A report from WLNS in Michigan. “When it comes to the current housing market, Lansing broker Heather Driscoll said it’s in the process of cooling off. ‘It has somewhat evened out I would say,’ she said. ‘So, we are now going back to seeing a lot of price reductions.’ Heather is also seeing homes sitting on the market longer and offers coming in from buyers lower than the listing price. ‘So, it is definitely a different market than what we saw six to twelve months ago,’ Driscoll said.”
“According to Driscoll, the average home price for the area was around $255,000 during the time of the hot market and that price is now dwindling. ‘And we are seeing a little bit lower than that, we’re seeing about $200,000 to $225,000,’ she adds.”
The Lincoln Journal Star. “Higher mortgage rates appear to finally be having an effect on the local real estate market.According to the Great Plains Regional Multiple Listing Service, sales of existing homes in the Lincoln area were down almost 10% in July compared with a year ago. That’s the third time in the past four months that sales have declined on a year-over-year basis. Mark Faatz, an agent with Nebraska Realty, said it’s still a seller’s market, but it’s more of a normal market, with much less of the ‘crazy behavior’ of the past few years when buyers bid up the price of houses and it was not uncommon for sellers to get half a dozen offers or more. ‘There’s not many multiple-offer situations right now,’ Faatz said.”
The Denver Gazette in Colorado. “Metro Denver home sale prices dropped for the second month in a row in August, and days on market have reached a breathing-room level of 19 days, when it was just nine days a year ago, according to the Denver Metro Association of Realtors Market Trends report. The average sales price for multifamily and single-family homes in the 11-county metro Denver area dropped 5.93% to $657,284 in August compared to the previous month. The median price also dropped month-over-month slightly to $579,900. It was the third month prices either dropped, or stayed flat from the previous month.”
“There were 6,939 homes available for sale at the end of last month, down 5.73% from July but up almost twice as many as August 2021. ‘All of the major statistical categories are pointing towards the market slowing down,’ Market Trends Chair Andrew Abrams wrote in the report. ‘Sellers have to recalibrate their expectations and patience after a wild summer.’”
“The end-of-summer market showed continued cooling as the number of closings dropped 5.93% from July to 4,221. That’s 30.21% less activity then August 2021. The drop in prices — list-to-price ratio dropped below 100% for the first time since July of 2020 — is simply adjusting from historic highs, according to Abrams. ‘While some will take this as a sign that the real estate market is about to crash, this simply is not the case,’ he wrote. An interesting stat from the report showed the number of for-sale single-family homes, called ‘detached,’ were up 114.58% from August of 2021 to 5,298 homes, while multifamily home inventory grew 47.44% in that time. ‘The majority of buyers motivations have shifted from buying for financial reasons,’ according to Abrams, ‘to buying for their lifestyle.’”
5280 in Colorado. “If you’ve spent time downtown recently, you may have noticed it feels different: quieter, emptier, less vibrant. What we once thought was a temporary shift to remote work now feels more permanent; lingering variants won’t stop, well, lingering; and businesses can’t seem to find the talent they need to thrive. What’s the biggest challenge facing downtown Denver right now? Kourtny Garrett, CEO of the Downtown Denver Partnership: ‘Bringing people back. In a matter of 24 to 48 hours in March 2020, we lost just over 100,000 people from our downtown core.’”
From Silicon Valley in California. “Jenny Dang stood inside the entrance to her restaurant, China Wok, in downtown San Jose on a recent weekday and waved toward her customer-free dining room. ‘Look, lunch — so empty here,’ said Dang, a 38-year veteran of the downtown scene. ‘I don’t know how long I can stay.’ Business is down 60% from before the COVID pandemic, she said. ‘It used to be good.’”
“While other major U.S. urban cores are teeming with people, downtown San Jose is seeing only half the human activity of pre-pandemic times, central Oakland is slightly worse off, and San Francisco’s core is not even a third of the way back to its former level — the worst recovery level of any large city in North America, according to new data. The University of Toronto numbers, based on cell phone location information, quantify what’s evident to anyone setting foot in Bay Area city centers.”
“‘You don’t need to be a statistical giant to know a ghost town when you see one,’ said Jim Wunderman, CEO of the Bay Area Council, a group representing hundreds of employers.”
KCRA in California. “Open drug use has worsened in the Broadway area of Land Park recently, according to neighbors who say they are upset about a lack of action to combat lawlessness. ‘It kills me, our city has been destroyed,’ said Land Park resident and mother of two, Monica Robinson. ‘When I drive through this neighborhood now, I don’t know what my kids are going to see, but more importantly I don’t know how I’m going to explain to my kids what they’re seeing.’”
“According to the city of Sacramento and police, in the last month, narcotics, burglary, aggravated assault, battery, vandalism, and weapon-related crimes have all been committed in the vicinity of Broadway, which flanks the northern side of Land Park. ‘We’ve got people dealing drugs, and shooting up, and having crazy episodes in front of children … I keep hearing about revitalization in this area, and this is what we’re getting instead,’ said Land Park Community Association vice president Kristina Rogers. ‘Crime is happening every day 24/7, drug dealing is happening 24/7.’”
