A report from the Orange County Register in California. “Orange County’s more affordable housing has been hit harder by the home-price collapse coming off May 2022’s pandemic-fueled bubble. The countywide median selling price was $950,000 in January, according to CoreLogic. That’s off 10% from the $1.054 million peak set in May 2022 as prices surged 41% from February 2020. The bargain hunter’s favorite — the resale condo — had its median selling price fall 15% since May’s peak to $635,000 in January, after jumping 43% in the pandemic surge to the May 2022 peak. But for existing single-family homes, the median of $1.1 million in January is off only 8% from May 2022 after jumping 46% in the surge.”
“Look at the 20 ZIPs with the largest declines since May’s peak, noting that pricing at the neighborhood level can be volatile. No. 1 Newport Beach 92663: Off 45% to $1.7 million between May 2022 and January. That’s a reversal from a 30% gain in the pandemic boom, February 2020 to the May 2022 peak. No. 2 Santa Ana 92701: Off 45% to $405,000 since May vs. gains of 102% in the boom. No. 3 La Habra 90631: Off 43% to $709,500 since May vs. gains of 101% in the boom. No. 4 Laguna Woods 92637: Off 37% to $284,000 since May vs. gains of 19% in the boom. No. 5 Corona del Mar 92625: Off 32% to $3.18 million since May vs. gains of 40% in the boom. No. 6 Anaheim 92808: Off 30% to $712,500 since May vs. gains of 52% in the boom. No. 7 Irvine 92614: Off 29% to $813,000 since May vs. gains of 44% in the boom. No. 8 Tustin 92780: Off 26% to $686,250 since May vs. gains of 39% in the boom.”
“No. 9 Fullerton 92832: Off 21% to $620,000 since May vs. gains of 31% in the boom. No. 10 Orange 92867: Off 21% to $890,000 since May vs. gains of 42% in the boom. No. 11 Huntington Beach 92648: Off 20% to $1.15 million since May vs. gains of 35% in the boom. No. 12 Los Alamitos 90720: Off 20% to $1.25 million since May vs. gains of 61% in the boom. No. 13 Yorba Linda 92887: Off 20% to $1.06 million since May vs. gains of 58% in the boom. No. 14 Cypress 90630: Off 19% to $783,000 since May vs. gains of 28% in the boom. No. 15 Santa Ana 92705: Off 18% to $1.24 million since May vs. gains of 68% in the boom. No. 16 Huntington Beach 92649: Off 18% to $885,000 since May vs. gains of 25% in the boom. No. 17 Orange 92865: Off 18% to $770,500 since May vs. gains of 45% in the boom. No. 18 Rancho Santa Margarita 92688: Off 18% to $730,000 since May vs. gains of 32% in the boom. No. 19 Santa Ana 92707: Off 17% to $485,000 since May vs. gains of 14% in the boom. No. 20 Irvine 92603: Off 17% to $1.87 million since May vs. gains of 87% in the boom.”
Yahoo Finance. “The wealthy may be staying put in their McMansions, at least for now. In January, the median home price sold in luxury markets was at a 23% discount to listing, wider than November and December. Luxury homes priced above $2.5 million are at a new multi-year peak in terms of days on the market at 61 versus 37 in January 2022. One of most increasingly pressured luxury housing markets based on Jefferies’ research was Park City, Utah. The median price sold of a luxury home plunged 30% in January, marking the second straight monthly drop following a 6% decline in December.”
Market Watch. “The housing market rout is dragging certain million-dollar homes back to earth. Redfin said that certain million-dollar homes exited the category in January as prices dipped. And in some parts of the country, they’re falling even more. The report said that the ‘Bay Area, Seattle and New York are losing million-dollar homes fastest.’”
