A report from Business Insider. “‘Someone turned out the light on our sales in June,’ an Atlanta homebuilder said in the survey. Meanwhile, a homebuilder in Austin said, ‘Sales have fallen off a cliff. We’re selling one-third of what we sold in March and April.’”
From Newsweek. “‘All across the country, builders are telling me now that traffic is slowing down. They’re telling me that they’re having people talk about canceling existing contracts,’ said Jerry Howard, the CEO of the National Association of Home Builders. ‘It is a pretty grim outlook right now from where I sit.”
From Fortune. “‘Peak euphoria is behind us. We are giving back some of the euphoria pricing that was rolling over every housing market,’ says Rick Palacios Jr., head of research at John Burns Real Estate Consulting.”
The Connecticut Post. “‘The housing market has changed drastically in the last month because higher rates make homes even more expensive than they used to be. At the same time, fewer people can afford pricey homes because of the volatile stock market,’ Redfin agent Joanna Rose said. ‘In the early spring, every home was selling over its asking price with multiple bids. Then the number of people attending open houses dropped from 20 to two, and now some homes are sitting on the market for over a month and selling for under asking price. Supply is starting to pile up.’”
Erie News Now in Pennsylvania. “No one was spending, so the Federal Reserve slashed interest rates to nearly zero. ‘All of a sudden, it transitioned into a seller’s market,’ said Realtor Marsha Marsh. ‘Sellers were thrilled. People were selling their houses that didn’t really need to sell or wanted to sell but thought they better sell.’ But easily available money spurred rampant inflation, so rates are now rising to re-settle the market. ‘People think that’s the way it’s always going to be, and when it corrects itself, which is what’s happening now, then people get panicked,’ she said of the rise in rates.”
The Colorado Sun. “It’s not looking like the funny-money housing market collapse of 2008, but more of a slow deflation as the number of homes available for sale falls after nearly two years of frantic buying and selling. Jim Renshaw, the vice-president of Land Title Guarantee Co., which has 50 offices around the state, started seeing a slowdown in deals a couple months ago. Many homes in down-valley communities like Eagle and Gypsum are selling for more than $1 million, setting records. That’s prodding many residents to list their homes ‘as they are trying to capture the high prices and cash out,’ Renshaw said.”
“Prices in Aspen and Snowmass continue to explode, with the average home in 2022 in Aspen selling for $18.7 million, compared with $12.7 million in the first five months of 2021. Average home prices in Aspen through May 2022 are up 21%. But sales are collapsing, with the number of home sales closed in June 2022 down 43% compared with June 2021. The 36 deals closed in June is close to the number that closed in June 2019, which was 32. ‘This likely indicates more of a market normalization,’ Renshaw said.”
The Press & Courier in Indiana. “On the surface, Evansville’s housing market, which has boomed over the last two years, is continuing its hot streak. But there are signs that the market is starting to slow down. Stacy Stevens with Landmark Realty & Development and fellow Realtor Becky Demastus, both acknowledged that ‘aggressive’ listing prices that price homes above their market value aren’t quite selling like they were even four to five months ago.”
“‘I think that when a seller prices their home where it needs to be that we are still seeing multiple offers and over-list price offers,’ Demastus said. ‘But on houses where they just start way too aggressively, they do not sell right away and they are having to do price reductions.’ Stevens likened it to a game of musical chairs, with sellers seeing their neighbor’s home go for $50,000 above market value. They think they can sell their home for $60,000 or $70,000 more than it’s worth. ‘Once the music stops and the buyers stop coming out, that price looks ridiculous.’”
The Denton Record Chronicle in Texas. “Home sales in the city of Denton continued to slide in June. Closed sales were down 9% year over year. Pending contracts managed a 5% gain with inventory now rising quickly from the pandemic lows. Median and average home prices in Denton were up 19.9% and 17.6% from last year. That still leaves them below the highs we saw a few months ago. In terms of prices per square foot, average Denton home prices have dropped 7.5% from their peak back in March.”
“The number of homes for sale in Denton was up 51% from June of last year. Months of inventory has grown 67%. Good homes that are fairly priced are still selling, but it’s a dramatically different market than what we were experiencing earlier this year. Denton County inventory is up 80% from a year ago. With the decline in sales, the number of months of inventory has spiked 90% from a year ago. Months of inventory for new construction in Denton County is up 15% from a year ago. That’s nothing compared with what’s going on in Prosper.”
“Home prices in Prosper skyrocketed to a ridiculous high in May, then subsequently collapsed over $125,000 last month as 6% mortgage rates sent them crashing back to reality. New home inventory in Prosper (months of inventory) is now the highest since the Great Recession back in 2007. People are finally questioning the sanity of spending exorbitant sums of money for shelter that was selling for 60-80% less before the pandemic.”
