people have decided not to put their homes on the market,” Harrison said.

Even as New York and the suburbs have begun to gradually reopen from months of lockdown, some practices adopted in the Covid era might be here to stay — like virtual tours.

“I don’t think it’s going away,” O’Connell said. “Yes, we can do in-house showings now and that’s great, but I think it’s a lot more effective if someone can virtually tour a property before coming and physically touring a property.” She added it was “less intrusive for the homeowner who doesn’t have their home exposed to people that potentially are tire-kicking or just trying to figure out where they are in their journey of purchasing a home.”

Meanwhile, issues that had hampered the Tri-State resi market prior to the pandemic, like the new federal cap on state and local tax — aka SALT — deductions, may now be in the rearview mirror.

“I think now more than ever, it’s not as big an issue as it was,” said O’Connell, arguing that the market has largely digested the impact of the new rules. “If you want to live here, it is what it is.”

The panelists noted that the wave of new interest in their markets have touched submarkets across the board, as commutability to Manhattan has become less of a factor and the supply-and-demand dynamic has forced buyers to be less selective.

“When you have a lot of demand there and there’s multiple people that are going after it, that’s pure capitalism,” Breunich said. “And that’s why it’s such a good industry to be in, because nobody sets the market except the people.” The buyers, he said, are “coming in with cash. They want to move in in three to four weeks and they’re going for the mortgage afterwards. There’s a middle-to-upper crust of the population, in my opinion, that’s doing this.”

OJO Labs, AI startup, raises $62.5M to buy listing portal

OJO co-founder & CEO John Berkowitz

OJO co-founder & CEO John Berkowitz

OJO Labs, an Austin-based startup with an AI-powered digital home-buying assistant, has raised $62.5 million in fresh capital and will acquire Movoto, a residential listings site, the company said Wednesday.

OJO said the Series D was led by Wafra with participation from Breyer Capital, LiveOak Venture Partners, Royal Bank of Canada and Northwestern Mutual Future Ventures. It brings the company’s total funding to $134 million since 2015. Forbes first reported the funding round.

Movoto is among the five biggest residential search portals, with 24 million monthly visits, behind industry leaders Zillow and Realtor.com. John Berkowitz, OJO’s co-founder and CEO, said the company’s digital advisor will be integrated into Movoto’s listing portal to guide consumer searches. Movoto is also a licensed brokerage in 50 states.

Berkowitz said to date, it’s been challenging to build a search portal to scale while also creating a personalized experience for consumers. But he said he’s less focused on beating third-party listing sites than he is on reinventing the search process.

“We see ourselves as an end-to-end platform in a sea of point solutions,” he said. The pandemic has elicited “deeper questions” and “more hesitancy” from buyers for whom OJO’s digital advisor is more relevant.

Movoto is the third acquisition for OJO Labs, which last year scooped up RealSavvy, a platform for agents and brokers. In 2018, it acquired Wolfnet Technologies, which standardizes data for multiple listing services. In March, OJO Labs announced a partnership with Realogy to vet and sustain client leads for agents.

Syrian dictator’s uncle sentenced to prison, and $101M in European real estate is seized

Rifaat al-Assad (Wikipedia Commons)

Rifaat al-Assad (Wikipedia Commons)

It could be the end of the road for Rifaat al-Assad, the exiled uncle of Syrian President Bashar al-Assad.

The 82-year-old was convicted in France for illegally amassing a real estate portfolio worth $101 million using money he embezzled from the Syrian state, according to Bloomberg.

A French court sentenced Al-Assad to four years in prison and seized all of his property in the country as well as a home in London worth an estimated $25 million. His French properties include a manor and castle.

The court also confiscated rent he collected from tenants in Paris buildings he owns, including rent collected from a jeweler who has worked with celebrities.

His lawyers said they would appeal, with lawyer Benjamin Grundler saying that “there isn’t a cent of funds that comes from Syria in this case” and that “all the transfers” were legal.

