A report from Floor Daily. “‘There are a lot of unhappy people in the housing market right now. Among the most miserable are sellers realizing they have listed their properties too late,’ reports the Wall Street Journal. Homes that have been on the market for three months or longer are reducing prices by around 11% from the list price, according to the National Association of Realtors. ‘The days of bidding wars and homes selling for tens of thousands of dollars over asking are over,’ said Daryl Fairweather, chief economist at Redfin.”
From KIRO Seattle in Washington. “‘Today’s buyers have their cups finally overflowing with options as residential inventory grows to about two months of supply,’ said Dick Beeson, managing broker at RE/MAX Northwest Realtors in Gig Harbor. Beeson also said that sellers ‘are starting to see that overpricing just ain’t in the cards right now,’ since inventory is so high and buy and seller expectations have shifted.”
“According to Northwest MLS statistics, active listings have nearly doubled since last year, going from 7,948 available single family homes and condos to 15,381 — an increase of 93.5%. Pending sales are also down 24% from last year, dropping from 11,567 mutually accepted offers to 8,775. Northwest MLS says there’s been a nearly 30% year-over-year decrease in closed sales, dropping from 10,919 to 7,645.”
The Business Times in Colorado. “Real estate activity continues to slow in Mesa County as rising interest rates, higher inflation and mounting uncertainty dampen demand. At the end of July, there were 559 active listings in Mesa County. That’s a 57 percent increase over the same time last year — and relief for buyers who until recently were desperate for more selection, said Robert Bray, chief executive officer of Bray & Co. Real Estate in Grand Junction. Meanwhile, property foreclosure filings continue to increase in Mesa County — but not to the same degree foreclosure sales. Through the first seven months of 2022, 157 foreclosure filings were reported in Mesa County, said Annette Young, the administrative coordinator at Heritage Title Co. in Grand Junction. That compares to just 13 for the same span in 2021.”
Flagstaff Business News in Arizona. “There have been many interesting changes in the Flagstaff real estate market this year, and it seems to be evolving on an almost daily basis. Inventory in the last few months has been steadily increasing. It is safe to say that Flagstaff’s home values peaked in February of this year. Since then, we have been witnessing a ‘shift,’ as many of my colleagues have coined it. Increasing interest rates, a trepidatious stock market and inflation have put many buyers on pause.”
From 4WWL on Louisiana. “NEW ORLEANS —Do you remember last year, if you were trying to buy a house, you were competing with half a dozen other potential buyers? All making an offer on the same house? Well, realtors now say it’s a buyers’ market. Rosalyn Moore listed her house four weeks ago, but it’s still for sale. ‘The process isn’t going as quickly as we thought it might,’ Moore said. ‘Its taking a little longer because everything was selling so quickly before. We may have to rent it instead of selling it and I am not crazy about that idea.’”
The Merced Sun Star in California. “After a couple years of house prices rising in Merced County, the median selling price of a house in the local market dipped a bit in June. The drop in price has followed a statewide trend between May and June. Statewide, the median price dropped by about 4% in June, according to the California Association of Realtors. Of the California’s 58 counties, that median price fell in 32 counties, including high-priced Bay Area markets like San Francisco, Santa Clara and Alameda counties.”
“There were 259 homes listed for sale in Merced County in April. That number has climbed to 363 homes on the market in Merced County in July. ‘While prices haven’t yet and probably will not fall off a cliff, we have seen a pull back in the number of transactions and many listing price reductions across the board,’ said Brandon Ruscoe, agent for Better Homes and Gardens. ‘There have been slightly over 160 price drops for Merced County single family home listings between June 1 and August 1st.’”
From Ridgecrestca.com in California. “As we walk into a cooling off market, appraisers are reporting that lender underwriters are being pickier when it comes to what type of neighboring homes and features are being used to value the subject home. Some appraisers are experiencing more scrutinizing reviews of their appraisal reports. Gone are the days when it was possible to tip the scales up and over to receive a higher value, especially when it comes to the high-end homes.”
“Lenders typically sell off their loans to the secondary mortgage market, and thus loan underwriters are being more careful about how investors are viewing their files. The more top heavy the files, the more difficult they are to sell. Thus, Freddie Mac and Fanny Mae, the entities that guarantee government backed loans, are walking with caution at this time.”
“This will all have an effect on how mortgage underwriters view appraisals. As a result, don’t be surprised if a home price set on the high end does not appraise at the contract price. If you are preparing to list a home, take precautionary steps concerning the list price. In a downward trending market, the strategy is to set a list price below other competing homes.”
From McClatchy News. “A husband and wife real estate team was sentenced to prison after federal prosecutors say they stole more than $300,000 by creating fake sales contracts for several properties — including some that were never up for sale in Virginia. ‘Bills were tight,’ the husband told investigators when asked why the couple carried out the scheme in which they sent at least 19 fake sales contracts to advance commission companies to quickly get money, according to court documents.”