“I have seen price reductions of 10-20% on some recent listings when the sellers and agents completely misjudged the market and what they are actually selling. What these agents aren’t telling their clients is that overpricing your home and missing the market is a perfect recipe for equity destruction. When the market is heading away from you, time is not your friend. Inventory, and the competition that comes with it, is growing by the day.”
“The inflated (empty) promises and listing price cuts will continue until it becomes clear to most sellers that the housing market correction is real. The price you can get for your home with rates at 6% is simply not the same as a market with rates below 3% and your central bank pumping $120 billion per month into the financial system. The golden goose has been cooked, flipped and manipulated into a colossal mess of unaffordable real estate.”
From Fox 5 in California. “After months on the rise, the median home price in San Diego County has recently dropped an estimated 2.9%, according to one real-estate official. ‘We’re finally starting to see a slow down in home prices,’ said Phillip Molnar, a business writer for the San Diego Union-Tribune. ‘They’ve been on a tear for about two and a half years.’ Molnar says that the current median home price is now $825,000, down from the May 2022 price of $850,000. The nearly 3% drop from May to June represents the biggest decrease in Southern California in recent history, according to Molnar.”
“‘We kind of expected home prices to go down at the start of the year, but unfortunately, what happened for a lot of buyers is people are nervous about interest rates going up so they rushed into the market and bought whatever they could, doing these crazy deals going over asking price and all that stuff,’ Molnar said.”
From WOOD TV. “Higher interest rates are leading to slimmer staffing at some banks in West Michigan. Last week, Grand Rapids-based Northpointe Bank confirmed it recently laid off 43 employees. Northpointe Bank CEO Charles Williams said severance packages were given to all affected workers. ‘As a national lender, we have been impacted by the large rise in interest rates coupled with the lower mortgage volume, among other factors,’ Williams stated.”
“In April, Troy, Michigan-based Flagstar Bank announced it had cut 420 jobs from its mortgage department, about 20% of that department’s total workforce. Lee Smith, president of mortgage at Flagstar Bank, said the company used layoffs and attrition to trim his department in the face of ‘unprecedented increases in interest rates and a significantly smaller mortgage market than what we experienced in 2020 and 2021.’”
From Global News in Canada. “Calgary’s hot housing market is following the lead of many others across the country and cooling off. Local realtor Curtis Prokopchuk couldn’t catch his breath for months. Now there’s been a definite shift in the market, he told Global News. ‘I’ve seen already a significant amount of price decreases,’ Prokopchuk said. He added that many sellers were basing the listing price on what other homes in the neighbourhood sold for earlier in the year. But he said most homes aren’t selling for way above asking anymore.”
Bloomberg on Canada. “Home contractor Anthony Sayers thought he had a budget of C=$160,000 for a home renovation project he had agreed to do in Toronto. Then the housing market turned and his client cut that almost in half. ‘The realtor came in and basically showed them that the market is done,’ he said, explaining that the clients had been depending on the sale of another property to fund the renovation. ‘It has turned down, and the money that they put in, they might not get back.’”
“‘People are afraid,” said Roman Orlov, a home renovation contractor in Toronto, who says new business inquiries have dropped about 40% in the last few months, and he’s heard the same thing from colleagues who do landscaping, painting, and pool work. ‘There is a downturn in the volume of inquiries.’”
China Digital Times. “‘If tens of thousands of homebuyers really stop paying their mortgage, the real estate companies will soon collapse because they have no liquidity,’ Dan Wang, chief economist at Hang Seng Bank China, told Nikkei Asia. ‘There are huge risks for banks, particularly local banks, whose assets are mainly in the housing market, and there is no way that the central bank could save all of them,’ she added.”
“Braving the risk of incurring bad credit, many homebuyers remained defiant in their boycott. In one online homebuyers’ group, after someone expressed concern about how ceasing to make payments might affect their credit score, another responded, ‘If you can’t even afford to eat, do you really care about your credit score?‘ The homeowners of one real-estate project in Zhengzhou declared in a unanimous statement, ‘At a time when we are desperate and fighting for survival, a credit score is just a paper tiger to us, a pair of shackles that can be discarded at any time. This is the helpless cry of millions of ordinary citizens like us.’”
“Some on social media have taken to using “Camel” Xiangzi, the aspirational but ill-fated protagonist of Lao She’s 1937 serialized novel “Rickshaw Boy,” as a stand-in for duped and frustrated homebuyers. A now-deleted WeChat article (“Xiangzi Decided to Stop Pulling the Rickshaw,” archived by CDT Chinese editors) included a poignant comment posted below a Douyin video filmed by a young couple in Zhengzhou, whose joy at purchasing a home had turned to anxiety about shouldering an expensive mortgage on a stalled housing project. The comment, which resonated with many social media users, read: “Xiangzi thought that if only he worked hard at pulling the rickshaw, someday he could own a rickshaw of his very own.”