It’s Friday desk clearing time for this blogger. “‘What we did during the pandemic, that wasn’t sustainable. That was an anomaly. That was not what’s normal,’ said Realtor Stephanie Grable. ‘Right now the bidding wars don’t exist.’ The median home sales price in Utah was $492,000 in October. Prices have fallen from the peak of $539,000 in May of this year. The number of homes available for sale in Utah jumped nearly 94% from this time last year to 12,237 active listings.”
“The days of buyers purchasing homes sight unseen and forgoing inspections seem to be over, area agents said. ‘There’s not multiple showings on the first day,’ said Kyle Kershner, the owner of Killington Pico Realty. ‘We’re not seeing those bidding wars.’ ‘It’s taken a little longer to sell and prices have leveled off,’ said Nathan Mastroeni, the broker at Four Seasons Sotheby’s International Realty in Killington. ‘The price acceleration has really calmed down. If you’re priced too high, you may be sitting.’”
“Brittney Pino doesn’t quite want to call Baton Rouge a buyer’s market for home sales. She doesn’t really want to call it a seller’s market, either. Instead, Pino — a 20-year real estate veteran — referred to it as a ‘freeze market’ because both buyers and sellers are nervous about rising interest rates. ‘Before, it was much easier where you could just kind of list the home and it would sell,’ Pino said with a laugh. ‘Now it won’t be so easy.’”
“It’s taking almost twice as long for homes to sell in South Florida. On a month-to-month basis, however, prices are slowly starting to moderate or decline across the area. For example in Palm Beach County, the median sale price of a home in July was $600,000, before decreasing to $565,000 in August. In September it reached $580,000, before decreasing to $570,000 in October. ‘I think what is happening is that sellers realized that if they need to sell, they have to reduce the price,’ added Patty DaSilva, broker with Green Realty Properties in Cooper City. ‘The buyers are slower to make a move. They have more to chose from now and they don’t need to move as fast.’”
“Clark County’s average home price continued to trend downward last month. Terry Wollam, managing broker at Wollam and Associates, said this downward trend is not surprising. ‘I think that there’s a sentiment from buyers that they’ve seen some drops in pricing and they’re hoping that those prices would continue to drop,’ Wollam said. ‘Statistically, it’s hard to reject that.’”
“California Association of Realtors data shows the typical price for single family homes across Southern California is about $743,000. That’s down about 8% from a peak in May. ‘If somebody actually put a 20% down payment and, one third of their income for housing costs, for Orange County for example, we’re looking at a household income of roughly about $278,000,’ said Oscar Wei, the deputy chief economist for the California Association of Realtors. Redfin found the annual salary needed to afford a typical mortgage in Anaheim, for example, would be more than $254,000. The typical annual household income is in Anaheim is about $77,000.”
“Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a net loss of $624 on each loan they originated in Q3 of 2022, down from a reported loss of $82 per loan in Q2 of 2022. ‘The average pre-tax net production income per loan reached its lowest level since the inception of MBA’s report in 2008, which is sobering news given that the third quarter is historically the strongest quarter of the year,’ said Marina Walsh, CMB, MBA’s VP of Industry Analysis. ‘The industry continues to struggle with a perfect storm of lower production volume and revenues and escalating production costs, which for the first time exceed $11,000 per loan. Companies are responding to tough market conditions by reducing excess capacity, including staff.’ Including all business lines (both production and servicing), 46 percent of the firms in the study posted pre-tax net financial profits in the third quarter, down from 57 percent in the second quarter.”
“Mortgage quotes for investment properties dropped 60 per cent in October from September, according to Victor Tran, a mortgage specialist. ‘Investor demand is definitely down,’ Mr. Tran says. One reason for the caution is that people are watching to see what the Bank of Canada does at its next rate setting confab on Dec. 7. Many investors are already seeing negative cash flow – meaning the rent they collect does not cover their mortgage payments, taxes and other expenses. Now they are worried that property prices will continue to decline. An investor who buys now with a 20-per-cent down payment risks seeing the price of the asset continue to slide until they have no equity at all, Mr. Tran points out. ‘There’s a very good chance they’ll be left with nothing.’”
