A report from Reuters. “The stock of housing under construction increased 1.3% to a rate of 1,426 million units last month, the highest since February 1974.”
From Market Watch. “Zillow’s unexpected announcement this week that it’s putting a temporary stop to its home-buying activities raised many analysts’ eyebrows. And some argue that more concerning trends could be on the way. Independent real-estate analyst Mike DelPrete found that Zillow, Offerpad and Opendoor were all paying well above the value of homes to purchase them in 2021, whereas back in 2019 they typically purchased properties at a discount. ‘Is it possible that Zillow is seeing something in their data…that maybe on the margin makes them a little bit nervous about holding inventory right now?’ said Tom White, an internet research analyst.”
From Bloomberg. “It’s not just regular working people buying homes; many homebuyers are actually professional investors and speculators. In August 2021, The Wall Street Journal reported that private equity firms like BlackRock, Inc. were buying up residential properties by the neighborhood and even well-above market prices. Additionally, REITs like Invitation Homes Inc and American Homes 4 Rent are in the homebuying space. Real estate platform firms like Zillow and Opendoor Technologies Inc are in the house-flipping business too. And then you must account for the many individual real estate investors out there who inspire the various house-flipping shows on home and garden channels.”
“This means it’s difficult to know how much of the housing market demand is from ‘real homebuyers’ and how much is from investors. It’s also difficult to find a similar time in history for comparison to determine if the current investing and building trends are sustainable.”
Fox 10 Phoenix in Arizona. “There has been a bit of a jolt to the real estate market, as Zillow announced it is halting its home buying program, called Zillow Offers, in Phoenix and other cities. ‘Zillow’s inventory has grown 1,000% since last year in Phoenix. Just in Phoenix,’ said Tina Tamboer, a Senior Analyst with The Cromford Report. ‘When they purchase a home, they have to sell it right away,’ said Tamboer. ‘Sometimes, you have to wait for that inventory to dissipate.’”
The Boston Globe. “The Greater Boston Association of Realtors, which tracks activity in 64 cities and towns in Eastern Massachusetts. It said the typical single-family home sold for $750,000 in September, a record for the month and up 10 percent from September 2020, but down 4 percent from August and the lowest median price in six months. That plateau comes as sales volume slows, particularly for single-family homes, which fell 13 percent from the same time last year, even as listings trended upward at the start of the traditionally busier fall season.”
“‘There’s definitely a more relaxed feel, and slower pace to this fall’s market,’ said GBAR’s president, Dino Confalone. ‘We are seeing less urgency among buyers, especially where inventory levels have improved steadily since the end of August. Others seem to be pumping the brakes so as not to overextend themselves financially.’”
The Watauga Democrat in North Carolina. “High Country MLS President Shy Fecteau said that ‘while inventory levels may be lower compared to this time last year, the good news for buyers is that there are plenty of new listings coming on the market every week.’”
The Dallas Morning News in Texas. “Like many other experts in the real estate industry, Najat Murillo with Fathom Realty is seeing that the Dallas-area housing market may be showing signs of slowing in this hot sellers’ market. ‘Many homes are still receiving multiple offers, but not quite as many as we’ve seen in the last several months,’ she said. ‘Buyers are growing tired of the bidding wars and some can no longer afford the increased prices,’ she said.”
From Eastsider LA in California. “Here are some examples, followed by a breakdown by neighborhood, of recent price cuts on homes, condos, apartments and other Eastside properties. How Low Will They Go? $25k slice on Silver Lake condo; $100k chop on Montecito Heights 4-bedroom; $86k cut on Los Feliz Traditional.”
The Sacramento Bee in California. “‘We are of course seeing some seasonal slowing, which is a good thing because we don’t want a repeat of the market last year when prices basically kept rising throughout the fall. That sort of growth is not sustainable,’ said Ryan Lundquist, a certified residential appraiser and housing market analyst. ‘In short, we are starting to see the typical signs we’d expect for this time of year with prices softening, it’s taking slightly longer to sell, and there aren’t as many bidding wars.’”
