A report from International Business Times. “‘Until recently, not many people thought that housing was in a bubble,’ Tabitha Mazzara, Director of Operations at mortgage lender MBANC. But Dallas Fed researchers recently noted ‘abnormal US housing market behavior,’ ‘reasons for concern,’ and calling housing prices ‘unhinged from fundamentals.’”
“Kirby Scofield Broker, Owner of Scofield Realty, isn’t concerned. ‘No, we are not seeing any slow-down, simple Supply and Demand economics,’ he says. ‘The rates aren’t factoring the premium over an appraised value that is pricing people out by cash on hand. We just had one at the average price, and even when the rate went up and the client was scared, the lender came back and said it raised it $40 a month. That’s nothing vs. the $50k over appraisal just to win the bid on the home.’ That sounds like the housing market back in 2006-7, shortly before the housing market crashed.”
From NPR News. “Here’s a not-so-fun fact: The monthly mortgage payment it takes to buy the typical home in the U.S. is now up by a staggering 55% compared with the start of last year. That’s because of the dramatic rise in mortgage rates in recent weeks on top of price gains in the hot housing market. Back when Nick Cacciatore, who was looking last summer in Tampa, Fla., mortgage rates were under 3%. ‘It added like $700 a month in monthly payments,’ he says. ‘I mean, a ridiculous amount just from the interest rates.’ And that doesn’t even factor in the big gain in prices over the past year as he’s been trying to buy a home.”
“In the Seattle area, Alex Bacon and her husband are getting ready to sell their very small starter house, which they bought about five years ago. It was all they could afford, and it’s directly under the flight path of Seattle’s airport. ‘I’m just off the end of one of the runways, so the air just smells of jet fuel,’ she says. ‘I can’t have people over for a barbecue because every time you have a conversation, you have to pause for 30 seconds in the middle of your thought,’ she says, because a 747 is roaring over her backyard.’”
“‘We’re starting to see rates around 5%, and I’m just so afraid that if they get too much higher, we won’t be able to afford the house we want up there,’ she says.”
From Redfin. “‘When will it end?. This question has repeatedly flashed across my screen over the past several weeks, sent by Redfin colleagues. The ship is still facing north, but some flags can be seen waving in the periphery, telling us that a cooldown is taking shape. In pricey coastal areas including Los Angeles, San Francisco, Seattle and Boston, fewer people are starting online home searches, touring homes with real estate agents and applying for mortgages than this time last year.”
“Tours of for-sale homes in California have dropped 21% as of March 31 from the first week of 2022. In both Los Angeles and Orange County, the number of homebuyers who applied for a mortgage dropped 18% year over year in February, and in both San Francisco and San Diego the drop was 13%. ‘Even though the market is still driven by huge demand and a lack of supply, we are seeing a slight slowdown,’ said Los Angeles Redfin manager John Underwood. ‘Rising rates have pushed a few folks out of the market. We’re starting to hear from sellers who want to get their home listed before summer because they feel like we’re nearing the peak of the market.’”
The Globe and Mail in Canada. “As tens of thousands of people opt to plunk down deposits and sign contracts to buy a condominium unit before construction has begun, those close to the industry say many of those have no intention of ever buying the finished product.”
“‘A lot of people are buying on the assumption they are going to assign,’ said Sundeep Bahl, salesperson with Re/Max Real Estate Solutions, referring to the unregulated market where buyers sell or flip pre-construction contracts to another party. ‘As soon as they sign up their first question is: ‘Is there an assignment clause?’ A lot of people are just speculators in the market,’ he said.”
“‘I know people who are buying 50 and 20 [pre-construction condos], they are going to assign them,’ said David Feld, a real estate lawyer and entrepreneur who works with the True Condo Team, who specialize in pre-construction condos. ‘I’ve done it twice myself [flipped an assignment] and I have three more coming … three I’ve given deposits on.’”
“‘January and February it was extremely busy, we did 8-10 [assignment flips] in one month,’ Mr. Bahl said. ‘Some of those people were making $200,000 to $300,000 more than what they paid.’ But Mr. Bahl warns that anyone buying today may not find the same pot of gold if the market cools. ‘If they assign in the next two-three years, are they going to be able to make $300,000 more? That’s an assumption that hasn’t been tested.’”
From Newshub New Zealand. “An expert says the housing market is unlikely to crash despite prices experiencing their largest quarterly drop in more than a decade. ‘I think what we are seeing is a correction where we’ve had these massive increases over the last 12 months, those areas that have had the biggest increases are showing the biggest correction,’ GV general manager David Nagel. ‘I don’t think we are going to see the bottom fall out of the market.’”
“QV senior consultant Blake Ngarimu said the stats showed a continuing fall in the market. ‘It’s now more evident that Wellington is becoming a buyers’ market. Developers are reducing asking prices and properties are sitting on the market for longer and typically selling below or at asking price,’ he said. ‘It’s a clear indication that the higher interest rates and tougher lending conditions, coupled with the increase in supply, are having an impact on the market. There has also been a significant increase in listings, giving buyers more options.’”
The Daily Telegraph in Australia. “Sydney home sellers ‘still have their heads stuck in 2021’ despite a slowing property market and growing hesitation from buyers, one of the city’s top buyer’s agents has revealed. PK Property director Peter Kelaher revealed in a widely distributed email to clients that buyers may not be able to get great bargains until later in the year because sellers still expected huge prices. ‘That means a lot of failed auctions, both on the day, and pulled before auction dates,’ he explained. ‘A-grade stock is still going extremely well … anything that is compromised in any way, which I call C-grade, is getting smashed,’ the buyer’s agent said.”
“His comments came as a glut of new properties have streamed onto the market ahead of Easter, with this week’s 1554 scheduled auctions marking the biggest weekly volume of auctions this year.”
The Sydney Morning Herald. “Commonwealth Bank’s head of Australian economics, Gareth Aird, said potential interest rate hikes would weigh on sellers’ minds more than the upcoming federal election. ‘Sellers would be aware we’re on the cusp of a rate hike cycle. I would imagine people would like to sell their properties before rates start going up because there will be buyers out there who expect prices to be lower, and they would like to be ahead of that before it happens,’ Mr Aird said.”
“He said a pull-back in property prices was all but guaranteed at this point, with growing consensus among experts and the market alike. ‘If a lot of would-be buyers wait for prices to drop, then they’ll invariably drop. Buyer’s attitudes towards where they think prices will go is a very good driver of where prices go. It becomes a collective mindset.’”
“BresicWhitney chief executive Thomas McGlynn said the two long weekends at the end of April were bringing many listings forward. He said many sellers realise that the best time to sell was Spring last year and want to capitalise on whatever momentum is left. ‘The big question is going to be what is the appetite going to be post-Easter when we know when the election is going to be?’ he said.”