A report from Market Watch. “Rick Palacios Jr., research director at John Burns Real Estate Consulting, said that he’s seeing a surge in sellers shifting from sales to rentals in California. ‘Home prices have been falling for several months now in major California markets, and sellers realize that, so they may be inclined to switch,’ he told MarketWatch. Some of these homeowners were hoping to flip their house, but the cooling market is holding them back, he noted. ‘We know that investor transactions as a percentage of all home sales in places like Los Angeles, Orange County, San Diego, Sacramento, San Jose, and San Francisco, are all around 20% to 30%,’ Palacios Jr. said.”
The World Property Journal. “According to the California Association of Realtors, housing demand in California cooled further in July 2022. California’s median home price declined 3.5 percent in July to $833,910 from the $863,790 recorded in June. ‘Home sales have taken a trouncing as the market has shifted in response to the recent surge in interest rates, and pending sales suggest that the market could remain soft in August,’ said C.A.R Chief Economist Jordan Levine.”
“Eleven counties recorded a dip in their median price from July of last year, with Tehama dropping the most at -19.3 percent, followed by San Francisco (-8.2 percent) and San Mateo (-6.9 percent). Forty-six of the 51 counties tracked by C.A.R. registered a year-over-year increase in active listings in July, compared to 44 counties in June. Five counties had triple-digit year-over-year gains in for-sale properties, with Yuba leading the pack with a growth rate at 169.8 percent, followed by Merced (157.0 percent) and Solano (129.5 percent).”
From Inside NOVA. “The median single-family home-sales price in Arlington at the end of the year is expected to be about 9 percent lower than in the heat of summer. The Northern Virginia Association of Realtors (NVAR) and Center for Regional Analysis at George Mason University are projecting a median sales price for single-family homes in Arlington of $1.11 million in December, which would be down from $1.22 million in June, which is expected to be the peak month for home prices in the county for 2022. In the townhome market, the median sales price projected for December is $821,111, well below the $920,250 recorded during the peak month of July.”
From Michigan Live. “A report by Moody Analytics found 210 metro areas were overvalued by 25% or more. Within that stat are 10 Michigan markets. Moody’s Analytics Deputy Chief Economist Cris deRitis is hesitant to call it a housing bubble, though. Instead he prefers ‘a housing correction.’ ‘A bubble, for me, implies a big pop,’ he said. ‘We are assuming that we have overvaluation. Home prices are going to slow but incomes are then going to slowly increase over time and kind of catch up with house prices. And that’s how this whole thing resolves.’”
“Those who bought in the last six months may be more at risk considering they bought in what now looks like the peak of home prices and they don’t have as much of a buffer in home appreciation over time. Home flippers may be more vulnerable in this market for the same reason, deRitis said. Sellers should take note and adjust their expectations, deRitis said. ‘I think it’s pretty clear that the sellers have to have realistic expectations,’ he said. ‘This idea of listing your home on a Thursday, selling it by Sunday with five different competing offers with escalation clauses, having your pick up bids. I think you need to reset.’”
The Aspen Daily News in Colorado. “In Denver, the largest metropolitan area close to the Aspen-Snowmass market, signs are emerging that market prices are softening, inventory is rising and the market is moving from a strong seller’s market toward a buyer’s market. This is happening across the country, with markets that showed the biggest price appreciation over the past two years leading the trend from seller’s to buyer’s markets. What does all this mean for owners, sellers and buyers in the Aspen-Snowmass area? This summer, we started seeing the first indications that the local real estate market is slowing. By the end of July, the number of sold listings had declined from last year by 38% in Aspen and 52% in Snowmass. We’re also seeing the number of listings increasing and price cuts on existing listings becoming the norm.”
The Denver Channel in Colorado. “Buyer’s now have the power in Denver’s housing market as home prices are falling and homes are staying in the market for longer, according to a monthly update from the Denver Metro Association of Realtors. About 6,939 active listings were reported for the month of August. The average closing price for a single-family home last month was $744.589, down 4.39% from July. Andrew Abrams, chairman of the DMAR Market Trends Committee said said people should expect more deals that contain a seller concession.”
“‘The advice for selling is: Do your research and understand what that research means. If a property is sitting on the market, even though it might be listed higher, it doesn’t mean someone wants it at that higher price, and so use that as an indicator of what’s too high,’ Abrams told Denver7. If you’re selling, he said, you have to base your price on the last 60 days not the last 6 months, or you’ll probably have to drop your price.”
