A report from the New York Post. “The median home listing price has plunged by more than 10% in Austin, Texas, since June, according to Realtor.com. That marked the steepest decline of any city in the US over that period. ‘Sellers are thinking, ‘Gee, this is painful,’ Paul Reddam, an Austin-based real estate agent with Homesville Realty Group, told Realtor.com. ‘We’re kind of seeing what we saw in 2001, when the dot-com bubble burst. We had a lot of people leaving at that time, and people didn’t want to sell because they were underwater.’”
“Phoenix, Ariz., ranked second among the markets with the steepest three-month declines in listing prices. The city’s median home list price declined 9.9% to $493,500 in September. Palm Bay, Fla., was third on the list, with a decline of 8.9% to $379,995 for the month. Other cities rounding out the top 10 list of buyer-friendly markets included Charleston, SC; Ogden, Utah; Denver, Colo.; Las Vegas; Stockton, Calif.; Durham, NC and Spokane, Wash.”
From KING 5 in Washington. “According to Redfin,Seattle’s housing market is cooling faster than any other city in the US. Ginger York with Marketplace Sotheby’s International Realty said homes are also decreasing their listing prices, allowing buyers more opportunities to negotiate. ‘Back in April, they had two to three homes to choose from, now they have ten to twenty homes to choose from and that might allow them to get into their favorite neighborhoods,’ said York.”
The News Herald in Florida. “According to Susan West, president of the Central Panhandle Association of Realtors, Bay’s housing market had an approximately three-month absorption rate as of Thursday, meaning it would take about three months for all available homes in the area to be purchased if no new listings were added. Bay County currently has about 1,700 properties for sale, split between single-family homes, condos, townhomes and manufactured homes, according to CPAR. This is about 1,000 more than it had at the beginning of the year. ‘We’ve been in a … rising market since around 2013 or 2014, (and that) can only run for so long,’ said Charlie Commander, manager of Century 21 Commander Realty. ‘It’s going to be an incentive-laden market for the foreseeable future.’”
From Barron‘s. “Median listing prices in Ketchum peaked at $2.172 million in March 2022, according to Realtor.com, more than double the $925,000 median price in October 2019. By September, however, median listing prices had softened to $1.2 million. ‘Things are calming down,’ said Kirsten DeHart, associate broker at Wood River Properties. Christy Morrison, an agent with Corcoran Global Living in Truckee said property values here doubled through the pandemic, Ms. Morrison said. Average prices now hover around $1 million, though a post-Covid rebalancing has curtailed prices by about 10%.”
The Daily Press in Virginia. “The median sales price of new homes in Hampton Roads is ‘cooling, slowly,’ from an all-time high of $328,795 in May to $315,990 in August, said Liz Moore, board president of REIN, the multiple listing service serving Hampton Roads. A silver lining is that ‘for the first time in a long time, many sellers are reducing their asking prices in order to get their homes sold as quickly as possible,’ Moore said. A bit more good news, is that ‘the cooling is going to mean fewer bidding wars, and buyers won’t have to pay the crazy prices like they did six months ago,’ Moore added. Moore also said buyers are in a better position to get concessions from sellers, ‘like paying buyer closing costs, which was unheard of in the last two years.’”
From Mansion Global. “New York City’s luxury home market saw its third week of declining sales in the seven days ending Sunday, according to Monday’s Olshan report. Last week’s No. 1 deal was a penthouse at 25 Columbus Circle, which was developed as the Time Warner Center—now the Deutsche Bank Center—and completed in 2003. Last asking $49.9 million, down from its original list price of $75 million in July 2019, the condo has gone into contract for $40 million.”
The Long Beach Post in California. “Following month-after-month, year-after-year increases in Long Beach home prices—generally growing upward by 14-18%—things are beginning to swing the other way as the real estate market teeters on the verge of a serious decline. Back in March of last year I wrote about the horrible and sad situation the first-time home buyers faced, with prices skyrocketing and monied buyers outbidding new homebuyers with bids far in excess of asking prices, frequently offering cash. Many would-be homeowners at the time told me they were laying low until things simmered down—often referring to ‘when the bubble bursts.’”
“The downturn is being caused by what Phil Jones, Realtor and past president and director of the Greater Long Beach Board of Realtors terms ‘a perfect storm’ of several unfavorable factors occurring at once. Home prices are no longer appreciating wildly and, in fact, have backed off a bit to the point where Jones says the median price for a home in Long Beach has backed down from a bit over $900,000 to about $830,000.”
“And those who choose to list their home for whatever reason—perhaps to snag a still-considerable amount of equity and move to a more financially amenable location outside of California—will likely have to sell their home at a reduced price relative to, say, as recently as a couple of months ago. And selling at a reduced price, says Jones, is ‘something we haven’t seen in eons.’ The raising of interest rates, Jones said, ‘was like turning the faucet off’ the real estate boom. In short, said Jones, ‘the Federal Reserve has dumped a bucket of ice water on the long-hot real estate market.’”
