It’s Friday desk clearing time for this blogger. “National Association of REALTORS Chief Economist Lawrence Yun: ‘Oh, well, the refinancing chance may be over because rates will only go higher from this point. The mortgage rates were essentially at 3% last year. It’s already at 4% or slightly above. And I think that’s a healthy development because we had this intense housing shortage leading to just where people are just waiving appraisals, waiving home inspection, which sometimes people feel very uncomfortable about.’ RACHELLE AKUFFO: ‘And we certainly are seeing a little bit of buyer’s remorse, so we’ll have to be following that story.’”
“LAUREN MORGAN: ‘The day we moved in, our air conditioner broke. And so that was, like, the first instance of is this a mistake?’ That’s Lauren Morgan. She’s 30. And she and her husband are the proud new home owners of a quaint home in Norwood, Mass., 30 minutes south of downtown Boston. Like many millennials, they moved in June of 2021. And… MORGAN: ‘Every time something does come up, I say to my husband, like, maybe we should be renting. Like, if only we were still renting, then the landlord could deal with this.’”
“According to a Hippo Insurance report, 68 percent of buyers in 2021 paid above asking price. Kevin Kieffer, a Realtor with Compass’ EastBayPro Team in the San Francisco Bay area, calls this behavior ‘panic buying.’ In the current market, he says, it can be easy for prospective homeowners to get in over their heads. Buyer’s remorse: What regrets do new homeowners have?”
“‘There are a lot of people who are buying homes for the first time, and they just don’t realize the volume of things you need to do to maintain a house,’ says Steve Wilson, senior underwriting manager at Hippo. ‘People are having remorse around the upkeep of the home, and how failure to do that maintenance can lead to a costly issue.’”
“The 22News I-Team visited a home in Holland that was recently sold. Shannon Boyce was the attorney broker for the listing. They got an offer, but during an inspection, they found out that the foundation contained pyrrhotite. ‘It was devastating,’ Boyce explained. ‘He went from top value offers to now, we did a very drastic drop in price. When you have a certain number in your head, and then reality strikes and that number is now down, it hurts.’”
“There’s a new buzzword in New Zealand’s housing market — FOOP, the fear of overpaying. ‘There is now a fear of overpaying among buyers,’ said Jen Baird, chief executive at the Real Estate Institute of New Zealand. ‘As a shift of sentiment sets in and buyers are less willing, or unable, to pay the prices we saw toward the end of 2021, pressure will come on vendors to adjust their expectations to meet the market.’”
“The proportion of home-loan applications being converted into actual loans fell to just 33% in January from 39% in November, according to data from Auckland-based credit bureau Centrix. ‘People who were getting credit prior to December the first weren’t getting it after December the first,’ said Centrix Chief Executive Keith McLaughlin. He couldn’t recall the rate being as low as this, and ‘I’ve only been in the industry about 50 years,’ he said.”
“After rising a whopping 22 per cent in 2021 – the strongest annual growth since 1989 – Australia’s house price boom is fast running out of steam. One of the key drivers behind the slowing house price momentum is rising mortgage rates. If the discount variable mortgage rate was to rise by 2.15 per cent to 5.60 per cent, as predicted by the market, then mortgage repayments would lift by 29 per cent from their current level. This would see monthly mortgage repayments on the median priced Australian home rise from $2599 in February 2022 to $3344 – an increase of $744.”
“For the median Sydney buyer, median monthly repayments would rise by a whopping $1141, whereas they would rise by $818 in Melbourne. The impact would be even more severe for the circa $500 billion worth of fixed rate mortgages due to expire over the next two years, most of which were originated at rates under 2.5 per cent. Those borrowers are facing more than a doubling of mortgage rates when it comes time to refinance. A 29 per cent increase in monthly mortgage repayments would lift Australia’s Debt Servicing Ratio – defined as the percentage of household disposable income going towards principal and interest debt repayments – to its highest level since the Global Financial Crisis in 2008.”
“Investors in China’s $870 billion of offshore bonds are facing up to the realities of being last in line as borrowers struggle to pay during an unprecedented wave of distress that’s sent defaults to a record. Already behind their onshore peers in the pecking order, hurdles faced by dollar-note holders in their efforts to claw back money are growing. They include backroom deals that give priority to undisclosed private lenders, unfavorable extensions and payment delays — all underscoring poor governance at debtors and the diminished power of creditors.”
“The new reality comes in the wake of China’s property-market collapse. ‘Companies have investors by the throat because on one hand they have no money and in some cases no willingness to pay, while on the other hand they know that investors cannot stomach a full default,’ said Raymond Chia, head of credit research for Asia ex-Japan at Schroder Investment Management. Some of the pain for offshore bondholders may be self-inflicted, said Chia. After earning billions of dollars trading Chinese high-yield bonds over the years, investors continued to bet on them even as they saw ‘structures become looser and looser — especially since 2016 with lots of covenant relaxation,’ he said. Bloomberg Intelligence estimates that funds around the world have increased their exposure by about $4 billion since the crisis started, with U.S.-based giant BlackRock Inc. leading the charge.”
“‘Companies haven’t been transparent about their private debt and upcoming payments, but the market’s also been rife with rumors supposedly linked to short-selling,’ said Anthony Leung, head of fixed income at Metropoly Capital HK Ltd. ‘The lack of transparency has led to a vicious cycle of panic selling and a collapse in the price of securities, which closes refinancing channels.’”
“This is the best time to buy properties. As I can see, [with the] lowering price of the condominiums and properties, like in BGC (Bonifacio Global City), you can get 30 percent to 40 percent off. That never really happened [in] the last 14 years,’ Michael Christian Tee Rosanes, an expert in real estate, said. He said a condominium is good to buy because the price is 30 percent to 50 percent discounted. In comparison, before Covid-19 pandemic hit, condo prices were at a rate between P300,000 to P350,000 per sqm.”
“In terms of real estates, the top 10 companies, such as Megaworld, Federal Land, Ayala Land, Rockwell and DMCI, would be safer choices because of their financial stability. ‘Or, on the other way around, find a secondary market or individual owner who need cash or foreclosed properties in the bank or by individual,’ Rosanes said.”