A report from the Review Journal. “Homebuilder confidence dropped again this month as buyers hit the brakes in Southern Nevada and around the country. In another sign of a ‘weakening market,’ 24 percent of builders reported cutting their home prices, up from 19 percent last month, said the association’s chairman, Jerry Konter. ‘In this soft market, more than half of the builders in our survey reported using incentives to bolster sales,’ including free amenities and price reductions, added association chief economist Robert Dietz. Homebuilders logged 434 net sales — newly signed purchase contracts minus cancellations — in Southern Nevada in July, down 61.5 percent from the same month last year, according to Las Vegas-based Home Builders Research.”
The Real Deal. “As the real estate market softens, Opendoor’s bottom line appears to be following suit. The iBuying giant is for the first time selling homes at a loss. Analyst Mike DelPrete said in a research note it’s the result of a fast-changing market, cooled by rising mortgage rates and stock market uncertainty. A Bloomberg analysis of Yipitdata says that as a result, the company lost money on 42 percent of its sales in August.”
“DelPrete said he doesn’t know why the company would try to accelerate sales when they’re losing money on those sales, but said it could hint at an even slower winter. It’s also lowering its initial asking prices, as well as the prices of homes already on the market. ‘The first hypothesis is they wanted to book as much revenue as possible in the third quarter,’ he said. ‘The second would be they think things are going to get worse — better to lose a little money now than a lot of money later.’”
From KOMU 8 News in Missouri. “After what broker Dana Wildhaber called an ‘unprecedented’ year of housing prices and offers out on the table, he said things finally seem to be cooling off. ‘I sense that the craziness is over,’ Wildhaber said. ‘Six, seven, eight offers, we’re not really seeing that anymore, and for a long time we were seeing that on every other transaction, I mean it was just crazy.’ KOMU 8 News received the most recent data looking at the market from the Jefferson City Board of REALTORS. As of August, median sales prices across the board’s jurisdiction in Cole, Callaway, Moniteau and Osage Counties had increased to $210,850 in 2022 from $165,000 in 2020.”
The Post and Courier. “The nine-month slide in home sales across South Carolina from rising lending rates has slowed the rapid pace of price increases and slightly boosted inventory amid emerging signs that sellers may no longer be driving the market. ‘We are seeing a turn from a seller’s market to a buyer’s market,’ said Cindy Creamer, president of the Columbia-based S.C. Realtors Association and an agent on Hilton Head Island. ‘Houses are on the market longer, and we are seeing price reductions.’”
From WVEC TV. “Virginia Beach senior mortgage banker Robby Dobrinski said he’s noticing a shift. ‘You’re not seeing a lot of people guaranteeing over asking price as you saw much before unless it’s in a really desirable area with the best school districts,’ Dobrinsky explained. He added that he’s seen a lot of price reductions.”
The Sun Sentinel in Florida. “With the frenzied housing market coming to an end, some sellers are considering putting their homes up for rent instead. ‘We are seeing that more now. Sellers are saying ‘I want my price, but I need to move so I will take a tenant if I can’t sell it,’ said Patty DaSilva, real estate broker with Green Realty Properties in Cooper City. For sellers who feel that they missed the peak of the market, trying to wait out the current slow down probably isn’t the best idea. Experts say that it’s likely that prices will level off and the market will regain more balance, so the chances of another sharp uptick in prices probably won’t happen.”
“‘It could take more than 5 years for them to reach their current values again, so unless they plan on keeping their property for longer than 5 years, we’re advising sellers to sell now,’ said Brian Pearl, principal agent with the Pearl Antonucci Group in Boca Raton. Agents are seeing more price reductions as sellers who had tried match prices of six months ago are having to recalibrate.”
From Mansion Global. “After Mark and Melissa Reichert moved from California to Dallas, the couple put their home in the Los Angeles suburbs up for sale this summer. Yet even after they cut the asking price by $10,000, there was hardly any interest. Instead, they decided to rent out the house. Their monthly payout now covers their ownership costs. ‘There’s just not serious buyers out there,’ he said. In Southern California, 10% of home sellers switched their listings from for-sale to for-rent due to higher mortgage rates, and 9% in Texas did so, according to the survey.”
“‘People are hearing that rents are going up, so they’re saying, ‘Well if I can’t sell it for what I want, I’ll just rent it, because I’ll get a really good rent,’ said Anthony Lamacchia, who owns a Waltham, Mass.-based real-estate brokerage.”
The San Mateo Business Journal. “Median single-family residential home prices rose 2.5% to $1.85 million from July to August, according to San Mateo County Association of Realtors, which experts suggest it’s becoming a balanced market. August’s numbers mirror the median prices from a year ago at $1.85 million. It marks a 8% decrease from April of this year when prices reached an all time high of $2.25 million, according to SAMCAR data. Compass Real Estate agent Charles Gillooley Jr., who focuses on San Carlos among other areas, believes the combination of high interest rates and volatility in the stock market has led home buyers to be more deliberate. It seems the market has corrected itself and potential home buyers may be waiting out the market more than they have in previous years, he said.”
“‘It’s like hey, nothing is moving quickly, I got time to look at the other 10 houses on my list and then decide,’ said Gillooley Jr. ‘At one point, there were between 25 and 35 houses on the market in San Carlos and over a third of them had taken price reductions.’ Compass Real Estate agent Raziel Ungar, who focuses on Burlingame among other areas, said that prices are still down from a few months ago so for his clients who are selling their homes that it comes down to having open conversations. ‘If they are hoping to have their home sold for the highest possible price, we just need to be very realistic and put out a fair price.’”
