A report from the Daily Herald in Washington. “‘I was putting listings on the market right when the interest rates increased,’ said Dafna Shalev, real estate broker in Woodinville. ‘The buyers stopped coming. There were no showings. Nothing.’ What happened next? Prices began dropping, she said. Price cuts are becoming more common especially when properties sit on the market for more than a week, Shalev said. The number of active listings in Snohomish County in June was 1,973, compared to 1,182 in May, according to data from the listing service.”
From Your Valley in Arizona. “Ron Palmer has sold real estate in Glendale for 19 years. He had a buyer in town with a cash offer company and opportunity for a quick close. The way home prices are falling, however, the buyer was the one backing out. The numbers showed that they couldn’t turn the house around and sell it at a profit they’d like to have because of the market’s appreciation.”
“Just from March to July, inventory in this part of town has increased 253%, Palmer notes. Listings under contract have decreased by 33%, and showing requests have gone down 4.9%. Also, the median sales price in 85310 in March was $625,000, but by July dropped 15% to $540,000. ‘The market has absolutely shifted, and it’s shifting historically,’ he added. ‘Most experts feel like March/April was the peak of the market. And it’s actually turning faster than it did in ’08.’”
“Most of all, he says, sellers are the ones seeing more concessions these days, not buyers. ‘Before, sellers were pretty much in the driver’s seat,’ Palmer said. ‘We’re seeing price reductions at normal to starting to climb into above-normal territories. In other words a lot of sellers are having to reduce price just to see if they can attract a buyer.’”
From WTSP in Florida. “‘Absolutely, it’s starting to turn. Yes,’ said Tampa real estate agent Cristan Fadal. ‘We are not at peak. We’ve gone past peak.’ Fadal knows the market and says it’s already happening —prices are stabilizing, and inventory is rebounding. ‘I think sellers that were on the fence for a while, definitely they see that as prices come down, they don’t want to miss the boat,’ he said.”
From CNN Business. “Prices on new construction homes are actually falling. The median sales price of a new construction home dropped to $402,400 in June, down from $444,500 in May, according to the US Census Bureau and the Department of Housing and Urban Development. ‘This is the biggest crack yet in home-price inflation,’ said Robert Frick, corporate economist at Navy Federal Credit Union. ‘If existing home prices follow suit, we may finally see a break in annual increases that have priced millions of Americans out of the housing market.’”
Bay Area Newsgroup in California. “For the first time in years, the tables are starting to turn in the Bay Area’s insane housing market — as prices drop, some sellers have been forced to make concessions. They’re chipping in to help pay closing costs and even to buy points to lower mortgage rates — all to convince increasingly reluctant buyers that the time is right to purchase a home. ‘I’m seeing sellers concerned about prices dropping,’ said San Jose-based real estate agent Gustavo Gonzalez, who works with both buyers and sellers. The change comes as June home sale prices dropped from the previous month in all of the five core Bay Area counties, according to new data from CoreLogic.”
“‘The market is absolutely changing,’ said David Stark, public affairs director for the Bay East Association of Realtors. ‘Particularly when you have buyers or sellers in the market expecting certain things to happen because that’s what’s been happening, when you do have a shift it’s a big deal and it raises some eyebrows. However, you’ve got to take a longer view.’”
From the Herald-Zeitung in Texas. “Diana Clary, a real estate broker with Phyllis Browning Co has been noticing a large shift in the San Antonio-New Braunfels market, especially when it comes to inventory. At the height of the housing market in March Clary noted that there were a little over 100 active listings. Fast forward to the end of July and there are over 350 listings in the New Braunfels area.”
“While the demand hasn’t gone anywhere, the additional inventory is beginning to balance out the market and with more inventory comes more price reductions to compete with the growing market, Clary said. On Friday, July 29, there were over 300 listings that recently came onto the market and about 300 price reductions, according to Clary.”
“‘You have more people putting their homes on the market, which is excellent for people that are wanting to purchase properties because they have more supply,’ Clary said. ‘We’re seeing more price reductions because people were pricing it like there was less quality. The more homes that come on the market, the more supply, which automatically drives down the price.’”
Curbed New York. “In Bay Ridge, nearly two dozen Chinese immigrant families are facing a nightmare case of housing fraud. Just a few days ago, they were at risk of being evicted from condos that they thought they had bought from a developer. But it turned out that he didn’t actually have the ability to sell them. The New York Post reported that the developer, Xihui Wu, had built a 25-unit building at 345 Ovington Avenue; in 2012 he began selling units — some buyers paid deposits ranging from $100,000 to $460,000 in cash and checks — without obtaining the rights from the state to do so.”
“According to lawsuits, by 2018 Wu had stopped paying the mortgage and owed more than $5 million to lender Maxim Credit Group, which started foreclosure proceedings. Then, the residents said, Wu disappeared with $4 million of their money. One buyer told Documented that he had known Wu for seven years before he paid a $200,000 deposit. Another, Jianli Chen, said that ‘as a new immigrant from China, I don’t know the normal process of buying a property here.’ He paid Wu $345,000. The residents won judgments against Wu for the deposits they paid, but it’s unlikely that they’ll see that money.”
The Canadian Press. “When Shannon Tebb listed her downtown Toronto loft for sale in mid-June, she did everything to make the property attractive for buyers. But by July, she was pulling the property off the market — and not because she’d found a seller. Tebb terminated the listing because the market shifted so significantly that the bidding wars and frenzied pace of sales seen earlier this year had dissipated. ‘Everyone was saying, ‘nobody’s going and looking at anything,’ so then we lowered the price…and we had a few walk-ins but nothing, no offers.’”
