A report from the Arizona Republic. “As interest rates have risen nationally, housing sales prices have fallen about 13% in the Phoenix metro since the peak in May 2022, said Danny Court, partner and senior economist with Elliott D. Pollack & Co. However, even if prices fall another 10 to 15%, they will still be about where prices were in 2021. ‘It will be nothing as severe as 2007 to 2009,’ Court said. However, he said, Phoenix has lost one of the major drivers that economic developers had touted for years: housing affordability. In December 2022, only 12.7% of houses listed on the market in the Phoenix area were priced under $300,000. At the end of 2019, 37% of houses were listed for under $300,000. ‘We were typically more affordable than the U.S. as a whole,’ he said. ‘That is not the case anymore.’”
From NBC 4 i. “Columbus Realtors’ Central Ohio Housing Report for December found the average sales price for a home was $318,581, dropping only $650 from $319,231 in November. Still, the shift represents a six-month decrease since the market hit 2022’s peak in June at $354,380. 2022 President of Columbus Realtors Sue Van Woerkom said homes are spending an average of 29 days on the market, an increase from 18 days in December 2021. In addition, inventory rose 36% compared to last year. ‘Despite this being a seller’s market, buyers do have their pick right now,’ Van Woerkom said.”
From WSJM. “The housing market in southwest Michigan continued to trend down in December. The Southwestern Michigan Association of Realtors says the number of houses sold was down 44% compared to December of 2021. Year-to-date sales in 2022 fell 16% from the record-setting number of sales in 2021. Looking ahead, the realtors association says 2023 may be the year of change. Executive Alan Jeffries says it looks like the market will continue correcting itself when it comes to prices. He says the market is going through a ‘denial stage’ due to interest rates, but should adjust in the first half of the year. The average selling price in December was $299,000, down 21% from $377,000 in December of 2021.”
KOMU in Missouri. “Across the last two years, realtor Ashley Pederson says she has seen the housing market go from hot to lukewarm. ‘2021 was crazy, you put a home on the market and get 20 offers,’ Pederson said. ‘We still have a lot of buyers. Definitely interest rates is what has caused it to not have 20 offers on a home.’ Blake Werner, the president of the Jefferson City Area Board of Realtors, said while it has been a fast game, buyers should be able to wait longer before putting in an offer this year. ‘I predict the prices are not going to continue, we’re already at a peak,’ Werner said. ‘So I don’t believe we’ll have an increase in value this coming year.’”
CBS New York. “Navy wife Doslyn Rodrigues has lived all over the world, but all she wants now is a home in Brooklyn for her and her two boys while her husband is stationed in Maryland and she attends law school. Rodrigues is already approved for a $1 million loan and says her wish list isn’t long, and still, she can’t find a home to buy. ‘I saw another house on East 87th, too. The seller was selling the house for $1,050,000, then they raised the price to $1,200,000,’ she said. ‘It occurred to me that this is just, like, a game, too, on the seller’s part. When I offered the million dollars, they came back and said, oh, can you add $150,000 more onto that? … I am just frustrated.’”
“Steven James, president of Berkshire Hathaway Home Services, says the current housing market is crippling under the weight of low inventory, high demand and many unmet expectations. ‘If you’re a seller who really wants to sell … now you have to wrap your mind around the idea you’re not going to get the price that you thought it was worth, and you’re not sure exactly what you’re going to get. And the buyer is wanting to do it because they have this pent-up demand to do it, and all of a sudden the interest rates have basically doubled in the span of a year,’ he said.”
The Miami Herald in Florida. “Residents and business owners in Miami’s Little Haiti neighborhood are now confronting a new source of worry and uncertainty: The purchase by developers of a significant slice of properties along its main commercial street. Some 20 properties, including the iconic Churchill’s Pub live music venue that’s been closed since March 2020 and commercial buildings housing neighborhood stalwarts like Sonny Sounds, changed hands in one fell swoop over the holidays. It was a massive foreclosure auction of longtime Little Haiti landlord Mallory Kauderer’s holdings along Northeast Second Avenue.”
“The virtual cessation of activities at the center means remaining foot traffic along that stretch of Second Avenue, which came mostly from tourists and crowds attending regular concerts and events, has evaporated — and so has business, said Jean-Marie ‘Jan Mapou’ Denis, a poet and playwright and longtime owner of Libreri Mapou, a bookstore and cultural center. ‘It’s a cemetery around here,’ Mapou said. ‘Things are really bad. You don’t see people anymore, the foot traffic we used to have. Everybody’s talking about it. Little Haiti’s going down the drain. If they kill the cultural center, that’s it for Little Haiti. That’s all that we have left.’”
The Gazette Journal in Nevada. “Reno-based Clear Capital executed another round of layoffs today, with the real estate appraisal and technology firm blaming a challenging market. The layoffs involve 250 employees or about a quarter of the company’s staff. The restructuring will impact Clear Capital’s global workforce, including employees in Reno. ‘We are seeing a seismic shift in the housing market, but more specifically in the appraisal and valuation industry,’ said Clear Capital CEO Duane Andrews. For Clear Capital, the decision marks the second round of layoffs in just three months.”
From KATU Portland. “Employment economists expect a mild recession in Oregon about halfway through the year. Gail Krumenauer, the state employment economist with the Oregon Employment Department said analysts are predicting about 24,000 job losses. Right now, companies like Quail Homes said things are slow. Owner Jon Girod said he noticed a change over the last few months. ‘Before, it was very difficult to get any workers on your jobs because they’re just overwhelmed with work. Now, we’re actually seeing we’re probably averaging two to four calls a day for people looking for work,’ Girod said.”
