A report from ABC 7. “The feds shut down New York-based Signature Bank to protect investors following the collapse of the Silicon Valley Bank. Signature Bank is a big cryptocurrency lender in New York. On Sunday, the Federal Deposit Insurance Corporation (FDIC) took over its assets worth more than $110 billion and more than 88 billion in deposits. Signature is now the third largest bank to fall into financial failure in U.S. history.”
From Bloomberg. “The positive effect from the American regulators’ overnight support actions in the banking system quickly evaporated on Monday morning, with stocks signaling that fallout from the incident is far from over. First Republic Bank remained under pressure, with shares plunging 70% in US premarket trading even after the lender moved to try and quell concern about its liquidity after the failure of SVB. PacWest Bancorp lost more than 40%, Western Alliance Bancorp sank 30%, Charles Schwab Corp. dropped about 20% and Zions Bancorp fell 15%. Comerica Inc. slid 7%.”
“Most large US banks also erased earlier gains in US premarket trading, with JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. all trading lower. ‘We’re seeing a liquidity withdrawal, the classic thing that you’d expect following a credit event like what’s happening at SVB,’ said Haig Bathgate at Atomos Investments. ‘People get scared, reduce exposure to equities and move into government bonds. They’re wondering if anyone else will be in this position as these things don’t tend to happen in isolation.’”
From Cryptopolitan. “The employees of First Republic Bank are preparing themselves for the worst as the bank is on the verge of going out of business. The Federal Deposit Insurance Corporation of the United States has reached a settlement with First Republic Bank, and as a result, the bank is no longer processing any wire transfer transactions. Reports of First Republic Bank’s collapse have been circulating on social media. Twitter user @APAbacus has claimed that the bank is on the verge of bankruptcy, and staff is bracing for the worst on March 12.”
“These banks have shown contracting margins over the past year, or the smallest expansions of margins. They include Customers Bancorp, First Republic Bank, Sandy Spring Bancorp, New York Community Bancorp, First Foundation, Ally Financial, Dime Community Bancshares, Pacific Premier Bancorp, Prosperity Bancshares, and Columbia Financial. The news of First Republic Bank’s collapse comes amid growing concerns about the stability of the US banking system.”
From NPR. “A senior Treasury official on Sunday stressed Silicon Valley Bank’s investors will not be provided with any relief by Sunday’s actions. ‘The bank’s equity and bondholders are being wiped out. They took a risk as owners of those securities. They will take the losses,’ the official said.”
From NBC News. “SVB’s historic meltdown last week was largely attributed to deteriorating business conditions in the firm’s concentrated customer base and an ill-timed decision to invest billions of dollars in mortgage-backed securities. But long-time clients and others with intimate knowledge of how SVB operated say the bank did itself no favors. Between the bank’s refusal to upgrade its technology to meet the demands of modern-day businesses and its treatment of many startup customers, SVB’s problems extended beyond its risk profile and a challenging economy.”
“An ex-SVB manager, who worked on risk initiatives and asked not to be identified, said the bank remained technologically stagnant even as it was a haven for startups that had an eye for cutting-edge software and products. As she described it, ‘the backend of the bank is all bubblegum and wires.’”
From First Post. “On 9 March, the bank’s shares plunged by 41 per cent, the biggest decline since 1998. The fall came after SVB sold all of the available-for-sale securities in its portfolio and updated its forecast for the year to include a sharper decline in net interest income, reports Hindustan Times. The regulatory filing at the end of the business day showed that SVB had a negative cash balance of $958 million.”
Fromm WYH Radio. “When looking at prices at the market level, the NAR found that 20 of the 186 cities monitored by the group saw prices drop in the fourth quarter of last year. Among the cities that saw prices drop included San Jose, California, decreasing 5.8% compared to a year ago; San Francisco, California, dropping 6.1%; Boise, Idaho, falling 3.4%; Anaheim, California, down 1.6%; Austin, Texas, down 1.3%; Los Angeles, California, falling 1.3%; and Boulder, Colorado, down 2.0%, the NAR reported.”
“In the fourth quarter, the NAR listed San Jose as the most expensive place to buy a home in the U.S., despite it seeing prices fall 17% from their peak when the median home price was $1.9 million in the second quarter last year. They now sit just below $1.6 million. Part of the reason prices are decreasing in these areas comes from what NAR’s chief economist Lawerence Yun calls ‘weaker employment and higher instances of residents moving to other areas.’ Yun noted that the relief is needed, as prices have far surpassed the wage increases and consumer price inflation throughout the last half-decade. ‘A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years,’ Yun shared.”
The Mountain Democrat in California. “A year ago the median selling price for a El Dorado County home was $740,000. The average time a home was listed before an offer was accepted was seven days and 80% of sales averaged 103% higher than the listing price. This year the housing market, like the weather, has been cold and wet. Since the first of this year the median price for a county home has been $560,000. Statistically, sellers have lost 24% of their home’s 2022 value in the last year, while mortgage rates for buyers have increased 89%. Sellers need to price their homes at where the market is today or will be tomorrow not where it has been.”
The Coeur d’Alene Press in Idaho. “The median price for single-family homes in Kootenai County fell slightly to $511,000 in February. It was $525,000 in January. The local housing market reached a median price of $559,000 in May, which was the highest of 2022.”
KING 5 in Washington. “Although interest rates are high, that’s not stopping homebuyers in Pierce County. Victor Bustos spent his Sunday looking for a potential new home with his daughters. Bustos said he’s seen seven homes so far. According to Regina Madira with RM Home Specialists, that isn’t surprising. ‘We just saw a surge of inventory, really starting since last August,’ Madira said. ‘Just so much inventory, and that’s when the interest rates started to go really high, and so the demand really fell off.’”
The Deseret News. “The average total building cost in Utah, including land and construction fees, is $538,000, the study shows. That is $97,000 less than the average single-family home listing price of $635,000. Quinn Crowton’s work as a realtor for Century 21 Everest takes him across Weber, Tooele, Salt Lake and Utah counties. He said homebuyers wanting to move to expanding areas like Herriman, Bluffdale and Riverton should definitely look at new builds, which are priced competitively with older homes.”
“The current housing market has made it much easier to get seller concessions, where the seller agrees to help pay part of the closing costs, Crowton said. Loans and discounts are also more prevalent, including the 2-1 buydown loan, a mortgage where the first two years of the loan are set at a reduced price. ‘Since (interest) rates hiked, lots of builders are wanting to get rid of their inventory, so they’re willing to take lower bids and willing to give those incentives back to the buyers to get rid of their inventory,’ he said.”
Blackburn News in Canada. “The real estate market in Chatham-Kent is seeing fewer buyers these days despite more homes available for sale, something that was not the case over the past few years. The average price of homes sold in February was $426,963, a decrease of 19.7 per cent from February 2022. Local realtors sold a total of $26 million in February, a sharp decrease of 60.5 per cent from the same month last year. If you’re a buyer there’s lots of inventory to choose from. The Chatham-Kent Association of Realtors also said there are a total of 294 homes for sale, a 320 per cent jump from a year ago. ‘Active listings haven’t been this high in the month of February in more than five years,’ CKAR said.”
The Sydney Morning Herald in Australia. “Red Maple Finance director and mortgage broker Nariman Amalsadiwala said his clients in Melbourne’s western suburbs were suffering as rate rises continued to bite. ‘If you’re an average household doing your budget how do you find that extra $1000 to $2000 per month?’ he said. ‘People will be eating up their savings. Some … are going to be in a bit of stress. We might even see some investors selling investment properties if they just can’t take it.’”