A report from the Denver Business Journal. “Mark Vitner, senior economist at Wells Fargo & Co., said companies in the iBuying space are essentially IT companies. ‘In this market, it’s been very hard to collect accurate information,’ Vitner said. ‘We also seem to be on the back side of the price spike.’”
The Colorado Springs Gazette. “Zillow last week notified the Colorado Department of Labo and Employment it will lay off 20 employees from its Centennial office starting Jan. 3 as the Seattle-based company exits the home-buying market. Zillow has been an active buyer of homes across Colorado and has nearly 180 homes on the market in Colorado Springs, Denver and Fort Collins. The company bought just over 100 homes in El Paso County between late 2019 and Aug. 20, and owns 103 homes in Douglas County and 60 in Adams County, according to assessor’s office records in those counties.”
The Twin Cities Business Journal. “As Zillow Group Inc. scraps its nationwide home-buying program, it’s leaving more than 150 homes still for sale in the Minneapolis/St. Paul market. And it’s tapped local Realtor Kris Lindahl to do the job. Lindahl was part of Zillow’s local iBuyer effort since, after Zillow bought up local homes, it relied on local players like Lindahl to find new buyers. But Zillow’s original plan fell apart this fall. (Racket also suggests that Zillow significantly overpaid fo the homes it bought, but that’s Zillow’s problem, not Lindahl’s.)”
The Tacoma Daily Index. “Zillow, the housing reference/research company, with the Oscar winning real estate summary of the decade, observed that ‘the unpredictably in forecasting home prices far exceeds what we anticipated.’ And in other news, water is still wet.”
“Losing more than half a billion dollars in six months puts Zillow (almost) in Evergrande territory. When it comes to value, two-thirds of the homes Zillow bought are underwater. And if you think you’ve made some bad investments, in the third quarter of 2021 Zillow said it bought 9,680 homes and sold 3,032 of them, with the sales producing an average loss in gross terms of more than $80,000 per house.”
From Quartz. “More low-priced homes were put up for sale in the third quarter of 2021 than any other segment, according to Redfin. Cheaper homes are hitting the market as people who can no longer afford to pay their mortgages put their homes up for sale. Emergency federal mortgage forbearance policy allowed those affected by the pandemic to temporarily pause mortgage payments. Once it ended this October, more people were forced to sell. This contributed to the total of 78,000 affordable homes on the market in the third quarter, a continued increase in supply that began in the second quarter of 2021.”
“‘People who may have lost their job or lost income could postpone the decision to sell their home and downsize to something more affordable or to take out their equity and start renting,’ says Daryl Fairweather, chief economist at Redfin. ‘Now, those people have a very strong motivator to sell because they have to start making their monthly mortgage payments again.’”
From WYTV on Ohio. “Prices for homes continue to go up but the number of foreclosed homes is also on the rise. Could this lead to a potential housing market crash? A recent report on Realtor.com showed filings for foreclosure have gone up almost 70 percent. ‘Now that maybe that has either lifted or softened, you’re going to see the filings come up based on people not paying their mortgages or being in default,’ said Jason Altobelli, with Altobelli Real Estate.”
The Peninsula Press. “Living with complete strangers in overcrowded dwellings, living out of cars, or subletting garages and backyard sheds: these are the conditions where countless farmworker families dwell in California. ‘These are the living conditions you would find in a third-world country, not the fifth largest economy, such as ours, here in the State of California,’ said Assemblymember Robert Rivas (D-Salinas).”
The Daily Mail. “House prices across Australia are expected to start falling with the two biggest banks hiking their mortgage rates multiple times in just weeks – with the others to follow. Sydney’s median house price has surged by 30.4 per cent during the past year to a very unaffordable $1.334million. The typical national property price of $686,339 is now so expensive an average, full-time worker on $90,329 a year would owe six times their salary, even with a 20 per cent mortgage deposit factored in.”
“RateCity research director Sally Tindall said ANZ and National Australia Bank were expected to also raise their fixed rates ‘in a matter of days’ after the Reserve Bank this week declared it was more concerned about inflation. ‘CBA has abandoned its efforts to keep at least one fixed rate under two per cent. While a rate starting with a ‘one’ is a great marketing tool, it was clearly unsustainable for the bank.’”
From Business Insider. “Wealth management products (WMPs) are a ‘lurking off-balance sheet risk’ for the troubled Chinese property market, economists at consultancy Pantheon Macroeconomics have said. The economics consultancy said property developers such as Evergrande and Kaisa are making the situation worse by rapidly selling property to fund activities or raise cash. This will ‘only add to the pressure on Chinese property prices, which have already begun to decline on a monthly basis,’ they said.”
From Bloomberg. “Just weeks ago, Wall Street analysts and central bankers were quick to assure investors that a collapse by China Evergrande Group wouldn’t be a Lehman moment. Regulators in Beijing said that the crisis would be ‘contained.’ Now that a bond selloff has spread to China’s entire real estate sector and beyond, concern is growing about the potential risk to the global financial system.”
“The cash crunch is worsening by the day. The yield on a Bloomberg index of Chinese junk dollar bonds — dominated by property firms — has surged toward 24%. Kaisa Group Holdings Ltd., which said last week it missed payments on wealth products, was downgraded further into junk by Fitch Ratings on Tuesday.The selloff has spread to higher-grade issuers such as Country Garden Holdings Co., while even a company controlled by China’s government has seen its bonds slump.”
From Motley Fool. “What happens when you hand an increasingly authoritarian political figure a property bubble? In Xi Jinping’s case, he pops it. A crackdown on real estate by China’s assertive president triggered the biggest sell-off in the history of the country’s international junk bond market and, in a mere six months, bondholders have lost third of their investments’ wealth. The bonds in China’s international junk bond index are currently valued by markets at $39 billion less than their face value of $112 billion, according to a Bank of America index. Six months ago, the market and face values of bonds were on par. Investors have been dumping them nonstop since, with no end to the pain in sight.”