A report from the Niagara Gazette in New York. “‘The first sign of a housing boom came in April 2020,’ said Jamie Yaman, the principal broker for Cortland-based Yaman Real Estate. ‘That is a market we will never see again. There was a lot of money pumped into the economy.’ Prices rose 20% to 30% on all types of housing – single-family, lakeside, vacant land that had been on the market for years, Yaman said.’Every property class we had was getting hit.’ The median sale price for a single-family house rose 14.5% between 2020 and 2021, to $151,985. That’s 26.7% higher than 2017, state Realtors figures show. They sold, anyway, regardless of the price: 490 houses in 2021, up 26.9% from the previous year and 18.6% more than 2017.”
“‘The real estate market, prices are definitely going down,’ said Rose ‘Marie’ Ferro, president of the Cortland County Board of Realtors. The housing boom in single-family home sales was not sustainable and it was just a matter of time until market conditions deteriorated, Ferro said. ‘It was not realistic,’ she said. ‘It was a fantasy world.’ Houses are sitting on the market a little longer and the annual winter slow down in sales is coming, she said.”
The New Hampshire Union Leader. “Many homes for sale are still getting multiple offers, but not as many as earlier this year or 2021, according to real estate agents. ‘There’s still so many people that didn’t win the (house) lottery the last three or four years, they’re still out there and they still want to buy,’ said Realtor Rachel Eames. The median-sales price for a house has jumped nearly $90,000 in two years and $40,000 in the past year alone. Bedford real estate agent Greg Powers said he has anecdotally seen some asking prices trimmed.”
“‘I just think a lot of those price reductions are very optimistic sellers thinking the market was going to go on forever and you could get any price,’ he said. ‘That has changed a little bit, and buyers are a little more discerning these days. For sellers, pricing is crucial. No more let’s price it high and see what happens.’ ‘We have plateaued and prices are slowly, slowly kind of decompressing,’ said Eames, based in Concord. ‘They’re slowly becoming more palatable for buyers, but we are talking a little smidge. It is not going to be a buyer’s market.’”
From KPNX TV in Arizona. “As the housing market in Phoenix continues to sizzle, it’s wise to stay strong against competitive sellers. ‘It went from sellers not really having to do anything to their homes, to now they’re sort of incentivizing buyers to come in and see the home and make an offer,’ said Jennie Richau with Brokers Hub Realty. Back in the spring, Richau said they only had 4,300 listings. Now that number has increased to over 21,000. Therefore, capitalizing on the market is big. Homeowners should consider ‘dolling up their dwelling’ to draw in potential buyers to stand out from the other options. ‘It’s really about setting your listing apart these days,’ she said.”
The Spokesman Review in Washington. “Spokane County homebuyers might be finding they have more leverage when purchasing a home this fall. The county’s housing market, which was red hot in the summer with bidding wars and homes going under contract within days, continued to level off in September. The median closing price for homes and condos on less than 1 acre was $409,950 in September. The median price was $416,450 a month before. ‘The increase in interest rates, I think, can cause a little fear from buyers,’ said Tiffany Claxton, CEO of the Realtors association. ‘It’s turning toward a buyers’ market, but we’re not there yet. Now, a buyer has the opportunity to look at three, four or five listings and the ability to add back in inspections and contingencies, whereas during the last two to three years, it has been so competitive that buyers were removing contingencies and putting in all cash offers with a 15-day close.’”
“For home sellers to remain competitive in the local market, they should realize there’s a shift occurring, Claxton said. ‘We’re not in the same place we were in six months to a year ago, where the market was warranting much higher listing prices,’ she said.”
The Houston Chronicle in Texas. “A Houston developer unveiled designs for a 10-story condominium building in Galveston that draws inspiration from luxury beach side residences of Miami. The project could break ground in late 2023. Satya, a condo developer and commercial real estate consulting firm is planning a wide, glass-clad building with ocean views for all 63 residences on Galveston’s West End. The project would join Galveston’s newer condominiums of Palisade Palms, the Emerald and Diamond Beach. Condos in those buildings have been strong sellers, although competition has been less fierce since July as high interest rates cut into buying power.”
“‘When any of those units come on the market, they sell fairly quickly, because people like new,’ said Andrea Sunseri, a real estate agent with Sand and ‘N Sea Properties in Galveston. ‘We were getting multiple offers on properties at the beginning of the year. Not so much anymore.’”
Multi-Housing News. “Is the transformation of commercial office buildings to multifamily residences hype or hard news? So far, it’s been mostly hype, according to Julie Whelan, global head of occupier research at CBRE. ‘The jury is still out’ on just how much the office market is now overbuilt thanks to the pandemic and the resulting work-from-home movement, said Ed Cross, a developer who is turning the 31-story Tower Life tower in San Antonio’s downtown into a mixed use property.”
“In his own town, Cross told the meeting, office buildings are 85 percent leased but only 20 percent occupied. But even if the sector is just 20 percent overbuilt, Cross added, the market can absorb no more than 7 percent, leaving the other 13 percent to founder and leaving lenders holding the bag. Only if lenders sell on the cheap to avoid foreclosure, he said, will developers like Cross & Co. begin to use their ingenuity.”
