A report from Market Watch. “Prices ‘might go down a little bit, but a crash I consider to be a more than 10% decline in home values, and that seems far-fetched right now,’ says Daryl Fairweather, chief economist for Redfin.”
From Bloomberg. “Home prices in the US have taken a turn and are now posting the biggest monthly declines since 2009. The sharpest correction in August was in San Jose, California, down 13% from its 2022 peak, followed by San Francisco at almost 11% and Seattle at 9.9%, the company said.”
The San Diego Union Tribune in California. “The prevalence of corporate buyers in the local housing market may be leveling off. Median home prices in August decreased for the third month in a row to $799,000, according to CoreLogic. While down from the all-time high of $850,000 in May. ‘It seems like it may be coming to an end now,’ Thomas Malone, the CoreLogic economist, said of the investor surge in the market. Investors can be more sensitive to interest rate increases and more hesitant to jump in, he said.”
The Columbia Missourian. “Following the national trend, the housing market in Boone County is showing signs of cooling down after a superheated market spike during the pandemic. This August, homebuyers saw lower prices in median single-family houses from last year, according to the Columbia Board of Realtors. Other signs of a slower market were an increase in house inventory and more days on the market, the report showed. In Columbia, home prices were down more than the rest of Boone County in August, by 3.8% from last year, selling for a median price of $255,000, according to Redfin.”
“These are signs that the housing market is cooling down in Boone County and, if it keeps up, homebuyers could start to see and negotiate lower prices, said Saku Aura, an assistant economics professor at MU. The current numbers are good for homebuyers compared to what was seen during the heated market the past couple of years, but for sellers ‘this is unambiguously bad news,’ Aura said.”
The Daily Sentinel in Colorado. “According to the Bray Report, active listings in Mesa County have had a dramatic increase over the past few months. Active listings were up 48% from August of the previous year, with 594 listings in August 2022 as opposed to 400 the same time a year prior. ‘I think active listings are up because people have decided to go forward with life. I think the actual sales are down because interest rates have gone up. It makes homes less affordable to the buyer pool,’ said Diane Hanke, a real estate agent with Bray Real Estate.”
“The median 2022 price for a Mesa County home reached an average high point of $410,000 in June, then that dropped to $399,000 in July. Data included in the Bray Report also illustrates a 22% decrease in sales. August 2022 reported a total of 266 houses sold, whereas 342 houses were sold the same time a year prior. Based on these trends, Hanke expects climbing interest rates to slow and eventually plateau, though she doesn’t expect prices to come down. ‘I think interest rates are going to stabilize,’ Hanke said. ‘I sold real estate when interest rates were 15-16%, so it doesn’t scare me, but it scares a lot of people. I think things will be the same next year as they are now, mainly a seller’s market. I don’t think prices are going to shoot up rapidly, but I don’t think they’re going to come down much, either.’”
The American Statesman. “University of Texas football head coach Steve Sarkisian has put his South Austin home on the market, but he’s not leaving Austin. The house, which has 5,331 square feet and five bedrooms, was listed for sale this week with an asking price of $7.5 million. Drew Tate, an Austin real estate broker who has the listing, said Sarkisian and his family have already moved into a newly built home that is a better fit. At the time Sarkisian was hired by UT in 2021, Austin ‘was a really tight market, with multiple offers and properties selling the first day on the market,’ said Tate, who represented the Sarkisians during their first Austin home search. ‘It was a crazy real estate time.’”
“Now, the market ‘has softened comparatively,’ he said.’It’s really moving closer to normal. For so long, we had so little inventory and so many buyers who were coming from out of town and running prices up. That has slowed. A 30% increase year-over-year in prices, which we have seen — that’s not sustainable,’ Tate said. ‘The market is really moving closer to normal.’”
The New York Times. “Are landlords minting money? It depends on the landlord. Publicly traded owners of sprawling real estate portfolios, such as Invitation Homes, have enjoyed some of their best returns over the past few quarters. Things look very different, however, for Neal Verma, whose company manages 6,000 apartments in the Houston area. Earlier this year, Verma experimented with raising rents enough to cover the cost of spiking wages, property taxes, insurance and maintenance. Turnover doubled in the properties where he tried it, as people left for nearby buildings.”
“‘It’s crushing our margins,’ Verma said. ‘Our profits from last year have evaporated, and we’re running at break-even at a number of properties. There’s some people who think landlords must be making money. No. We’ve only gone up 12 to 14%, and our expenses have gone up 30%.’”
“Steve Schwat is a principal at UIP Asset Management, which owns a portfolio of buildings in Washington, D.C., a market that has been resilient to economic cycles but hasn’t seen outsize rent growth after the early days of the pandemic. For him, the costs of financing and construction wipe out the upside of high occupancy rates and rising rents. ‘I think this inflationary environment is a more negative to landlords than it is a positive,’ Schwat said. ‘Most landlords would tell you, ‘I really liked 2021.’ Things were coming back, interest rates were low, things seemed to be going relatively easy; 2022 is a (expletive).’”
