A report from Click Orlando in Florida. “Orlando resident Jeriah Owens is searching to buy her second home. She told News 6 that as a single mom especially, it’s been a little frustrating with the up and down interest rates and the pricing on homes. ‘When I was searching two years ago, the same type of houses I’m looking at right now, they were like $250,000 – $300,000 — 2 years ago and now minimum they’re like $450,000 and they are the same type of houses.’ Owens said she knows it also depends on how much buyers are willing to spend right now. ‘If I go higher, of course, there are houses everywhere,’ Owens said. ‘I would say there are still a good amount of selections, just not affordable.’ In December of last year, the report showed the inventory for single-family homes was at 4,900, compared to a little more than 1,900 homes available in December 2021.”
The Orlando Sentinel in Florida. “Orlando’s hot housing market cooled in the second half of 2022, with sales and prices dropping and inventory rising. The median home price in metro Orlando in 2022 was $365,000, a record high for a year, according to the recap report by the Orlando Regional Realtor Association. Home prices hit a peak in June of $387,000 before falling to $353,200 in December. Lisa Hill, incoming president of the association says she wouldn’t be surprised if people who bought high in the last couple of years can’t get the same price when they try to sell. ‘A lot of those buyers were offering tens of thousands of dollars over list price,’ said Hill. ‘There probably will be people who take a loss because they came in heavy with cash.’”
Boston.com in Massachusetts. “The Greater Boston Association of Realtors reported Tuesday that sales in the region had fallen by a third year over year for single-family homes and condos. The sales total is the lowest for December in more than a decade, according to the report. ‘Compared to the torrid sales pace of the last two years, it was a much quieter December than we’re used to, as more buyers than normal chose to take a step back to evaluate the market this fall,’ said Alison Socha, GBAR president. ‘Among single-family homes, the median sales price declined 1.2 percent on an annual basis, from $749,000 in December 2021 to $740,000 last month,’ the GBAR found. ‘In the condominium market, prices fell even more, declining on an annual basis by 2.4 percent from a median selling price of $624,950 last December to $610,000 in December 2022.’”
Axios Des Moines in Iowa. “‘We’re entering a bit of a recovery phase right now,’ says broker Jen Stanbrough with Jen Stanbrough Real Estate. ‘We’re back to an even market — it’s not a seller’s market or a buyer’s market.’ Over the summer, Stanbrough recalls going into houses where there may have been 15 other people looking at a house or waiting on the doorstep. ‘I had to tell my clients, ‘If you want this house, you have to make an offer today,’ she says. ‘We saw a lot of bus remorse. We’re not seeing that now.’”
From Detroit Business. “‘A return to seasonality in the market contributed to the drop in home sales over last year. As we see a return to a more balanced market, buyers and sellers are able to negotiate, and sellers no longer have the solid upper hand they had the past couple of years,’ says Jeanette Schneider, president of RE/MAX of Southeastern Michigan.”
“The median sales price dropped from $263,875 to $257,975, or 2.2 percent, year-over-year. The price drop was more significant month-over-month, dropping from $271,685. The median price fell 17.2 percent in the city of Detroit, from $80,000 to $66,250. Oakland County fell from $320,000 to $300,000, or 6.3 percent. Wayne County fell from $170,000 to $162,000 — 4.7 percent — and Macomb County fell 2.4 percent from $225,500 to $220,000.”
Las Vegas Business Press. “It’s no secret that Southern Nevada’s real estate market in 2022 was a tale of two markets. The year started on a tear that was a powerful continuation of the pandemic-crazed market. Then, and not unexpectedly, the shift hit in late April, early May, and our market quickly became a balanced-to-buyer’s market from a strong seller’s market. For-sale inventory quadrupled while sales halved, ultimately impacting home prices and giving back the entire 11 percent appreciation realized through April. Buyers have come to accept higher (but still low) rates and sellers are recognizing the gravy train has stopped and the need for realistic pricing has taken its place.”
The Denton Record Chronicle in Texas. “A large round of year-end discounting by local home builders helped push pending sales to basically flat from a year ago. Those inventory discounts and promotions also helped push home prices lower. The median price of a home in the city of Denton fell $20,000 in December. That put local home prices down $55,000 (13.4%) from their summer peak. Denton home prices gave up nearly all their gains for 2022. Prices for December were up just 1.4% year-over-year.”
“There are many DFW buyers who purchased in the spring and summer of 2022 who are now sitting in homes that are worth less than they paid for them. It turns out that home prices can and do sometimes fall. They can fall rather precipitously when your central bank is forced to reverse decades of easy money policy. Once reality set in, the reaction function was sharp. Median percent of list in Denton went into a freefall during the last half of the year as sellers woke up to the reality that homes aren’t worth as much when interest rates double.”
“The reality is there are too many agents chasing clients. The inevitable purge and consolidation coming for the industry will ultimately be good for consumers. The pandemic boom and bust exposed how many agents were willing to ignore fiduciary duty to make a buck. As the Fed tightens policy and ends the era of free money, more levered speculators and unscrupulous behavior get exposed for what they always were. From crypto to real estate, the theme has been the same. If sunlight is a good disinfectant, real rates have a similar benefit.”
