It’s Friday desk clearing time for this blogger. “Already recent housing-market data has shown the massive effect the surge in rates has had on home buyers. ‘The pandemic boom in home sales is over, and activity is back at pre-pandemic levels,’ wrote Mizuho Securities U.S. economist Alex Pelle and chief U.S. economist Steven Ricchiuto.”
“Brokers are also seeing some signs of a cool-down. ‘Things do seem to be leveling off,’ said Kristina Loper, a Keller Williams agent in Tacoma. Loper listed a ‘great town house’ in University Place that only drew one offer. ‘I was shocked,’ she said.”
“Bob Goodall, the president of Goodall Homes, has been building homes in Middle Tennessee since 1983. ‘We are definitely seeing a bit of softening in the market. When you when you raise prices as much as prices have been raised over the past couple of years, when you raise interest rates — and the prospect of continued rising interest rates — historically, it always affects the market and that’s what it’s made to do. It feels like we’re in the ninth inning. We were probably getting there pre-Covid, and then with Covid, all this money flushed into the economy extended it.’”
“It costs a lot more to build a house than it did two years ago, but residential developers are shielded thanks to skyrocketing home prices. Some builders are concerned that shield is about to break. ‘I think there’s some definite fear,’ said Eric White, Atlanta division president for Toll Brothers Inc. ‘If you’re looking at a $500,000 home, with the interest rate jump we saw recently, that adds $500 or $600 a month [to a mortgage payment].’”
“Raleigh Mayor Pro Tem Nicole Stewart said she’s seen her own neighborhood affected by corporate landlords buying single-family houses. ‘Their home was put on the market with an exorbitant price tag — without any improvements done to the property — resulting in the home sitting vacant for a year. The corporate investor is finally having renovations done, but in the meantime, a home that previously provided housing in my neighborhood is now sitting vacant, along with at least three other vacant and move-in ready homes nearby,’ she said. ‘How — one might ask — can homes sit vacant for this long, in this housing market?’”
“Last summer Stewart asked how many vacant homes are in Raleigh, with staff still working to get that information. ‘One figure I have heard recently from Coastal Federal Credit Union is that 13,000 homes in Wake County are owned by these investment companies and that only about half of them are being rented,’ Stewart said.”
“More mortgage firms are starting to let workers go as demand for mortgage refinancings falls off a cliff. Employees at American Financing Corp. in Aurora experienced the harsh new reality facing the mortgage industry Monday when they were called to a Zoom meeting titled ‘Our Future Includes You.’ For a large, but undisclosed number, that description wasn’t entirely accurate. ‘The mortgage market is starting to normalize after being incredibly hot for the past two years. We explored many angles but unfortunately had to lay off some of our employees.,’ said Susan Cahill, president at American Financing in an email.”
“Subtracting out points and other items, rates on 30-year loans are actually closer to 5.5%, said Lou Barnes, a capital markets analyst in Boulder with Cherry Creek Mortgage. ‘The industry capacity is so bloated by the two years of COVID-19,’ he said. ‘No matter how disciplined you are, everybody is going to get caught.’”
“Prospective homebuyers saw clear signs of a cooling Toronto market in April as the region’s real estate board reported sales dropped by about 41 per cent since last year and 27 per cent from a month earlier. ‘We’ve seen a change in the market … business is still happening, but it’s not as crazy,’ said Despina Zanganas, a Toronto Realtor with PSR Brokerage. ‘What I’ve seen is a lot of properties just sitting on the market.’”
“Months ago, it was hard for her to even secure a booking to visit some condos listed for sale, but now viewings have plunged. She often sees condos receive only one or two visits a day from prospective buyers. The slowing is most pronounced in the area surrounding Toronto known as the 905, which includes municipalities such as Mississauga, Brampton, and Markham. Zanganas believes it is taking time for sellers to adjust to the market’s current conditions.”
“‘A lot of these sellers are not accepting the reality of what’s happening, so they’re still overpricing their properties and expecting like $200,000 over,’ she said.”
“Domain Chief of Research and Economics, Dr Nicola Powell, said prices peaked in June last year. Powell said Sydney’s rate of growth was flatlining after an extreme property boom and this was also reflected on the Central Coast. ‘Flattened house prices and declining unit prices has made Sydney’s price growth rate one of the most significant slowdowns of all the capital cities,’ she said. A year ago, house prices were rising at 46 times the current pace, and at the same time unit prices were also increasing. This indicates that Sydney’s steepest upswing on record has ended.’”
“New Zealand‘s building industry admits it’s facing one of its biggest challenges ever as costs spiral and procurement challenges mount. It comes after Wellington company Armstrong Downes Commercial went into liquidation, sparking fears more could follow. Grant Thornton liquidators said two of Armstrong Downes’ largest projects were suffering substantial losses as a result of being fixed-price contracts. Those problems were expected to impact the cooling residential market too.”
“‘In the medium term, it’s going to mean there’s much less of an appetite by developers for actually want to build because they’re not going to be able to build for the price the market’s prepared to pay for a property,’ housing commentator Ashley Church said.”
“Residents of Beijing fretted on Friday over dozens of new COVID-19 cases reported daily and over the possibility of more restrictions on movements as China’s leaders threatened action against critics of their zero-COVID policy. ‘We will try to cooperate,’ said 42-year-old Beijing finance worker Hu, giving only her surname. ‘But I also hope that the government can introduce some policies that will not affect the overall life of citizens. After all, we all have mortgages and car loans.’”