The Orlando Sentinel in Florida. “Orlando rent prices fell in the third quarter of 2022, the first time in three years monthly rents have declined. The last time monthly rents fell on a quarterly basis was the third quarter of 2019. ‘It’s not … weakening; it’s normalizing,’ said Lisa McNatt, CoStar’s director of market analytics for Orlando. Vacancy rates also ticked up 1% from the previous quarter to 6.2%, primarily because of the completion of new apartments, McNatt said. Orlando added 3,000 new apartments from July through September, compared with only 949 new ones in the second quarter.”
From Kelowna now in Canada. “The worst of the price slashing is likely over in Kelowna’s confusing and rapidly changing housing market. The ReMax Fall Canadian Housing Market Outlook pegs the average residential sale price in Kelowna as of Aug. 31 at $933,112, an 11% tumble from its peak of $1,050,000 in February. 11% represents a significant $116,888 price drop. And it’s probably not finished falling, according to Kelowna-based ReMax Canada executive vice-president Elton Ash.”
“‘I imagine the total price drop will end up to be around 15%,’ said Ash. ‘So, that means the average residential sale price bottoming out in the high $800,000s.’ We did the math and a 15% plunge from the pinnacle of $1,050,000 is $892,500. ‘The market is definitely adjusting and changing. Confusing is the best way to put it,’ said Ash.”
“If you bought at the peak, you’re probably kicking yourself right now. If you’re trying to sell your home, you’re likely having to reduce the price repeatedly. And if you’re looking to buy a home, you’re probably holding off to see how low prices can go. Potential buyers willing to pull the trigger can likely negotiate a good deal. However, it’s all relative. The potential buyer on the precipice of a bargain likely just had to sell their previous home for a steal.”
Manchester Evening News. “The UK economy has been plunged into turmoil. A weak pound reduces our buying power on imported goods. It means everything becomes more expensive. First-time buyer Andrew, 30, from Sale, has a mortgage in principle with Nationwide. But following the crash he’s now wondering whether he should – or can even afford – to go ahead. ‘I’m concerned that I’m overextending with my potential purchase and that I’m going to end up losing my house in a few years. I’m worried about keeping up with mortgage payments and that if I buy now, houses will plummet within the next year and I’ll be screwed.’”
“‘The biggest factor in property price inflation has been the availability of mortgages,’ said Jamie Thompson of Openshaw-based Jamie Thompson Mortgages. ‘More and more lenders increasing their maximum loan sizes and making their criteria more flexible in the past 12 months has been a major factor in pushing prices higher and higher. Now that dozens of lenders have withdrawn all products, this could be the catalyst for a cliff edge drop in property prices.’”
From ABC News in Australia. “Property prices are continuing to decrease nationally as higher interest rates bite, with capital city housing markets falling by up to 6 per cent in the past three months. Country and regional city homes had been withstanding the pressure until recently, but CoreLogic’s Tim Lawless says that market is now following the broader downward trend. ‘It is absolutely a buyers’ market,’ Mr Lawless said. ‘Even going back to the last recession in the early 1990s, housing prices weren’t falling this quickly in Sydney.’”
Newshub New Zealand. “House prices have steadily been dropping since they peaked in January this year at a whopping $1,063,765, according to QV. Now just nine months later average house prices are sitting at $973,848. ‘When we’re talking about this cooling…If you actually look at what you paid for it originally, have you lost money on that original sale price?’ asked spokesperson for realestate.co.nz Vanessa Williams. ‘There will be a very small subset of New Zealanders who purchased in January that will need to sell at the moment that is going to be such a small, small percentage and yes, that 7 percent drop will be impacting those specific people.’”
“‘But most people buy properties for the long term and if you actually look at ‘have I lost any money from the day that I purchased my home, I would say about 99 percent of New Zealanders are not losing on the price they paid for their property,’ she said. ‘I think the more people who own their own home and go into their own home, I think that’s such a positive thing for New Zealand that I love that its part of our culture. ‘”
Radio New Zealand. “New figures show the national average asking price for houses has continued to decline. Major property website realestate.co.nz reported asking prices have fallen 7.2 percent since January, when the average hit a record high of over $1m. Spokesperson Vanessa Williams said asking prices have decreased by about $10,000 per month across the motu to $921,187 in September.”
“Though interest rates were predicted to rise further Williams did not believe New Zealanders’ ‘passion for property’ would change a great deal. ‘We’ve had [interest rates] so low for so long that we sometimes forget there is a bit of a normalisation that is going to happen,’ she said. ‘We’re nowhere near where we were in the ’80s.’”