A report from the Post Independent in Colorado. “Bryan Snow and his family moved to the Roaring Fork Valley from Denver after his wife got a job in Basalt. They found a house between Carbondale and Iron Bridge. He said it was crazy for a little while. Then he noticed interest rates rising and inflation and everything seemed to stop. ‘Things seemed to slow down really quickly, like kind of overnight almost, actually,’ he said.”
“Right now, housing markets are a mixed bag throughout Colorado. Although Carbondale continues to see prices and demand rise, places like Denver are softening. ‘It’s almost like everybody’s taken a big breath, which is actually very nice,’ said Erin Bassett, spokesperson for the Glenwood Springs Association of Realtors. ‘I was looking through the data for the whole state, and there’s only a couple of boards that are still holding steady. Our inventory is still down, our prices are still up, whereas in the Denver market, they are starting to see quite a bit more softening.’”
From Market Watch. “Buyers are simply feeling more uncertainty with the possibility of a broader economic recession looming. ‘And the first reaction people have is to just not do anything,’ Jen Holland, a realtor with ERA Key Realty in Massachusetts, told MarketWatch. Part of it is also herd mentality: ‘When everybody went out to look at homes, there were lines out the door at open houses,’ she said. ‘Everybody was like, ‘I’d better go buy a house.’”
The Charlotte Observer in North Carolina. “When we think of a recession and the housing market, the 2008 bust might come to mind. Understandably, potential buyers today may worry that buying during an economic downturn doesn’t make sense. During a recession, however, home prices usually decrease as demand slows. This opens up the possibility of buying a home at a more affordable price than we’ve seen during the past two years. ‘We’re seeing some of this right now,’ says Thomas Parrish, head of retail lending product management at BMO Harris Bank. ‘You’re starting to see home prices start to moderate in some markets.’”
The Mankato Free Press. “Statewide, closed sales were down 19% in July compared to July 2021, according to the latest report from Minnesota Realtors. While high-end homes were selling well last year and early this year, that market has cooled. ‘If you’re in the $700,000 and up, it’s definitely a little quiet now,’ said Jen True, owner of True Real Estate in Mankato.”
The Atlanta Business Chronicle in Georgia. “Just a few months ago, home sellers in metro Atlanta were in complete control. That’s not the case anymore. As housing supply plummeted to a record low level over the course of 2021 and early 2022, most listings attracted bidding wars that resulted in sales prices as high as 20% above asking. Some sellers who are listing their homes now are finding a new reality in the housing market.”
“‘Buyers, more than ever, want to see inspirational pricing,’ said Rob Smith, a broker with Keller Williams. ‘They’re completely ignoring anything that’s overpriced. Quick adjustments are the name of the game. Anybody who has their home on the market longer than three weeks, that’s like six months 10 years ago. That is going to be the kiss of death time on market. We’re still going to sell houses,’ Smith said. ‘We’re just going to see a lot of price reductions.’”
From Realtor.com. “‘Last year’s compressed home sale timelines are lengthening,’ notes Realtor.com® Chief Economist Danielle Hale. ‘For a third week in a row, homes are sitting on the market for a longer time than last year, and the gap has increased each week.’ This new breather not only offers homebuyers more time, but also paves the way to a less frantic home-shopping mindset overall. ‘As both buyers and sellers adjust to the rebalancing market, expectations shift, reducing the sense of urgency in the market and reinforcing the trend toward longer sale timelines,’ Hale explains.”
“In other words, listings may linger even longer once homebuyers start kicking back and thinking, ‘What’s the rush?’”
From Candy’s Dirt in Texas. “So with declining sales and more homes on the market, it should be easier for buyers to snag their dream house, right? It’s true that the Dallas-Fort Worth region has seen a trend toward ‘price improvements,’ with 3,824 listings posting price reductions in the past seven days.”
The Herald Tribune in Florida. “If you only paid attention to news headlines, you would be convinced that the real estate market is in a free fall. Citing sensational statistics like ‘Pending home sales crash 30%’ or ‘Record number of price reductions’ may lead one to think that home prices are falling and the pendulum has shifted into the hands of buyers. Not so fast. It’s important to put these statistics into some perspective to understand what is really happening in our local real estate market throughout Southwest Florida (and most of the United States).”
“With the abrupt change in interest rates from below 3% to around 5%, it felt as though the spigot was turning off. The frantic pace of activity with 20+ offers on an available property seemed to evaporate overnight. While closed sales have fallen in the neighborhood of 20% relative to 2021 (the most active real estate market on record), when compared to 2019, we are in fact almost 20% ahead of the level of ‘normal’ activity from that time period.”
“Gone are the days that a seller can name whatever price they want to sell with only the most favorable terms. Hence, price reductions are at record levels where sellers are coming back to the reality that a home must be competitively priced in order to sell.”
The Red Rock News in Arizona. “The city of Sedona is launching a program where the city will pay short-term rental property owners from a fund of up to $240,000 to ‘convert’ short-term rentals to long-term rentals for residents, and giving those owners incentives to keep the rentals on the market for at least two years. If it sounds like a bribe or a ransom payment, well, it is.”
“Now with the market beginning to drop, and short-term rental prices seemingly on the verge of collapse — with some rentals charging half what they did three years ago despite the cost of inflation — the city of Sedona is incentivizing these owners to convert their properties back into long-term rentals, which many might do anyway based solely on the flailing market.”
“Let’s be clear — short-term rentals are not housing options, they are risky hotel investments and should face the same reward-loss calculation as any investment. They should not be ‘all reward.’ If these risky investment properties are no longer profitable, can’t pay off loans and go into foreclosure, that’s the market speaking.”
