It’s Friday desk clearing time for this blogger. “Seattle-area home prices dropped again in March. The median single-family home in King County sold for $840,000 in March, down about 10% from a year earlier, according to the Northwest Multiple Listing Service. Prices dropped sharply on the Eastside, where the median home price plunged 17% to $1.4 million. Nearby counties are reporting similar trends. The median Snohomish County home sold for $724,000 in March, down 9.5% year over year. The median Pierce County home sold for $526,000, down 6%. The median Kitsap County home sold for $517,500, down 4%.”
“Homes priced between $1.5 millionand $2 million are ‘flying off the shelves,’ said Seattle RE/MAX broker John Manning. But townhomes, typically a more affordable option for first-time homebuyers, are ‘sitting around unsold,’ Manning said. Tech layoffs in the Seattle area have shaken the confidence of younger tech workers who would be townhome buyers, Manning said. That’s especially true for tech employees on work visas, who can be forced to leave the U.S. if they don’t find another job. ‘They are sitting back and not getting in the market as much because they’re worried about where they will be employed,’ Manning said.”
“Not even the luxe real estate offerings of the Hamptons are immune from an ongoing slowdown. The median home sale price in the Hamptons fell to $1.66 million in the first quarter of 2023 – a 7.6% decline compared to the same period one year earlier, when the median home sale price was $1.8 million. The sharpest plunges in median home sale prices occurred in the Shelter Island market, where the figure plunged nearly 38% to $1.61 million. Sale prices in Amagansett and Bridgehampton each fell by more than 15%. All 12 Hamptons-area real estate markets tracked by the firm reported declines in total home sales. Overall, the number of home sales plunged by a whopping 44% for the first quarter year-over-year.”
“The number of homes on the market has exploded since last year — three times more, in fact. In March 2022, inventory was tight with only 2,000 homes on the market, but March 2023 was a different story with 6,000 homes available. Realtor Ethan Flynn’s data shows that inventory jumping even higher in April. At the same time inventory is up, Flynn said that contract volume is down as much as 20%. ‘When you look at the relative affordability of Nashville and the Nashville housing market, another 10% to 20% drop in prices is not unreasonable,’ said Flynn.”
“As prices have stabilized and mortgage interest rates have risen sharply, sales in general have slipped to nearly 30% of the volume from the year prior. ‘We’ve seen people who are deciding to wait, whether it’s because they’re not finding the home they want even though our inventories have come up,’ said Brian Tresidder, the 2023 president of the Realtor Association of Sarasota and Manatee. ‘Prices shot up, interest rates shot up, insurance has gone up, and so there’s not this rush for them to buy something that they may not necessarily like.’”
“Out of the 3,144 counties across the U.S., Los Angeles saw the largest drop in population between July 1, 2021 and July 1, 2022, according to the U.S. Census Bureau. More than 90,000 people left the area, though that’s fewer than the roughly 180,000 that moved the previous year. During the same 2021-2022 time period, California as a whole lost about 114,000 people, meaning L.A.’s exodus could’ve accounted for about 80 percent.”
“‘Anytime we see a coastal California County losing folks, that’s really a policy failure on our part,’ said Adam Fowler, founding partner at CVL Economics in Los Angeles, who also points to a lack of affordable housing supply as a major issue. He’s also watching office vacancy rates, which have been steadily climbing in many places. ‘That’s going to really have some red flags for our fiscal house of cards in jurisdictions over the next decade,’ he said. ‘We’re not sure how that’s going to play out if the valuation of those buildings follows the downward trajectory of what office vacancies might indicate. How we pay for things locally is going to hinge on a lot of those questions in the next few years.’”
“More office space is being vacated than occupied in Dallas-Fort Worth. A quarter of DFW office space was vacant in Q1, while sublease availability remained elevated at 9.1M SF, per JLL. ‘Dallas has a record amount of sublease space on the market, over three times the amount of space we had pre-pandemic,’ said Robbie Baty, Cushman & Wakefield’s vice chairman. ‘While many building owners will be able to refinance and keep their buildings, there is a high likelihood that many buildings that are struggling will result in defaults and/or foreclosures.’ The construction pipeline remains robust, per Cushman & Wakefield, with 5M SF of new office space underway.”
“Seemingly gone — at least temporarily –are the days of the blockbuster deals. ‘No one’s willing to be the first one out of the box [in 2023] to put their properties out there to see how much the market has changed,’ NIC Chief Economist Beth Mace told Senior Housing News. ‘The market is still pretty stalled and it’s a very challenging environment.’ There are also still plenty of distressed properties that could hit the market in 2023. ‘I think the market’s been shocked and still trying to absorb what’s been happening,’ Mace said. Without pricing transparency, Mace said the industry could expect to see fewer deals and lower valuation adjustments. ‘There’s difficult decisions for portfolio managers probably right now on what to retain looking at their entire portfolio of properties,’ Mace said.”
