A report from The Chronicle in Washington. “From October to November, home prices fell 10.54% in Lewis County, dropping from $427,000 in October to $382,000 in November, compared to a monthly decrease of 3.63% in Pacific County, 5.62% in Cowlitz County and 6.99% in Thurston County. ‘So basically all the gains for the year have been wiped out but we’re still higher than the average we were at last year by about $13,000,’ said Eren Millam, a Lewis County-based realtor. ‘For everyone who thinks there’s a price crash coming, these numbers are showing everything is down 30% to 40%, but price is the one thing that’s still up. Over the last eight months, the average price has been around $430,000. I do believe that is our new baseline (in Lewis County). We’re not going back to our average of $140,000 like it was when I first got into real estate.’”
“According to Northwest MLS, the median home price statewide rose 0.88% from November 2021 to November 2022, increasing from $570,000 to $575,000. From October to November home prices statewide fell slightly from $595,000 to $575,000, a decline of 3.36%. During that time, the number of active listings in Washington more than doubled, rising 165% from 4,621 listings in November 2021 to 12,245 in November 2022. In Lewis County, the number of active listings for November stood at 274, up 107.58% from 132 listings in November 2021.”
The Islander News in Florida. “Fifteen residential properties, 14 in Brickell, were recorded as sold during the period of December 5-9. Each property on this list was sold for under the asking price, meaning that Key Biscayne and Brickell are solidly ensconced in the housing market correction happening across the US. $1,520,000. 2 bed/2 bath/1,523 square feet. 1425 Brickell Ave., Apt. 63A, Miami, FL 33131. This Four Seasons Brickell two-bedroom with direct views of Biscayne Bay was listed in April for $2 million.”
Bisnow Houston in Texas. “Just 10 months ago, manufactured housing couldn’t be cranked out fast enough to meet the demand of people looking for affordable homeownership. Now, business activity in the sector has slipped for the eighth consecutive month amid rising interest rates. ‘Supply ramped up and probably got past demand there for a little bit,’ said Rob Ripperda, vice president of operations for the Texas Manufactured Housing Association. ‘Production ramped up past the point of those order flows. We’ve seen a pullback of the manufacturers saying, ‘All right, we’re going to have to give the retailers time to clear some of this inventory.’”
The Dallas Morning News. “Texas added 33,600 jobs in November, the second-smallest monthly gain in over a year. But evidence of a slowdown is mounting after Friday’s release of new and revised job numbers. Texas’ construction industry lost 3,900 jobs last month. Statewide, construction has lost employment for four straight months and for five of the past six. Building permits issued for single-family homes in Texas have been falling since summer, and were 27% lower in October compared with a year earlier.”
“‘Builders have been working off their backlogs, and as their housing units are completed, some people are starting to lose their jobs,’ said Adam Perdue, an economist with the Texas Real Estate Research Center at Texas A&M University. ‘We know that higher interest rates have hit the real estate industry particularly hard.’”
Arlington Now in Virginia. “A project to redevelop the Key Bridge Marriott building appears to have stalled with no indication of picking back up. That may be related to signs of financial distress for the property owner and developer, Woodridge Capital Partners. The Arlington County Board approved the project at 1401 Langston Blvd in Rosslyn — on a prominent plot of land overlooking the river and parts of D.C. — on March 24, 2020. The applicant, Woodridge affiliate KBLH, LLC, proposed to partially demolish and renovate the existing hotel and construct two new residential buildings: one with 151 condo units and one with 300 apartments.”
“Six months after the Marriott shuttered the hotel in July 2021, the Washington Business Journal noted no signs of progress on the project. ARLnow checked permit records and found only one new permit has been filed since, back in February 2022. Meanwhile, a search of property records indicates Woodridge is behind on its 2022 real estate taxes, owing $426,488, which was due in October. Evidence of a worsening financial situation for Woodridge is stronger on the West Coast. In Los Angeles, where the company is based.”
“Woodridge finished the renovated Century Plaza hotel in the middle of the pandemic and the condo towers last summer, as L.A.’s housing market began to falter. Now, an affiliate of Woodridge called Next Century Partners is set to lose its stake in the project via a foreclosure auction scheduled for Dec. 14, commercial real estate data group CoStar reported. Farther north, a ritzy hotel in San Francisco’s Nob Hill neighborhood, owned by Woodridge, closed after the company defaulted on a $56 million loan from Deutsche Bank. ‘The only upcoming groundbreaking Woodridge will be involved on is one that will find it beneath a patch of clover,’ a reader quipped in a tip, suggesting that the project may need to change hands to move forward. ‘Next developer please!’”
The New York Times on California. “There was a time three years ago when a walk through downtown San Francisco was a picture of what it meant for a city to be economically successful. Today San Francisco has what is perhaps the most deserted major downtown in America. In any given week, office buildings are at about 40% of their pre-pandemic occupancy, and the vacancy rate has jumped to 24% from 5% since 2019. All of this was rooted in the cost of housing, which had been expensive for decades but had morphed into a disaster.”
“‘Imagine a forest where an entire species suddenly disappears,’ said Tracy Hadden Loh, a fellow at the Brookings Institution who studies urban real estate. ‘It disrupts the whole ecosystem and produces a lot of chaos. The same thing is happening in downtowns.’”
From Market Watch. “The office sector has been the biggest drag on real-estate investment trusts in 2022, which is shaping up to be their second-worst year on record, according to Morgan Stanley’s REIT outlook. Total returns were pegged at nearly -37% (see chart) on the year through Dec. 9, ranking office as the biggest drag on REITs. Overall, REITs were headed for a roughly -22% total return, on pace for the worst year after 2008, according to the Morgan Stanley team.”
