A report from the Boston Globe in Massachusetts. “For the two decades Erika Patino’s parents owned their modest two-family in Hyde Park, the house was a rock for them, their ticket to economic stability. As federal and state rental assistance programs dried up last year, the Patinos stopped receiving payments from their tenants, who were themselves struggling to make ends meet. Soon, they fell behind on their mortgage. Left with no other options, they sold the house in September. ‘My parents didn’t really have a choice,’ said Erika, who is 37. ‘They couldn’t pay the mortgage without the rent money after they retired, and they had no one to turn to for financial help.’”
“‘There are landlords in this state — particularly our mom-and-pop folks — that are finding themselves in a situation where their property is no longer paying for itself, or they are actually losing money,’ said Doug Quattrochi, executive director of the trade association MassLandlords. Beatriz Yañez Placencia, with her husband owns a three-decker in East Boston. Her tenants — both families she is close with — lost their jobs during the pandemic, and the rising cost of everyday goods means they are paying less and less of the agreed-upon rent. That in turn is hammering Placencia; she and her husband, who are both temporarily out of work due to medical issues, had to take a loan from a friend to keep up with the mortgage payments. ‘We are really struggling,’ she said in Spanish through a translator. ‘I don’t know what we will do.’”
From Candy’s Dirt. “We started the year with a market so hot we could barely write up listings — they’d sell by the second graf. Then the Federal Reserve raised interest rates and the market slowed in a fell swoop to get a grip on inflation. Texas did have more houses on the market in July than any time since late 2020 as home sales declined in the state’s major metros — especially Austin, ouch! Since the fall, sellers have had to make repairs and trim prices to entice buyers. The median sales price of a single-family North Texas home fell almost 9 percent from a record $435,000 in May and June to $396,500 in November.”
“We watch the real estate industry 24/7, which made our heads spin during the second half of the year. Lots of layoffs, mostly at the ‘disruptors.’ That includes OfferPad, Opendoor, Redfin, and Compass. The tech-driven, early-to-mid-2000s were the birthplace of the internet broker — brokerages who called themselves tech companies looking to provide consumers with one-stop, hassle-free online shopping for a home and maybe even replace the agent. OfferPad recently laid off more than 7 percent of its workforce, suffered losses of $8 million in Q3, and is posting anemic stock prices.”
“Compass’ stock has fallen 85 percent since going public last year and experienced two rounds of layoffs. The aggressive NYC-based brokerage from founder Robert Reffkin reached a market capitalization of $8 billion on its first day of trading April 1, 2021. Now the company is valued at just $1 billion following disappointing earnings, including a second-quarter report outlining how its losses have risen to $101 million.”
“It’s not just the disruptors: Ryan Gorman was pushed out as CEO of Coldwell Banker, a subsidiary of Anywhere Real Estate, whose stock has fallen nearly 60 percent this year despite turning a $55 million profit in Q3. Gorman made $3.5 million annually, and shareholders are liking that he won’t be replaced. The non-traditional brokerages that focus on revenue and pleasing shareholders rather than old-fashioned profits seem to be ailing.”
8 News Now in Nevada. “Omar Jones has lived in the neighborhood off of Pecos Road and Lake Mead Boulevard for 3 years and said people who are experiencing homelessness started moving into the back lot last year. ‘One time I got a call from my wife, and she was facetiming me and showing me the fire is up above the wall and at this point, you’re talking about a 12-foot fire that they started,’ Jones said. He is not the only one experiencing problems. For now, Jones said he feels stuck and is running out of options even after contacting his HOA and the property owner.”
“‘I don’t even know what to say right now, I just think we need help either from the community or the city of Las Vegas or if our jurisdiction is the city of North Las Vegas, I would like help from them,’ Jones added.”
“Gray Stojanovich became homeless in February 2021 after his home was foreclosed. He and his wife temporarily live in the middle of the lot and plan to move out soon. Stojanovich said many people experiencing homelessness suffer from mental health and substance issues. With nowhere to go, he said most people without housing stay put until they are kicked out. ‘I don’t know what to tell you, I’d be concerned too if I was a neighbor. I was a homeowner before,’ Stojanovich added.”
From WKRN. “As we head into 2023, the Nashville real estate market is in a much different position than it was last year. If you ask Greater Nashville Realtors’ 2022 President Steve Jolly what he thinks of Middle Tennesse’s housing market, he’ll tell you it’s still in solid shape. However, he warns challenges could lie ahead. ‘My biggest concern is inflation and whether the Fed can get that under control. If they can’t, we’re definitely going to see more interest rate rises, and that would be devastating to the market. It would bring home sales down to a screeching halt,’ Jolly said.”
“Jolly said 2022 turned up some major perks for buyers. ‘They don’t have to give up as many of the terms that they were giving up last year. They can have an inspection, they can have an appraisal. They can actually get some closing costs paid or possibly even get an interest rate buydown so it’s more affordable that first and second year,’ Jolly explained.”