Al-Assad was exiled from Syria in the mid-1980s after trying to take power from his older brother Hafez al-Assad, who ran the country for 30 years before handing power to his son Bashar.

The brothers agreed to resolve the issue with Rifaat’s exile and Hafez is said to have given his brother $300 million in public funds over the course of his exile, according to Bloomberg. Rifaat is also under investigation in Spain. [Bloomberg— Dennis Lynch

One down, six to go: Elon Musk sells Bel Air mansion for $29M

Elon Musk and the home (Credit: Pascal Le Segretain/Getty Images and Sotheby's via Money.com)

Elon Musk and the home (Credit: Pascal Le Segretain/Getty Images and Sotheby’s via Money.com)

Elon Musk may yet colonize Mars, and in the meantime he has vowed to shed all his earthly real estate holdings. So far so good.

The Tesla and SpaceX co-founder sold his 16,000-square-foot Bel Air mansion for $29 million, according to the Wall Street Journal. The buyer of the home at 10911 Chalon Road was William Ding, a Chinese billionaire and founder of the technology company NetEase, the Journal reported.

The sale price was 40 percent above the $17 million Musk paid for the property in 2012. Despite an unsteady Los Angeles luxury market, it was just $1 million less than what Musk listed it for in May.

Last month, Musk announced on Twitter he would sell almost all his possessions and “own no house.”

The billionaire entrepreneur also listed a 2,800-square-feet neighboring home at 10930 Chalon Road; that one is on the market for $10 million. He later listed five more houses — four in Bel Air and one in the Bay Area — for a combined $97.5 million.

Musk told the Journal last month he’s not selling the homes to raise money for his companies, but to “make my life as simple as possible right now.”

In late March, he caused a stir by tweet-storming his opposition to Gov. Gavin Newsom’s shelter-in-place order, a move that prevented Tesla and SpaceX employees from commuting to their jobs. Musk threatened to open the Tesla factory, and later said he would move his companies out of California. He eventually backed down. [WSJ]Matthew Blake

Steve Harvey picks up friend Tyler Perry’s old Atlanta mansion for $15M

Steve Harvey and Tyler Perry with the house (Credit: Jim Spellman/WireImage and Cindy Ord, via Getty Images

Steve Harvey and Tyler Perry with the house (Credit: Jim Spellman/WireImage and Cindy Ord, via Getty Images, and Atlanta Fine Homes Sotheby’s International)

Steve Harvey is the new owner of a sprawling estate outside Atlanta once owned by his friend, actor and producer Tyler Perry.

The comedian and TV host paid $15 million for the 17-acre property, according to TMZ. The main house is nearly 35,000 square feet with seven bedrooms and a slew of amenities.

The most extravagant might be the underground ballroom. There’s also a wine cellar, gym, theater and an indoor resistance pool.

The grounds include a lighted tennis court, infinity pool, a guest house, and a runway for remote-controlled planes.

Perry bought the estate in 2007 for $9 million and sunk several million dollars into a renovation. He sold it in 2016 to evangelist David Turner for $17.5 million. Turner put the property on the market in 2018 for $25 million.

The two have been friends for a number of years. Harvey made a cameo appearance in at least one of Perry’s films, 2009’s “Madea Goes to Jail.”

Harvey hosted “Family Feud” and his syndicated radio show in Atlanta for most of the last decade, but in 2018 moved both productions along with his now-canceled talk show to Los Angeles, according to the Atlanta Journal-Constitution.

Harvey rented a mansion in Beverly Park, but there’s no word if he’s locked down a more permanent home in the L.A. area. [TMZ]Dennis Lynch

Palm Beach oceanfront estate lists for $50M

172 South Ocean Boulevard, Palm Beach with Gary Pohrer (Credit: Google Maps)

172 South Ocean Boulevard, Palm Beach with Gary Pohrer (Credit: Google Maps)

A Palm Beach oceanfront estate hit the market for $49.5 million, marking one of the highest-priced listings in the ritzy town.

