It’s Friday desk clearing time for this blogger. “In Orlando, 29% of homes on the market reduced their prices in October, up from 16% the same time a year ago. Real estate agent Kimberly Ann Zeidner says Zeidner says she’s trying to talk her investor homeowner into knocking $20,000 off its price, currently in the $300,000 range. Zeidner says part of the issue is expectations. Sellers are still asking for about the same amount as their neighbors were getting earlier this year, but those prices aren’t reflective of what people are willing or perhaps even capable to pay. ‘You’re using bad [comparables],’ she said. Zeidner said buyers ‘want something turn key and they want it below asking.’ That means sellers have to make sure their house is ready to show and priced ready to take a cut.”
“‘Stuck. That’s how realtors describe this market. Sellers are stuck in the prices of the past and buyers are stuck with the fear of what the future may hold,’ Boulder-area realtor Kelly Moye said. ‘Sellers are learning to price to 2021 numbers and buyers are learning to leverage motivated sellers by requesting concessions to buy down their interest rate.’”
“Even after all these aggressive price cuts, iBuyers still have a tremendous amount of inventory to offload in bubbly markets. In Phoenix alone, Parcl Labs estimates iBuyers still own around $1 billion worth of units. ‘Their [iBuyers] sales transactions alone accounted for nearly 10% of all Phoenix sales activity in September. As more pressure builds for them to exit their positions they will likely become more aggressive in their pricing, this will continue a downward spiral until prices reach a point where demand enters to stabilize it,’ Jason Lewris, co-founder tells Fortune. ‘All of the conditions are there for a crash [in Phoenix].’”
“Do those ‘for sale’ signs in your neighborhood seem to be up for longer than usual? It’s not just your imagination: sales prices might still be creeping up in many areas, but the Portland metro area real estate market is slowing down. Lake Oswego/West Linn: These southern suburbs are still home to metro area’s highest median sales price, clocking in at $795,500 in October 2022, though that’s well down from their July median sales price of $913,600.”
“Southern Nevada house prices resumed their downward slide last month. The median sales price of previously owned single-family homes — the bulk of the market — was $440,000 in October. House prices have now dropped by more than $40,000 from the record-high of $482,000 in May. Further underscoring the market’s dramatic change from last year’s buying spree, sales totals have plunged from 2021 levels and available inventory has skyrocketed. Also, 7,906 houses were on the market without offers at the end of October, up 140.5 percent year-over-year, according to Las Vegas Realtors.”
“Higher mortgage rates have ‘shrunk the buyer pool,’ which has led to increased inventory and, ultimately, lower sales prices, Las Vegas Realtors President Brandon Roberts told the Review-Journal. During the pandemic’s sales frenzy, buyers often had to ‘settle for whatever they could get,’ he noted. But the market changed quickly this year as interest rates marched higher. ‘It was almost overnight,’ he said.”
“After two years of intense competition and skyrocketing prices, the market in suburban Placer County has cooled. The trend largely mirrors the rest of the Sacramento region and Northern California, where prices and sales began to dip in May. Sacramento real estate market appraiser Ryan Lundquist said it’s a mix of rising mortgage rates, lower median prices and a drop in sales volume. ‘It’s made the market more challenging, and (buyers) have gained more power because it’s more difficult to afford and sellers are having a harder time selling,’ Lundquist said.”
“The median price in the region dropped an average of 2.5% every month for the last five months, according to Lundquist’s data. The median price dropped 12.4% in Placer from May to October, the steepest decline in the Sacramento region, the data show. What’s more, nearly 56% of the 525 active listings on the Placer County market last week had a price reduction, the highest percentage in the four-county region, according to Lundquist. ‘Buyers can command credits and price reductions so that’s the good news,’ Lundquist said. The median price for a home in the four-county Sacramento region stood at $550,000 in October, exactly what it was the year before, according to Lundquist.”
“The housing market has returned to earth. Home sellers can’t just name a price and expect buyers to pay; meanwhile over a trillion dollars in wealth in the form of home equity has evaporated. A whopping $1.37 trillion in mortgage holder equity vanished in the third quarter, thanks to falling homeprices, according to calculations by Blackknight. It’s the sharpest single-quarter decline, by dollar value, since 2000. On a percentage basis, it’s the steepest drop since 2009. The biggest drops in equity are in San Jose (24%), Seattle (21%) and San Francisco (20%). California accounted for more than half of the national decline in equity.”
