A report from Miami Community News in Florida. “It is as if the collective consciousness of anyone thinking of selling said, ‘Oh, I have missed the top and I better get on market right now so I don’t lose more money.’ This is one of the biggest reasons for our current perfect storm. Just a few months ago we had lines waiting outside open houses and multiple offers on the first day, sometimes sight unseen. A number of Mortgage Loan Officers report that lenders are starving for someone to talk to, let alone lend to. Underwriters are calling their MLOs asking if they can do anything for them today. Some lenders are closing down all together, while most are cutting staff. The mortgage gold rush is over.”
The Washington Post. “Penn Johnson, 62, says he sold his house in affluent Fairfield County, Conn., last year and started renting. He owned a home there for 32 years before downsizing. For sellers, it marks the end of the ‘name your price’ era. Johnson, who works in residential lending, said more sellers are accepting offers below their asking price. ‘[Sellers] felt like they had a lot of market power, and I think that market power went away as the market became more balanced,’ he said.”
The American Statesman in Texas. “Real estate agents have been saying the Central Texas market has been showing signs of slowing from its previously scorching level, and the latest home-sales figures from the Austin Board of Realtors for June supported that. The survey says the median list price of homes on the market in Austin is $620,000, and the percentage of listings with price reductions is 32.4%. ‘Homebuyers looking to make a move in once-unaffordable cities, like Austin, may finally have the upper hand,’ Realtor.com said.”
From 12 News in Arizona. “The Phoenix housing market is cooling down. There are 16,000 new homes listed per day as opposed to only 4,000 at the height of the real estate boom. ‘This is not a market crash,’ Arizona Association of Realtor’s treasurer Sindy Ready said. ‘Prices are staying about the same; they’re adjusting a little bit…mostly on listings that were overpriced.’”
“iBuyers, companies like Opendoor and Offerpad, who buy homes and resell them, are also slowing their buying spree, Tina Tamboer with The Cromford Report said. ‘A lot of these corporate iBuyers were flipping their homes to institutions based out of Wall Street,’ Tamboer said. ‘So when Wall Street started to pull out, they scaled back quite a bit.’”
From Bloomberg. “Opendoor Technologies Inc. agreed to pay $62 million to the Federal Trade Commission to settle allegations that it misled potential home sellers in its marketing campaigns. The commission alleged that Opendoor tricked customers by promising they could make more money by selling to the company than they would on the open market, according to a statement. ‘Opendoor promised to revolutionize the real estate market but built its business using old-fashioned deception about how much consumers could earn from selling their homes on the platform,’ Samuel Levine, director of the FTC’s bureau of consumer protection, said in the statement.”
The Silicon Valley Business Journal. “Housing prices in San Jose fell by an average of $75,300 from April to June, the biggest drop in prices over that time period among the top 50 U.S. markets, according to a new report. The price of the average house in the Capital of Silicon Valley fell from $1.56 million in April to $1.49 million two months later, market analysis firm Black Knight said. That was a 5.1% decline. Over that two-month period, eleven other top 50 markets also saw drops in home prices, with seven seeing prices fall by at least 1%. Four of those were in California — in San Francisco, average home prices dropped by 2.8%; in San Diego by 2%, Los Angeles by 1.3% and Sacramento by 1.1%.”
“San Jose’s housing price growth is down by 11.4 percentage points from its high point from the past year, Riverside’s by 10.5 percentage points, San Diego’s, 9.8 percentage points, and San Francisco’s 9.6 percentage points. But the market that had seen its housing appreciation decline the most in June from its peak from the past year was Austin, Texas. The annualized price increase there was down 22 percentage points that month from its high point.”
The New York Post. “Debra Winger has put the uptown home she shares with her husband back on the market following a price drop and a broker swap.Her two-bedroom, two-bath co-op is in a grand Beaux-Arts building at 300 W. 109th St.It’s now asking $1.49 million — down from its $1.77 million ask last November, further down from its $1.95 million ask in 2019. The couple bought it for $1.85 million in 2015.”
The Nevada Current. “‘I have one seller who is not lowering their price because I think they haven’t come to terms with where the market is heading right now,’ says Dawn Houlf, a longtime Las Vegas real estate agent. Another would-be seller waited on the sidelines, attempting to time the peak of the market. ‘They took six weeks to get the house ready to sell and missed the boat.’”
“Supply is up 134% from a year ago, according to Las Vegas Reators. ‘We saw a lot of sellers motivated by greed, for lack of a better word,’ says Diane Varney, a Las Vegas realtor. ‘If I get my price, I’ll sell. Otherwise, I’ll stay put,’ That’s not a life event. People usually move for life events.’ Varney says a quarter of listings in Southern Nevada have reduced prices. ‘A seller has to be motivated by something other than price. Inventory in Las Vegas is almost four times what it was in March,’ she says. ‘I show them the statistics and explain the laws of supply and demand.’”
“‘If you’re getting showings and no offers, you’re roughly 5% overpriced. If you’re getting no showings and no offers, then you’re roughly 10% overpriced,’ Varney says of the rules for a normal market. ‘We’re coming out of a ‘no rules’ era where we saw 25% to 35% property value increases within the last 24 months.’”
“In Reno, where the median price of a home was $677,500 in June, 32.6% of listings had price reductions that month, according to Realtor.com, which deemed Reno first in the nation for slashing home prices. ‘Pricing your home correctly from the get go is key. I’m seeing price reductions upwards of 20% right now,’ says Sarah Scattini, president of the Reno Sparks Association of Realtors. ‘Sellers are offering incentives to buyers – credits for closing costs, credits to buy down their interest rate. Motivated sellers are likely to be more realistic.’”