From Newsweek. “House prices in Phoenix, Arizona, have been dropping for two consecutive months, as one of the hottest housing markets appears to begin cooling down. For now, homebuyers are better off waiting for prices to continue dropping. ‘I think it’s time to be patient if you’re a buyer. You’ll get a much better opportunity to buy a home six, 12, 18, 24, 36 months from now, depending on where you are, what you’re looking for,’ said Moody’s Analytics chief economist Mark Zandi.”
From Candy’s Dirt in Texas. “Do you know how I can tell the housing market in Fort Worth is still balancing? It’s not the increase in inventory. It’s not the increase in days on market that homes are showing. It’s the nearly 50 emails per week that I receive from new home builders. Ask any Realtor and they will tell you that their email, text, and paper marketing from new home builders has skyrocketed in the past months versus the previous 20.”
“Now that the real estate market is cooling and the pool of eligible home buyers is shrinking, builders are rolling out the red carpet to prospective buyers and Realtors in hopes of keeping their projected sales numbers high and their shareholders and bankers happy. A quick search of the MLS data for the City of Fort Worth shows there are roughly 3,800 homes now available for sale. Of that, more than 700 of them are new homes completed or under construction in 2022.”
“In a real estate market with low inventory and high demand (like we’ve enjoyed for past 20-plus months) builders have been able to put a price on a home and get it with little hesitation. In a real estate market where buyers are tightening their budget and interest rates are limiting their buying power, homes aren’t going to fly off the shelf. We are already seeing builders groveling back to buyers and Realtors, offering bonuses and incentives and discounts on homes. Prices are being slashed by the tens of thousands on completed or nearly completed inventory homes.”
The Dunfermline Press in the UK. “Michael Maloco, senior partner with local solicitors and estate agents maloco + associates, acknowledged there were tough times ahead but he and his colleagues believe a slowdown could benefit those struggling to get on the property ladder. ‘To pretend differently would be misleading and, frankly, stupid. Likewise, to predict as some in the media have that we are on the verge of a 2008-type collapse in the property market is, we think, equally wrong.’”
“Laura Mowat, the firm’s head of conveyancing, said demand for homes remained strong. ‘This imbalance has driven prices higher and higher in the last 18 months and there’s still a striking mismatch between supply and demand with the latter swamping the former. That simply can’t go on and indeed we welcome some sanity returning to the market even if as the result of a bit of an economic shock. We predict that values may soften a little by perhaps a few percentage points. What is likely to change is the actual sale prices properties achieve. The days of buyers paying 10 and 20 per cent-plus over home report are, we think, coming to an end ‘”
From Bloomberg. “Property in Gangnam — a trio of exclusive districts in South Korea’s capital, Seoul — is beginning to buckle as the central bank’s yearlong tightening cycle weighs on the luxury real estate market. Apartment prices in all Gangnam districts have declined for four consecutive weeks, data from the Korea Real Estate Board show, portending the first monthly decline since the Bank of Korea began raising its key rate last August. The hit to Gangnam signals the impact of policy tightening is now reaching into the upper stratum of Korea’s 51 million people.”
“The incipient correction in luxury homes isn’t limited to Gangnam, either. The 50 premium homes picked nationwide by Kookmin Bank have fallen for two months in a row, according to data released last week. Now, as home prices begin to fall, the tables are turning. But potential buyers aren’t rushing to brokers to try to secure a property. The BOK’s rate rises and expectations of further tightening, together with the low volume of deals, are fueling expectations the downturn will be protracted. ‘With households starting a deleveraging cycle, we expect housing prices to remain under pressure in coming years,’ said Park Jeong Woo, an economist at Nomura Holdings Inc.”
The Sydney Morning Herald in Australia. “The Reserve Bank has increased official interest rates for a record fifth consecutive month, lifting them by another half of a percentage point as it races to bring inflation under control. Since the RBA started lifting rates in May, the cumulative increase in repayments is now more than $1000 a month on an $800,000 loan. Treasurer Jim Chalmers said the rate rise would be difficult news for many Australians, despite being widely expected.”
“‘The bank had flagged more increases, the markets had anticipated and homeowners were expecting it as well, but the fact that we knew it was coming doesn’t make it any easier for people,’ he said during question time. ‘This will tighten the screws on family budgets. This will put more pressure on a lot of Australians who are already stretched.’”
“The Greens’ treasury and economic justice spokesman, Nick McKim, said RBA governor Philip Lowe should resign as governor for ‘misleading Australians about interest rate rises.’ ‘Dr Lowe induced hundreds of thousands of Australians into taking out massive mortgages by effectively saying that interest rates would not rise until 2024,’ he said. ‘Having failed to keep that commitment, he should now resign. The preconditions that Philip Lowe set for increasing rates have not been met.’”
ABC News in Australia. “Danial Khan and his partner bought their first home in Sydney’s outer-west in January 2021, when rates were at rock-bottom levels and the property market was strong. Their mortgage repayments have since gone up from just under 3 per cent to almost 5 per cent. ‘The monthly repayments have been quite substantial since the [rate] jump,’ Mr Khan said. ‘We’ve just done a whole revamp of our expenses, making sure we’re not spending on unnecessary things.’”
“That has meant ditching some streaming services and other subscriptions, but Mr Khan is now turning his mind to other ways the couple can save money. ‘I understand that interest rates going up are because they want to manage the economy well, but increasing them quite a lot might cause a lot of people to have major lifestyle changes,’ he said. ‘The interest rates might increase to help the economy, but I would ask at what cost?’”