The Sarnia Observer in Canada. “Home prices in the London area fell for the seventh straight month in September, taking the average resale price of houses in the region below the level a year ago. The average price dropped to $635,250 in September from $648,000 in August and also down from $641,800 a year ago, figures released by the London and St. Thomas Association of Realtors show. It is the first time in recent memory that the number has dropped year over year. As well, only 497 homes exchanged hands last month, 42 per cent fewer than in 2021.”
“‘We are closer to a balanced market, which is a good sign,’ said Randy Pawlowski, LSTAR’s president. ‘We started the year with some big fluctuation, but in the last couple of months, things have stabilized a bit. I’ve never seen anything quite like this roller-coaster ride we’ve been on this year . . . but hopefully, with some luck, within a one-year time period, we’ll get ourselves back to some normalcy.’”
The Telegraph in the UK. “Ollie Marshall, of buying agency Prime Purchase, noted a London house that was marketed new with a £55m guide price in 2016. When the pound was at its peak against the dollar in June 2016, just before the Brexit referendum, this was equivalent to $81m. Since 2016, PCL house prices have fallen. The property has also lost its new build premium. Now, it is on the market for £35m. When the pound hit a record low against the dollar on the Monday after the mini-Budget, with an exchange rate at 1.035, for an American buyer, this property cost $36m. This was a saving of around $45m compared to five years ago – a drop of 56pc.”
The Daily Telegraph. “A growing number of Australians are facing ‘mortgage prison’ whereby they are unable to refinance their home loans following recent hikes from the Reserve Bank. Data from comparison site Mozo found three in five mortgage holders were under financial stress because of rising interest rates, with one in three claiming this would become severe if their interest rate rose to between 5 and 7 per cent. Compare Club Home Loan Expert Broker Sophie Matthews said the RBA’s 25 basis point increase had taken some mortgage holders to full borrowing capacity.”
“She said a further 25 basis point increase would make it ‘nearly impossible to refinance’ for borrowers already at their max. ‘Then loans will technically be beyond what that homeowner can afford,’ she said. ‘This is what’s known as being in a ‘mortgage prison’.”
“CEO of Sydney brokerage Shore Financial Theo Chambers said about 30 to 40 per cent of the firm’s clients looking to refinance were becoming stuck. He said the majority of home loan customers borrow at their maximum borrowing power based on the lender’s assessment, which include various forms of income discounting as well as an interest rate buffer or floor rate. ‘People who borrowed at their max need to wait until their financial circumstances improves; they pay down their debt, get a pay rise or a combination of the two,’ he said.”
“He said many clients were anxious about the rising costs. ‘I do feel like there is some unprecedented panic,’ he said. Borrowers are also being stung with loyalty tax, he said, with many lenders increasing their variable rates for existing customers at a higher rate than the RBA increases. ‘I’ve fallen off my chair looking at some of the rates my clients are on,’ he said.”
From Bloomberg. “On a recent Saturday, more than 100 salespeople swarmed the floors of a luxury shopping mall in Hong Kong, haranguing shoppers to check out deals at one of the city’s latest residential projects. One Innovale – Bellevue, built by Henderson Land Development Co., priced its first batch of apartments 9% lower than the nearby second-hand homes in New Territories, about 25 miles from the Central financial district. But the response has been below par since its launch last month: about a third remained unsold as of the first week of October.”
“It’s even worse for others. At the end of the first day on sale, a 139-unit development failed to move a single unit — rare for a city where projects get snapped up within hours in a robust market. Another widely-advertised project only found buyers for two units throughout the day, according to sales records. ‘We are fighting for fewer customers due to concerns about interest rates,’ said realtor Sam Wong. ‘Everyone is competing to be cheaper.’”
“The sliding demand shows how a city at the forefront of a global property downturn is bracing for an even deeper slump in coming months as interest rates rise. ‘A higher interest rate usually contracts economic activity, especially considering the already weakened demand in Hong Kong under the pandemic and control measures,’ said Aries Kin-Ming Wong, who teaches economics at Hong Kong Baptist University. ‘It can have an even greater impact on property markets as the recent wave of emigration has already put a downward pressure on the prices.’”
“A 250-square-feet studio, smaller than an average parking lot, is selling for more than $500,000 in the emerging middle-class neighborhood of Kai Tak. With that kind of money, one can buy a unit near Soho in New York. ‘Everyone can feel the market worsening — interest rates keep rising and the local economy is not doing great,’ said Greg Cheung, 37, who has been looking to buy a home in Hong Kong for a few years. ‘I have less desire to buy now.’”
“‘Sellers have to cut their prices several times before buyers accept a deal and many of them have become disheartened,’ said Jason Hau, who works for Centaline Property Agency Ltd. ‘It wasn’t as bad even during the 2008 financial crisis.’”