From Market Place. “‘Usually, San Francisco is so solid that you just know things are going to roll along,’ said Cynthia Cummins, principal agent with Kindred SF Homes. ‘Now, everything has changed.’ Cummins said median sale prices for single-family homes in San Francisco are similar to where they were at the beginning of 2022. But between then and now, there’s been a lot of movement. ‘Things went crazy in April and May, and then there was this sharp drop-off,’ she said.”
“Similarly, the number of buyers interested in property in the Lake Tahoe region has shrunk significantly, according to David Westall, an agent with Sierra Sotheby’s International Realty in Tahoe City, California. ‘There’s a lot of fear, uncertainty and doubt, which always created hesitation for buyers,’ he said.”
“‘It’s like a faucet was turned all the way to the right,’ said Mindy Palmer, an agent with Berkshire Hathaway Montana Properties, referring to the flow of people moving in over the past couple of years. ‘And right now, there’s a drip. Things are still happening, but it’s a real head turner — if not a head-spinner — for people,’ she said. With fewer buyers coming in, Palmer said there’s been a shift in power from sellers to buyers. ‘The sellers that were on the fence just a few months ago are shocked to find that they don’t have quite the same power that their predecessors did,’ she said.”
The Palm Springs Post in California. “While both home prices and sales in the Coachella Valley typically see a seasonal rise this time of year, analysts tracked another steady – and puzzling – decline last month. The median price of a detached home in the valley declined to $640,000, down almost 10% from the peak of $710,000 a few months ago. Palm Springs is the only valley city that saw a year-over-year price decrease, with the median home price now sitting at $1.14 million, compared to $1.19 million last year.”
“The reason for the decline in prices, the housing report says, is a little more complicated than an abundance of supply over demand. Instead, the change from a ‘premium market’ to a ‘discount market’ could account for much of the average price decline. For example, ‘homes which sold for 2% over list now sell for 2% under,’ the report said. ‘With no change in list price, this accounts for a 4% decline.’”
From Bloomberg. “Some of the biggest investors in US commercial real estate are looking to cash in before property values slide further. A group of property funds for institutional investors ended last year with $20 billion in withdrawal requests, the biggest waiting line since the Great Recession, according to IDR Investment Management. ‘It’s like the nightclub where everybody lines up to get in and then lines up to leave when it closes,’ John Murray, head of global private commercial real estate at Pacific Investment Management Co.”
Insauga in Canada. “One expert – Mississauga real estate mogul Sam McDadi – believes 2023 will be a much different year, and a challenging one at that. ‘This is the first time in a long time we’ve started seeing ‘power of sales’ because property prices have adjusted downward. We’ve seen [price drops] anywhere from 10 to 25% depending on location,’ said McDadi. A power of sale, different from a foreclosure, refers to a situation in which a homeowner defaults on their mortgage and the mortgage lender opts to possess and sell the house.”
“‘We tell a lot of buyers who were unfortunate when they bought during the bidding war frenzy during the first quarter: Don’t worry, the market will always come back, the GTA is resilient. But as long as you haven’t sold it, you haven’t accrued a loss.’ One notable example of a property selling at a major loss involved a Brampton home which traded in the first quarter of 2022 (the height of the market) for $2,650,000. Towards the end of 2022, the same property sold under power of sale for $1,850,000 – a stark difference of $800,000 within the span of six to eight months.”
From Reuters. “House prices in South Korea fell 1.98% in December from a month earlier, the fastest drop since data releases began in late 2003 and a seventh consecutive month of decline, according to data from the Korea Real Estate Board. That follows a 1.37% loss in November and marked a 4.68% decline for 2022, turning around from a 9.93% gain in 2021, the board said in a statement. House prices were falling sharply around the world as central banks have quickly raised interest rates to fight inflation, cooling the economy and pushing up mortgage rates.”
The New Zealand Herald. “It’s a home buyers’ bonanza but a grim time for sellers with house prices falling in almost every region and taking an especially big tumble in two major cities. New Real Estate Institute data showed sales plummeted 39 per cent year-on-year, and Auckland house prices fell 18 per cent to a median $1.05 million. The median sale price has decreased nationally over the year by 12.2 per cent to $790,000. The median price in Wellington last month was $790,000, down 20.2 per cent.”
“ANZ suggested New Zealand was two-thirds of the way through the downturn. ‘Prices are now around 15 per cent below their November 2021 peak,’ ANZ economists said. ‘We maintain our forecast for a peak-to-trough decline of 22 per cent.’ Increases in borrowing rates to date will take some time to work their way through the housing market, Westpac added. ‘We’re still seeing a drop-off in new listings, as property owners choose to hold back rather than sell at a loss. That tends to slow the process of finding the new equilibrium price level, and suggests that we’ll see further falls in sale prices over the coming months.’”