Housing market stress is spreading fast with foreclosure filings up 18% in August to pandemic highs.
This distress is hitting condos hardest, where prices have dropped 12% across major cities as inventory piles up.
The pain extends to commercial properties too, with multifamily loans defaulting at the highest rate in two years as higher rates squeeze cash flows.
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Even premium retail like San Francisco malls are struggling with empty anchor stores and debt they can't refinance.
While big institutional buyers have pulled back from single-family rentals, they still control pricing and leave smaller players paying more.
In this edition of the AltReports:
📈 Foreclosure filings surge 18% to March 2020 highs
📊 Condo prices crater 12% in 25 major cities
🎯 Multifamily delinquencies hit 2-year peak at 3.02%
💰 SF malls collapse under debt and anchor vacancies
🏘️ Big funds pause SFR buys but still set prices
🔑 Renters priced out as owners drown in payments
Video of the Week: August Distressed Properties
Chart of the Week: Multifamily Starts Plummet in West Coast Markets
Podcast of the Week: Zero to 5 Million
Foreclosure Filings Surge 18% in August
Foreclosure filings jumped 18% year over year in August, hitting the highest levels since March 2020.
Mortgage stress and expiring relief programs are dumping a fresh wave of distressed homes onto the market.
💡 Investor Takeaway: Target properties in pre-foreclosure with 60-90 days until auction and equity cushions of 20%+ for direct seller negotiations.
Condo Market Implodes with Double-Digit Drop
Condo prices in 25 major U.S. cities have plunged 12% through August, showing the market has flat-out collapsed.
Unsold units are piling up, sellers are slashing prices, and carrying costs are burning through cash.
💡 Investor Takeaway: Focus on buildings with under 40% owner-occupancy and HOA reserves above $50K per unit.
Q2 Commercial Multifamily Mortgage Delinquencies Hit Two-Year High
Missed payments on commercial multifamily loans jumped to 3.02% in Q2, the worst mark we’ve seen in two years.
That spike shows rising interest rates and softer rents are finally squeezing landlords and cranking up default pressure on those loans.
💡 Investor Takeaway: Target markets with 8%+ rent declines like Austin, Phoenix, and Nashville where overleveraged owners bought at 4-5% cap rates.
San Francisco Malls Crater Under Debt and Vacancies
San Francisco’s flagship shopping centers have turned into distressed assets with anchor vacancies soaring and looming debt maturities that owners can’t cover.
Lenders and landlords are slashing rents, cutting capex and hashing out workouts to avoid taking these ghost-mall trophies back.
💡 Investor Takeaway: Partner with debt funds to acquire performing mall loans at 70-80 cents on dollar
Institutions Step Back from SFR Buys but Still Set Prices
Big funds are hitting pause on single-family rental deals because rising rates and stubborn home prices killed their margins.
They may be on the sidelines, but they’re still the ones driving price tags and deal terms, leaving smaller buyers stuck paying more.
💡 Investor Takeaway: Target 3BR/2BA homes in Sunbelt markets priced $200-400K with rent-to-price ratios above 1%
Renters Priced Out, Owners Struggle
U.S. renters are officially priced out of the homeownership game as runaway prices and high rates crush monthly budgets.
That squeeze is forcing renters to hunker down in rentals and leaving leveraged owners drowning in payment shocks.
💡 Investor Takeaway: Build relationships with HUD-approved housing counselors and bankruptcy attorneys.