A report from 425 Business in Washington. “Snohomish County saw its median sales price settle at $645,000 last month, down 6.1 percent from a year ago, and also down from December, when the median was $679,000. Looking at single-family homes only, the median sales price last month was $781,098 in King County, up 0.8 percent from a year ago and down from $825,000 in December. On the county’s Eastside, the median was $1.32 million, down 12.9 percent from a year ago.”
The Bend Bulletin in Oregon. “‘Things have cooled off,’ said Danielle Snow, John L. Scott Real Estate principal broker. ‘The amount of time on the market is more normal.’ Snow said that buyers should still make offers even if they’re not close to the asking price. In Sunriver the median price of a single-family home was $930,000 in January, compared to $1.1 million in December. In La Pine, the median price of a single family home in January was $380,000, about $10,000 less than what it was the month before, according to the report. And in Sisters, the median single-family home price was $555,000 in January, compared to $650,000 in December.”
Hawaii News Now. “Good news for prospective Oahu homeowners: The median price of a single-family home dipped below $1 million for the first time since the summer of 2021. The median price for a single-family home on Oahu is $985,500, which fell by 6% from January 2022. The median price for condos also fell from last year, but by 4%, to $490,000. Experts say buyer competition continues to soften from the peak in 2021. ‘After 12 months of declining sales, we’re seeing more of the effects of the slowing market on median home prices,’ said Chief Operating Officer for Locations Chad Takesue. Single-family home sales were down by 52% from January 2022, while condo sales declined by 50%.”
Candy’s Dirt in Texas. “Dear real estate professional, I see you. The battles you’ve fought in the last six months have been real. You’ve been forced to transition from abundance to scarcity, but so far you’ve survived. I’m here to tell you again that the game is going to change. The hard times are going to end. However, there are forces at work against you, some quite distant. Learn about them, be aware, but don’t give up. Hope is around the corner.”
“The interwoven nature of the world causes us to be subject to the whims of powers that rarely even consider us. Take for example today’s problem — the Bank of England is raising mortgage rates on Texas home buyers. You read that correctly, the Bank of England as well as the European Central Bank believe the risk of over-raising their rates is far smaller than the risk of allowing inflation to continue at current levels. The first problem is that markets are begging the Fed and central banks for a pivot, believing inflation has been defeated. In essence, these economic superpowers are nuking our markets based on data we released, which they don’t understand, and our shoppers are paying the price.”
The Real Deal on New York. “Hawkins Way Capital’s purchase of a shuttered Marriott on Manhattan’s East Side came at a heavy discount from what the property last sold for, newly filed city records reveal. The Beverly Hills-based firm teamed with Värde Partners to acquire the former New York Marriott East Side hotel at 525 Lexington Avenue from German investment firm Deka Immobilien. City records filed Monday show that the firms paid $153.4 million for the 655-key property — a little more than half the $270 million Deka paid for it in 2015. The deal comes a year after Hawkins Way and Värde snapped up the former Midtown DoubleTree at 569 Lexington Avenue for $146 million. That deal also represented a staggering loss; seller RLJ Lodging Trust paid over $330 million for it in 2010.”
From Moneywise. “The white-collar recession is well underway. After nearly a decade of six-figure salaries, cushy jobs and extravagant office perks, Silicon Valley firms are finally cutting back. Nearly 90,000 tech workers were laid off in 2022 alone. This year isn’t off to a great start either. Things aren’t much better for those who have (so far) escaped the layoffs. Countless tech firms, private and public, have watched their valuation tumble over the past 12 months. And now, the Financial Times reports that a number of panicked laid-off workers are ‘flooding secondary markets’ with their shares of their former companies. Which means those valuations are likely to plunge even further.”
Colorado Public Radio. “Free rent on the 16th Street Mall in downtown Denver sounds like a pretty good deal. But some businesses are finding that there are catches — namely crime and a lack of security along the mall. That’s led downtown boosters to make changes to a program that offers businesses rent-free space. The program is an effort to breathe life into areas of the city that are struggling with a glut of empty storefronts. Tae and Roderick O’Dorisio were part of the first phase. Their online business took off during the pandemic. Tea with Tae sells tea in a subscription service format. And they were excited to have a real storefront for the first time.”
