A report from the Idaho Press. “Brett Hughes, owner of Boise Premier Real Estate said in 2010 less than three homes in the million-dollar price range were sold in Ada County. That is partially because many of these homes that are now valued at $1 million or more, are double, and in some cases, triple, what they were valued at three to four years ago. ‘They’re pulling equity out of their places elsewhere, and bringing them here, and our prices still look pretty affordable to some,’ Hughes said. ‘That’s a really interesting factor because they don’t have to have an appraisal, they don’t have to have the full underwriting. So values can climb quickly,’ Hughes said. ‘And now, that becomes comparable for somebody else who’s actually getting financing. So it’s kind of like a vicious cycle to make prices go up quickly.’”
From Business Insider. “The number of Americans who have trouble landing a mortgage is on the rise, and a group of niche lenders are cashing in to help. Sprout Mortgage, Angel Oak, Carrington, and Athas Capital Group are four of the lenders who promise to help borrowers without a W-2. With the rest of the mortgage industry shrinking, these lenders are doing better than ever by catering to borrowers who were outcasts of the market because of low credit scores, heavy debt, or their status as nonsalaried workers.”
“‘It really is more of an art and a specialty in the non-QM,’ said Greg Austin, an executive vice president at the California firm Carrington Mortgage Services, another non-QM lender with ties to the pre-crisis subprime industry.”
From Toronto Storeys in Canada. “Before 2020, the idea of spending millions of dollars to live in the far out suburbs of the GTA would have seemed preposterous to most homebuyers. Then the pandemic hit, the market shifted, and that became entirely commonplace. Now as the market shifts again — this time with demand declining and prices falling — some buyers are experiencing overwhelming buyers’ remorse and trying to back out of deals.”
“‘It’s the reverse FOMO,’ said mortgage broker Ron Butler. ‘It’s FOGS: fear of getting screwed. When you start to hear conversations like the price of townhouses in Brampton is falling $15,000 a week, that’s very exciting to people. That is extremely impactful. And when enough people hear it, it’s frightening.’”
“These buyers are backing out because they don’t want to get stuck overpaying for a home they submitted an offer for a few months ago that, come closing time, is worth significantly less than what they agreed to pay. ‘I read comments about it and they just start with ‘I’m scared — I don’t want to close this transaction and instantly lose $180,000,’ Butler said. ‘Part of it is also sort of a culture we’ve developed where people think that you can get out of things.’”
From CTV News in Canada. “The red-hot housing market over the last several months pushed many buyers fighting through bidding wars to put in unconditional offers at high prices. But now that the market is cooling, some are ending up with mortgages that can’t cover the full cost of their home following an appraisal. Toronto-based mortgage broker Mary Sialtsis says there are ‘very few options’ for these buyers. ‘Especially in the last couple of months, I’ve had a few different clients that have dealt with this situation,’ she told CTV. ‘Unfortunately, there are very few options when you’ve purchased a property with no conditions and no financing conditions.’”
“Sialtsis warns that putting in offers without any financing conditions puts buyers at a huge risk, as the buyer is legally bound to close the deal regardless of whether they’re able to get a sufficient mortgage. ‘I really don’t think buyers fully understand the impact of those unconditional offers when they submit an offer to purchase a property,’ she said. ‘It becomes a legally binding contract and that buyer is expected to close on the closing date.’”
From Stuff New Zealand. “The level of housing market volatility is the highest in 30 years and that is causing the market downturn to snowball as the weakness works its way up to higher-end properties, a valuer says. ‘In my 30-plus years as a registered valuer, I have never seen anything quite like it before, and I am not sure if we have seen the worst of it, either. This residential property rollercoaster still has a way to go,’ Quotable Value general manager David Nagel said.”
“Nagel said that what began as a reduction at the more affordable end of the market was now beginning to affect prices much further up the property ladder. ‘What we are seeing now is a growing number of main centres experiencing declining prices at both ends of the market. Those losses are starting to mount, month to month, up and down the property ladder.’”
From Bloomberg. “Didi Global Inc. is widely expected to secure a blessing from shareholders on Monday to delist in New York, capping an 11-month ordeal that wiped out around $60 billion of its market value and turned the ride-hailing giant into a symbol of China’s tech crackdown.”
From Fortune. “The dot-com crash haunts the memories of many of the more seasoned investors on Wall Street, and this year’s stock market rout is conjuring up some serious déjà vu. It was a dot-com bust that washed out a slew of tech sector darlings that had ruled the 90s, and there’s a startlingly similar trend today in a market that didn’t exist decades ago—cryptocurrencies. The crypto market has lost roughly $1 trillion in value year-to-date in one of the worst sell-offs in the maturing market’s history.”
“‘In the dot-com era, and in the current market run-up and decline this year, there was a fervent, largely mindless belief that a subset of investments would go up in price forever,’ explained George Ball, the chairman of Sanders Morris Harris, a Houston-based investment firm that manages $4.9 billion. ‘The reasoning, if there was any, had no grounding in metrics, no real grounding in logic, and relied on a very high rate of growth continuing beyond any reasonable expectations of the boundaries of scale.’”
“‘I think, simply, with the long passage of high rates of growth and prosperity and GDP gains, we’re entitled to a recession. The popping of the bubble will create an awareness of reason and logic that a cold shower brings about,’ he said.”
From Bloomberg. “The world’s richest nation is waking up to an unpleasant and unfamiliar sensation: It’s getting poorer. A plunge in wealth since the start of 2022 that JPMorgan Chase & Co. estimates totals at least $5 trillion — and could reach $9 trillion by year-end. It all adds up to the sudden removal of a major prop to confidence: ever-bigger nest eggs. And it’s by design. To stamp out the highest inflation in decades, the Fed needs Americans to curb their spending, even if it requires an economic slowdown to get there. ‘It’s painful to get back to normal after really being in a fantasy world last year,’ said John Norris, chief economist at Oakworth Capital Bank.”
The Evening Standard. “The crash was so spectacular that some people are calling it the Lehman Brothers of the crypto world. The market value of cryptocurrencies, almost $3 trillion in November, is now just $1.3 trillion.The largest crypto-trading platform in the US, Coinbase, lost half its value in a week and has warned users they could lose their money if the company goes bankrupt. Founder Brian Armstrong has seen $11 billion vanish from his personal wealth. He’s just one of the ‘crypto bros’ who lost vast sums.”
“The reason for the crash is debated. Some say it was due to a general fall in financial markets. ‘It’s not just crypto, it’s everything,’ says Oleg Giberstein, co-founder of London-based crypto trading startup Coinrule. ‘Netflix is down, tax stocks are down. The markets are depressed. Crypto is a risky asset class so gets hit the worst.’ Oleg, who set up Coinrule three years ago, says Luna was also ‘an absolute disaster.’”
“Another, who said he became a millionaire aged 20 thanks to crypto, has lost his fortune and his girlfriend. ‘I was looking for some good long-term holds,’ he adds. ‘My cousin informed me about Luna. I was really intrigued with what he told me, so intrigued that I decided that my money would be safe there. Stupidly I bought over 55k Luna at $80+ during the dip.’ Now it’s worth less than $500 and when he told his girlfriend the news she dumped him. ‘I wish I could go back in time,’ he says.”
“For some it’s been life-ruining. One Reddit user said: ‘I lost over $450k USD, I cannot pay the bank. I will lose my home soon. I’ll become homeless. Suicide is the only way out for me.’”