“After receiving the seemingly legitimate contracts, including some that listed nonexistent buyers and sellers, these companies would loan the couple money before the purported closing date of a property sale, according to the U.S. Attorney’s Office for the Western District of Virginia. The husband, Jessee Allen DeLoach, 40, and wife, Natasha Ashley Miller DeLoach, 38, of Wise, were each sentenced to 15 months in federal prison after they both pleaded guilty to wire fraud, an Aug. 4 news release from the attorney’s office says.”
The Globe and Mail in Canada. “Real estate markets in Toronto and Vancouver tumbled further in July, with sales and home prices declining for another month as getting mortgages becomes more difficult and buyers wait to see how low prices can go. The home price index, which adjusts for the high end of the market, fell for the fourth straight month in the Toronto region. The typical price of a home was $1,157,500 in July, down 13 per cent from the peak in March and marking the largest four-month decline since the turn of the century.”
“In the Vancouver area, home prices eased for the third consecutive month to $1,207,400. That is 12 per cent lower than the top of the Vancouver market in April. ‘Pricing is dropping across the board,’ said Brendon Cowans, vice-president of sales for Property.ca, a Toronto-based brokerage. Farah Omran, an economist with Bank of Nova Scotia, said more people now expect prices to drop. ‘Buyers are increasingly feeling less rushed and are holding off for cheaper price tags,’ she said in a recent research note.”
The Edmonton Journal in Canada. “Paul Gravelle, board chair for the Realtors Association of Edmonton, said it’s normal for numbers to trend downward in the summertime. ‘You never want to predict some of these numbers, but it’s not shocking that it’s across the board on all products,’ he said, adding he expects to see the downward trend continue for the next month or two. ‘The listings aren’t moving, our average days on market are starting to creep up there so people are taking longer to sell and so you just got to set that expectation for your sellers.’”
The Daily Mail Australia. “A series of interest rate hikes have caused dramatic house price plunges of $250,000 in wealthy suburbs and the downturn is expected to get worse. Upmarket parts of Sydney and Melbourne are suffering six-figure falls in just three months, with Brisbane and regional areas of coastal NSW now also going backwards, after being some of Australia’s strongest performing markets in 2021.”
“Sydney’s north shore, covering Chatswood and Wahroonga, is the worst affected with Domain sales data showing a $250,000 plunge in the median house price during the June quarter. A drop of 8.4 per cent in just three months took the median house price back to $2,720,000. On the neighbouring northern beaches, stretching from Manly to Palm Beach, mid-point house prices in just three months have plunged by $187,500 or 6.8 per cent to $2,582,500.”
“Melbourne’s upmarket inner-east, covering Kew and Box Hill, has seen its median house price fall by $107,500 in three months, with the 6.1 per cent quarterly decline taking the median house price down to $1,660,000. CoreLogic data showed wealthy postcodes in the big cities are leading the downturn with coastal and tree change regional areas also taking a hit after previously being some of the strongest performing markets.”
The South China Morning Post. “Guangzhou R&F Properties warned investors on Friday that its net loss for 2021 could widen to 17 billion yuan (US$2.5 billion) from the previously reported 8.7 billion yuan, due to an additional impairment loss. The company said in a filing to the Hong Kong stock exchange after the market close that it would set aside another 6.9 billion yuan provision for an impairment loss arising from inventory, on top of an initial assessment of 6.1 billion yuan in an unaudited earnings report.”
“‘Bad news about China’s troubled developers is surfacing one by one and it seems that the worst is yet to come,’ said Wang Feng, chairman of Shanghai-based financial services group Ye Lang Capital. ‘No recovery is in sight, as the national economy remains weak.’”
From Yahoo Finance. “The Federal Reserve became ensnared in a ‘cognitive trap’ that made the central bank believe inflation was fleeting, Mohamed El-Erian, Allianz SE chief economic adviser and ex-PIMCO CEO, said. ‘Had [the Fed] listened to companies, they would have been much more humble in saying that we don’t quite understand the inflation dynamics… and yet the Fed got hooked on this notion that it’s transitory, and then it got itself into a cognitive trap,’ he told Yahoo Finance. The term ‘transitory’ is a pointed reference. El-Erian is alluding to Fed Chair Jerome Powell’s 2021 assertions that price increases were ‘transitory.’ Ultimately, Powell walked that back, eventually telling Congress in November that it was ‘a good time to retire that word.’”
“‘You ended up with this absurd situation in March, still pumping in liquidity,’ he told Yahoo Finance. ‘It was still doing QE in March… So, it’s bad analysis, bad forecast, too-little-too-late, and miscommunication ‚ and that’s how we’ve ended up in this mess.’”