The 13,153-square-foot mansion at 172 South Ocean Boulevard is owned by trusts in the names of Burke E. Ross Jr., his brother, Amory L. Ross and Linda Daddario, records show.

Called La Salona, the estate has 16 bedrooms, 17 bathrooms and five half-bathrooms, according to the listing in Realtor.com. The property spans nearly an acre and has an additional 6,167 square feet that include patios, balconies and a summer kitchen.

Ross is a private equity investor and president of Palm Beach-based ADEC Private Equity, according to his LinkedIn page. Amory L. Ross is his brother.

The estate was built in 1926 by Palm Beach architect Marion Sims Wyeth and was most recently renovated in 2016, according to the listing. It last sold for $4.8 million in 2000, property records show.

Gary Pohrer of Douglas Elliman has the listing. He declined to comment.

The estate currently ranks as the second highest-priced home on the market in Palm Beach. The most expensive, at 1744 South Ocean Boulevard, is listed for $59.9 million with Elliman’s Ashley McIntosh, Chris Leavitt and Pohrer.

Several pricey sales have closed in Palm Beach recently despite the pandemic.

Last month, Taubman Centers Chairman and CEO Robert S. Taubman sold the oceanfront estate at 1820 South Ocean Boulevard for nearly $47 million. The buyer of the 10-bedroom, 19,069-square-foot mansion is tied to Peter Brant, chairman and CEO of White Birch Paper, a top newsprint manufacturer with pulp and paper mills in Canada and the U.S.

A few weeks earlier, luxury homebuilder Mark Pulte sold the Palm Beach estate at 446 North Lake Way for $33.2 million, and a company tied to the Estée Lauder family acquired the mansion at 1063 North Ocean Boulevard for $25.4 million.

David Geffen pays $68M for Casey Wasserman’s Beverly Hills manse

David Geffen, Casey Wasserman, and the property (Credit: Larry French, Paul Bruinooge/Patrick McMullan via Getty Images, and NearMap via Los Angeles Times)

David Geffen, Casey Wasserman, and the property (Credit: Larry French, Paul Bruinooge/Patrick McMullan via Getty Images, and NearMap via Los Angeles Times)

UPDATED, June 8, 12:12 p.m.: Entertainment industry titan and ultra-luxury real estate trader David Geffen has paid $68 million for a Beverly Hills estate owned by Los Angeles Olympic Organizing Committee President Casey Wasserman, The Real Deal has learned.

The Los Angeles Times first reported on the sale but did not have a price.

The 3.3-acre property was most recently listed for $82.5 million, the Times reported. It first hit the market in late 2018 asking $125 million and Wasserman cut the price at least twice after that. The deal price is a 46 percent chop from that original listing amount.

A source confirmed the $68 million figure, which includes about $3 million for furniture and other valuable items in the house.

In February, Geffen sold a massive Beverly Hills estate to Amazon CEO Jeff Bezos for an L.A. County record-setting $165 million.

The Wasserman property has a three-story house that spans over 18,500 square feet and is built in a modernist style. It was designed by Pritzker Prize-winning architect Richard Meier, who was accused in 2018 of sexual misconduct and harassment by multiple women.

The six-bedroom, 14-bathroom home has a large indoor-outdoor great room and an open dining area. Spaces are connected with automated steel doors. Amenities include a home theater, gym, and an art studio.
A deck area connects to the 85-foot infinity pool and a pool house.

Westside Estate Agency co-founder Stephen Shapiro had the listing and co-founder Kurt Rappaport represented Geffen.

Last year Geffen also bought a one-acre development site on so-called Billionaires Row in Beverly Hills for $30 million.

High-end properties continued to hit the market this year despite the impact of the coronavirus pandemic. One spec home in Bel-Air even re-listed for nine-figures after two years without a sale.

The updated story includes the sale price and buyer broker.