KTVZ in Oregon. “Bend’s median sales price slipped $25,000 to $660,000, down more than $100,000 from the peak $773,000 seen a year ago and the lowest figure since a $645,000 figure seen in the fall of 2021, Redmond’s Beacon Appraisal Group said. Redmond’s median sales price rose, meanwhile, for the first time in several months, up $20,000 to $440,000, still down about $100,000 from last summer’s peak figure of $542,000.”
Bisnow Dallas Fort Worth in Texas. “After months of speculation, CBRE finally came clean earlier Monday about its decision to forgo plans for its new HQ, the latest in a series of cost-cutting moves taken by major corporations hoping to claw their way out of a downturn. Profits and revenue at the nation’s largest brokerage firms took a big hit in the second half of last year, and CBRE was no exception. Losses sustained in 2022 and the growing costs of new builds prompted CBRE to reverse course on previously stated plans to invest millions into a 27-story global headquarters at the corner of McKinney and Maple avenues, just down the street from its current offices in Uptown Dallas. Instead, the company will move its C-suite into a 67K SF space by Klyde Warren Park.”
“Trimming real estate is a common lever to pull when looking to save money, as evidenced by the slew of publicly traded companies that have taken similar steps over the last few months, said King White, CEO of Dallas-based Site Selection Group. The company also expects to save $300M by laying off workers, a move which was ‘largely done’ by the beginning of this year, a company spokesperson told Bisnow in a previous interview. ‘They are probably under pressure, just like any other large corporation, to control costs, and real estate is one way to do it,’ White said. ‘It’s no different than what you’re seeing with Amazon delaying construction on their campus in Virginia.’”
The Dallas Morning News. “Interceramic Inc., the largest glazed floor tile manufacturer in North America, will close its United States operations this year. The Chihuahua, Mexico-based company reported in a filing with the Texas Workforce Commission that it will permanently close its Carrollton corporate office, Garland manufacturing site and showrooms across the state, resulting in nearly 400 job cuts across Texas.”
“By shutting down its U.S. operations, Interceramic is cutting 161 jobs at its Garland facility and 118 at its corporate office and distribution center in Carrollton at the end of the month. The firm’s showrooms across Austin, Fort Worth, Houston, Spring, Plano and San Antonio employed nearly 100 workers.”
The Real Deal. “Commercial real estate continued to take it on the chin last week, and brokerages are preparing for even rougher times ahead. CBRE, JLL, Colliers and Cushman & Wakefield, among others, are moving forward with cost-cutting measures, including layoffs, as property sales and leasing eat into their profits. Symbolic of the tough times, the iconic — but vacant — Flatiron Building is heading to auction scheduled by a New York state judge for March 22.”
“Sorgente Group, Jeffrey Gural’s GFP Real Estate and ABS Real Estate Partners, which owns 75 percent of the building at 175 Fifth Avenue, sued in 2021 to seek a partition sale after the owners said they could not see eye to eye with the 25 percent owner, Nathan Silverstein. The judge issued an order in January allowing the sale to go forward.It’s not the only high-rise potentially poised to hit auction. A subsidiary of M&T Bank asked a court to approve the foreclosure on 29 West 35th Street so it can sell the building at auction.”
“The Brooklyn office market looks equally bleak. While the vacancy rate held at about 21 percent in 2022, net absorption in the fourth quarter crashed from around 279,500 square feet in 2021, down to 950 square feet at the close of 2022 (though that’s a ignificant improvement from the third quarter). Meanwhile, in Queens, for the second time in three months, the Chetrit Group — squeezed by occupancy struggles and a floating rate loan made expensive by the Fed’s rate increases — fell behind on a $225 million loan covering 640 multifamily units in Jamaica. That mortgage comes due in July. In addition, Grant King is seeing his share of hard times, as Relevant Group, which he co-founded, lost the Tommie and Thompson hotels to mezzanine lenders through foreclosures.”