The Real Deal on California. “Dreams for hundreds of housing units and other development projects in the Bay Area have given way to nightmares of dilapidated spaces filled with illegal dumping, homeless encampments and drug users. Vacant development sites have proliferated across the South of Market neighborhood in San Francisco. Apartments, condos, hotels and office space have all fallen by the wayside, failing to deliver an expected 16 million square feet of housing and office space in Central SoMa alone, the San Francisco Chronicle reported.”
“‘There were all these high hopes and now everything is stuck,’ SoMa resident Brian Wallace told the publication.”
KFMB in California. “San Diego’s homeless crisis is profoundly impacting both people living on the streets and the people living and working near unhoused individuals. For some people living in Downtown San Diego, the situation has gotten so bad – they want to leave the area and are willing to break their leases. Fred Altman is among the many San Diegans who call downtown home. He says he and his family are considering moving out due to issues he says comes with the homelessness crisis. ‘I’ve seen overdoses, I’ve seen stabbings… people dying on the sidewalk,’ said Altman.”
From Nerd Wallet. “John Burns Real Estate Consulting predicts that home prices will fall 20% to 22% from their peak in spring 2022, and Zonda, a real estate consulting firm, forecasts a 15% drop from the peak. These companies don’t expect the entirety of the declines to happen in 2023; prices may fall through 2024. Rick Palacios Jr., director of research for John Burns, noted that the median existing home price rose about 40% from spring 2020 to spring 2022. The way he sees it, a drop of 20% wouldn’t be surprising after such a swift run-up in prices. ‘We squeezed a decade of home price appreciation into two years,’ Palacios said.”
The Star Phoenix in Canada. “Higher interest rates are beginning to soften Saskatoon home sales, which have been strong since the middle of 2020. Interest rates may start to affect homeowners trying to renew mortgages , which could drive up inventory, said Norm Fisher, owner of Royal LePage Vidorra. ‘My concern is there are going to be people faced with having to sell their house when it comes to renewing their mortgage. That is potentially going to bring more inventory back on the market. In fact, a lot of people who are going to renew, they won’t even have the option of being able to shop around. They won’t qualify at the posted rate.’”
“Shawna MacDonald, a Saskatoon mortgage broker, is hearing from clients asking for advice. ‘A lot of my variable (rate) clients are really feeling the pinch,’ she said. ‘I’m fielding calls: does it make sense to lock in? What do we do?’ There are measures in place to help people stay in their homes, she added. For example, some lenders are extending amortizations from 20 to 30 years for clients with equity.”
“For those who are seeking a home in a tight price range, Fisher suggests looking for a home that is not move-in ready. ‘There’s property out there that has been sitting for a little while. You can actually get some dollars off . . . replace flooring and cabinets and get a decent house at a fair price.’”
From Globes. “In November the Central Bureau of Statistics reported a 25% fall in the purchase of new apartments compared with the second quarter, and a 40% fall from the third quarter of 2021. This trend will likely continue, and this has been the aim of the Bank of Israel, which has been raising interest rates in order to fight the cost of living in Israel, including housing prices.”
“The sales departments of real estate developers have been examining how to tempt buyers in the current situation. ‘I think that 2021 was not a relevant indication for today,’ explains Irit Hopper, the owner of InHouse Real Estate Management and Marketing, which is currently marketing new homes in five projects in Ashkelon, Modi’in, Rosh Ha’ayin and elsewhere. Hopper explains that 2021 was an exception in every possible way, and the comparison to this year in her eyes is a mistake. ‘In my opinion, the logical comparison should be to 2019 – before Covid – which was a relatively normal year, but with zero interest. In relation to it, we really see a slowdown, but definitely not stagnation.’”
“Eldar Real Estate and Marketing CEO Ronny Cohen, who is currently marketing 100 projects around Israel agrees and thinks that 2021 was an abnormal year in which 151,000 new and second-hand apartments were sold, while in a regular year the figure would be closer to 110,000. ‘If you look at the numbers for 2021, we see that there was a rise of about 40% in sales, and what we see now is a return to a sane market.’”
“‘We feel the fall and we’re experiencing it in the field in the past few months. Ultimately it is a return to a sane market. Although the reasons are a rise in interest rates and the harm to the purchasing power of the public, and there are other reasons, but it is a return to sanity and normality in the market.’”
“Nir Shmol, CEO of the Urban Renewal Co., which currently markets more than 15 projects nationwide that include about 2,000 housing units, believes that the slowdown in sales is felt more in the Tel Aviv area than in the rest of Israel and the reason for this is the tech crisis.”
“‘The housing market in Tel Aviv was driven by tech people. The tech sector, which was responsible for 40% of Israeli exports, has suffered a big blow in the last six months, and the value of many of the companies has been cut by more than 50%. As a result, tech employees who had options in the company and equity of several million shekels, as soon as the stock fell, these options were worth nothing and their equity disappeared.’”