A report from News Source 8 in Maine. “It’s no secret that real estate is a hot topic nationwide. ‘The average median price for Aroostook county is 129,950 dollars that is for a single family residential in Aroostook county. So you back up to two years ago, 73,500 dollars, two years later, today the average median is 129 thousand, that’s nearly double on an average sale for a single family dwelling,’ said Stephanie Beaulieu, Owner of Fields Realty.”
The Salt Lake Tribune in Utah. “The median price for an existing single-family home in Salt Lake County was at $350,250 in late April 2019. ‘We’ll be at $700,000 before you know it,’ predicted Dave Anderton, spokesperson for the Salt Lake Board of Realtors, which released its latest quarterly sales data Friday.”
Montana Free Press. “In just two years, the median single-family home price in Missoula increased more than 50%, according to the Missoula Organization of Realtors. In January 2022, the city’s median home price soared to an all-time high of $485,000, compared to the median price of $315,000 in 2019. In Missoula, home values shot up 57% from January 2020 to January 2022, according to Zillow.”
The Payson Roundup in Arizona. “The days of finding an affordable home in Rim Country are over for many for now, at least. ‘Lot development has tripled in the last seven or eight years. It used to be $25,000 and now it’s pushing $75,000 just for developing, meaning putting in roads and that kind of stuff,’ said Realtor Rory Huff.”
Flagstaff Business News. “Arizona’s real estate market remains ‘ridiculously hot,’ says Arizona Association of Realtors President Gary Nelson. Flagstaff, Sedona, Prescott and parts of Scottsdale are experiencing the biggest spike in the cost of homes, says Nelson, a longtime realtor and delegated-associate broker with Realty Executives in Flagstaff. Better Homes and Gardens Real Estate Bloomtree Realty CEO Nick Malouff says Hillcrest, inside Forest Trails on the west side of Prescott, was built and sold two years ago in the high $600,000s. ‘Now, it would probably go in the high $800s – a $200,000 increase in two years.’”
“A home in Prescott’s Tenney Ranch sold for $589,000 in 2016. ‘It just went on the market for $1.2 million,” said Malouff. “This is what’s happened in pricing. And it’s not just new homes. An older home in Timber Ridge, built in the late ‘80s, was bought in 2015 for $289,000. It just sold for $639,000.’”
From KEYE Austin. “The poll asked 1,200 Texans if they agree or disagree with this statement: ‘I spend too much of my income on housing.’ 50% Statewide agreed. A man named Stephen told us, ‘The house I bought is now triple in value and I bought it 11 years ago on the east side.’”
Bisnow Dallas Fort Worth on Texas. “The sale of development sites in the U.S. was up 43.5% last year, with $31.8B in sales in 2021 compared to $22.15B in 2019, according to data. Prices for shovel-ready sites have increased between 50% and 200% in some cases, according to Wealth Management. ‘The cost of materials, development, labor [are up] really across the board … and on top of that, the price of land is through the roof,’ said Andrew Pieper, vice president of Dallas-based Hillwood Communities. ‘It is certainly unsustainable, and I just don’t know when it will break.’”
The Coastal Courier on Florida. “When we lived in Miami, I loved the two-story house we once lived in that was close to Calle Ocho (S.W. 8 Street in Miami, in the heart of Little Havana). We moved into that house when I was 4 years old. My mom said they bought it for $23,000. We lived there for about four years, and Mom says they sold it for $65,000. We moved because that area had taken a turn for the worse But that area has since been revitalized. Out of curiosity, I looked up our old house on Zillow. It has a current estimated value of $645,000–$845,000. WHAT?”
From Yahoo Finance. “Kathy Casey is a realtor in Denver. ‘Oh, my God, Dave. $300,000– man. You’d be hard pressed to find anything for $300,000 these days.’ Q: Kathy, I just want to– sorry to cut you off. I just want to ask you real quickly before we have to go, what has been the impact of rising mortgage rates over 30% now on– over 5% on a 30 year?”
“KATHY CASEY: I’m sorry, I missed the question. – The impact of rising mortgage rates on the Denver market. KATHY CASEY: [? Looking ?] [? at ?] the rates, so, yeah, that’s a very good question. You’re going to need to really circle back with your lender. Make sure that you are still qualified at what you thought you were a couple of months ago. A couple of months ago when interest rates were at 4%, now they’re at 5.5%. You’re probably paying a $500,000 loan a couple of hundred dollars more, so you want to make sure that you circle back with your lender and make sure you still qualify for that amount.”