“‘Sometimes buildings are worth less than the land under them,’ Cross said. ‘If lenders sell to anyone with dollars, that’s when we can get really creative … . Some lenders are not going to sell for just any number, but they really have to. Lenders have to decide how much pain they are willing to endure.’”
“Douglas Cameron of Cameron Management, a Texas firm which is transforming the Esperson office building in downtown Houston into residential rental units, agreed with that assessment. Foreclosure is a word we’re going to start hearing again unless banks become very motivated to do something, lest they end up owning some under-performing buildings. ‘Once lenders start collecting rent themselves,’ Cameron warned, ‘their properties will lose even more value.’”
The Financial Post in Canada. “Nervous investors looking to offload their pre-construction condos in the secondary market may find themselves out of luck, industry watchers say, as a softening real estate market and rising interest rates send buyers to the sidelines. A number of real estate agents in the Greater Toronto Area told the Financial Post they have been seeing a surge of calls asking about ‘assignment sales,’ a kind of legal transaction in which the original pre-construction condo buyer ‘assigns’ or transfers the rights and obligations of the purchase agreement to another buyer.”
“Those in the industry say stagnating condo prices are making it more difficult for owners to exit their investments. At Precondo.ca, an online catalogue of pre-construction units across the GTA, investor concern is evident in an increase in chatter about such sales. The overall share of conversations with the intent to trigger an assignment sale jumped from four per cent in 2017 to 14 per cent this year, based on a sample of 78,000 calls that were screened for the use of the words ‘assignment,’ ‘assign’ or ‘flip.’”
“Precondo.ca chief executive Jordon Scrinko said he has never seen the assignment market this soft before. ‘Within the past three to five years, there is a sizeable chunk of the market of the pre-construction buying pool, who bought units that may never actually intended to close on, and some of them — even more worrying — actually factually cannot afford to close on,’ Scrinko said. ‘If they bought five years ago, they’re still in profit in nine out of 10 cases. But if they bought, say 2020 or end of 2019 and … the building’s coming up on occupancy today and they’re trying to flip that contract today — in most cases, those people are not equity-positive.’”
“John Pasalis, president at Toronto-based Realosophy Realty, said trouble in the pre-construction condo market could have wider consequences. ‘The idea, of course, is the second new housing sales and starts slow down, that ends up having a broader domino effect economically,’ he said. ‘We lose jobs in the construction industry and housing fuels a significant section of our economy. So, there’s massive economic risks. I think the bigger effect would just be a turn to pessimism, and when people become pessimistic, you end up potentially with some more distress, some panic selling, and potentially more downward pressure on prices as well,’ he added.”
The Evening Standard in the UK. “The number of buyers searching for homes in London has slumped dramatically since the mini-budget. One developer said the turmoil has ‘literally killed the housing market stone dead.’ Richard Donnell, director of research at Zoopla, said: ‘Demand for homes has fallen the most in outer areas and the commuter zones where house price growth has been strongest in the last two years as buyers search for space and push up the value of three-bed homes.’”
“Joe Garner, managing director of property developer NewPlace, said: ‘A house price crash in the capital is now a fait accompli. The only unknown is how hard and how fast the crash is. Only a few weeks ago, I was fairly confident the crash would be minimal, but then Liz Truss and Kwasi Kwarteng blew the mortgage, property and bond markets apart. We will now be lucky if we manage to get away with a 10 per cent drop in prices, and a fall of 20 per cent in London cannot be ruled out. Projected monthly repayments will have doubled for some first-time buyers in the past few weeks alone, making buying a property practically impossible.’”
The South China Morning Post. “Hong Kong’s serviced-apartment operators are taking friendly fire from an unlikely competitor, as hotels that have lost their quarantine income slash prices to fill empty rooms after local authorities relaxed their isolation rules for inbound travellers. The former quarantine hotels are hurting for guests because few business travellers and tourists have returned, leaving the market flooded with vacant rooms, said Derek Sun Wei-kong, managing director of Signature Homes.”
“‘Hotels, when they are not full, tend to lower the price and attract long-stay guests,’ he said. ‘And that’s basically taking market share from serviced apartments and residential.’ The government engaged some 26,000 hotel rooms – about 29 per cent of Hong Kong’s total inventory – up until September 26 when hotel quarantines were scrapped. ‘Suddenly, they have no need of it,’ he told the Post. ‘So the 26,000 rooms kind of flooded the market immediately.’”
“With no reopening of the border with mainland China in sight, 85 per cent of the previous mainland China market is non-existent, said William Cheng Kai-ming, chairman of Magnificent Hotel Investments. ‘Even with the introduction of a ‘0+0′ policy, which is not expected any time soon, bookings or occupancies may only improve by 15 or 20 per cent, as that is how much the non-mainland Chinese market used to contribute,’ Cheng said. ‘Unless the mainland Chinese border reopens completely, there are not going to be any meaningful bookings, and most hotels will be operating at heavy losses.’ Rents in Hong Kong have dropped by 5 to 10 per cent since 2018 amid the 2019 social unrest and Covid-19, Sun said.”