A report from ABC 15 in Arizona. “‘Home prices are now down 8% in Phoenix compared to the 2022 spring peak, which is twice as large as the decline in prices nationally, but still lower than declines in the Bay Area and Seattle — down about 14%,’ said Selma Hepp, chief economist for CoreLogic.”
From NBC News. “The past year has been a rollercoaster ride for homebuyers and sellers alike. In early 2022, homes in Atlanta were getting as many as 32 offers with bids averaging $85,000 over asking price, according to one real estate agent. ‘We were getting one, two offers towards the summer,’ said Courtney Phillips of EXP Realty. But by the fall, mortgage rates had more than doubled from the start of the year, as the Fed began raising interest rates to tackle surging inflation. ‘And then it just kind of slowed,’ Phillips recalled, ‘where you’re on the market a couple of weeks and you get one really strong offer at list price.’ By November and December, she said home sellers were cutting prices.”
“Phillips said there are signs of a recovery as homebuyers have started coming back into the market in recent weeks. But as is always the case with real estate, she said, it depends on the property. ‘If the home is priced correctly, and it’s presenting well and it’s in a great area, then you’re getting multiple offers,’ she said. ‘Otherwise, it is sitting.’”
From Fauquier Now in Virginia. “High-interest rates have affected home buyers’ purchasing power, including in Fauquier County. Compared to 2021, the number of home sales in Fauquier declined by 31%. Similarly, in surrounding counties such as Culpeper, Rappahannock, and Madison, home sales declined between 23% and 33%. Lisa Sturtevant, chief economist at Bright MLS said the home sale activity in Fauquier is closer to what it was in 2018. Although Sturtevant said home prices would begin to plateau soon, the current median price of a home in Fauquier is approximately $530,000, which is $35,000 higher than a year ago.”
“The decline in demand for homes has afforded buyers more leverage when they are negotiating with sellers. Over the last few years, many home buyers have offered to waive home inspections or increase their offer to keep their bids competitive. Sturtevant said this is starting to change. ‘We’re starting to see sellers having to respond to these requests,’ she said.”
The Greeley Tribune. “Homesellers will see increasing prices in 2023, but they may have to wait until later in the year and they may have to be patient as prices return slowly toward their peaks of mid-2022. So said Windermere Real Estate Services Co. chief economist Matthew Gardner at the annual real estate and economic forecast event that the Northern Colorado branch of the company, based in Fort Collins. ‘We will see a recession this year. It’s not 2007 again. It’s more like 1990; we’ll see a couple of quarters of decline, a modest contraction this year,’ Gardner said. ‘Blame the Fed. They’ve successfully regulated inflation only three times in history.’”
“Sellers ‘have had their way’ in the market since 2012, and that’s changing. Northern Colorado is moving toward a more-balanced market with buyers and sellers having more equal power over sales. ‘The market is actually good. I’m not worried about it. You’ll be giving back a bit of the amazing price growth that you’ve experienced over the past couple of years.’”
CBS Sacramento in California. “‘Right now is a great time for buyers because they have a little less competition than they saw a year or two ago,’ said Sacramento realtor imberly Prince. ‘This is the best time for a home buyer to get into the market because we have sellers that are motivated to sell,’ said mortgage planner Katie Pastor Trinidad. Homes are sitting on the market longer, and once in contract, homes are selling for below list price, and sellers and builders are more willing to offer concessions.”
From Fortune. “Among the 150 major housing markets tracked by Burns Home Value Index, 100 markets ended 2022 with local home prices below their 2022 peak. Among the down markets, 24 regional housing markets ended 2022 with home prices down at least 5% from their respective 2022 peak price. The vast majority of the markets with sharp price drops, including places like Seattle (-8.7%) and Santa Cruz (-8.2%), are on the West Coast. The sharp home price corrections aren’t just occurring in high-cost West Coast markets. It’s also happening in “bubbly” housing markets, including places like Austin (-9.5% from its 2022 peak), Boise (-8.1%), Las Vegas (-8.3%), and Phoenix (-8.9%).”
The Real Deal on New York. “Vornado Realty Trust’s challenges continue to show up on its balance sheet: The company has written down the value of its real estate portfolio by $600 million. Steve Roth’s real estate investment trust indicated the reduction late Tuesday, Crain’s reported. About 80 percent of the writedown — $480 million — stems from a handful of Midtown properties.”
“The properties accounting for the other $120 million is unclear. The seven buildings involved in the writedown were valued at $5.6 billion four years ago. Today, they are worth $4 billion, a 30 percent drop. Evercore ISI analyst Steve Sakwa estimated the properties generate between $200 million and $225 million in net operating income, down from $250 million four years ago. It’s the latest in a litany of bad news for Roth’s firm. Last month, the city’s second-largest commercial landlord cut its dividend by nearly 30 percent, blaming the economic downturn and rising interest rates. A cut was expected, but the size of it shocked some analysts.”
KIRO 7 in Washington. “The Seattle Fire Department has responded to a historic number of overdose calls in recent memory. The department said it has responded to more than 5,200 overdose calls in the last 12 months. Kristen Neil has worked in downtown Seattle for over 20 years and said she believes the problem of people overdosing has worsened. ‘It’s flooded on the streets. It’s all you see every day when you walk up the street,’ Neil said. Neil has also had to make calls to 911 because of people passed out in front of her work. ‘Like walking out the door and having to call and watching somebody do chest compressions on someone else. You know, it’s kind of hard,’ Neil said.”
