A report from Bankrate. “‘California will be a prime target for price declines,’ says Lawrence Yun, chief economist at the National Association of Realtors. ‘It’s almost assured that expensive areas will go through some price adjustment.’ The retreat in home values doesn’t surprise housing economists. Many have been questioning just how far prices could climb. The once-frothy tech hubs of Northern California and Seattle are enduring the largest pullbacks in home values, according to CoreLogic.”
From KTAR in Arizona. “‘The fourth quarter of any year, seasonally for Greater Phoenix, regardless of the market, is the best time for buyers, frankly, because many sellers want to sell before the end of the year. It tends to be the slowest time anyway,’ Tina Tamboer of the Cromford Report. ‘You’re looking at about 42% of sales through the MLS [Multiple Listing Service] are including seller-paid closing costs, and some areas of the Valley that 70-80% of sales will involve a concession by the seller.’”
“‘Sellers need to be very realistic about the timeframe it’s going take to sell their home, that many offers are going be coming in with requests for closing cost assistance, with requests for repairs,’ she said. ‘The days of getting offers over asking price, waiving appraisals, those days are well over now.’”
The Dallas Business Journal in Texas. “The average price of a new house in Dallas-Fort Worth declined by more than $10,000 last month, and the new home sales count fell slightly. New home prices also dropped in Austin and San Antonio last month. DFW homebuilders are responding to sharply higher interest rates by offering incentives to buyers and higher commissions and bonuses for real estate agents, said Ben Caballero, CEO of HomesUSA.com. ‘With inventory increasing, and the pace of new home sales stabilizing, Dallas builders are implementing multiple strategies to avoid price reductions,’ Caballero said in the latest report.”
“Dallas-Fort Worth active new home sale listings reported to the Multiple Listing Services increased last month, according to HomesUSA. In September, the three-month moving average of active new home listings in DFW was 6,249 compared to 5,581 in August. In addition to DFW, the Houston, Austin and San Antonio metro areas also reported an increase in new home sales inventory last month.”
Nevada Public Radio. “Las Vegas Realtors reports the median home price in Southern Nevada sits around $450,000. That’s down about $30,000 compared to May. And at the end of September, more than 10,000 homes, condos and townhomes were listed for sale without any sort of offer. Jon Gedde is the CEO of SimpliFi Mortgage and serves as chair of the Nevada Mortgage Lenders Association: ‘Interest rates have been very low for quite some time. And as the pandemic came and reared its ugly head, part of the strategy of the government was to put some additional capital into the market to make sure that the economy wouldn’t crash. One of the ways that they did that was buying mortgage-backed securities, which drove rates from the high … 4% range down into the low threes, and sometimes even into the twos. Now we’re in a very different economic situation, where there’s too much capital in the market, and prices have been increasing across the board and all sectors. The government needs to slow things down a bit, and the way they do that is by raising interest rates.’”
Boston.com in Massachusetts. “Looking at the town-by-town numbers, the year-over-year numbers for the Arlington single-family home market point to a downturn, but don’t be fooled. Sales were down 30.6% year over year, and the median sale price fell from $999,000 to $845,000 from September 2021 to September 2022.”
KUTV in Utah. “New numbers show slumping home sales along the Wasatch Front as mortgage rates keep rising. According to new data from the Salt Lake Board of Realtors, home sales in Salt Lake County fell 31 percent in September compared to the year before. ‘Mortgage rates are sinking home sales,’ said Dave Anderton, spokesperson for the Salt Lake Board of Realtors.”
From NBC News. “The businessman accused of swindling people out of their life savings by promising to build them tiny homes and not delivering is now the target of a police investigation. Matt Sowash, founder of the Colorado-based nonprofit Holy Ground Tiny Houses, has also filed for bankruptcy, court records revealed Wednesday. A convicted felon who previously served two years in prison for bilking investors in unrelated ventures, Sowash made the move to protect his assets just a month after he suggested in an interview with NBC News that he might not declare bankruptcy ‘because I can’t sit back and watch all those people lose homes.’”