“REITs invest in all types of real estate, from hotels to office towers to industrial lots, and own an estimated $4.5 trillion in assets across the U.S., according to data from the National Association of REITs. The Dow Jones Equity REIT Index was down 24.7% on the year through Friday. Distressed commercial-property sales have been relatively few this year but could tick up in 2023, when billions of dollars in loans come due and landlords face much higher interest rates and likely lower property values. In another sign of potential stress to come, some $162 billion of maturing loans in commercial-mortgage bond deals come due in 2023, the most in the next decade, according to CRED iQ, which tracks property data.”
The Globe and Mail. “Couples grappling with the fraught decisions that come with separation and divorce are feeling an added burden this year: The downturn in Canada’s real estate market is causing more clashes when it comes to dividing the family home. Alyssa Bach, an associate with the Toronto-based family law firm of Shulman & Partners LLP is accustomed to dealing with distressed clients, but she has seen a noticeable increase in conflict since sales and prices began to slide in the housing market.”
“Some of the thorny issues that couples need to navigate include the timing of a sale and the all-important asking price, Ms. Bach says. She has encountered spouses who dragged their heels on listing a property for sale, only to face a host of new problems. ‘When people were looking to sell at the peak, the decision got put off,’ says Ms. Bach. ‘Now they’re stuck in a different market.’”
Bayshore Broadcasting in Canada. “Home prices and sales activity fell further in Grey Bruce in November as the housing market downturn continued. Home prices are down around 19 per cent since spring. RAGBOS reported in April the average was just over $744,000. RAGBOS explains active listings at the end of November 2022 are more than 159 per cent higher than last year and at their highest level in more than five years for the month, with 944 residential units available for sale. This as 283 new listings hit the market, the most in November in more than five years. RAGBOS says months of inventory numbered 7.4 at the end of November, up from 1.5 months recorded in the same month last year.”
The Korea Times. “Korea’s housing market is feared to be heading for a hard landing as multiple indicators show a steep downturn approaching. Home prices have continued on a downward spiral, while transactions keep falling and the number of unsold new apartments is rising. What is more concerning is that home prices in the nation have dropped more sharply than most other countries in the Asia-Pacific region in the midst of high interest rates, price misalignment and other downside risks in the region.”
“In its latest report, the International Monetary Fund (IMF) has shown that housing prices in Korea fell about 18 percent between the fourth quarter of 2019 and the fourth quarter of 2021. The report also showed that Korea was only behind New Zealand and Australia, which saw a decline of about 35 percent and 23 percent, respectively, during the cited period. The decline rate turned out to be nearly 10 percent for the entire world and nearly 15 percent for advanced economies.”
“On Sunday, KB Kookmin Bank said the prices of apartments, the most common form of housing in Korea, already fell 1.63 percent in the January-November period. ‘The 1.63 percent fall is the fastest since 1998 when apartment prices plunged 13.56 percent,’ it said. Also on Sunday, the Real Estate Board said that apartment prices dropped 4.79 percent in the first 11 months of this year and that the annual decline rate may reach 7 percent.”
News.com.au in Australia. “The Block has come and gone from most people’s memories for another season, but a sad reality has set in for the year’s unluckiest contestants. Gold Coast couple Dylan and Jenny are the only team whose house remains unsold. Dylan Adams and Jenny Heath now say they may have to concede their home will sell well under its value. ‘When it [the house] was about to go for $4.1m we were screaming ‘No, no, no’ at the TV because that’s not what you want [a $20,000 profit],’ Jenny told Newscorp on auction day.”
“Now this week Jenny has come out and said it was ‘crazy’ that their house ‘is worth so much more than what it will go for’, according to Daily Mail. ‘We’re still in the same position as when we left The Block,’ Dylan told Nine this week. ‘We did have a few people keen a few weeks ago, but we’ve heard nothing since then,’ Jenny said. ‘Honestly it’s crazy that it’s still on the market. We just don’t know whether we’re going to make nothing, or if we could make $10,000 or $100,000,’ Jenny said. The highest bid that Jenny and Dylan got on the five-bedroom, three-bathroom house on auction day was $4,075,000, just below the reserve price of $4,080,000.”
From Business Insider. “Tadeh Tarverdian, a customer of FTX who had $10,000 in his account when the exchange collapsed last month, said news of the Sam Bankman-Fried’s arrest made him more anxious about getting his money back. He worries the arrest could delay the process of returning customer funds. The money represents around a decade’s worth of savings, and would have helped him fund his attendance to medical school. ‘It really wouldn’t change my life or anyone’s life if he goes to jail or prison. Maybe some people do get a sense of closure, but they’re still going to lose their funds,’ Tarverdian said.”
“Evan Luthra, an entrepreneur who says he lost $2 million when the exchange collapsed, also doesn’t find comfort in Bankman-Fried’s arrest. He’s already written off his investment, and says he’s not convinced Bankman-Fried will be convicted, or receive the proper punishment. Tarverdian said he wanted to see Bankman-Fried take accountability for the collapse, while Luthra said Bankman-Fried’s public apologies made him angry.”
“‘It really pisses me off that he can go around getting … respect from the New York Times to be put on stage,’ he said, referring to Bankman-Fried’s interview at the New York Times DealBook conference a few weeks after the exchange filed for bankruptcy. ‘He painted the story. He knew from the beginning what he was doing and he really got us. I am very pissed off and it makes me feel very, very deceived.’”