A report from Bloomberg. “After an abrupt end to the US housing boom, home flippers who were winning big just months ago are now racing to stem losses. It’s a swift turnabout for flippers such as Tammi Merrell, who’s stuck with homes to sell and loans to pay. ‘It’s a high-risk, high-reward business — and now we’re facing the high risk,’ said Merrell, a full-time flipper in the Denver area. ‘I’m just praying for break even.’ By May, Merrell knew trouble was brewing when she had to cut a home price by $20,000 to get the property sold. In August, she lost $8,000 on another house as the market deteriorated.”
“Now she’s got one house under contract, another on the market getting lowball offers and two more in progress that will be finished in the next two months. Losses will grow but even thin margins are a big problem when you’re a full-time flipper, she said. ‘We have hard-money loans with 10% to 14% interest rates,’ Merrell said. ‘It’s a constant dance — do I wait it out or do I price drop? Both cost money.’”
“Phoenix property investor Ben Arredondo has had to slash prices after the slowdown caught him mid-flip on 27 houses. He’s managed to sell most of them but says he expects to lose around $1.3 million — if he’s lucky. ‘I know a lot of investors who are getting hammered,’ Arredondo said.”
The Gazette Journal in Nevada. “The combined median for Reno and Sparks peaked in May this year when it reached a record $615,000. The city of Sparks also reached its highest median home sale price during the same month at $570,000 while Reno peaked a month later in June at $635,000. Reno and Sparks have seen median home prices steadily decline since then, however. By September, Reno was down to $540,000 while Sparks was at $515,000. ‘Savvy homebuyers are finding excellent opportunities among the homes available for purchase across various price ranges,’ said RSAR president Sarah Scattini.”
The New Hampshire Business Review. “The market for single-family homes in New Hampshire is finally slowing down. The median price – $440,000 – is 10 percent higher than in September 2021, but it fell $10,000 from the August, and $20,000 off its peak in May and June. The number of closings is down as well, and they’ve been going down for the last 12 months. In September, pending sales fell 21 percent year over year for homes and 13.1 percent for condos.”
From KTVB in Idaho. “Home prices in Ada County are dropping. Boise Regional Realtors President, Becky Enrico-Crum said because of that increased interest rate, there are more homes available to buy in Ada County. At the end of September, there were 2,420 available listings on the Intermountain MLS, a 93.8% increase from last year. The median sales price was $540,000 in September, according to the press release. That is down $25,000 from August, but still almost 1% higher than last September.”
“‘We have several of those buyers that have been, I mean, they tried over and over again for two years during, you know, all the multiple offers,’ Enrico-Crum said, ‘and they would lose and lose, and now it’s kind of like, alright, now we can actually buy something.’ However, people selling their house might feel differently; they are likely getting less money than they would just one month ago, Enrico-Crum said. She said people who bought their houses this year need to wait about three to four years before they sell to see any substantial equity gain.”
From WhatcomTalk in Washington. “Mortgage Loan Officer Tiffany Bergsma-Evans sat down with WhatcomTalk. ‘Homes are less expensive than they were in the spring. And we are still seeing pricing coming down. There are more homes on the market, fewer bidding wars, and homes are starting to sell at their listing price or slightly under. This means buyers are having some success in negotiating home prices down,’ says Bergsma-Evans. ‘Buyers are also having success with contingent offers, like selling their existing home first to free up funds for the purchase.’”
The Bend Bulletin in Oregon. “In Redmond, the median single-family home price was $525,000 in September, $17,000 lower than it was in August. A year ago, the median sales price was $450,000, according to the report. In Sisters, the median sales price was $590,000 in September, a decline from August when it was $730,000, according to the report. It now takes about 16 days to sell a single-family home in Sisters, and there is about three months of inventory on the market. And in La Pine, the median sales price of a single-family home dropped to $430,000 in September, down about $40,000 from August, according to the report. There currently is about four months worth of supply up for sale, and it takes about 55 days to sell a home in La Pine, according to the monthly report.”
From KXAN in Texas. “More people in Austin are being forced to make a tough decision for their dream home: Pay thousands of extra dollars, or walk away and lose thousands. One local realty company said folks who bought at the top of Austin’s housing market earlier this year, or even earlier, now find themselves trapped in confusing contracts with their builders. ‘With interest rates, the homes are much cheaper,’ said Tim Behe, an agent with Spyglass Realty.’Other homes– same exact floor plans, are actually $50 – $60,000 less, and the builders haven’t been really working with the buyers at this point.’”
“Spyglass said about a dozen of their clients haven’t been able to get into their newly constructed homes on time. They said one client ended up breaking their contract with the builder, and forfeiting their $25,000 deposit.”
The Oklahoman. “‘There still is a decent demand for new homes. Interest rates have caused some slowdown in traffic, but it still exists,’ said Mike Means, executive vice president of the Oklahoma Home Builders Association. Means added, ‘I do not know for certain, but have heard some builders are selling at almost cost just to keep cash flow going, hoping to ride things out. This will hurt in the long run because of how that affects appraisals.’”
