A report from Fortune. “So why is inventory rising now? ‘There’s a mentality among some sellers that if they don’t sell now, they’ll miss their opportunity to get top dollar,’ said Ali Wolf, chief economist at Zonda.”
From ROI New Jersey. “Kristin Ehrgott has been selling high-end homes in New Jersey for more than a decade. And she’ll be the first to admit that the frenzy that overtook the market in the opening months of the COVID-19 pandemic is over. ‘When anybody tells me, ‘We’re in a bubble, the prices are too high, I’m not going to buy right now,’ I tell them, ‘You’re absolutely wrong — and you don’t understand the market if that’s what you think,’ she said. And those looking to turn a quick buck already have come and gone, too, she said.”
From WATE on Tennessee. “Hancen Sale, the Governmental Affairs & Policy Director for the Knoxville Area Association of Realtors, said while prices are staying high, buyers can expect homes to stay on the market longer and to be competing with fewer offers. ‘Earlier in the year, we would see like 15 offers,’ Sale said. ‘I think we’ve gotten down to like three or four.’”
“Broker Lane Shuler said this cooled down period was expected. Shuler also talked about why more homes are going back on the market than in the past. ‘People feel like they overpay in the bidding process, they win the house, then when they go to the inspection, they sort of feel like they need to get everything that they’ve asked for because they feel like they overpaid,’ he said.”
The Sun Sentinel in Florida. “Q: Now that evictions are resuming, I need to deal with my tenant who is over six months behind. I have continued paying the mortgage, but it has not been easy. I need the cash flow from a paying tenant before I end up in foreclosure. Is there anything that I should know? A: If your tenant has a regular job or valuable possessions, it may be worth getting a money judgment and trying to collect.”
From 13 WHAM. “New York has extended eviction protections for tenants through January. Yet there’s a gaping hole involving landlords. Some are now falling behind in property taxes and that could ultimately fall back on the people who rent from them – and on the neighborhoods. ‘I don’t make enough to subsidize city rental properties,’ said Rich Tyson.”
“Tyson is a Realtor who wanted to do more to invest in Rochester neighborhoods, so he became a landlord. Gradually, over five years, he acquired and refurbished 37 properties. Then came the notices in the mail. ‘These are what I’m starting to get, which are back taxes,’ he told 13WHAM. Tyson says he owes a combined $52,000 in taxes to the City of Rochester and Monroe County. Some of that is in arrears. Tyson said he is now selling his properties to avoid bankruptcy.”
From Summit Daily in Colorado. “Breckenridge is looking to cap its short-term rental licenses, but local vacation homeowners are concerned about how this could impact their property values. In particular, owners along the Four O’Clock corridor fear the impact of licenses being nontransferable at sale. Abby Epperson, a Realtor who owns a unit and lives full time at the Park Place Plaza condominium, said the town should consider exempting this corridor. While she lives in Breckenridge for most of the year, she short-term rents her home whenever she is away. She said the inability of a new owner to get a short-term rental license will decrease the value of all the properties at the base of the ski area.”
“‘What the council is proposing is a serious, purposeful devaluation in our property prices,’ Epperson said. ‘They’re trying to do a blanket policy, so they’re picking winners and losers because it’s going to affect the values of our homes. When you have a residence for 17 years, you don’t expect it to go down because of the decision of seven people, and that’s heartbreaking.’”
“Gary Stephens has owned a condo at Park Place Plaza for 30 years. ‘I bought my place in this corridor with the hopes that its value would go up as all these new town and ski resort amenities were brought to fruition,’ Stephens said.”
The Globe and Mail in Canada. “Over decades, real estate has become an increasingly big slice of the economy, taking the mantle of Canada’s largest industry in the 2008-2009 recession. Before the COVID-19 health crisis, residential investment routinely amounted to 7 per cent of nominal gross domestic product. More recently, that’s surged to more than 10 per cent – or roughly double the equivalent rate in the United States. Now, things are shifting. As housing activity cools, the industry has become a drag on an economy that increasingly relies on it.”