“There were daily incidents with people experiencing homelessness, in particular with people using drugs, Roderick said. ‘They’re being aggressive either with our customers or employees … making a ruckus and causing people to feel uncomfortable inside the space,’ he said. Then, in November, their best employee quit after two shootings happened outside the store just hours before it opened.”
“‘When she came in and opened the shop up, one of our giant bay windows was completely cracked, like about to burst and shatter because of the bullet hole at the bottom of it,’ Roderick said. It was one thing after another. ‘Somebody defecated all over the store,’ Tae said. Aside from the security problems, the store wasn’t really making money. Black Friday, the biggest shopping day of the year, was a bust. They closed the store in December — a couple of months before the deal on free rent expired. ‘We’re definitely going to do it [again]. Just not there,’ Roderick said.”
Castanet in Canada. “January is normally a slow real estate month, and this year was no exception. The slowdown, combined with rising interest rates, resulted in benchmark prices falling throughout the Central and North Okanagan in most housing categories. According to Association of Interior Realtors statistics released Monday, there were 552 residential unit sales last month across the region, which includes the entire Okanagan, and the Kamloops Kootenay and South Peace River regions. That was nearly half the number of sales from last January.”
“The benchmark price of a single-family home in the Central Okanagan fell below the $1 million mark for the third time in the last five months, checking in at $976,800. That marks the lowest the price has been since October 2021. Central Okanagan’s condominium benchmark price dropped 2% to $492,000 from December. The benchmark prices of single-family homes and townhouses in the North Okanagan both dropped significantly in January, down 2.9% and 4.1%, respectively, from December.”
From CBC News. “Several Canadian cities are facing high office vacancy rates. The idea of turning empty offices into housing is very trendy. There’s even government funding for renovating offices into residential use. How much do conversions reduce the glut of office space, and create meaningful housing stock? Conversion costs often just don’t add up to make housing a viable option, said Raymond Wong, a vice president with Toronto-based Altus Group, a commercial real estate advisory and data company. ‘If you go through all those variables with space layout, the building itself and the anticipated cost, it might be easier to demolish it and start from scratch,’ he said.”
From ABC News. “Late last November, Reserve Bank governor Philip Lowe was forced into a humiliating public apology. After almost two years of assuring Australians that interest rates were unlikely to rise above zero until 2024, the RBA boss — having by then elivered seven consecutive rate hikes — had little option but to confront the growing tide of public anger head on. ‘I’m sorry that people listened to what we’ve said and acted upon that and now find themselves in a position they don’t want to be in,’ he told a Senate Estimates Committee.”
“Particularly worrying, however, was the finding that 15 per cent of all homeowners would see their spare cash flow turn negative. In other words, they wouldn’t be earning enough money to cover the mortgage, let alone buy food. Here is the graph. It’s not easy to decipher but in many ways it tells a far bleaker story than even the RBA would have us believe.”
“Head further to the left though, and the bars show borrowers who would drop between 20 per cent and 100 per cent of their spare cash. And the grey bar on the left represents those who would be well and truly under water. Obviously though, the closer you get to the grey bar, the more difficult it is to survive. So, unless they have large savings buffers, many of those too are likely to either default, be forced to sell their homes or try to come to some sort of arrangement with their bank.”
Business Insider. “The IMF said in a report on China’s economy that the country’s property crisis remains ‘unresolved.’ Despite China’s efforts to reassure investors about the health of its property sector, more than half of 60 mainland China-listed developers are likely to post losses for 2022, per Bloomberg calculations which used public data. And on top of that, investment into China’s property fell 10% in 2022 from a year ago, according to official data released on January 17.”
“‘The real problem is that many developers simply do not generate positive cash flow and that the funding model of unfettered pre-sale receipts is broken,’ Andrew Lawrence, TS Lombard’s Asia property analyst, wrote in a January 12 note seen by Insider.”