A report from the Boston Globe in Massachusetts. “The median sales price of a single-family home in Greater Boston dropped nearly 8 percent year over year to $700,000 in February, according to the Greater Boston Association of Realtors. ‘People who saw their neighbors sell homes last spring for well over asking price with multiple offers to choose from have had a big wake-up call over the last ten months as the market has cooled,’ added Daryl Fairweather, Redfin’s chief economist. ‘By this point, savvy sellers have adjusted their expectations and learned that pricing their home correctly the day they list it is better than overpricing and having to lower it later on.’”
From Deseret News. “The median price of all home types sold in Salt Lake County, Utah’s most populous county along the Wasatch Front, fell below the half-million dollar mark in February, down to $494,500, a nearly 4% decrease from a year earlier, according to the Salt Lake Board of Realtors. The median price of a single-family home in Salt Lake County fell to $560,000 in February, down $90,000 from its peak in May 2022 when the median home sold for $650,000. That’s an almost 14% price decrease. Only 590 Salt Lake County homes sold in January, down 36% compared to 927 sales in January 2022. That marked the fewest number of homes sold in a single month since January 2011, when 571 homes were sold, according to the Salt Lake Board of Realtors. Multifamily homes saw the biggest percent decrease in sales for the month at a decline of 46%.”
The Real Deal on Texas. “Arbor Realty Trust has foreclosed on a quartet of low-income multifamily properties in Houston valued at $229 million. The portfolio includes Heights at Post Oak, Redford Apartments, Reserve at Westwood and Timber Ridge Apartments, all of which were purchased by Jay Gajavelli’s Applesway Investment between August 2021 and April 2022. Located within the city’s Outer Loop, the properties house a combined 3,200 apartment units.”
“Arbor initiated the foreclosure on March 13 after Applesway defaulted on its mortgage payments. The properties went to auction on April 4, but no bids were made, according to sources familiar with the foreclosure. Arbor initiated a credit bid, in which the lender can use the outstanding debt owed on a property as collateral for their bid at a foreclosure auction, for each property. Distress hit beyond foreclosures with sales of multifamily properties falling at their fastest rate since the 2008 mortgage crisis, following a period of massive transactions that peaked in 2021. Particularly, in the Sunbelt regions.”
Bisnow New York. “Sales volumes in New York City commercial real estate slowed across asset classes during the first quarter of this year. While defaults and discounts are on the rise, distress and forced sales will likely only show up during Q3 or even later as owners run out of equity in the face of refinancing deals, said Avison Young Tri-State Investment Sales Group Head James Nelson. ‘We are seeing some distress with sales, you do read about that happening,’ Nelson said, adding that the contagion is concentrated in the office sector but is also spreading to multifamily because of financing conditions. ‘It would not surprise me if we start seeing more of those forced sales, but I don’t think there’s going to be a meaningful impact in Q2 because a lot of buyers and sellers are still prolonging decision-making.’”
The Real Deal on California. “Build Inc. has surrendered a property approved for a 40-story apartment highrise in San Francisco’s Hub District to its lender. The San Francisco-based developer has filed a deed-in-foreclosure for its stalled One Oak project at 1500 Market Street and will hand it over to Seattle-based Washington Capital Management, the San Francisco Business Times reported. Build owed $44 million for the property at the edge of Civic Center, Mission and South of Market, according to the filing.”
“Its surrender marks the latest real estate casualty in a city where a third of the offices are vacant and rising interest rates, the coronavirus pandemic and soaring construction costs have hobbled housing development. Rents have fallen 15 percent since March 2020, according to CBRE. The One Oak project was approved in 2017 as a mixed-use, 304-unit tower containing 1,200-square-foot condominiums. At the time, the development was valued at $400 million. But Build couldn’t get investors to bankroll it as construction costs rose faster than home prices. In 2018, the firm tried to sell the site for an undisclosed price. Last summer, the developer turned toward building apartments instead.”
425 Business in Washington. “The median sales price of single-family homes and condominiums in King and Snohomish counties in March dropped 9.4% and 10.4%, respectively, from March 2022. Additionally, total active listings rose, while the number of pending and closed sales dropped, according to figures released last week by the Northwest Multiple Listing Service. The story was similar across the the 26-county region covered by NWMLS. On the Eastside of King County, the median sales price of single-family homes only was $1.4 million, down 17% from a year ago.”
“In Snohomish County, the median sales price of homes and condos combined was $680,000 last month. For homes only, the median was $724,000, down 9.5%. For condos only, the median was $495,000, down 10.8%. In the southeast county, where median sales prices are typically highest, the median for single-family homes was $995,950, down 23.3%.”
Mortgage News Daily. “Money, some say, makes the world go ‘round. Last week we all learned that net production income for independent mortgage bankers fell to a $301 loss (13 basis points) for all of 2022, according to the MBA, a series low for the index which began in 2008. Marina Walsh, CMB, MBA’s VP of Industry Analysis, sagely observed, ‘The stellar profits of the previous two years dissipated because of declining volume, lower revenues, and higher costs per loan (which hit $10,624 per loan).’ True: 1.5 closed loans a month per production employee stinks.”