“Scattini agrees Reno’s ranking as the top market for slashing prices indicates it was among the most inflated markets in the U..S. ‘Prices are getting hit hardest in the markets that have been on the hot streak during the pandemic,’ she says.”
“As interest rates rise, so-called creative financing, popular before the housing bubble burst in 2007, is making a comeback. ‘There is what we call a bank statement loan, where all they have to do is provide their bank statements and have a 650 or 680 FICO score,’ says Houlf. ‘But that’s at a higher interest rate. You’re looking at seven, seven and a half percent rather than paying five and a half or six.’ Adjustable rate mortgages (ARMs) were popular during the predatory lending practices that preceded the Great Recession and have fallen out of favor. Now, they’re back.”
The Real Deal. “The nation’s most overvalued housing market is coming down from a pandemic peak as mortgage rates rise, sending some newcomers back from where they came.Idaho’s capital region, one of the fastest-accelerating markets in the past two years, is reversing course,the Wall Street Journal reported. After single-family home prices in the Boise area jumped 79 percent in two years, they’re set to drop by as much as 10 percent.”
“Some people who moved to Boise are returning to their pre-pandemic home bases to go back to the office or be closer to family, the publication reported. Stagnant or falling prices might be welcome news for longtime residents priced out of a market that was within their grasp not long ago. ‘It did go way too far,’ Corey Barton, president of CBH Homes, the area’s biggest home builder, told the outlet. ‘It’s slowly going back to the old Boise.’”
The Georgia Straight in Canada. “Preliminary statistics show a deep slide in home sales in Greater Vancouver. Numbers compiled by real-estate site Zealty.ca show that a total of 1,901 properties sold in July 2022. The figure represents a 43 percent plunge compared to the same month in 2021. Compared to sales in June 2022, transactions in July decreased 22.7 percent. Of the 1,901 properties sold in July 2022, less than a third or 29.1 percent were purchased either at full price or over the listed price.”
“Zealty.ca numbers also show that there are more houses available for sale in the market. In July 2022, the months of inventory stood at 5.3 months, a 76.7 percent increase on an annual basis. Vancouver Eastside saw 198 sales in July 2022, marking a 44.8 percent decline. Meanwhile, Vancouver Westside recorded 371 sales last month, representing a 35 percent decrease compared to July 2021.”
From Business Update. “The real estate platform is traded as the next unicorn. McMakler is now laying off more than a hundred employees. Two weeks ago, the world seemed fine at the Berlin real estate platform McMakler. Employees cheerfully published group photos with colleagues on Linkedin under the hashtag #OneTeam, the occasion was a summer party in Berlin’s trendy Spindler & Klatt club. But apparently things are not going quite as harmoniously as portrayed at the start-up. A few days after the company party, there was a mass layoff at McMakler, according to information from the founding scene.”
“A spokeswoman did not go into details. Just this much: ‘McMakler is a growth company, but we also pay attention to cost control. We are currently experiencing a changing situation in the overall economic environment, which we must take into account at an early stage.’”
Stuff New Zealand. “Realestate.co.nz reports that the number of homes available for sale has increased steadily since mid last year. In July last year, there were 12,684 on the market. At the end of July this year, that had lifted to 26,358. Eleven regions had at least twice the housing stock this year compared to last, including Hawkes Bay, Nelson and Bays, Wellington, Bay of Plenty, Waikato, Central North Island, Manawatu/Whanganui, Wairarapa and Northland. ‘The market has started to shift. We’ve seen a record number of consents from councils to build new homes and buyer FOMO (fear of missing out) decreasing. The scales have tipped; buyers now have the edge,’ said spokesperson Vanessa Williams.”
ABC Business. “While some Australians may rejoice at the idea of a drop in house prices, interest rate rises mean home owners face the prospect of their asset dropping in value at the same time their mortgage repayments steadily increase. And those who bought recently, at the peak of the market, are more likely to have the most left to pay off on their loans, meaning interest rate rises will cause them the most pain.”
“Bobby Graham bought a house in January in Hobart’s outer suburbs for slightly more than he had hoped to pay, after saving for the past five years. Just months before his purchase completed, as late as October, the Reserve Bank of Australia was still saying it expected interest rates would not rise until 2024. There have now been three months of straight rate rises, and another due today.”
“While he is not struggling to meet payments, Mr Graham says the changing circumstances have meant he needed to adjust something else — his expectations. ‘It’s the perfect storm — you pay the higher price because you bought at the peak of the market then there is an increase in interest rates,’ he said. ‘And it becomes obvious that everything else is becoming more expensive due to inflation.’ He described the increases in his mortgage repayments as ‘a bit of a kick.’”
“As part of his changes he has had to cancel several interstate trips planned for this year in a bid to save money and meet home and mortgage commitments. ‘You pay so much of your income, just to maintain your house,’ he said.”
The New York Times. “Last month, Chinese officials announced that the economy grew at its slowest pace since the early days of the pandemic. Unemployment is high, the housing market is in crisis and nervous consumers — living under the constant threat of lockdowns and mass testing — are not spending. Fang Wei, 34, said she has scaled back her spending since she left a job in 2020. In the past, she spent most of her salary on brands like Michael Kors, Coach and Valentino during frequent shopping trips.”
“Even though she is employed again, working in advertising in Beijing, she now allocates a quarter of her salary on food, transportation and other living costs. She hands the rest to her mother, who puts the money in the bank. ‘Because I’m worried about being laid off, I transfer everything to my mother every month,’ Fang said. ‘It’s very depressing to go from enjoying life to subsistence.’”