A report from ABC News. “Wesley and Kimberly Robinson, both elementary school teachers, started building a new home for themselves and their two daughters in Rogers, Arkansas, last year, when interest rates were close to 3%. But their mortgage rate ended up to 5% when they finally locked it in this summer — adding about $300 to $400 to their monthly mortgage payment, according to Wesley Robinson. And now he fears higher mortgage rates might scare off buyers for their old home, which they have yet to sell. ‘If now rates are like 6% or higher, do we need to like discount our home a little bit?’ he asked. ‘We don’t want our home to sit there for weeks and weeks unsold. We kind of need the money.’”
From Boston.com. “Homes sales in Massachusetts have plummeted. Prospective Boston buyers may be facing higher mortgage rates, but declining single-family home prices may help to ease the burden. The city saw a 20% increase in sales but a 24.9% drop in the median home price, from $3,995,000 in August 2021 to $3,000,000 in August 2022. Somerville experienced the same fluctuations: a 66.7% increase in sales but a 13.2% drop in the median price, from $1,325,000 in August 2021 to $1,150,000 last month.”
News and Observer in North Carolina. “Triangle home prices fell for the second straight month in August, and Realtors say home-sellers must come to grips with new market dynamics. ‘We have a come-to-Jesus moment with sellers,’ said Jennifer Munoz, an agent with eXp Realty in Raleigh. Since peaking in June, Wake County prices have dropped from $493,000 to $475,000, while prices have also receded in Orange (down 17%), Durham (down 4.5%) and Johnston (down 1%) in the past two months.”
KPHO Phoenix in Arizona. “‘We are seeing an uptick in requests for quotes and staging right now, probably three times the calls that we’re used to receiving,’ said Tom Carr, co-owner of Staged to Sell Design in Scottsdale. ‘Months ago, you could put the hook in the water, no bait, and people were biting all day long. [Home buyers] can be more choosy now.’”
The Dallas Business Journal. “Active housing inventory in the DFW market is up 94% over last year, while sales are down 13.7%, according to the latest Re/Max National Housing Report. ‘I am seeing more inventory,’ said Kelly Boulton, a HomeLight Elite Agent in the Dallas area. ‘Compared to January 2022, which had two weeks of inventory supply in North Texas, we are now at over two months supply. I am seeing price reductions and fewer buyers. However, I am seeing multiple offers on homes under $400,000 in certain market areas. We are still seeing a lot of home sellers who think they can continue to price their homes too high for today’s changing market and think that buyers are still willing to pay over fair market value, which is just not the case.’”
The Orange County Register in California. “‘The train kind of left the station as far as over-bidding on properties,’ said Gail Anderson, an agent with Inet Realty in Irvine. ‘For $750,000 properties, we were getting offers close to $900,000. That’s not happening anymore. … There no longer are multiple offers. … No more lines at open houses.’ ‘The market’s taking a downturn,’ said Juan Zarate, an agent for The Real Estate Shoppe in Murietta. ‘We’re seeing a slight increase in inventory, decrease in prices and a little more flexibility with sellers. … We’re in a different market than we were as little as six months ago.’”
“One example was a 112-year-old house Anderson sold in Anaheim on Aug. 31. A month after listing the home for $889,000, the owners had just one offer for $20,000 less than their asking price. ‘They ended up accepting that offer, and that’s what’s happening almost everywhere now,’ Anderson said.”
The Union Tribune in California. “San Diego County’s median home price fell for a third month in August, down 6 percent from its peak in the spring. ‘Buyers are taking their time. There’s no sense of urgency,’ said Jan Ryan, an RE/MAX agent based in Ramona. Ryan said she was recently able to sell a large single-family home in Ramona’s Black Canyon Estates for around $1 million — but it took 45 days and a $86,000 price cut. She said the home would have sold over a weekend last year as buyers seemed to be doing anything they could to get a property. Ryan said the slowdown is more subtle, not a noticeable crash. ‘It’s a soft landing,’ she said.”
The Los Angeles Times in California. “‘That maddening competition is gone,’ said Jeff Lazerson, president of brokerage Mortgage Grader, noting sellers are more open to low down payment offers they previously would have ignored. When it comes to individual counties, the median is down more than regionwide, ranging from 2.8% below the all-time high in Riverside County to 6.7% below the peak in Orange County.”
The San Francisco Chronicle in California. “Compass is undergoing a round of layoffs that will primarily affect its technology team. About 3,000 of the company’s 21,636 employees are based in the Bay Area, according to LinkedIn. It’s unclear how many employees will be affected by this round of layoffs, and Compass declined SFGATE’s request for comment. This is Compass’ second round of layoffs in recent months — the company laid off about 450 people in June, mainly due to ‘clear signals of slowing economic growth,’ a Compass spokesperson previously told SFGATE. Redfin also laid off hundreds of employees around that time, and Realtor.com laid off an undisclosed number of employees earlier this month as a result of slowing sales volume in the real estate market.”
A press release. “Seattle’s housing market is slowing faster than any other housing market in the country amid rising mortgage rates, inflation, a slowing stock market and broad economic uncertainty, according to Redfin. Las Vegas came in second place, followed by San Jose, CA, San Diego, Sacramento, CA, Denver, Phoenix, Oakland, CA, North Port, FL and Tacoma, WA. ‘A lot of sellers aren’t able to get the price they want because buyers don’t want to compete with other offers when mortgage rates are double what they were a year ago,’ said Seattle Redfin agent David Palmer. ‘That means there are fewer sellers listing their homes and fewer buyers making offers on the ones that do hit the market.’”