The Orange County Register in California. “Homebuying in Los Angeles and Orange counties tumbled 46% over 12 months to the slowest December on record. Sales totaled 5,772 in the two counties — down 4,833 from December 2021, according to CoreLogic. Just how slow is the market? It was the No. 1 slowest-selling December in records dating to 1988. It was the fourth-smallest sales total for any month. The year’s sales drop ranked eighth-largest over 35 years. Plus, it was 50% below December’s average sales since 1988.”
“In Los Angeles County, the $775,000 median was down 1.1% in a month and 3% lower in a year. It’s also 10% off the $865,000 record high set in April 2022. Orange County’s $933,500 median was down 2.8% in a month and 1% lower in a year. It’s also 11% off the $1,054,000 peak of May 2022.”
“Single-family homes prices: Los Angeles County’s $830,000 median was flat for the month and 4% lower in a year. Orange County’s $1 million median was down 3% in a month and 6% lower in a year. New homes prices: Los Angeles County’s $924,250 new-home median was up 11% in a month and 14% higher in a year. Orange County’s $1 million median was down 5% in a month and 16% lower in a year.”
NBC Bay Area in California. “Home prices continue to drop in the Bay Area from this time a year ago, according to Redfin. In San Francisco, prices were down 10% year over year, and in San Jose they have dropped 7% year over year, the report shows. Daryl Fairweather, chief economist with Redfin, has some advice for those looking to buy: ‘Now is the time to strike if you have the means to do so. If you are buying now, you are pretty much in the driver’s seat,’ she said. ‘You can take your time when it comes to touring homes, submit an offer that’s … a bit under the asking price and really ask for any amenities you want.’”
The Globe and Mail in Canada. “241 Spinnaker Dr., Mayne Island, B.C. Asking price: $479,000 (Nov. 3, 2022). Selling price: $375,000 (Nov. 13, 2022). It’s a fixer-upper, says agent Ian Watt, who purchased the house for himself. The sale completed Dec. 6. Although Mayne Island is mostly a recreational market, there are some retirees and remote workers who live there, says Mr. Watt, who intends to fix up the house and then possibly rent it out. Because the market has adjusted in recent months, he made a much lower offer, in cash, without subjects, which was accepted. He knew of no other offers. ‘I told the agent, I don’t want to insult the seller, but this is a declining market. I didn’t want to pay last year’s price, especially with the cost for renovations.’”
From RTHK. “Government data shows Hong Kong home prices fell by 15.6 percent in the past year, the steepest decline since 1998 when prices plunged by almost a third. Figures from the Rating and Valuation Department reveal the first annual drop since the global financial crisis in 2008. Prices of smaller private homes fell by 16 percent, and larger properties by 6.8 percent. December home prices dropped two percent from the previous month, falling for the seventh month in a row.”
“Peter Churchouse from Portwood Capital said he expects transaction volumes to rebound thanks to the reopening of the border. ‘We may see in the first half of this year a little more downside on pricing, but my expectation is that the pricing will probably bottom by the end of the first half,’ he told RTHK. Churchouse said it’s high time the government withdraws the double stamp duty for non-local and corporate buyers, saying the reasons for introducing these ‘spicy measures’ to suppress speculation are no longer applicable.”
The Daily Mail. “Houses were still affordable for average earners in some of Australia’s capital cities only two years ago – but that has now all changed. The Australian Prudential Regulation Authority, the banking regulator, is concerned when a borrower owes the bank six times, or more, of what they earn before tax. But just two years ago, debt-to-income ratios in some of Australia’s major cities were typically well below this threshold. That changed when Reserve Bank of Australia Governor Philip Lowe and his board slashed the cash rate to a record-low of 0.1 per cent in November 2020 as Covid lockdowns threatened to push up unemployment.”
“This saw prices in some cities surge by close to a third in just a year, with steeper price increases in 12 months than the previous decade, locking younger Australians out of real estate. Joey Moloney, a senior associate with the Grattan Institute think tank, said the issue of unaffordable housing had spread beyond Sydney and Melbourne since the start of the pandemic. ‘For a long time, the debate about housing affordability, or lack thereof in Australia, was a story concentrated on to the major capitals in Melbourne and Sydney,’ he told Daily Mail Australia. ‘But it does seem like there’s been a shift in the conversation, where these astronomical house prices that are far outstripping wages is not just a Sydney phenomenon or a Melbourne phenomenon, it’s an all-capital city phenomenon.By cutting the cash rate to 0.1 per cent, and that flowing to the rates that banks will charge, that had a dramatic effect on house prices.’”
“In November 2020, Brisbane’s median house price was $610,237 and an average, full-time worker earning $89,003 a year with a 20 per cent mortgage deposit of $122,047 had a debt-to-income ratio of 5.5. By November 2021, Brisbane’s middle house price had surged by a whopping 27.9 per cent to $780,684, CoreLogic data showed. The Queensland capital’s price growth in a year, in dollar terms, had surpassed the previous 13 years of value increases. Put another way, Brisbane’s median house price recorded more growth from November 2020 to November 2021 than it did from November 2007 to November 2020.”
“An average, full-time worker on $90,917 with a $156,137 mortgage deposit now had a debt-to-income ratio of 6.9 – well into mortgage stress territory. During the past two years, Adelaide house prices have soared by 40.2 per cent. In dollar terms, the South Australian capital had more growth in two years than the previous 17 years. A full-time worker on $92,030 with a mortgage deposit of $140,478 would have a debt-to-income ratio of 6.1 – now in mortgage stress territory.”
“Mr Moloney said borrowers who owed more than six times what they earned were at particular risk of not being able to service the monthly mortgage repayments, with more interest rate rises expected. ‘The more debt you have, relative to the income coming in to service that debt, the less room you have to move if the cost of servicing that debt, which is to say interest rates, go up,’ he said.”