A report from the Orange County Register. “When times get tough in homes sales, watch what the homebuilders are doing. Take Landsea Homes, a small builder that blossomed in California. It’s moving its headquarters to Texas as part of a nationwide growth plan. But the relocation also comes as builders like Landsea suffer the pains of a sales crash that not only curtailed house hunting last year but also scared want-to-be buyers to walk away from sales contracts. Landsea, for example, said its cancellation rate was running a mind-blowing 72% for its Arizona sales near year’s end. Builders realize the pandemic era’s homebuying bubble has burst and it will take major price cuts to get buyers interested again. Sellers of existing homes should note that.”
The Real Deal on California. “A developer with dreams of turning a blighted office building in West San Jose into 137 homes has defaulted on a loan, with the lender threatening to seize the property. Kochland, an affiliate controlled by Kenneth Ryan Koch of Grass Valley, has received notice of a $505,000 loan default for its five-story mixed-use apartment project at 826 North Winchester Boulevard, the San Jose Mercury News reported.“
“Emerson Vista, a San Jose-based lender, filed the notice saying its loan last December was in default and is threatening to try to seize ownership of the site. The vacant two-story office building, covered with graffiti and surrounded by a chain-link fence, has been cycling in and out of foreclosure for years. Since the start of the pandemic, the Winchester Professional Building has had three owners and faced two foreclosure proceedings.”
From WTOP News. “Modestly-falling home prices have shaved off the top of the D.C. region’s housing market, with the number of homes valued at $1 million or more falling. That matches a national trend. The median price of all homes sold in the D.C. region in January was 1.3% lower than December. Prices peaked in May 2022, with the median price now 15% below that peak level, according to Bright MLS.”
The Highlands Ranch Herald. “It’s a statistic that, not long ago, homebuyers could have only dreamed of: The median price of a single-family home in the Denver area dropped by more than $90,000. The drop from $660,000 in April to $569,800 this January represented the steepest, longest sustained decline in median sales price for single-family homes in the Denver metro area since the start of 2010. That’s according to the Colorado Association of Realtors, whose data goes back to that year. Statewide, the decline in the median price of a single-family home from April to January also represented the steepest, longest sustained decline in that same period.”
The Seattle Times in Washington. “King County home prices tumbled 7% in February, the first year-over-year drop since the once-sizzling housing market began to see cooling prices. Within King County, prices fell most on the Eastside, where the median single-family home sold for about $1.3 million, down 21% from a year ago. The median Snohomish County home sold for $690,560, down about 7%. The median Kitsap County home sold for $499,995, down 5%. The median Pierce County home sold for $529,900, down 1%. Condo prices are following a similar trend. The median King County condo sold for $468,500 in February, down 12% from last year.”
“‘It’s a total 180,’ said Seattle Redfin agent Sarah Rollinger. Sellers are ‘holding on to last year’s prices,’ Rollinger said. ‘They find out that they can’t necessarily get the price that their neighbor got last year. They think maybe it’s not the best time to sell.’”
Nevada Business. “Las Vegas REALTORS® reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service during February was $424,995. That’s nearly identical to the previous month, but down 5.6% from $450,000 in February of 2022. It’s also down from the all-time record price of $482,000 in May of 2022. The median price of local condos and townhomes sold in February was $255,000, the same as it was in January. That’s down 1.9% from $260,000 in February of 2022, and down from the all-time record price of $285,000 in May.”
The Philadelphia Inquirer in Pennsylvania. “The number of home showings in the Philadelphia region has ticked up and so has the number of new listings of homes. ‘This is not 2021 or the beginning of 2022. You’re not gonna get outrageous prices for your house. That time is past,’ said Keith Chennault, owner of Chennault Real Estate, based in West Philadelphia. ‘I tell sellers all the time, ‘Understand the market that we’re in.’”
WKRN in Tennessee. “Take a look at greater Nashville year-over-year, according to new numbers in the RE/MAX National Housing Report: Home sales are down 29.7%. The average home sells in 42 days — 71% longer than last year. And for new listings, we are second highest in the country — up 45.2%. For sellers, Jeff Checko, relocation director with the Ashton Real Estate Group said to think carefully about selling and losing that historically low interest rate you might have — and don’t be afraid to cut your list price. ‘There are situations where sellers are getting bad advice from professionals that just want to earn their business, setting the wrong expectations, and then they have a problem because their house is sitting there and not selling,’ said Checko.”
The Wall Street Journal. “Some hotel owners that rode out the pandemic are finding the recent travel rebound might not be enough to persuade lenders to extend new credit when their debts mature in the coming months or years. Lenders are asking hotel owners to put up more capital before agreeing to refinance their loans — but cash-strapped borrowers saddled with lots of debt might not be able to meet the requirements. Tens of billions of loans backed by hotel properties as collateral are coming due in the next two years. Roughly $30.9 billion, or about 30% of the $101.63 billion securitized hotel loans in the U.S., are set to mature by 2024, according to commercial-real-estate brokerage firm Newmark Group Inc.”
“Lenders that had offered loan extensions or forbearances in the early days of the pandemic are less likely to lend to the same borrowers because of economic uncertainties facing those hotels, said Michelle Russo, chief executive of hotelAVE, a consulting firm focused on the hospitality industry that has provided services to roughly 1,000 hotels and currently manages more than 70 of them. Ms. Russo said one of hotelAVE’s client hotels ‘got a letter from the bank saying, ‘We just want you to know, nine months out, we are not renewing. Don’t come to us.’”