The Toronto Star in Canada. “Some Ontario cities’ home prices have declined by almost a staggering 30 per cent, nearly double Toronto’s price drop since the February 2022 peak, according to a report from Desjardins. Leading up to the February 2022 peak, in the pandemic, more people from the GTA wanted to move to bigger homes with greater access to the outdoors. That’s why prices in Windsor increased by 98 per cent, Oshawa prices increased by 87 per cent, London prices increased by almost 80 per cent, Hamilton increased by almost 75 per cent and St. Catharines increased by 77 per cent. Toronto prices increased by 47 per cent, according to the report.”
“But after the peak, prices in Windsor dropped by almost 26 per cent, Oshawa prices dropped by 26.5 per cent, London saw an almost 27 per cent drop, Hamilton dropped by 25 per cent, and St. Catharines saw an almost 30 per cent drop. In Toronto, the price drop was 17 per cent. New Toronto real estate board data released last week reinforces this trend. It showed that average home prices in King, Ont., fell by $1 million from the market peak last year, from $3.2 million to $2.1 million.”
The Globe and Mail in Canada. “14810 51 Ave., NW., No. 311, Edmonton. Asking price: $229,000 (December, 2022). Previous asking price: $249,900 (July, 2022) *under previous agent. Selling price: $221,000 (December, 2022). This two-bedroom-plus-den suite in a residential suburb near Fort Edmonton Park, went without an offer for roughly five months last year. A new team of agents was brought in and made some subtle changes, including new listing photography and a slimmed-down price tag. Over the next two weeks there were five showings and one visitor made an accepted offer at $8,000 under the asking price.”
“‘Condos are inherently very difficult to sell in Edmonton, the main reason being that there is a lot of new development, therefore you’re competing with brand new construction priced super competitively,’ agent Clare Packer said. ‘We’re seeing sales where someone bought a luxury condo downtown for $750,000 in 2018 and now its worth $400,000. That’s the standard.’”
Domain News in Australia. “Melbourne home sellers are being advised to adjust their price expectations, as buyers achieve the biggest discounts in nearly four years. Buyers enjoyed an average 6.7 per cent discount on Melbourne houses over the three months to January, Domain data show, the most since the September 2019 quarter.Tayne Akyalcin recently bought an apartment in South Yarra, a renovated one-bedroom in an old brick walk-up block. It was scheduled to go to auction, but his budget was below the bottom of the quoted price range – and his offer came with conditions. He was unwilling to budge, so he didn’t attend the auction.”
“‘I decided not to go to the auction because I wasn’t too sure what the sale price was going to be,’ he said. ‘sat on it and I got a call back later.’ It didn’t sell. Akyalcin found himself in a powerful position when it came time to negotiate with the vendor, and bought the house for the price he wanted with the conditions attached. Akyalcin had help buying from property services company Entourage Finance, whose director Antoinette Sagaria said the relatively few active buyers had created enviable market conditions for those in a position to purchase.”
“‘We’re in a buyers’ market. An informed buyer has a great deal of power,’ she said. ‘A price guide is exactly that … it’s a guide. If you know the market, the price being asked becomes irrelevant. If you know the market you can stand your ground.’”
From Vietnam.net. “According to the Ministry of Construction (MOC), products are mostly mid- and high-end, with nearly no affordable housing. The proportion of more affordable housing products dropped from 20 percent in 2019 to below 5 percent in 2022. The number of projects under execution is very small. In 2020, only 1 percent of total housing products were affordable, and there has been no such product since 2021. As of the end of December 31, 2022, the outstanding loans provided to the real estate sector had reached VND800 trillion.”
“Many real estate firms have downsized their staff. The number of workers at Dat Xanh dropped from 6,380 to 3,340 in Q4/2022. Meanwhile, Khai Hoan Land had to shut down branches and representative offices in Nha Trang and Can Tho. Prime Minister Pham Minh Chinh said that all subjects have to take initiative in solving problems. Real estate firms must be responsible for themselves and settle difficulties themselves. No one has to ‘rescue’ others.”