“Las Vegas home prices were down 3% in August from the month before. And about 26% fewer homes sold within two weeks than a year earlier, compared with a 6% increase in February. ‘The housing market has changed very quickly in buyers’ favor,’ said Las Vegas Redfin agent Tzahi Arbeli. ‘Not only have prices fallen in recent months, but sellers see the market cooling and they’re more open to negotiating prices, giving concessions and paying closing costs. They may accept an offer that’s $20,000 below asking price and pay for repairs the buyer found during an inspection. Sellers can still get a fair price—but it’s with the understanding that they may have to wait several weeks for the right offer, and buyers are no longer willing to overpay.’”
From Bisnow. “Chinese investors are shedding billions of dollars worth of American assets as once-valuable properties become financially distressed. That tendency to overpay has now forced some Chinese firms to sell off their assets as higher interest rates and other factors leave companies in financial turmoil. ‘You get these liquidity booms that originate in overseas markets and lead investors to head abroad,’ Seaforth Land CEO Tyler Goodwin said. ‘The Chinese had that, and now we’ve seen the implications.’”
“This could have a ripple effect on the commercial real estate market as a whole since the inordinately large sums paid by Chinese investors tended to push up values at nearby properties and beyond.”
The Commercial Observer. “‘Commercial mortgage backed securities (CMBS) conduit and single borrower large loan (SBLL) transactions incurred approximately $205 million in realized losses during August 2022 via the workout of distressed assets,’ wrote Marc McDevitt, a senior managing director at CRED iQ. ‘CRED iQ identified 19 workouts classified as dispositions, liquidations, or discounted payoffs in August 2022. Additionally, there were seven distressed loans securitized in Freddie K transactions that needed workouts, with four of the loans incurring aggregate losses of $2.7 million.’”
“‘Of the 26 total workouts, only eight of the assets were resolved without a loss. Of the 18 workouts resulting in losses, severities for the month of August ranged from one percent to greater than 100 percent, based on outstanding balances at disposition. Realized losses in August were 28 percent higher than the amount of realized losses in July due, in part, to a higher number of workouts. Lodging properties accounted for the highest number of distressed CMBS workouts last month with nine total resolutions. Other property types with multiple distressed workouts included eight distressed multifamily properties, five distressed retail properties, and three office properties.’”
The Globe and Mail in Canada. “152 Convoy Cres., Vaughan, Ont. Asking price: $1,170,000 (July, 2022). Previous asking price: $1,249,000 (June, 2022). Selling price: $1.1-million (July, 2022). Agent Vadim Vilensky’s clients wanted to buy their first home in Etobicoke this spring and had a budget with an upper limit of $1.15-million. But their hopes were dashed when they could find nothing acceptable and prices through the roof. ‘They’d seen how the market went from a townhouse costing $900,000 go all the way to $1.5-million in a very short amount of time, so I told them not to buy anything,’ Mr. Vilensky said. ‘Prices there went up too fast.’”
“When they resumed their home search this summer, they looked north to Vaughan where this semi-detached house had its list price reduced from $1,249,000 to $1.170,000 about a week after first coming on the market. Negotiations lead to a $1.1-million agreement. ‘It was a lot of back and forth, almost a week-long [process], but I told my clients not to give up because the seller is motivated,’ Mr. Vilensky said. The 30- by 85-foot property is well situated. ‘There is greenery at the back, so it’s like a ravine,’ Mr. Vilensky said.”
The Spinoff. “Rich Listers premiered on our screens last week as New Zealand’s answer to Selling Sunset. The Bravo reality series follows a group of real estate agents as they sell New Zealand’s most exclusive and expensive properties, taking viewers into a luxurious world of shiny cars, fancy light fittings and million dollar views. Rich Listers is fantasy television that wants to show us how well the rich live, while also reminding us that this is the closest most of us will ever get to it. By focusing on people who are motivated only by making money in a time when people are struggling to find affordable housing, Rich Listers becomes as empty as the shell of the Pacifica penthouse. Even though there’s great views, it doesn’t mean we want to buy it.”
“On the other side of the TV cul-de-sac is The Spinoff documentary series Bad News, which began its third season with an episode about the country’s growing wealth gap. Look, there’s good news and there’s Bad News and then there’s watching a real estate agent drool over a $500,000 commission for selling an overpriced concrete cave to an offshore billionaire. Let’s put on our monocle and get our calculators ready for a tour through TV’s contrasting ends of the wealth spectrum.”
The Singapore Business Review. “Apart from client demands, realtors in Singapore also had to deal with changes in the real estate industry. To keep up with the new realities, ERA Realty’s Division Director, Jazreel Lim said she had to change her mindset and the way she approached her clients. ‘In any market, referrals are usually the best source of leads…Simply put, if the fishes aren’t biting, I have to go where they are,’ she told Singapore Business Review.”
“According to Lim, she was only able to transact at least four homes in Q121, but in Q222, she had zero. In the same period, only 1,825 new private homes were sold in Singapore, a 47.8% decrease from the same period last year. ‘I was panicking to see such a stark difference, but I think as real estate agents, we have to always keep cool. We have to understand that we can’t change the market, so what we can do is change our mindset and the way we approach our clients,’ Lim,