“Sales of homes and prices continued to drop in Langley in October as the frenzy of house buying that hit during the pandemic continued to deflate through the fall. Some sellers, however, are still listing their properties at prices higher than the new normal, and therefore, they aren’t getting offers. ‘I don’t think it’s set in enough to people that the party’s over for super-high prices,’ said Langley realtor Alex Maldeis.”
“In the Greater Vancouver region, home sales recorded on the MLS system are predicted to finish the year at 30,000 units before slowing to 26,000 units in 2023 as the full impact of higher mortgage rates is felt, said the BCREA. In the Lower Mainland specifically, prices are currently down roughly 9 per cent from their peak in February, according to the BCREA. The report also predicts that unemployment will rise from 4.9 per cent at the end of 2022 to almost 6 per cent in 2023. When unemployment goes up, there are more listings seen in the market, says BCREA Chief Economist Brendon Ogmundson. ‘When we have a negative shock to the economy that causes a rise in unemployment, you tend to see an increase in things like listings,’ he said. ‘People unfortunately lose their jobs and are forced to sell, resulting in that uptick.’”
“In Melbourne, Marshall White director John Bongiorno said because buyers are mindful the price of their property will fall, they are saying they are in no hurry to purchase. ‘It is one of the catchcries you hear in the marketplace – buyers aren’t in a hurry to buy unless they find the right property at the right price,’ Bongiorno said. ‘What we’re seeing more of now is vendors starting to adjust – vendors coming around and saying, ‘I realise that it’s not the price that I probably would have gotten last year,’ but they’re accepting of the adjustment to the market.’”
“Other buyers are showing signs of bargain hunting, such as the four bidders at a property quoted at $1.25 million to $1.35 million buyers’ advocate Jarrod McCabe attended this weekend. It opened at $1.2 million and passed in at the bottom of the quote range.’To go to an auction and only bid below the quote price, you’re highly unlikely to buy property,’ he said.”
“The bonds of Indonesian property companies are slumping, adding to signs of property debt distress that’s been deepening in China, South Korea and Vietnam. Agung Podomoro’s 2024 dollar bond extended declines this week to 6.7 cents, which would be the worst such fall since July 2021. That brings the notes to a record low of 37 cents on the dollar, Bloomberg-compiled data show. Other signs of strains have also been cropping up. On Wednesday, builder PT Kawasan Industri Jababeka was downgraded further into junk territory by Fitch Ratings, which said it believed that a recent debt exchange offer was conducted to avoid a default. The mounting strains come as property firms in more countries grapple with slower sales and higher borrowing costs.”
“Rising interest rates around the world are exposing risks that have accumulated in property markets, juiced by cheap funding during the pandemic. China has been grappling with a property debt crisis as developer defaults worsen to a record. In Vietnam, such companies are struggling to access capital and potential home buyers face tightening credit in the wake of a government crackdown on bond sales.”
“With the way liquidity has been plunging in Vietnam’s property market, it could experience a recession next year, says Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association (HoREA). ‘A number of property companies are facing the risk of falling liquidity and might have to make painful decisions to survive,’ he told VnExpress. With bank’s credit quotas full and tighter controls over the bond market, property developers are ‘hungry’ for capital and must borrow from unofficial lenders at high interest rate (up to 40-50% of contract value), which means future projects carry great risks.”
“Unsold inventory of 45 major property developers in the first nine months was valued at VND273.37 trillion, accounting for more than half of their combined asset value. This is a risk as many unsold inventories are at unfinished projects and policies are needed to help untie the legal knot at these locations, he added.”
“From the nine per cent year-on-year growth for more than four decades to less than three per cent now, China braces for an unprecedented slowdown. The 2022 World Bank GDP growth projection for China is 2.8 per cent. The average growth rate data for its Asia-Pacific neighbours is 5.3 per cent. Thus, China is estimated to grow at half the rate than its neighbours. Why? While most economies suffer due to global factors, the Chinese slowdown is largely caused by its own acts of commission.”
“The housing sector accounts for a quarter of the Chinese GDP. The failure of Evergrande Group, China’s second-largest housing firm, to meet offshore debt obligations precipitated the housing crisis. Developers abandoned semi-finished buildings, founders sold their stakes, exited the groups, forcing homebuyers not to pay the mortgage. Housing loan default may lead to a crisis in banking as banks lent $7.5 trillion or a quarter of all bank loans to housing. The housing bubble wiped out most gains of the hard-working Chinese middle class.”