A report from the Seattle Business Journal in Washington. “The median sale price of single-family homes in Seattle fell nearly 12% from April to May, according to the Northwest Multiple Listing Service (NWMLS). Meanwhile, the number of in-city pending sales declined over 25% year over year, while closed sales tumbled 16% as the number of listings shot up over 15%. It’s a clear sign that the region’s home market is cooling off.”
“May ended with over 4,600 single-family homes listed across the four-county metro. That was nearly 2,100 more than May 2021. The cooling market means sellers really need to rethink their expectations, Mike Larson, managing broker at Compass in Tacoma, said in the NWMLS news release. He said the days of ‘multiple offers and waived inspections, at least in Pierce County, are behind us.’”
The Denver Channel in Colorado. “For what feels like the first time in a long time, the housing market is shifting, and this time in the direction of the buyer. Andrew Abrams, chair of the market trends committee for the DMAR, says while the dip in prices is small, it could mean that rising inflation, interest rates, and a drop in demand are settling in. ‘We are seeing an increase in days in the [Multiple Listing Service], and I think that’s going to be common because as the amount of buyers start to shrink and the seasonality of the market and inventory increases, there’s going to be people that haven’t adjusted,’ said Abrams.”
From CNBC. “After many months of soaring home prices, the real estate market finally seems to be cooling down. According to the Federal Reserve Bank of St. Louis, there were 376,018 homes listed in February 2022. In May 2022, the number jumped to 516,362, showing an increase of 37%. Now, it seems homes are sitting on the market longer and fewer offers are being made on each home.”
“Coby Herzog, a real estate agent in San Diego: ‘Listing agents are starting to respond and be helpful again now that they aren’t receiving 100+ messages a day,’ says Herzog, who is also noticing that offers are more often being recognized and responded to lately, rather than getting rejected.”
The Orange County Register. “The number of U.S. homes for sale jumped 25% from April to May, the biggest one-month jump in a database that dates to 2016. And where did owners rush to sell the most? If one sees the May surge as good news for home shoppers, California ranked No. 7 at 37%. The biggest jumps were in the Western U.S: No. 1 Washington, up 62%, then Utah at 60%, Idaho at 52%, Arizona at 45% and Colorado at 41%. Smallest? South Dakota at 4%, then Hawaii at 8%, West Virginia at 11%, New York at 11% and Louisiana at 12%. And California’s rivals: Texas, No. 19 at 27% and Florida, No. 22 at 25%.”
“An average May in pre-pandemic years saw U.S. listings rise slightly by 4% from April to May. This year, May’s increase was six times bigger. California’s average May jump in 2017-19 was 8%. This year’s jump was 4.5 times bigger. The biggest increases? Wisconsin’s 22% was 18 times bigger than the 2017-19 May pace; Delaware’s 23% was 15 times larger, Arkansas’s 15% was a 14-fold increase, and Oklahoma’s 17% was 10 times faster.”
“Among 50 big metro areas tracked, the year’s largest jump in homes on the market was in Austin (up 86%), then came Phoenix (up 67%), Sacramento (up 55%) and the Inland Empire (up 52%).”
From USA Today. “About 1 in 5 sellers, or 19% of listings, dropped their price in the four weeks ending on May 22, up from 13% a month earlier and 9.8% a year ago. ‘We’re seeing more and more buyers pull back, whether that’s a decline in people searching for homes, a decline in people touring homes, getting mortgage applications approved for buying a home — pretty much all of these leading indicators show a continuation of buyers reacting to the higher interest rates,’ says Taylor Marr, deputy chief economist for Redfin.”
Hawaii News Now. “The Honolulu Board of Realtors says the single-family home market showed small signs of cooling as there was a drop in closed sales compared to a year ago. ‘As interest rates and median sales prices rise, the question of what families can afford is clearly impacting market dynamics,’ said Chad Takesue, president of the Honolulu Board of REALTORS®. “We see this reflected in the active inventory of single-family homes, which rose 39.8% from a year ago.’”
From CTV News in Canada. “The scorching hot Ottawa real estate market has cooled, but home values here are holding. Marnie Bennet, who has been in the industry for more than four decades, says she is acting as part psychologist and economist as well as realtor right now with ‘managing expectations.’ She reassures everyone that industry growth has been a lottery win for homeowners, even with the cool down. ‘The home equity growth that home sellers have experienced in in the last 2 years would traditionally take 10 to 12 years to realize,’ explains Bennett. ‘The market is cooling, but that cool down isn’t just a reality check. It’s a return to a more normal market.’”
“COVID-19 created a whirlwind of home buying and the highest escalation of home prices on record. ‘Renters and first time homebuyers raced to buy a home and this created price increases of up to 78 per cent since 2020,’ says Bennett. ‘After experiencing shocking sticker prices for homes and ‘free’ money with the lowest interest rates in the history of Canada. we are now returning to a normal real estate market.’”
“Bennett says homebuyers enjoyed the lowest interest ever offered in Canada at about 1.5 per cent. ‘The result in the housing market is that home buyers are shell shocked about rising interest rates at over four per cent from only 1.5 per cent. Home sellers are having to appreciate that the joyride is over and that increased home prices are leveling off to normal increases,’ says Bennett.”
“For the third straight month there have been double digit decreases in home sales in Ottawa. ‘As a realtor we are having to educate both the homebuyer and the home seller about real estate cycles and that we are all adjusting now to normal times,’ Bennett says. ‘In this market with rising inventory of 168 per cent since January well cared for homes with top level presentation is necessary in order to sell.’ This is a positive for buyers out there as there is more choice and that prices are negotiable and terms. ‘This has all happened very quickly and in some areas we are headed towards a buyers market.’”
From ABC News. “The federal Treasurer has dubbed a rise in interest rates as ‘difficult news’ for home owners and foreshadowed life in Australia is set to become even more expensive. Treasurer Jim Chalmers said people would feel the economic pain of inflation with housing and living costs set to rise even further. Shadow Treasurer Angus Taylor said while the RBA was independent of government, Labor needed to adopt measures that would reduce the likelihood of further rate rises. ‘Today is a tough day for the 3.5 million Australian families who have a mortgage,’ he said.”
From Bloomberg. “China’s yearlong campaign to control runaway property prices has pummeled its biggest developers, tanking home sales 11 months straight and obliterating $65 billion in wealth for real estate moguls. ‘The golden days are over,’ said Craig Botham, chief China economist of Pantheon Macroeconomics Ltd. ‘Property can’t be the engine for economic growth or wealth accumulation. It’s in the past.’”