The Mountain Democrat in California. “Looking back to the 1980s every interest rate hike by the Feds hammered home sales. Real estate sales and corresponding property values are the most interest-rate-sensitive segments of the economy. When mortgage rates increase, fewer families can qualify to buy a home and financing a home purchase becomes more expensive for everyone else. Looking back to the 1980s every interest rate hike by the Feds hammered home sales. Mortgage rates that had been in the 7-8% range for the previous 10 years climbed above 12% and kept ratcheting up until they peaked at 16% in 1982. They remained above 12% through 1985 and above 10% until 1990. The impact of higher rates lowered home sales and values. Builders could not sell their standing inventory or finish homes they had started.”
From Money. “The typical mortgage payment in the U.S. is $664 more expensive compared to a year ago — an increase of nearly 40%. That’s thanks to higher home prices and rising mortgage rates. ‘Rising mortgage rates are taking a bite out of pending sales as both buyers and sellers take a step back from the turbulent market,’ Redfin Chief Economist Daryl Fairweather said. It’s still in the ‘early days’ when it comes to the new world of mortgage rates of 5% or higher. ‘The number of buyers willing to pay such high mortgage payments could evaporate by late summer,’ she said.”
From Housing Wire. “Add Mr. Cooper to the list of mortgage originators and servicers reducing staff: pink slips arrived for 250 employees in the first quarter, as the company faced declines in the earnings from loan originations. And the company is forecasting a few tough origination quarters ahead. During a conference call with analysts, Chris Marshall, vice chairman and president, said that rationalizing capacity is an unavoidable theme for everyone in originations. ‘In the second quarter, you will see us taking charge of staff reductions related to our lower originations.’”
“Given the magnitude of the rate increases over the last 90 days, the company forecasts quarterly origination volume earnings in the range of $65 million to $85 million for the rest of 2022, compared to $157 million in the first quarter. The Q1 2022 figure represented already a 14% decline quarter-over-quarter and a 57% drop year-over-year. Also, the company forecasts funded loan volume of around $8 billion. Mr. Cooper Group originated $11.6 billion from January to March, down 32.5% quarter-over-quarter and 54% year-over-year.”
Home and Property in the UK. “Roger Bootle is one of London’s best-known economists and was a leading voice in warning that house prices were too high before the global 2008 financial crisis. Bootle doesn’t like the word ‘crash’ but warns that a house price downturn could well be on the cards if interest rates rise, and we enter a recession. ‘I’ve always paid a lot of attention to the ratio of average house prices to average earnings,’ Bootle told me. ‘You can’t follow it blindly but when valuations are very high in relation to what people are earning, I get worried – and of course they’re very high now.’”
“What concerns Bootle is that ‘people in general are getting over-stretched in the valuations they’re placing on housing as an asset and the obligations they’re taking on with mortgages.’ As long as interest rates remain low, mortgage repayments are affordable. This, which has been the case in recent years, ‘fools people into thinking everything is fine’. Bootle thinks that we focus too much on mortgage affordability without remembering that interest rates can change, as they are right now.”
The Globe and Mail in Canada. “An increasing number of homeowners selling property in Toronto and surrounding areas this spring must brace themselves for those dreaded words: ‘the market has spoken.’ While some sellers are receiving outsized bids on offer night, others are disappointed when they aren’t rewarded with the premium they were hoping for.”
“In a strange reversal, some sellers’ agents then try to chase down the bidders a week or two later and woo them back to the table. The buyers’ agents may feel they have some leverage: the market has spoken – and the property is not worth what the seller figured it was.”
“Slower sales have led to some other unusual occurrences: bullies have pulled back and prospective buyers are lobbing bids hundreds of thousands below asking. Others have signed an agreement to purchase but they want the option to move the closing date forward if the interest rate they will pay on the mortgage rises in the meantime.”
“Some agents have seen buyers bid a hefty price in a bidding war – then have second thoughts and fail to show up with the deposit.”
The South China Morning Post. “Lived-in home prices in Hong Kong fell for the third straight month in March to a 14-month low as many homeowners sold their units at heavily discounted prices or even at a loss as the city struggled to contain the fifth-wave of the coronavirus pandemic. ‘Homeowners selling at a loss reached a new high in the first quarter,’ said Dereck Chan, head of research at Ricacorp Properties.”