“But Sowash sang a different tune in an Oct. 7 bankruptcy filing in Denver and in an Oct. 14 update that he sent to his customers. ‘This has really been a week of change,’ Sowash wrote. ‘I first want to apologize for this situation. Unfortunately, filing for Chapter 11 is the only way I can make sure the business is safe and that we can live up to our obligation of making sure everyone gets their money back.’”
“Customer Lori Birckhead, who runs the By Faith Farm in Tennessee with her husband, where they grow fresh vegetables for the needy. ‘The thing that hurts the most is, yes, we talked a lot about faith,’ she said of Sowash. ‘Part of why I was purchasing from him was because of what I heard from him. He came across as a godly person.’ Birckhead said she wired $46,504 to Sowash in April for an 8-foot-by-28 foot home that she was going to put on their land. She said she was told it would be delivered in July. ‘But here we are, and there’s no home,’ she said.”
WFTV in Florida. “Two families in Brevard County claim they paid for new roofs and then faced foreclosure threats because the roofing company didn’t pay its bills. A Florida law allows suppliers not paid by contractors to place liens against homeowners, who are then forced to pay twice or possibly lose their homes. ‘This is the new roof. It’s so beautiful,’ Pam Bender said. She’s happy with the way her roof looks but feels double-crossed by the contractor that installed it.”
“Bender says she paid Ben Kee Construction a total of $34,000 in full. Then months later, she received a notice. The roofing supplier had gone to court and placed a construction lien against her house because it had not been paid for materials used on her home. Bender said she questioned Ben Kee Construction and heard, ‘No, no, no, don’t worry about that. Don’t worry about that. We’ve got this covered.’ Two weeks later, she got a letter from the supplier informing her that unless she paid $16,000 for materials a second time, she could face foreclosure.”
From Bisnow. “Hundreds of shopping malls across the country require substantial investment to stay alive in today’s market, but disagreements over how much the properties are worth — even among professional appraisers — have left many of them sitting stagnant. ‘It’s a real Catch-22 happening across the country,’ said Trademark Property Co. CEO Terry Montesi, whose firm has completed multiple mall redevelopment projects. ‘Nobody’s selling anything, so there’s no comps, and appraisers just leave the values where they were, even though everybody knows the reason nobody’s selling anything is there’s no liquidity, they’re not worth hardly anything,’ Montesi said. ‘Appraisers aren’t making a guess that a $300M mall is now worth $100M, even though everybody knows that.’”
The Deep Dive. “A recent investigation by CBC Marketplace uncovered a ring of real estate agents, mortgage brokers, and even bank employees complicit in mortgage fraud, whom are raking in astounding amounts in fees from naive new Canadians. Although all of the agents acknowledged the couple would be disqualified from a mortgage, six of them said they are willing to create counterfeit documents on their behalf and know brokers that would submit the fraudulent documents to a bank.”
“‘You know, by books, you will not qualify,’ one agent was caught on camera saying. ‘They will do some documentation showing that you guys are making more and they will get you what you want. But they cannot openly say it out in public because that’s not true,’the agent continued, referring to connections they have that are willing to facilitate the process. ‘They will make a T4, they will make like she is on the payroll, they will use any company’s payroll and put their name onto that, right,’ another agent said.”
The Financial Post. “The buying and selling frenzy that drove Canada’s luxury real estate market to new heights during the pandemic continued to cool over the summer. Sales and listings of homes priced above $1 million fell across the country in the third quarter of 2022, as both buyers and sellers sat on the sidelines amid a weakening economy, bringing the market ‘back to reality,’ according to Sotheby’s International Realty Canada’s latest luxury real estate report.”
“‘Canada’s conventional and luxury real estate markets are undergoing a long-awaited transition after an era of over exuberance during the pandemic, particularly in those regions that saw the most acceleration over the past two years,’ said Don Kottick, chief executive of Sotheby’s.”
The Telegraph. “Demand for new houses fell sharply in the wake of the mini-Budget as would-be buyers adjust to a world of permanently higher interest rates, one of Britain’s top developers has said. Jason Honeyman, chief executive of the house builder Bellway, said that market turmoil following the botched tax cuts had delivered a ‘shock to the system’ and sent new home reservations at his company tumbling by 40pc in the following three weeks. Mr Honeyman said: ‘I think everyone has to get used to the fact that the era of low interest rates of one or two per cent is over.’”