“A bigger surge in hotel bankruptcy filings is unlikely because of factors including high costs associated with the process, said David Neff, a lawyer specializing in hotel bankruptcy at Perkins Coie LLP. ‘If things go south, many of them will just hand the keys back [to the lenders],’ Mr. Neff said. In downtown Cincinnati, the value of the Hilton Cincinnati Netherland Plaza dropped 18% to $86 million in April 2021 from $105.5 million in 2019, when the loan was issued. This past fall, lenders on the hotel’s $72.4 million loan maturing in October 2024 moved to foreclose on the property.”
From Bloomberg. “In Toronto, Canada’s largest city, the number of homes whose owners had fallen behind on their mortgage payments, allowing them to be seized and sold by the lender, hit 35 in February. There were no such ‘power of sale’ listings three years ago, according to data compiled by Daniel Foch, a Toronto-based real estate broker and researcher. Foch said he’s handling some of these listings himself, and most seem to be cases where a variable-rate mortgage was used to finance an investment property whose interest payments are now greater than what can be charged in rent, forcing the borrower into default.”
“‘We’re just being a lot more frugal and on top of our finances,’ said Peter Esper, a mortgage broker in the Toronto area who was hit hard by interest-rate increases after relying on variable-rate mortgages to finance his own real estate investments. The payments on the home he shares with his wife and two kids went up by nearly C$3,000 a month, while the difference between mortgage costs and what he was charging in rent on the four condos he owned as investment properties ballooned to a collective C$4,000 a month in negative cash flow.”
“Now he’s sold two of those condos and plans to list the third, while also canceling his cable TV package and opting to brew coffee at home rather than buying it at Tim Hortons for the foreseeable future. ‘Everyone’s just cutting back, watching what they’re spending,’ Esper said. ‘People aren’t going away as much, they’re not eating out as much. I think it’s been a big shock, considering how quickly it happened.’”
The Niagara Record in Canada. “A woman and her grandson are struggling with finding a place to live after a private mortgage lender they used has refused to renew their mortgage. Karen Backshall and Greyson Backshall say they are at wits end after attempting to save their home, which could lead to being forced to sell or face foreclosure. During the pandemic, Karen said, they fell on hard times so they turned to a private lender for a loan. When they went to renew, the lender refused, saying it wanted its money back.”
“In 2019 Karen was diagnosed with congestive heart failure and was hospitalized, which lead to the start of her money problems and having to retire from her job, she said. ‘(I was) only making $1,800 a month to pay the mortgage and household bills, so I remortgaged with a private lender,’ she said. ‘(They) now want the money back and I can’t pay them back. So, they are foreclosing on the house.’”
“She said the loan was for $510,000 to consolidate a previous mortgage and other bills, with an option to renew after a year. ‘The mortgage company I was dealing with told us two weeks before we were to renew, the investor was not willing to extend the mortgage past Dec. 21,’ she said. ‘He gave us roughly two weeks’ notice that we weren’t going to have a mortgage.’”
“She said she approached other mortgage companies and banks but has been unsuccessful, because and her grandson do not make enough money. ‘During the time period the mortgage holder gave us we received one (purchase) offer, and they were not able to come up to what we needed to pay off the mortgage and that’s when they (mortgage holder) decided they were foreclosing,’ Karen said.”
The Helsinki Times. “House pricesin Finland continued to slide in January. Statistics Finland released preliminary data indicating that the prices of old dwellings in housing companies dropped by 5.3 per cent year-on-year and 2.4 per cent month-on-month in January. The year-on-year drop stood at 5.5 per cent in the six largest cities and at 4.8 per cent in other localities across the country.”
“Out of the largest cities in Finland, the prices fell the most in Oulu, Helsinki and Vantaa, and the least in Tampere and Turku. ‘The decline in house prices continued, as expected, in January. The decline has now wiped out the gains made during the coronavirus pandemic, and the decline is likely to continue in the coming months,’ tweeted Joona Widgrén, an economist at OP Financial Group.”
“Widgrén revealed in a blog entry that house prices fell slightly faster than expected by the largest mortgage lender in Finland. ‘This was the weakest month in both the capital region and entire country in terms of sales volume in statistics dating back to 2015. House sales have continued sluggishly. Of course you should bear in mind that January is typically the weakest month [of the year] for house sales,’ he wrote according to Helsingin Sanomat. Widgrén pointed out that the sliding prices can create a cycle where buyers expecting the downward trend to continue end up prolonging the slump.”
The Herald Sun in Australia. “A five-bedroom mansion on Brighton’s prestigious Golden Mile sold for a mega $7.3m at its auction on Saturday, after three people placed bids to push it $100,000 over the $7.2m reserve. The 26 Bay St pad was initially listed for $7.4m-$7.6m. Morrell and Koren buyer’s advocate Matthew Cleverdon was in attendance and noted the property was also listed off market last year for $9.5m-$10.2m, but the vendors ‘rode the market down.’ ‘As the Bayside market softened in the back half of last year…. the vendors had to ride the wave of the falling market,’ Mr Cleverdon said. ‘The prices they were originally looking at fell as the market softened.’”