“That was apparent last Tuesday, when Canada posted a shock economic contraction for the second quarter. Residential investment fell 3.3 per cent, or at a 12.4-per-cent annualized rate. And further drops are likely coming, given that sales are continuing to ebb in major markets across the country. ‘Where I do worry … is the more cash flow that consumers are putting into housing stock, the less is available to drive the economy,’ said Royal Bank of Canada’s Chief executive Dave McKay. ‘I think all policy-makers are worried partly … about long-term economic drag from that much cash flow going into servicing housing.’”
From Mingtandi. “In today’s roundup of regional news headlines, developer Oceanwide Holdings is seeking to offload its main office complex in Beijing, according to people familiar with the matter, in a bid to raise cash after a unit defaulted. Hong Kong’s government has banned the real estate magnate Pan Sutong from selling residential property off the drawing plan until its construction is completed, in an unprecedented exercise of its mandate amid concerns over the developer’s cash crunch.”
“China Evergrande’s Shenzhen-traded 5.9 percent May 2023 bond fell more than 20 percent in afternoon trade on Tuesday, extending falls since a ratings downgrade made the company’s bonds ineligible for use as collateral in repo transactions.”
From Fitch Ratings. “Fitch Ratings has downgraded to ‘CC’, from ‘CCC+’, the Long-Term Foreign-Currency Issuer Default Ratings (IDR) of Chinese homebuilder, China Evergrande Group, and its subsidiaries, Hengda Real Estate Group Co., Ltd and Tianji Holding Limited. Fitch has also downgraded the senior unsecured ratings of Evergrande and Tianji to ‘C’, from ‘CCC’, with a Recovery Rating of ‘RR6’, as well as the Tianji-guaranteed senior unsecured notes issued by Scenery Journey Limited to ‘C’, from ‘CCC’, with a Recovery Rating of ‘RR6’.”
“The downgrade reflects our view that a default of some kind appears probable. We believe the recent drop off in contracted sales has weakened Evergrande’s ability to repay short-term debt, since contracted sales proceeds are its key source of liquidity. Reported contracted sales plunged by 26% yoy in August 2021, after dropping by 13% in July 2021 and 6% in June 2021, even though Evergrande has been selling properties at a discount to generate cash. The average selling price was down by 26% yoy in August 2021.”
From Mansion Global. “The market for what had been some of the most desirable apartments in China’s biggest and wealthiest cities has seized up, as Beijing intensifies a campaign to open access to education. Anxious parents have been snapping up apartments near well-regarded primary and middle schools in recent years, hoping to guarantee a place for their children. In seven cities where the ‘school-district housing’ frenzy has been most pronounced—which include the four megacities of Beijing, Shanghai, Shenzhen, and Guangzhou—prices for these homes have skyrocketed.”
“But in the space of a few months, China’s campaign to tamp down education costs—as well as real-estate frenzies—has chilled the once-hot market. In the centers of the seven cities, where school-district homes are clustered, the number of transactions fell 38% between January and July. owning a home close to a school will no longer guarantee a place in that school in Beijing and other cities, and primary- and middle-school teachers and principals will be rotated within the public-school system. That has undercut demand for apartments in those neighborhoods—bad news for families who emptied their savings to buy one.”
“Average home prices in three central districts of Shenzhen, where the city’s best schools are, tumbled by some 15% from January to July, according to E-House data. Chen Jinhua, a Shenzhen-based broker at Leyoujia Real Estate Trading Co., said a wave of homeowners scrambled to sell in early August, as worries grew about the new school policies. Since the guidance prices were introduced in February, asking prices have fallen by some 10%.”
“Among the newly dissuaded prospective home buyers is Su Min, a Beijing mother who had long been considering an apartment in Xicheng district in hopes of securing a coveted school placement in a few years’ time for her 2-year-old son. Though the asking price for one apartment she had been looking at was cut by 10%, or more than $120,000, Ms. Su now suspects that pouring her life savings into an old, small, shabby home that can no longer guarantee her son a desirable school placement doesn’t make much sense.”
“‘Fortunately we didn’t purchase at the peak,’ she said. ‘And now, maybe we don’t have to buy such a home anymore.’”