The Palm Springs Post in California. “The ‘corrective turn’ we’ve been talking about in the housing market appears to be continuing, according to the Greater Palm Springs Realtors. Across the Coachella Valley, the median price for a detached home fell by about $12,000 to $670,000 in September. ‘There is no doubt price increases are starting to slow,’ the report states. One of the most staggering signs of the turbulent housing market over the past year was the number of homes selling above list price. Last month, 28% of sales were above list price compared to more than 50% this time last year.”
The Globe and Mail in Canada. “2925 17 St. SW, Calgary. Asking price: $774,900 (June, 2022). Previous asking price: $799,900 (April, 2022). Selling price: $755,000 (July, 2022). ‘There were some townhouses with outdoor space or rooftop patios maybe one fourth the size, so there wasn’t a lot of direct competition for ours,’ said agent Joel Gwillim. ‘We had an offer fairly early on, but it was subject to a sale out east in Ontario, which was cooking and seemed like a no-brainer. But they couldn’t sell their home to facilitate the purchase here.’”
From Mansion Global. “Though prime property markets globally tend to offer a level of stability that the overall market does not, London’s high-end market has not been unscathed by the economic and political turmoil in the U.K. over the last few weeks, according to a report from LonRes. During the last seven days of September in London’s luxury market, the property data firm said the number of sales falling through jumped 88% compared to the same time last year, the number of price reductions spiked 76%, and the number properties withdrawn from the market increased 48%.”
“‘The events of the last two weeks have added an unwelcome degree of uncertainty to the U.K.’s economy and housing markets,’ Anthony Payne, managing director of LonRes, said in the report. ‘Prime London has not been immune to that uncertainty with evidence of more cautious buyers. Sales falling through, properties withdrawn from the market and price reductions all spiked in the week following the mini budget.’ ‘The relative value in [prime central London] compared to 2014 will underpin an overdue recovery in the medium term,’ Knight Frank said, referring to when the city’s market peaked.”
From Dutch News. “The average house sold for 5.8% less in the last financial quarter than between April and June, according to figures from estate agent association NVM. Its agents’ third quarter results are the first solid indication that the Dutch property market is taking a downturn, after months of fierce growth. The quarterly drop in prices registered by the NVM is the steepest it has ever measured in such a short period. At the end of 2021 the NVM, which monitors homes sold by its accredited agents, said house prices were growing year-on-year by 21.5%. That year-on-year growth has now plummeted to 2%.”
“Lana Gerssen, deputy chair of the NVM, said in a statement: ‘The figures for the third quarter of 2022 indicate that the extremely overheated market of the last one-and-a-half years has reached a turning point. ‘The quarter-on-quarter drop in prices that we have measured is relatively modest, compared to the extreme rises of recent quarters. However, we are still far from a normal market as the supply both in terms of numbers and types of houses is insufficient. The influence of increased mortgage interest rates, sky-high energy costs and inflation is taking the madness out of the market.’”
The Sydney Morning Herald in Australia. “During last year’s property boom, some families and first time buyers were borrowing to their maximum and then asking for help from the Bank of Mum and Dad, but attitudes had changed this year as repayments rise. Some, though, are still applying for as much as possible because the amount they can borrow has fallen faster than property prices have. Sydney-based Equilibria Finance managing director Anthony Landahl said buyers were much less willing to borrow their maximum, especially compared to last year when interest rates were at record lows.”
“‘What I guess has been happening, 12 months ago money was relatively cheap and people were trying to borrow to their maximum capacity to get into the market,’ Landhal said. ‘Now the market is coming off, people are very much more conscious of what their max is, and how much the repayments are, so they might not go to their maximum if they understand what the environment is.’”
“Vaughan Clark, senior finance broker with Clark Finance in Melbourne, said buyers were less willing to push themselves financially, especially if another rate rise was on the horizon. ‘People can’t go to the edge now,’ Clark said. ‘They’re putting themselves at risk if they borrow to the maximum.’ Dwelling values have fallen by 9.0 per cent in Sydney, 5.6 per cent in Melbourne and 4.3 per cent in Brisbane since their peaks, CoreLogic data shows.”
The South China Morning News. “Hong Kong property developers and agents are lobbying the government to scrap legacy stamp duties to avoid pushing homeowners into negative equity amid slumping home prices, a clarion call that is being dismissed by analysts. The city’s 1.4 million private property owners could face negative equity – when a home loan exceeds the market value of the property – if home prices fall further, said Stewart Leung, executive committee chairman of the Real Estate Developers Association (Reda), which represents the city’s biggest developers. ‘It will mess up the market,’ he said. ‘Even if home prices do not rise, do not let them fall.’”
“‘Many owners would rather change hands at a loss to cash out,’ said Louis Chan, chief executive of the residential division at Centaline. ‘Quite a few buyers who have entered the market with mortgages at a high loan-to-value ratio in recent years have fallen into a crisis of negative equity.’”
“For example, Cullinan West in western Kowloon saw a flat change hands at HK$32.5 million recently, for a loss of HK$10.49 million, according to Midland Realty. This year’s overall number of property transactions is expected to be around 64,000, the lowest in 32 years, said Freddie Wong, chairman of Midland Holdings. The sluggish transaction volume proves that the property market has entered an ‘ice age,’ and that the cooling measures launched earlier for the hot property market are out of date, Chan said.”