From Siliconvalley.com. “Hotel buying activity cooled off in Northern California, including in the Bay Area, during the first six months of 2022, a slump that might worsen during the rest of this year, an unsettling new report says. During the first six months of 2022, the dollar volume for purchases of Northern California hotels totaled slightly less than $1.03 billion, which represented a plunge of 63.4% from the $2.8 billion in hotel deals during the first half of 2021, according to Atlas Hospitality Group.”
“Another specter that has begun to haunt the hotel sector is the increasingly wobbly and uncertain economy in the Bay Area, California and nationwide. ‘Lenders and buyers are looking at a potential slowdown in the economy and a potential recession,’ said Alan Reay, president of Atlas Hospitality. ‘That makes lenders nervous. It makes buyers nervous. Lenders are pulling back from making loans on hotels.’”
“Weaknesses also have emerged in San Francisco, according to Reay. ‘There is definitely a shift going on in San Francisco, with large declines in the value of some hotels,’ Reay said. He pointed to the June 2022 purchase of The Marker Hotel for $77 million, which Reay said was bought in 2018 for $104 million — a 26% decline in value. Reay also said another large hotel in San Francisco is in escrow for a 30% price discount from its prior purchase.”
“‘Conventions have a lot of options such as Las Vegas,’ Reay said. ‘They don’t have to be in San Francisco. People see San Francisco as having a big crime problem and issues with homelessness.’”
From Kelowna Now in Canada. “Back in March 2021, when house buying in Kelowna was at its most frenzied zenith, 99.8% of the homes listed for sale sold. Last month, for single-family homes that number was 11%. That’s one dizzying plunge. When the percentage of listings sold dips below 15% it officially becomes a ‘buyers’ market.’ What that means is potential buyers have the upper hand to take their time and look around and negotiate a lower price on almost any home.”
“‘There seems to be a sense that buyers feel like it’s finally their turn,’ said ReMax Kelowna realtor Colin Krieg. ‘They can have the typical conditions of financing and home inspection without fear of losing the property, and, as a result, they’re writing more aggressive offers.’”
“For example, a single-family home listed at $1,100,000 could very well get a 7% less offer of $1,023,000 or $77,000 off. Negotiations start and the buyer may end up getting the house for $1,067,000 or $33,000 less than asking price. That $1,067,000 is just a little more than the benchmark selling price of a typical single-family home in Kelowna of $1,060,000 in July. That’s down from the record-high benchmark in April of $1,132,000.”
“Krieg has never seen a real estate market come to such a ‘screeching halt.’ ‘It’s always surprising when the market turns,’ said Krieg. ‘History tells us there will always be ups and downs, but this slowdown is unbelievable. The government wanted to shock and awe us with higher interest rates and they’ve certainly done it.’ Krieg is referring to sales volumes, which have slashed to half of what they were in July 2021.”
Newshub New Zealand. “The property market has been savaged with $100,000 trimmed off Auckland property prices since March, according to the latest Trade Me data. The price plummet is being linked to a supply boom. Average asking prices for properties across the country have dropped by 6 percent, or $61,000, since March. Auckland has seen the largest plunge – the average asking price is down $100,000 followed by Wellington with an $82,000 fall. Prices in Gisborne, Bay of Plenty and Hawke’s Bay are all down by at least $51,000.”
“Trade Me’s Gavin Lloyd says the price drops come down to a supply rush. ‘The month of July, 53 percent more listings on site than there was 12 months ago on Trade Me Property,’ he told Newshub. ‘Interest rates are a lot higher than they were 12 months ago, the cost of living is having a massive impact on people’s purchasing power at the moment, lending criteria is also a lot harder than it was 12 months ago.’”
From ABC Business. “Farheen Khan and her husband Faizan Afzal are about to achieve the great Australian dream — buying a home where their children can grow up, with nearby parks and a good school. The young family bought land in an estate in Perth’s south in 2020, when the federal and WA governments offered big incentives to people wanting to build a new home. But COVID caused major shortages in construction materials and the industry has also been grappling with a labour shortage in a low unemployment market. It has seen the timeline for a lot of new construction projects blow out.”
“Mr Afzal estimates they are sacrificing 70 per cent of their income on housing right now. ‘It’s been very, very tough,’ Mr Afzal said. ‘We are paying the mortgage, we’re paying the rent, plus the bills for both properties.’”
“It is a familiar story for nurse Steryn Wheeler. She was told a build would take six to eight months. A year and a half after signing the contract, she and her partner have had to move in with her parents amid a rental crisis while they wait for their home to be finished. She is anxious about rates going up even further.”
“‘You just get really nervous … especially being in my mid-20s, you know, the future of like, are we going to have children?’ she said. ‘We can’t really do that with these sort of price increases.’ Ms Wheeler now regrets locking herself into building a home, and she knows many other young people in the same boat who bought during the pandemic. ‘I think we got so caught up in wanting to have the grants and to be independent and have an adult lifestyle that we kind of forgot what at our core, we really wanted in our 20s,’ she said. ‘We don’t have anywhere to go from here. We’re stuck with these houses and these huge interest rates.’”
“Digital Finance Analytics principal analyst Martin North said many first time buyers got into the market to take advantage of the government’s home-builder incentives. But those incentives also helped drive up prices. ‘They tended to have bought with very large mortgages they bought at the top of the market, and now there’s a pincer movement going on,’ Mr North said. ‘Rates are going up, mortgage rates are going up, prices are beginning to slide back. And a lot of them are actually [now] in financial flow difficulty.’”