“In high-rise towers and boutique buildings from mid-town south to Lake Ontario, listings are lower than normal, says Christopher Bibby, broker with Re/Max Hallmark Bibby Group Realty. One day last week, Mr. Bibby had 17 condo listings pop up in the city core – and some of those had been relisted after failing to sell earlier. He cautions that prospective sellers should not hold out for a return to the mania of late 2021 and early 2022. ‘To expect that is not realistic,’ he says of the frenzy. ‘We won’t go back to that type of market again.’”
“Sarah Coles, head of personal finance at consultancy Hargreaves Lansdown, says: ‘The house price slip has become a slump, with the biggest annual price drop in 14 years [according to the Nationwide]. The pace of descent accelerated, and we’re already almost five per cent below the peak in August. Unfortunately, the indications for the future aren’t looking terribly promising either. Buyers have been broken by rampant inflation, jacked-up mortgage rates, a stagnating economy, and the threat that there could be worse to come.’”
“Sweden has long had one of Europe’s hottest housing markets, but prices have tumbled and are not set to recover for a long time, according to Danske Bank. Prices are currently down by 12% from the peak recorded in February last year, according to the bank’s data. Danske previously projected a 20% drop, peak to trough, in Swedish house prices. It has since revised that figure to a 25% dip, meaning prices are currently ‘still only half-way to the bottom,’ according to Danske Bank’s Nordic Outlook report.”
“House prices have dropped 8.2% year on year, an increase in the rate of slowdown, according to the NVM estate agent association. Although the unprecedented 20% annual increase in prices during corona has not been corrected, the rate of slump has increased and sales dropped to a five year low. This year, almost twice as many houses were for sale between January and March than in 2022, with a total of 31,000 for sale boards with NVM estate agents. The median sale price dropped by 3.6% compared with the last quarter of last year, with a marked collapse in pricier new build houses and properties of over €1 million. ‘Everyone thought that price increases of 20% a year would not be sustainable,’ said head of the NVM housing group Lana Gerssen,. ‘This is a normal correction on the enormous price rises of the past years.’”
“Data from Statistics Finland reveal that building contractors began construction on a total of 1,734 flats in January, signalling a drop of 835 from January 2021. At the same time, the number of vacant newly built flats is high partly because of a high number of newly completed flats and partly because of a slowdown in sales. The number of newly built flats sold was 80 per cent lower in January 2023 than in January 2021 in Jyväskylä. Sale times in the city, meanwhile, have tripled in the past two years. The drops in sales have been even more dramatic in Helsinki, Espoo, Turku and Oulu.”
“Tuomas Viljamaa, the managing director of the Federation of Real Estate Agency indicated that the decline in the number of new construction projects is not necessarily a negative development. ‘You could say that we’ve built beyond our needs in recent years. The positive thing about that is that price increases haven’t got out of hand,’ he elaborated.”
“Melbourne resident Eric Poon, 33, said he is among Porter Davis customers left without insurance, and argued the suggestion some people fell through the gap is an attempt to rationalise the home builder’s actions. He and wife Abby Zhong paid the deposit for their Porter Davis home at Lilydale in Melbourne’s outer north-east in December 2020, but the land was only titled last week because of delays by a land developer handing over the property. ‘This has put a considerable financial strain on us,’ Mr Poon told AAP. ‘We were hoping to complete the construction of our new home as soon as possible so that we could rent out our current apartment and generate some cash flow.’”
“Shareholders at Credit Suisse’s last-ever annual meeting vented their frustration, anger, and disappointment in remarks directed to the bank’s board. After sharing that he did not bring his gun to the final annual meeting, shareholder Guido Roethlisberger said that security checks at the door into the conference ‘were enough to annoy me,’ according to a translation of his remarks. Another angry shareholder appeared to be implying that Credit Suisse’s board would’ve been crucified during medieval times. Earlier in his remarks, the shareholder said one share of Credit Suisse was worth over 80 Swiss francs 25 years ago, but today a share is not enough to afford a Swiss pastry.”
“‘The value has decreased by about 99%,’ he said. ‘And for this achievement, the best top managers of the world would have been paid not only millions but billions in bonuses. And now, they probably want a golden parachute to bid farewell to us as well. Have you ever asked yourself, how much is enough? How much is enough for a golden parachute that is on his crashing plane that is the Credit Suisse?’”
“One shareholder held up a handful of walnut shells and said ‘a bag of these costs around one share’. He said he had a ‘gift’ for Credit Suisse, and held up walnut shells, saying a bag full of them would cost as much as one share of the troubled bank. He added that he ‘opened the shells, ate the nut inside of it and then glued them back together. So they’re hollow nuts.’”