“In 2019, little more than half of all homes for sale in the Sacramento region sold at listing price. Now, only 26% of homes are selling at list price; the vast majority are selling for 5 to 10% over asking price. Price per square foot also dropped from $330 to $320 between August and September.”
The Geogian Straight in Canada. “The biggest penthouse in downtown Vancouver has a new owner, finally. The two-level apartment at the Emeral West condo tower sold after 85 days on the market following its last listing. The five-bedroom and nine-bath luxury digs went for $9,250,000. Tracking by real-estate site Zealty.ca shows that 3101-717 Jervis Street was marketed for a way higher price more than three years ago.”
“The 9,186-square-foot penthouse was listed on August 7, 2018 for $20.5 million. The property did not sell, and the listing expired on January 2, 2019 with a lower price of $17,888,000. A new listing was made on January 28, 2019, and the price was reduced to $16.5 million. The listing expired on July 1 during the same year. The penthouse returned to the market on May 19, 2021, with a lower price of $14 million. The listing was terminated on July 20.”
“On the same day, the property was listed again, this time with an even lower price of $11,999,900. Zealty tracking indicates that the condo sold on October 13 for $9,250,000, which is 22.9 percent less than the last list price. Compared to its previous price of $20.5 million, the sold price was nearly 55 percent lower.”
The West Australian. “While property prices are largely reported to be on the rise throughout Perth and wider Western Australia, REIWA data for the 2021 financial year has revealed not all suburbs have been so lucky. Star performers over the 12-month period included Ascot and Henley Brook, where the median price leapt more than 40 per cent and 50 per cent respectively, while on the opposite end of the spectrum, Herne Hill (-28.8 per cent) and Forrestdale (-28.3 per cent) saw the biggest median price drops. Peppermint Grove was another well-established inner-city suburb that saw a decrease in price (10 per cent).”
Two reports from Bloomberg on China. “New-home prices fell in September for the first time since April 2015 data showed Wednesday. Sinic Holdings Group Co. became the latest developer to default, while Kaisa Group Holdings Ltd. cancelled meetings with some investors this week.”
“‘Now the priority is to prevent a state of panic,’ said Yan Yuejin, research director at Shanghai-based E-house China Research and Development Institute. ‘The home market has clearly entered a downward cycle.’ About three-quarters of cities saw second-hand home values fall from a month earlier. A price war is set to intensify in the coming months as landlords in wait-and-see mode surrender to the cooling trend, Yan said.”
“The drop in confidence has affected people like Carl, a property investment consultant in eastern Hangzhou. He says the number of prospective clients tumbled around 90% last month from the second quarter. ‘Business is so light,’ Carl said, asking not to give his full name while talking about government policy. One customer ‘became less and less interested each time we called him, and later on he wouldn’t even pick up our calls.’”
“Any recovery will be difficult until home values resume rising. ‘If property prices stop growing, we won’t buy,’ said Jack, a tech worker in Shenzhen who didn’t want to be identified by his surname for fear of reprisals from his company. ‘Right now, I’ll sit and watch.’”
The Vision Times. “Many Chinese provinces are witnessing a decline in housing prices, something that has happened for the first time in six years. Out of the 31 provincial-level divisions, 16 recorded a fall in housing prices in August. This includes cities that are directly administered by the central government. Prices are at their lowest since March 2015, according to official data.”
“However, official figures may not reflect the reality of the situation. In an attempt to quickly get their hands on cash, real estate developers are in a rush to dispose of assets and are offering steep discounts. Developers like China Evergrande are selling properties for half the original price.”
“The decline in property prices could also be a trend that is here to stay. Logan Wright, director of China market research at the Rhodium Group, said that the Chinese property market is ‘fundamentally imbalanced’ due to ‘too much housing’ and ‘too little demand among owner-occupiers.’ He believes that household formation rates peaked between 2013 and 2015; that’s when China’s working population started declining.”
“However, developers continued pumping out more projects. In 2019, developers started construction of 18 to 19 million units. When finished, there might not be enough people to buy these apartments; prices could drop even more.”