It’s Friday desk clearing time for this blogger. “Lotte Vonk knew that when her second child arrives in a few months, space in her suburban Chicago townhome would get tighter. They listed their home for $315,000 last week and have already had more than 20 viewings, but no viable offers. ‘Everything I know about the market has told me that the houses should be flying off the shelves,’ said Vonk. ‘When things are not selling it is either the price or the product. It was a gut rehab a few years ago, I know it isn’t the product. So it must be the price.’”
“The Realtor Association of Sarasota and Manatee noted that April was the first time ‘active inventory’ in the North Port-Sarasota-Bradenton metro area showed year-over-year positive growth since May 2019. Also, fewer homes for sale closed in both the single-family and condo markets, a trend that’s been ongoing for months. ‘As we’ve been anticipating, it appears that the rising interest rates and inflation are beginning to put pressure on our local real estate market,’ said Tony Veldkamp, 2022 RASM president. ‘While we’re still seeing fewer pending and closed sales when compared to last year, we are starting to see an increase in new listings and the amount of inventory of homes and condos for sale.’”
“Homebuyers tired of getting shut out in the Valley’s red hot housing market could finally be getting some relief. ‘Every morning, I get up to check MLS (multiple listing service) to see how many homes are active and coming soon,’ said HomeSmart Realtor Angie Koehle said. ‘This morning, it was 8,800. Last year at this time, it was 3,500, so there is definitely a shift right now.’ ‘After we’ve been going at full speed for two years, going back to a regular market is going to feel like we just passed a cop at 200 mph, and now we’re slamming on the brakes,’ said Tina Tamboer, a senior housing analyst with the Cromford Report. ‘That’s kind of what it feels like.’”
“Housing inventory in the Bay Area is finally up. ‘Less phone calls, I’m seeing less offers, less activities with open houses, definitely a cool down,’ said Holly Barr, real estate agent with Compass. She said a combination of still sky-high prices, combined with a rise in interest rates and inflation is leading would be buyers to hesitate, especially in tech-stock rich Silicon Valley. ‘Interest rates are high, and my stocks, low … I can’t do that anymore,’ said Barr.”
“For fixed borrowers, CREA said the stress test just moved from 5.25 per cent to the low six per cent range, another roughly one per cent increase in a month. ‘People are nervous. They are thinking, ‘if I take on this mortgage, when mortgage rates are going up and the price to (live) is more, what is going to happen?’ said Anita Springate-Renaud, a Toronto broker with Engel & Volkers.”
“She noticed that many homes were still getting multiple offers last month, but instead of 20 offers, two or three was becoming the norm. Properties are also taking longer to sell. Homes that used to find a buyer in three or four days are now sitting for two weeks, in some cases, she said. ‘The market balance has gone from drum tight with ‘not enough supply,’ to one that resembles the 2017-19 correction period,’ said BMO Capital Markets senior analyst Robert Kavcic.”
“Steve Dickie, president of the Realtors Association of Grey Bruce Owen Sound, said that local agents are starting to again see conditions put on sales, some price reductions on listed properties and even a decrease in the number of offers on homes. ‘The conversation around offices is that it is not as frenzied as it was last year,’ Dickie said. ‘There are still lots of situations where you have multiple offers, but if you are watching the board on a daily basis every once in a while you will see a price reduction, which we haven’t seen in a long time.’”
“In Toronto, the average price of homes declined 6.4 per cent in April from the month before on a seasonally adjusted basis. It was the biggest monthly drop in that market in two years. Toronto home sale totals also declined 26 per cent from the month before. Typically in Grey-Bruce, Dickie said they see prices level off for a while before they start to go up again. ‘Even this morning I was talking to several agents and they were talking about how they had more and more listings coming up, and there are more and more listings on the real estate board on a daily basis than we had seen earlier in the year. I am trying to tell people locally to stay calm,’ Dickie said. ‘Nothing is going to crash.’”
“One of the world’s bubbliest housing markets is tilting from sellers to buyers with dizzying speed. ‘ I think we have a group of people that kind of got caught with that market turning,’ said Bruce Joseph, founding director of Trident Mortgage Investment Corp. ‘We just came out of a very aggressive sellers’ market, and moved very quickly into a buyers’ market, so their strategy made a lot of sense until really the last several weeks.’”
“And those who took out shorter-term subprime mortgages — which account for 1.3% of Canada’s loan market — now face the prospect of having to refinance at double the cost. That could introduce forced sellers and distress to the market. And because some investors who bought condos during the pandemic financed their purchases with mortgages that only last a year or two they could be be facing those bleak economics on properties they already own.”
“‘That could introduce an element of somewhat distressed listings coming to market,’ said real estate researcher Ben Rabidoux . ‘You’re going to lose a significant portion of demand from the fact that the economics for investors have completely blown out. And for that small cohort that has short-term financing, and especially that non-prime, short-term financing, they will be renewing this year and it will be at substantially higher rates. The economics on that is going to get pretty painful.’”
“ASB’s economists said ‘three big housing nasties’ it had highlighted last year as potential risks to the housing market had arrived all at once – tighter credit conditions, higher mortgage rates and increased supply of new housing. An increase in supply of new houses was also helping to depress prices, the economists said. ‘We expect additional housing supply to come on stream ahead. We’re now five years into a residential construction boom, and this supply bulge should increasingly show up n higher inventory and new listings numbers. The housing shortage that has plagued the market over the past five years has been rapidly, if not completely, eroded thanks to new construction outpacing plunging population growth.’”
“Founded in 1976, Metricon is the largest player in the sector, employing 2500 Australians with 4000 projects in the pipeline, which is why speculation about the giant’s collapse has sparked panic across the nation. Westpac chief economist Bill Evans said a ‘a very major correction’ was already happening within the industry in the wake of a peak in interest caused by the government’s HomeBuilder scheme. ‘If you want to think about the pressure that HomeBuilder has put on demand, Victoria has suffered more than any of the others,’ Mr Evans said. ‘And now, of course, we are seeing a very major correction.’”
“Smaller operators like Hotondo Homes Hobart and Perth firms Home Innovation Builders and New Sensation Homes, as well as Sydney-based firm Next have also collapsed, leaving homeowners out of pocket and with unfinished houses. NSW couple Jessica Snowdon and her husband Steve also told news.com.au they were terrified by the Metricon situation after forkng out $31,500 in an initial deposit to the firm just four weeks ago. ‘We were just freaking out [when we saw the news], what’s going to happen?’ Ms Snowdon told news.com.au ‘It’s scary because we don’t know whether to pull out or not, if we pull out we still lose our money.’”
“Florence Mok, a new mother, thought she wouldn’t be able to get a mortgage for her HK$9 million ($1.1 million) dream apartment. When her family signed the papers, China Evergrande Group sales staff said not to worry. The developer’s financing arm offered them 90% leverage, no bank stress-test needed. Now Mok’s suffering from the fallout of Evergrande’s debt crisis. With the cash-strapped company no longer willing to provide financing, her family can’t find a bank for a mortgage. They might lose the down payment and apartment.”
“The Moks are among 80 families who have protested and appealed to authorities for help. Their dilemma exposes a risky, yet common practice among Hong Kong developers: real estate companies often lend to buyers to boost sales, potentially letting them stretch beyond their ability to pay.
‘It’s very disturbing,’ said Mok, 39. ‘We were expecting a home for our family, now we may lose everything.’”