“Strata found a surge in people mirroring Tebb’s decision to delist their property. While January’s hot market saw 380 terminated condo listings in the Greater Toronto Area, the real estate company said June brought 2,822 — a 643 per cent increase. ‘We’re seeing a lot of sellers just not getting the price they want and so they’re like, ‘we’re going to hold off’ or ‘I don’t want to sell $50,000 lower from what my neighbour got a month ago because that’s a lot of money,’ said Anna Wong, a Strata sales representative. ‘We were in a seller’s market for a while … and right now sellers are having a hard time adjusting.’”
“‘We are seeing some sellers stick on the market. They’re listing their properties trying to get yesterday’s prices and they’re staying on for long periods of time,’ said Dan Campanella, a broker with Keller Williams Advantage Realty, who represented Tebb.”
The Globe and Mail. “We’re witnessing a historic correction to home prices, Royal Bank of Canada warned last week. Not exactly what you want to hear if you just bought a home with the minimum 5-per-cent down payment. So far, the median priced condo in the Greater Toronto Area, for example, is already down almost 11 per cent since March, according to real estate fintech HouseSigma. It estimates the GTA’s median detached home has plunged almost 25 per cent – in less than five months.”
“If you bought a $500,000 home with 5-per-cent down, you were 98.8 per cent financed on day one. That’s because, after the $25,000 down payment, the lender usually rolls the 4-per-cent default insurance fees into the mortgage. Many insured buyers who purchased near the first quarter’s peak now owe significantly more on their mortgage than their home is worth. Some are more than 10 per cent underwater.”
The Daily Telegraph in Australia. “An increasing number of cash-strapped homeowners are being forced to list their properties at reduced prices in order to secure a quick sale. New figures revealed distressed property listings rose by four per cent over the month of July, while there was also a surge in unsuccessful sales campaigns for the month and year to date. The SQM Research data showed national residential property listings rose by 7.1 per cent to 237,336 properties. This is higher than the previously recorded figure of 221,571 recorded in June.”
“Listings lasting longer than 31 days and 180 days also rose by 14.1 per cent, a trend which SQM Research director Louis Christopher said will continue to rise over the remainder of 2022. ‘Vendors were largely unsuccessful in their selling efforts over July. There is now a clear trend across all cities of rising listings which is being driven by lower buyer interest and is ultimately symptomatic of a national housing downturn,’ Mr Christopher said. ‘Properties selling under distressed conditions rose again over July and we expect further rises in the coming months. However it should be noted that the rise in distressed activity is from an extraordinarily low base.’”
The South China Morning Post. “Some homeowners are already selling their flats at deep discounts or losses, according to property agents. ‘Due to the repeated outbreaks and the interest rate hikes in the United States, the pace of turnover for second hand transactions has slowed down slightly, and some owners have also begun to face the reality and increase discounts,’ said Wan Chan, chief district associate director at Centaline Property Agency. ‘There will be some incremental strain on consumers as a result of the higher mortgage payments on their household debt,’ said Standard Chartered CEO Bill Winters. ‘The reason that central bankers raise interest rates is to slow down economic activity in order to bring inflation under control. We will feel that in Hong Kong as we do everywhere else in the world.’”
“The number of loss-making transactions hit 695 in the first half of this year, the highest amount since 2011, according to Ricacorp Properties. For example, a flat at The Mediterranean in Sai Kung measuring 566 square feet recently changed hands at a loss of HK$2.54 million, or 24 per cent of the original price, according to Century 21 Goodwin. And St. Barths in Ma On Shan had a flat measuring 592 square feet that changed hands at a loss of HK$1.25 million (US$157,983), according to Centaline.”
From Bloomberg. “In a country that only tolerates dissent in small doses—and relies on property as its economic growth engine—a mortgage boycott by hundreds of thousands of middle-class Chinese has become a five-alarm fire for authorities. The ultimatum raced across social media platforms WeChat and Douyin, becoming a call to action for those caught out by China’s rapidly deflating property bubble. In days, the letter became a template for protests from Shanghai to Beijing, and Shenzhen to Zhengzhou, with homeowners cutting and pasting from it to draft their own boycott manifestos.”
“Within four weeks, more than 320 projects in about 100 cities were facing similar protests, roiling markets and forcing authorities to corral banks and developers to defuse the unrest. Censors have simultaneously stepped in to quell dissent, scrubbing posts, silencing protesters and banning document-sharing links. Still, the breadth of the support, and the speed with which it spread, shows that the Chinese aren’t afraid to band together on a national scale, especially when their treasured homes are at stake.”
“Homeowners staring at unfinished gray concrete blocks, and watching developer after developer default on their debt, began to compare notes about what to do to salvage their investments. Li was one of them. Checking on the construction site of his yet-to-be-built apartment in Wuhan had become a form of mental torture, he said. He made a 40% down payment on an Evergrande condo, eating up all his savings after several frugal years. Whenever he visited the complex of 39 skyscrapers he would see one or two workers, with only a few machines humming.”
“‘I only hear the birds sing,’ said Li, a 26-year-old tech worker who didn’t want his full name used for security reasons. ‘If I have to pay a mortgage for a home that’s never going to be finished, I feel my whole life would be ruined. Deep down, that makes me terrified.’”
“It remains to be seen whether all the proposed money will be delivered and how soon the apartments will be finished. Homeowners like Peter, who bought a 2 million yuan ($296,000) condo in Zhengzhou last May after borrowing from his parents and saving for years, want it all to end. ‘The developer has caused us tremendous harm and a lot of homeowners are depressed,’ he said. ‘I just want to get my apartment.’”