A report from WTOP. “About 1 million U.S. homeowners with a mortgage are still in some stage of a mortgage payment forbearance program with their lender. The current rate of delinquencies at all stages is 3.5%, and that is historically high. ‘The last time we saw this high of a level was back in 2008 and 2009 during the financial crisis. But what is different this time is that the foreclosure rate is at a historic low because of the forbearance program,’ said Lawrence Yun, chief economist at the National Association of Realtors.”
From Bankrate. “Subprime mortgages – also known as non-prime mortgages – are for borrowers with lower credit scores, typically below 600. Around 33 percent of all borrowers (not just of mortgages) fall into the subprime category based on credit score, according to Experian. If your credit needs work, a subprime mortgage isn’t your only option. FHA loans and VA loans can be alternatives for borrowers with credit challenges – FHA loans, for instance, accept scores as low as 500 if you can make a down payment of at least 10 percent.”
“While the subprime mortgages offered prior to the Great Recession were bad news – many borrowers were confused by attractive-sounding low payments that hid the realities of these loans – they were not illegal. Today, with additional regulations, they aren’t always bad, and aren’t illegal. In some cases, they might be the only option for borrowers who have gone through challenging financial times, such as declaring bankruptcy.”
The Powell Tribune. “Starting around the spring of 2020, the Big Horn Basin housing market began heating up. Flash forward to today and realtors report that, while sales are cooling ever-so-slightly, they remain busy. Travis Swenson, broker/owner of Metzler & Moore Realty, said one thing that keeps the market rolling is that not everyone who moves to Wyoming stays in Wyoming. ‘People love the glamor of summertime Wyoming, but they don’t like the nastiness of wintertime Wyoming. So we help them move in and then a couple years later, we help them move out,’ Swenson said.”
“‘It’s not the frenzy it was like it was in the spring and before,’ said Eric Paul, broker/owner of Heart Mountain Realty. Paul said the slight cooling of the market is a good outcome — if it’s the result of more buyers finding homes and leaving more inventory on the market. If demand is falling because of rising interest rates or other pressures on the market, then it’s a problem. ‘Less demand is never a good thing for the market,’ Paul said.”
From Marketplace. “The S&P Case-Shiller Home Price Index showed that in August the year-over-year increase in home prices was the lowest we’ve seen since the early days of the pandemic. Caily Langston didn’t have to give a cash gift to buy her first home in Northern California in June; she just had to pay $30,000 above asking. Langston said the pandemic’s housing market legacy will have another aspect: If she ever decides to sell, she’ll have very high expectations. ‘When we sell if we don’t have multiple offers waiving everything and giving us well over the price, I’m going to say, ‘What’s going on here?’ Langston said.”
The Journal Sentinel in Wisconsin. “A new development plan for a large portion of Milwaukee’s north side includes a focus on a lagging hotel project as well as additional affordable housing. Those neighborhoods are affected by reckless driving and other crimes, substantially declining population and what one planner called ‘an astounding number’ of vacant properties.”
The Real Deal. “New York City’s priciest condominium project is proving to be a lot less expensive than advertised. Since closings began at Gary Barnett’s Central Park Tower in February, sales have hit public records for 33 units, most boasting prized park views. But per square foot, the high-flying developer is getting 25 percent below what he was aiming for, according to an analysis by The Real Deal.”
“Three of the 20 full-floor units have sold for more than 35 percent less than their offering-plan prices, including one listed at $95 million that sold for $50 million.”
From WSVN in Florida. “About two dozen residents from the Crestview Towers in North Miami Beach held a protest in front of their building, more than three months after they were forced to leave their homes. Some protesters even banged on pots and pans. Close to 300 families were forced to evacuate on July 2 after a city engineer deemed the building unsafe. They still have no idea when they will be allowed back inside. Some were able to find other places to live temporarily, but they said their housing costs have now basically doubled.”
“‘I have to pay mortgage, I have to pay maintenance,’ said resident Beatriz Isaza. ‘I have to pay assessment, and then on top of that, I have to get a new property that I still have to pay.’ Other residents said they still haven’t found another place to rent. ‘I don’t have any more money now,’ said resident Ligia Mora. ‘We live in a hotel, and my kids are tired of that, because they don’t have space to play.’”