Go Banking Rates. “Prospective homebuyers can breathe sighs of relief as home prices are finally on the way down. In fact, a new report by Realtor.com found that, from July to August, national home prices experienced their most significant month-to-month plunge in data history, dating back to 2016.”
The London Free Press in Canada. “Once white-hot London home sale prices have fallen for a sixth straight month in the face of rising interest rates, with the average selling price dropping by another $19,000 last month. Average selling prices went through the roof earlier this year, hitting a record $825,221 in February, but they’ve plunged by $177,000 over the last half-year as borrowing costs have risen with a recent run-up in interest rates and another rate hike expected Wednesday.”
“In the wider London market, the average resale price for homes slid to $648,000 in August and the number of sales fell by a whopping 35 per cent compared to the same month last year, the area realty board reported Tuesday. ‘I can tell you that folks are nervous’ said Randy Pawlowski, president of the London-St. Thomas Association of Realtors. ‘They’re cautious and they’re taking a pause in spite of having so much inventory in the market.”‘
The Financial Post. “Montreal is the latest Canadian city to report that its real estate markets slowed in August, with monthly data released by the Quebec Professional Association of Real Estate Brokers (QPAREB) revealing ‘several signs of weakness.’ The median price of a single-family home in the city in August was $525,000, down from $550,000 in July, the QPAREB data showed. Prices peaked in April at $580,000 and have tumbled a cumulative nine per cent since then.”
“Meanwhile, the rush to unload properties showed no signs of slowing down. Active listings rose year over year in the Montreal CMA, with single-family home listings up 58 per cent and overall listings increasing by 37 per cent over August 2021. There are now 13,715 listings available for sale. ‘The magnitude of the increase in mortgage interest rates is beginning to be reflected in a more incisive way,’ said Charles Brant, director of the QPAREB’s market analysis department.”
The Daily Mail on the UK. “A desirable London mansion overlooking iconic Regent’s Park has had £50million shaved off its asking price of £180m, signalling that even the top end of the capital’s housing market is feeling the impact of economic downturn. For ‘prime’ properties, the decline may already have begun. According to estate agent Savills, average prices in this tier in London are 17.6 per cent below their 2014 peak. ‘There are no Russians obviously, few Chinese and very few Arab buyers,’ said Andrew Langton, chair of Aylesford International, the company marketing York Terrace East alongside Savills.”
From The Print on India. “A stench of rot fills the air as one walks through the paths of Golden Apartment in north Delhi’s Narela, near the border with Haryana. There are signs of what could have been — tall buildings, green patches, paved paths. But the structures look abandoned, weeds sway in the unkempt gardens, and the roads are strewn with garbage. It’s also eerily quiet. The housing project in Narela’s Pocket 1-A was envisioned as a bustling township, but no one really wants to live here, and many who do, wish they didn’t.”
“‘Only about 600 flats out of 1,600 must be occupied. Many people wanted to surrender them after buying from the government, as amenities were bad, but couldn’t for some reason. They now regret it as they are not able to resell them,’ said Aman Kumar, a resident of Golden Apartment.”
Interest New Zealand. “Westpac economists don’t see any chance of an ‘excess’ of houses in Auckland, even with what they describe as ‘a massive number’ of new homes still being built in the city. Westpac’s senior economist Satish Ranchhod said that in addition to the increases in operating costs, house prices have been tumbling. ‘Prices have already fallen 8% from their peak, and we think that there are further declines yet to come. We’re forecasting that house prices will fall by a total of 15% over 2022 and 2023 combined.’”
The South China Morning Post. “China’s real estate assets are facing the risk of a protracted pricing decline, if Japan’s experience in dealing with its own property bubble and more than two decades of economic stagnation are anything to go by, analysts said. ‘It does look a little bit worrisome,’ said Alicia Garcia Herrero, chief Asia-Pacific economist with the French investment bank. ‘It’s well known that if you have very low prices, that feeds asset price inflation. It happened in Japan and it’s what can happen in China, given that China has been undergoing deflationary pressures for so many reasons. One is ageing, the other is the idea of bursting of the bubble. For me, it looks like asset prices will need to correct structurally, but especially real estate prices.’”
“In the 1980s, with the Japanese having excessive savings and an easy monetary policy, the population kept buying property. This led to a massive property bubble in the 1990s, as investors were speculating that property prices would keep rising. The ensuing bubble led to Japan’s ‘lost decade,’ when its economic growth stagnated and deflation was a consistent feature of the economy, according to Natixis. Chinese developers owed as much as U$5 trillion as of the second quarter of 2021, according to Japanese bank Nomura.”