Durham Region in Canada. “‘Right now, for buyers, we’re almost back to where we were in the crazy times just because inventory is so low and we’re seeing multiple bids everywhere, especially in the last month,’ explained Oshawa real estate agent Chris Vale. ‘For sellers, I think with the price decrease that happened over the last year, where we saw pockets of Durham down more than 25 per cent, people are feeling that they may have missed out on selling at the highest price and are waiting for the peaks to come back and just seeing how things play out in the economy.’”
From Market Watch. “The Chinese government has been engaged in a decade-long campaign to stave off a financial crisis triggered by excessive debt growth, an effort that has critically damaged its $10.7 trillion real-estate debt market and set the stage for a political showdown between local and central governments. At the heart of Beijing’s debt problems has been the growth of the so-called shadow banking sector, made up of firms that act like banks by issuing loans but that are not subject to the same regulations and supervision as traditional banks, according to a report issued Monday by the Center for Strategic and International Studies, a nonpartisan think tank.”
“Chinese housing developers began funding their operations through preconstruction sales of homes, shifting their borrowing from shadow banks to prospective homeowners. ‘This process also introduced some Ponzi-type elements of financing into China’s property sector, as the rush to raise money from presales was likely necessary because shadow banking loans were being called in,’ wrote Logan Wright, a China expert at Rhodium Group.”
From Asia One. “Would you pay US$90,000 (S$120,000) to buy virtual property in the metaverse? While it would likely be a resounding no from many of us, Taiwan-based Singaporean singer JJ Lin did just that in November 2021. He announced on Twitter that he had bought three virtual properties on Decentraland, a 3D world where users can buy virtual plots of land as non-fungible tokens (NFTs), which media reports claimed at the time cost him about US$30,000 each. It seems that the singer’s investment hasn’t panned out, leading to netizens on Weibo having a field day with the news and trending ‘JJ Lin’s virtual real estate devaluation of 91 per cent’ on the platform.”
“In response, the 42-year-old cheekily posted a photo of his seemingly empty wallet on Weibo yesterday (April 9) with the caption: ‘I heard many people have been wanting to help me with my financial management recently!’ According to Metaverse analysis platform WeMeta, the real estate price per square metre of land on Decentraland dropped from US$6,000 in 2021 to a measly US$5 in 2023. This means JJ’s Decentraland portfolio is worth less than US$8,100 in present time.”
The Spinoff in New Zealand. “Real estate agents seemed uncertain and no one wanted to talk figures. So I decided to ask this agent outright. Was this home going to go for around $1.1 million? Eventually the agent indicated owners’ expectations at the upcoming auction were north of $1.3 million. As my partner and I drove away, we shook our heads. It was very likely the owners weren’t going to get anywhere near that. That particular auction was passed in. No one bid – or at least, no one bid enough. That same real estate agent has been pestering me with pleading text and email spam to ‘present all offers now’. With a CV of $1.26 million, that house is still on the market. As lovely as it is, we’re not interested in anything at risk of flooding and neither, it seems, are many others. In February of last year, Homes.co.nz estimates this house was worth up to $1.64 million. Now, it’s dropped to its lowest estimate in three years: $990,000.”
“This is what buying a home in Auckland looks like right now. Buyers like us are tentative, nervous and scared. Sellers have unrealistic expectations built up from the buoyant market of 12-18 months ago, so their homes sit on the market, refusing to budge at the price the vendors hope for. Homes at clear risk of flooding don’t move unless cheeky offers are accepted. In St Lukes, at a three-bedroom home with a stunning deck, the agent told me they’d received two offers in the low $800,000s. The CV was $1,650,000. We later discovered it was smack bang in a flood zone.”
“Developers have run out of cash so buyers are no longer competing with them. The council valuations are meaningless. Many homes advertise just how far desperate owners are willing to go below the last council valuation provided in 2021, back when the market was booming. ‘Selling 300+ below CV,’ says one home listed in Te Atatū South. ‘CV $1.38m selling $300k below the CV price,’ says another in Mount Albert.”
“For others, things are even more desperate. Some real estate agents promote properties as being sold under duress. ‘Urgent Action needed – must be sold,’ says the listing for a four-bed, two-bath in Waterview. A six-bed in Grey Lynn has ‘got to go!’ Search Trade Me for ‘mortgagee sales’ and you’ll find more than 25 properties listed in Auckland. ‘A fantastic opportunity with huge upside!’ say the notes for one. Several are developments paused mid-construction. Photos for a North Shore property with three townhouses mid-build show the site was vacated with giant bags of pink insulation scattered across unfinished decks. A ladder has toppled over in the front yard and planks cover the driveway.”
“Nothing is selling at auction. Friends who put their own homes up for sale have taken them down eight weeks later, preferring instead to wait out winter and try again next spring. Where’s the bottom? No one knows, but the further things fall, the better it is for first-home buyers, the people affected most by those soaring prices two years ago. For those caught in the middle, everything feels uncertain. Except, of course, for the reliable ping of notifications from real estate agents hustling for a sale. As one billboard for an Auckland CBD firm warns: ‘The slower the market, the harder we work.’”