From Canadian Mortgage Professional. “Despite concerns expressed by clients over the prospect of rising interest rates in the near future, Nick L’Ecuyer , principal broker at the Ontario-based Mortgage Wellness, told Canadian Mortgage Professional that it was important to realize any rate movement would be from the record-low levels they’ve trended at throughout the pandemic. ‘Rates shift every day. Of course they’re going to trend up over time – they’re at their lowest level in history,’ he said. ‘That’s the concern from consumers: interest rates. It’s not value, price or inflation.’”
“Unsurprisingly, many current homeowners are content with surging house prices, having purchased for a certain amount only to see their property’s value skyrocket as demand climbs rapidly. ‘Someone who is currently in a home and watching the value of that home increase is happy,’ L’Ecuyer said. ‘They purchased the home for, say, $600,000; if you checked in with them five years later on renewal, their house is worth $1 million and now it’s been hyperinflated to, say $1.3 million.’”
The Global Times. “The Standing Committee of the National People’s Congress, China’s top legislature, adopted a decision on Saturday to authorize the State Council, China’s cabinet, to hold trials of property tax reforms in some regions, according to a report by the Xinhua News Agency. A Shenzhen-based agent surnamed Xiao with Lianjia, a leading housing agency in China, said that within the past week, his branch added 50 new secondhand homes listed for sale with lower prices.”
“‘The average unit price has dropped by 300,000 yuan ($46,975) to 500,000 yuan. More people are searching for secondhand units, probably due to the lower prices,’ Xiao told the Global Times. Shenzhen has about 2 million secondhand residential units, and if the city is picked up for trying out the pilot reform, the number of secondhand houses will surge on the market, pushing prices down, Song Ding, a research fellow at the Shenzhen-based China Development Institute, told the Global Times.”
“Beijing property brokers have added more than 10,000 listings for secondhand homes in the past three months, and in Guangzhou, South China’s Guangdong Province, more than 8,000 secondhand houses were posted for sale in the past month, according to data from Lianjia. The property tax is expected to target the inventory house market and curb real estate speculation, which may mean there will be more secondhand houses on the market, causing prices to fall, Song Qinghui, an economist told the Global Times.”
“‘It will deal a blow to speculators, but it will be beneficial to the sound and stable development of the whole property market,’ Song said.”
From Marketplace on China. “Retiree Mr. Zhou, who would not give his first name for fear it could lead to government harassment, invests the bulk of his money in real estate. In 2016, he bought two condos from the developer Evergrande, which according to Zhou have already doubled in price. This summer, the same Evergrande agent who sold him the properties approached him about another investment.”
“‘It was just after July 1, the Chinese Communist party’s 100th birthday, and the Evergrande agent said the firm released a wealth management product to celebrate this event,’ he said. ‘It has annual returns of up to 11.8%, which the agent said are normally reserved for senior executives, but are now available to good clients like me.’”
“Zhou and his wife put in 1.7 million yuan, or $266,000, in July. Like most Chinese citizens, he trusts Evergrande’s core business in property. At one point, he said he had more than 10 but less than 20 condos. For two decades, home prices in China have only gone up. ‘We invested mainly because I believed in the shiny image of Evergrande’s founder, Xu Jiayin,’ Zhou said.”
“At a protest in southern Guangzhou city last month, about a dozen people stood outside Evergrande’s office holding up signs that read: ‘Evergrande defrauded its employees of money they earned with their blood and sweat.’ Similar small-scale protests have been held across China. Many, like Zhou, want their principals paid back. He said Evergrande has offered wealth management product investors like him three solutions. The first is a 10% repayment every three months.”
“‘In my case, it will take 30 months from next September. That will be 2025 before I can recover my principal and interest. What will Evergrande be like in 2025? We don’t know,’ Zhou said. Having the situation handled on a local level has been confusing and frustrating for investors like Zhou. ‘There is nobody in charge of this. When you go to an Evergrande office they will call the police and 30 to 40 fully armed officers show up,’ he said.”