“Sahil Jaggi, a broker with Re/Max Realtron Realty is watching to see if the trickle of properties for sale in the Toronto-area real estate market turns into a wave. He points out that builders have been hit by the high cost of construction in the past couple of years in addition to today’s rising interest rates. A builder who paid $1.5-million for a parcel of land and put $1-million into construction, for example, is likely trying to sell the newly finished house for $3-million or more to make a little bit of profit. Sales in that segment are very slow. ‘A lot of people who built luxury, expensive houses are being hurt the most. They’re probably going to have to sell for a loss.’”
“First-time buyers face being locked out of the market next year after Virgin Money became the latest bank to stop lending to borrowers with small deposits. The lender has ‘temporarily’ pulled all mortgages requiring a 5pc deposit and Help to Buy deals for new borrowers. Samuel Mather-Holgate, of mortgage broker Mather and Murray Financial, said 5pc was a ‘wafer thin layer of equity’ in a falling property market. He said: ‘I would expect to see the end of these types of mortgages for the next 12 months. Considering some economists think the worst-case scenario could be a fall in house prices of up to 30pc, I am surprised that 10pc deposit mortgages are still available.’”
“The Riksbank raised borrowing costs by 75 basis points and signaled more tightening is needed to tame inflation even as it predicted a worsening slump for Sweden’s economy. ‘This is a development we haven’t seen in living memory,’ central-bank governor, Stefan Ingves told reporters in Stockholm. ‘You probably have to go back to the early 1950s to find anything similar.’In what may be the most obvious real-economy effect of rate hiking, house prices have dropped by 14% from a peak earlier this year. Property values ‘will continue to fall in the coming years, to around the level prevailing prior to the pandemic,’ the Riksbank said. ‘There is a risk that the process of adapting will be more abrupt and that housing prices will fall more than is being assumed now.’”
“Nearly 150 suburbs have lost their $1 million property price tag as the real estate downturn takes hold across the country. New data from PropTrack found that 144 suburbs in Australia have been kicked out of the million-dollar property club since interest rates began rising in May, along with a crackdown on loans and the increasing cost of living crisis. The top 10 suburbs with the largest drops in price came from Brisbane, the NSW Central Coast (north of Sydney) and Canberra. However, the largest drop in value was just over 16 per cent, which means not all the gains from last year have been wiped out.”
“The market correction has been bad news for Stafford residents, in Brisbane’s north, with the median house price falling more there than anywhere else. Stafford’s 16.9 per cent drop saw properties in the area go from being worth a median of $1.127 million in May, to just $937,000 by October. That means those properties lost $191,000 worth of value. Other Brisbane areas that lost value included Upper Mount Gravatt and Salisbury both in the city’s south, losing $149,000 and $140,000 respectively. Nudgee in Brisbane’s north went from being worth $1,044,327 to $903,383, a 13.5 per cent drop.”
“Then in NSW, the Central Coast was named and shamed as the area rapidly losing value. Ettalong Beach, Umina Beach, Blackwall and Lisarow all made it on to the list. For Ettalong, it came second, as a result of shedding $190,000 worth of value in the past six months. The others lost $180,000, $159,000 and $153,000, respectively. Over in Canberra, two suburbs got an honourable mention for losing the most amount of money. Gowrie and Oxley went from being worth over $1 million down to $870,000 and $894,000 respectively. The former fell by 14.7 per cent while the latter dropped by 13.7 per cent.”
“New Zealand‘s house prices are forecast to fall more than previously thought this year and next with a peak-to-trough slump of 18% as aggressive interest rate hikes weaken an already-slowing housing market, a Reuters poll found. ‘The fall has been very orderly so far,’ said Sharon Zollner, chief economist at ANZ. ‘Even a 20% fall could be considered a soft landing. A hard landing would likely require an employment shock and forced sales, and we are not seeing any evidence to suggest this is happening en masse.’”
“Asked how much average house prices would fall from peak to trough, analysts who answered an additional question gave a median estimate of 18%, with forecasts in a 14%-23% range. ‘In percentage change terms, this sounds rather drastic, but it’s still only a partial unwinding of the COVID period run-up,’ Zollner said.