The Express News in Texas. “San Antonio families facing foreclosure are finding it more difficult to sell their homes as a market that was red-hot during the coronavirus pandemic shows signs of slowing down. There were 373 foreclosure postings in Bexar County in August, up nearly 43 percent from July, according to McKinney-based firm Foreclosure Listing Service. That volume is approaching pre-pandemic levels; there were 390 postings in August 2019.”
“Curtis Roddy, chief operating officer at Foreclosure Listing Service, attributes the increase to eviction moratoriums ending and a housing market that is becoming less frenzied. ‘It’s not as easy to sell your house,’ Roddy said. ‘People are less desperate to buy a house.’”
“At Texas RioGrande Legal Aid, a nonprofit that provides free legal services, lawyer Molly Rogers said anecdotally she has seen an increase in people seeking foreclosure assistance. ‘The economic strain that came with the pandemic is catching up with a lot of people who managed to keep their head above water for the last two and a half years,’ she said. ‘Now things are coming to a head, and there’s fewer of those programs available.’”
From DS News. “On Monday, the 2022 Five Star Conference continued with a full line-up. ‘Foreclosure starts are beginning to spike,’ noted Daren Blomquist VP at Auction.com. ‘We are also not seeing many institutional investors in the distressed sales space right now.’ ‘I think [unemployment] the elephant-in-the-room as this economy cools,’ said Kevin Osuna, EVP of Mortgage Servicing for Rushmore Management Services, LLC. ‘Where does unemployment go? What are your solutions to address that now that the option of forbearance has already been used.’”
From Market Watch. “‘2020, 2021 were the highest volume years ever,’ Mike Fratantoni, chief economist at the Mortgage Bankers Association, told MarketWatch. ‘During the pandemic, lenders really struggled to hire to fill their openings … we were hearing about seven figure sign-on bonuses for high producing officers.’ But after rates went up and business dried up, capacity needed to be reduced ‘to right-size the whole industry,’ Fratantoni added. Others say the drop in activity was something of a wake up call for the industry. ‘The economy hasn’t fallen apart,’ Melissa Cohn, regional vice president at William Raveis Mortgage, told MarketWatch. ‘It’s just that the mortgage business was too big.’”
From CTV News. “To curb soaring inflation, the Bank of Canada has been raising interest rates over the spring and summer to slow demand. University of Winnipeg Economist Phil Cyrenne says that could lead to job losses in some industries. ‘I think a recession is almost inevitable,’ said Cyrenne. The economist said a recession could impact sectors like home construction and auto sales, because higher interest rates will push some away from borrowing money for large purchases. ‘Which then reduces the amount of sales and the amount of expected business for these companies and that’s why as we go into a recession you might also see layoffs,’ said Cyrenne.”
“As she walks through the aisles at the supermarket, Susan Meged says the price of produce and other groceries is hard not to notice. Caught between inflation and a potential recession, Meged said she is locked into her mortgage rate. But she worries about people she knows who are struggling to keep up with their home payments. ‘They work overtime whenever they can get it, lots of overtime, but I feel bad for them because they have to be with their families,’ said Meged.”
From CBC News in Canada. “Plans to create a 31-unit housing complex at the former Summerset Manor site in Summerside, P.E.I., have been put on hold by the province. Despite the 31-unit project not going ahead for the time being, Barb Ramsay, councillor for Summerside-North said she’s talked with Housing Minister Matt MacKay frequently about housing needs in Summerside. ‘If you’re not getting any bidders on the tenders, it’s almost impossible,’ she said.”
The South China Morning Post. “Hong Kong homebuyers with tight budgets may be able to take advantage of a downturn to find bargains. Many owners are open to taking a loss to sell as soon as possible. At Cetus Square Mile in Tai Kok Tsui, for example, a flat measuring 417 sq ft changed hands at HK$7.91 million (US$1 million) in mid-September, according to Century 21 Home Fantasy, a loss of about 30 per cent from HK$11.07 million paid for it in 2018.”
“The ratio of second-hand housing deals that yield capital gains has fallen by 6.8 percentage points from the end of last year to 89.4 per cent in August, the biggest drop since the financial tsunami in 2008, according to Ricacorp Properties. This means one in 10 sellers incurred a loss. Ricacorp expects the metric to dip further to 88 per cent this month. In Taikoo Shing, representing the mid-price market, prices are down 17.3 per cent from the peak in June 2019 to HK$18,700 per square foot this month, according to Cushman. Some estates in Yuen Long, Tuen Mun and Tsuen Wan, such as Tsuen Wan Centre, have seen per-square-foot prices fall below HK$10,000, an unusually low benchmark, according to Century 21 Group.”
From Bloomberg. “From a start guarding trains full of metal from thieves on freezing winter nights, He Jinbi built a copper trading house so powerful that it handles one of every four tons imported into China. Now Maike is suffering a liquidity crisis, and He’s empire is under threat. The ripple effects could be felt across the world: the company handles a million tons a year — a quarter of China’s refined copper imports — making it the largest player in the most important global trade route for the metal, and a major trader on the London Metal Exchange.”
“He has been a poster child for China’s commodity-fueled boom over two decades — making a fortune from its ravenous demand for raw materials and then plunging it into the red-hot property market. Much as his rise was a microcosm of China’s economic boom, his current woes may mark a turning point for commodity markets: the end of an era in which Chinese demand could only go up.”
“‘For many years, traders like Maike have been quite important in the importation of copper into China — they’ve bought very consistently to keep the flow of financing going,’ said Simon Collins, the former head of metals trading at Trafigura Group. ‘With the property market like it is, I think the music could be stopping.”