Willamette Week in Oregon. “In Portland, many liberals are dodging stray bullets, losing catalytic converters to thieves, and sidestepping tents. Then they open their tax bills. Maybe they aren’t voting Republican. But some are voting with their feet, getting the hell out of a city that once stole their hearts, driven away as taxes rise and quality of life declines. Stu Peterson, 65, grew up in Portland, and has been selling commercial real estate for decades as a partner at Macadam Forbes. ‘I’ve never seen money move out of here,’ Peterson says. ‘Nobody ever wanted to leave Oregon. It’s a beautiful place. Most evacuees are high-wage earners who are fed up with the crime, taxes and homelessness, in that order. There’s an ugly spiral.’”
“There is more demand for expensive houses in Clackamas County than in Multnomah. In the past 12 months, 47 houses sold for $2.5 million or more in Clackamas, compared with 37 in Multnomah, according to sales compiled by Inhabit Real Estate. Another 12 high-end homes sold in Washington County. ‘Eighty-five percent of the people looking at these listings are trying to leave Multnomah County,’ says Lake Oswego real estate agent Justin Harnish. ‘I was with a woman this morning who said she was moving out of downtown because she saw a lady stab another lady in the face with scissors.’”
The Globe and Mail. “Canada’s housing market will slowly grind lower in 2023 before finding a bottom later this year, predicts Randall Bartlett, senior director of Canadian Economics at Desjardins Group. Still, buyers are likely to remain cautious as some price discovery takes place, Mr. Bartlett added in an interview. ‘Nobody wants to catch a falling knife.’ By the end of December, the national average house price had dropped 20 per cent from its early 2022 peak, and Mr. Bartlett figures it will slip up to five per cent from that level.”
“Christopher Bibby, broker with Re/Max Hallmark Bibby Group Realty, says the opening salvo of many buyers is an offer well below the asking price, but some back-and-forth usually leads to an agreement. ‘Frequently people will call just to gauge the motivation or how desperate we are.’ In one case, a unit at 55 Stewart St. was listed with an asking price of $2.595-million. The buyer chiseled that figure down to a sale price of $2,478,600.”
“Elli Davis, real estate agent with Sotheby’s International Realty Canada, encourages potential sellers to list when there is so little inventory available, but she stresses that they also need to be realistic about the asking price. Some are dismayed about the tumble from the heights of early 2022. ‘I don’t want to give my place away,’ is a common refrain, she says, as sellers adjust their mindsets to lower prices.”
From Bloomberg. “Shaky property markets across much of the world pose another risk to the global economy as higher interest rates erode household finances and threaten to exacerbate falling prices. Reports this week have shown the US housing slump stretched into a fifth month, China’s home sales slide continued and price declines persisted in both Australia and New Zealand. In Britain, prices are now in their worst losing streak since 2008. In the world’s No. 2 economy, China’s property slowdown is showing few signs of abating, even as authorities ramp up efforts to revive the industry. New home sales tumbled 32.5% in January from a year earlier, preliminary data from China Real Estate Information Corp. showed.”
“In the UK, more than a decade of steady growth has given way to the longest house price slump since the global financial crisis in 2008. Nationwide Building Society said the average home value has fallen for five months in a row. Prices continued to fall in Australia and New Zealand in January, with the slide likely to continue as neither property market has yet felt the full brunt of last year’s spike in interest rates. In capital city Wellington, prices have already fallen 18.1% from a ear earlier, CoreLogic data show. In the largest city Auckland, prices are down 8.2%. It’s a similar story in Australia. Housing is even cooling in Singapore.”
ABC News in Australia. “People who cannot afford to pay their mortgages or sell without taking a loss are increasingly putting their properties onto the heated rental market instead. Numerous real estate agents in Sydney and Melbourne say the trend is becoming more entrenched as mortgage stress escalates. Jazmin Pfluger took ABC News on a tour of a small one-bedroom apartment in Melbourne’s inner west that had been listed for sale for between $310,000 and $325,000. The real estate agent said there had not been ‘enough interest at that price point.’ ‘That’s compared to 12 months ago when the market was doing really well for sales,’ she said. ‘It’s definitely changed a bit since then. The prices have dropped.’”
“Sydney has continued to lead the peak-to-trough falls, down 13.8 per cent since the market topped out in January 2022, with the median home price back below $1 million for the first time since March 2021. However, Hobart and Brisbane are rapidly catching up, with steeper falls over the past month (1.7 and 1.4 per cent) and past quarter (5.5 and 4.8 per cent).”
“Tanmay Goswami is a real estate agent who sells homes in Sydney’s outer western suburbs and has noticed the same trend as Jazmin Pfluger in Melbourne. He has distressed sellers coming through his door who can no longer afford their mortgages as rates spike and inflation hits people’s cost of living. ‘We are getting now calls from lots of landlords,’ he told ABC News.’They are struggling with the repayments, so they are looking to sell. All the inflation and other day-to-day costs has gone up, so they can’t afford.’”
“However, once they list their properties for sale, some sellers are finding they cannot get what they paid for them, or even enough to pay off what they owe on the mortgage. This situation is known as negative equity, and it can potentially lead to bankruptcy for borrowers with money still owed to the bank even if the house is sold. CoreLogic analyst Eliza Owen said this reality is now hitting home for those who bought recently, especially in localities that have seen the biggest property price declines, in some cases already above 20 per cent.”
“‘It’s quite possible that people have lost value in their homes,’ she said. ‘And, depending on the size of the deposit they went in with, it could be that they’re in a negative equity position now as well. It wouldn’t be surprising to see more and more people struggling with higher mortgage repayments with the extremes that we’ve seen in interest rate movements.’”