A report from Reuters. “With the Fed poised to hike further, the MBA forecasts that total mortgage originations will fall 35.5% this year, with a 64% decline in refinancings. ‘We have a classic case of a mortgage boom to bust cycle,’ said Gerard Cassidy, Head of U.S. Bank Equity Strategy at RBC Capital Markets. ‘As the rates go higher the refinancing business is cooling, which it always does, and is going to force a massive shrinkage in the mortgage banking business.’”
National Public Radio. “Last month, Fannie and Freddie began accepting desktop appraisals nationwide for all eligible transactions. While some questioned whether remote appraisals could be accurate, they kept deals on track at a time of wariness over in-person interactions. ‘They [Fannie and Freddie] understood they needed to keep the flow of money going and without the appraisal, [it] was going to stop the mortgages,’ said Sandra K. Adomatis, vice president of the Appraisal Institute.”
From WNDU on Indiana. “It’s a sure-fire sign of how hot the housing market is. The crowds at St. Joseph County’s Sheriff Sales are growing. ‘I had 34 sales that day and I think all but three went, sold to, you know, outside people,’ said Lt. Paul Weisser with the St. Joseph County Police Civil Division. The one-hour auction took in more than $1 million. Many of the homes sold for far more than was owed on the mortgage. ‘It’s sad to see people lose their homes but then, you know, it’s good that these investors are willing to keep these houses going, and instead of let them go down, and you know, so that part is good to see there are investors out there trying to make things better for us, you know,’ Weisser said. An additional 28-foreclosed homes are on the docket for the next sheriff’s sale May 19th.”
From The City on New York. “Squeezed by higher property taxes, soaring energy costs and unpaid rent during the pandemic, landlords of regulated apartments are hoping for the biggest increase from the city Rent Guidelines Board in at least a decade. The research also showed that 6.5% of rent-stabilized buildings in 2020 were ‘distressed,’ or had costs higher than their gross income. The percentage of distressed buildings rose one percentage point between 2019 and 2020, the report found. More than half of the distressed buildings in 2020 were in Manhattan.”
“For an eight-unit building she owns in The Bronx, Valentina Gojcaj is facing a 40% increase in her tax bill for 2022 over the previous year, she said. Many buildings are barely breaking even. For her eight-unit building, Gojcaj’s said her annual revenue is $144,000 if all the apartments are occupied and the rent is paid on time. Her actual expenses for 2021 on that building were $38,000, the property tax bill for the coming year is $57,000 and her mortgage is $48,000, leaving a cushion of $1,000.”
The Inter-Mountain. “A closer look at the numbers by LendingTree tells a more patchwork tale. Yes, the market is hot in some states. In others, there is considerably less demand. The online lender looked at the number of homes sitting vacant in each state and found that West Virginia has the fourth-highest vacancy rate in the country, at 18.12% of our 896,570 housing units. Homes in certain markets in the state — Morgantown, Wheeling, Charleston and Martinsburg, to name a few – don’t last long once listed for sale. But overall, West Virginia is struggling with vacant homes.”
From WFTS. “According to the U.S. Census Bureau, the state of Florida leads the nation with 1.68 million vacant houses. However, just because they are not occupied, doesn’t mean they’re not owned. ‘When you say 1.6 million vacant homes, that means to me there is someone controlling the market artificially,’ Tampa Bay area real estate agent Louie Talacay said. Jen Simmons is frantically trying to move to Tampa Bay from her home in New Jersey. On the surface, it appears there is a sea of empty homes for Simmons and her family to move into, but in reality, they are fighting tooth and nail to win out on just one.”
From USA Today on California. “Ron Wyghtman has watched L.A. and his small corner of Venice change drastically over decades. The 66-year-old remembers when the city saw violent crime reach historic highs in the 1990s with gangs, murders and a crack epidemic. It got safer. But now, Wyghtman says he sees it both backtracking and moving toward a new crisis. Tents and a disheveled RV now line his streets. Feces often mark the black fence that surrounds his small community. The sounds of emergency sirens echo during the dead of night and in the middle of the day.”
“Misty Keyser, 51, hears sirens almost every evening along Venice Boulevard in L.A.’s Venice neighborhood. She says for years she’s watched in frustration as leaders statewide and in the Greater Los Angeles area promise change that never comes. Instead, she says, lower-income homes were replaced by mansions and vacation homes, only further crippling the state’s housing crisis. ‘It just feels like it’s only getting worse,’ she said from the stoop of her one-story bungalow. ‘I don’t know what is needed, but we need change. We have people living outside like a Third World country. I mean, that just sounds insane. How is it still happening?’”
From CFJC Today in Canada. “Right now in B.C., buyers are at risk. Out-of-control bidding wars are putting pressure on people to waive standard conditions just to have their offer considered. Sources in the industry say that as many as 70 per cent of offers made in B.C. over the past year were without conditions, meaning people are waiving home inspections or financing approval. Even in Kamloops, realtors say more sales are being completed with no conditions.”
“One family in Nanaimo found out the hard way just how risky that can be. After paying over the asking price and waiving an inspection on their first home, they found out it had damage that would cost up to $100,000 to repair. This could easily happen to any family throughout B.C.”
The Vietnam Investment Review. “The unprecedented cancellation of the Tan Hoang Minh private bond issuance has caused an uproar in the market. The cancellation occurred after the bidding process to buy a land lot in Ho Chi Minh City’s Thu Thiem Peninsula for a record $106,521 per square metre late last year. The company soon thereafter decided to pull out of the transaction in January, forfeiting millions of dollars in deposit money.”
“SSI analyst Trinh Thai stated, ‘Some are concerned that Tan Hoang Minh might face default risk from the scandal, which could trigger a domino effect in the property sector as seen with Evergrande in China. We might need to wait for the response by Tan Hoang Minh to see how it could resolve its obligation balance to pay off debt holders in the event claims from investors come due.’”
“On the flip side, bondholders are concerned about whether their investment money will be lost and, if so, how they will recover their funds from the cancellation.”
From Bloomberg. “China’s worst Covid-19 outbreak in two years is prolonging the country’s property slump, starving stressed developers of cash and weighing on the economy. ‘One major loser amid lockdowns is the property sector, which is now in the darkest moment with lots of defaults and consolidations,’ said Larry Hu, head of China economics at Macquarie Group Ltd. ‘I’m now worried about being fired,’ said You Zheng, a 26-year-old real estate agent who had been handing out leaflets to passers by with his mask on for months. ‘It was difficult enough last month when prospective buyers were afraid of being locked in a compound during apartment viewing. Now who knows when sales can resume.’”
From Stuff New Zealand. “REINZ ambassador for Palmerston North Andy Stewart said this doesn’t necessarily mean a prolonged drop. ‘I think what we’re seeing here is a correction. We need to think about this as being the norm, as opposed to the increases in the past few years which have been abnormal. It’s a buyer’s market at the moment and so sellers need to be attuned to what the actual price of their house is. Otherwise, these properties are just left to sit.’”
“Stewart went on to say that even with this drop in prices, most buyers were already property owners, with first home buyers still struggling with increased deposit criteria and interest rates. ‘First home buyers are almost non-existent here.’”
“Youm mortgage advisor and director Craig Seton expressed a similar sentiment around first home buyers, saying the increase to a 20% threshold for first time borrowers remained a difficult obstacle to overcome. ‘It’s getting really hard to get a loan above 80% and so that deposit is really hard for people to put together.’”