A report from the World Property Journal. “Based on a new report from Redfin, a fast-growing share of U.S. home-sellers are dropping their prices. ‘The slowdown over the last two weeks has felt significant,’ said Seattle-area Redfin real estate agent Dee Heyerdahl. ‘Usually April is when the spring homebuying and selling market begins to heat up, but this year things are cooling down a bit instead. Listings that a month ago would have had a dozen interested buyers touring in a single day now see less action than that in a whole week. The market still feels very hot, and as things slow down it just means homes might only sell for a few thousand over asking price instead of hundreds of thousands and multiple offers will mean three or four instead of 30 or 40. ‘”
From Boise Dev in Idaho. “The number of homes for sale continues to grow. As of the last day of March, 1,024 homes were available according to Intermountain Multiple Listing Service. While the inventory is still near multi-year lows, that figure is nearly double the number of homes up for sale on the last day of March last year when just 544 houses were available.”
The Center Square. “Colorado’s housing inventory improved last month. The Denver metro area saw its new listings increase by 47% on a year-over-year basis compared to the statewide average of 45%.”
From Socket Site in California. “The net number of homes on the market in San Francisco (i.e., inventory) has since ticked up another 8 percent. There are now 70 percent more homes on the market than there were at this time of the year prior to the pandemic; over twice as many as there were in early April of 2015; and the most, on a seasonal basis, since 2011. And while listed inventory levels typically peak in October, there are now more homes on the market in San Francisco than there were at any point in time from the end of 2011 through the second quarter of 2020.”
From Urban Turf. “The housing market in the DC region in March had a number of the familiar calling cards that have kept it competitive for years. However, there are two metrics that indicate that the sellers market is finally slowing down. Pending home sales in the region were down 12% year-over-year. Sales were down in almost every local jurisdiction compared to March 2021, with Loudoun County (-25%) and Fairfax County (-20%) leading the way. Second, home showings were also down across the board. Showings fell 22% annually in the region and again, dropped by double digits in most jurisdictions. ‘There are more signs that this year’s spring market will be different,’ the new Bright MLS report said.”
The Orlando Business Journal in Florida. “After just one weekend of open houses for a Central Florida home priced at $1.15 million, Orlando-based Diamond Real Estate Group founder and broker Tiphany Weeks found a buyer. However, after Weeks’ client went under contract with the buyer for $1.17 million, the buyer walked away from the table. That’s just one example of buyer’s remorse in the local red-hot housing market, Weeks told Orlando Business Journal. ‘With this market being so aggressive, buyers are having to act without fully processing what’s happening. We’re seeing a lot of transactions getting canceled. I believe it’s buyer’s remorse.’”
“Similarly, Coldwell Banker Realty agent Kim Arena, who is based in Orlando, told OBJ would-be buyers at all price points are putting in offers and backing out after the home inspection. ‘They’re using that as the get-out-of-jail-free card.’”
From Bloomberg on Canada. “Realtor Adil Dinani has a front-row seat to the cracks starting to show in one of the world’s hottest markets. A month ago, bidding wars between as many as 20 potential buyers were common for his listings in Vancouver. Now, occasionally only a single offer turns up — some people are even feeling bold enough to haggle. ‘The top is off,’ Dinani said of Canada’s record housing boom. He estimates the frenzy hit its peak sometime in February.”
“There simply may not be enough people who can afford the current prices at a higher cost of financing, said Stephen Brown, an economist with Capital Economics. When interest rates rise, ‘the price to clear the market suddenly needs to drop back to what a median household can afford,’ he said. ‘That’s where we have potential for what I’d describe as almost like an air pocket — where prices have surged so much, there’s potential for them to gap down to find where buyers are able to come in. There’s definitely going to be shock waves.’”
“‘The spring market happened in February this year,’ said Tom Storey, a broker who works in Toronto. ‘You’re not seeing every house that sells on the street, or every condo that sells in a building, sell for more than the last comparable. You’re starting to see some sell under.’ Reza Sabour, a mortgage broker in Vancouver, says buyers have already seen their purchasing power drop about 10 per cent over the past month or so. ‘There’s definitely going to be shock waves if rates continue like this,’ he said.”
From One Roof in New Zealand. “More mortgage pain is on the way, with the Reserve Bank expected to raise the Official Cash Rate tomorrow by as much as 0.5 percentage points.Borrowers coming off two-year fixed rates this year could find themselves paying 2% more in interest, while some first home buyers could find themselves failing mortgage affordability tests, locking them out of the market. ‘Potentially, some people won’t be able to borrow,’ says Kiwibank chief economist Jarrod Kerr.”
“ANZ chief economist Sharon Zollner is predicting a 0.5 point rise. ‘The main reason people say they shouldn’t or wouldn’t [increase the OCR to 1.5%] is that that the economy is clearly slowing and at risk of hard landings. We don’t actually disagree with that, but we think that’s outweighed by the fact that if they don’t rein in inflation promptly, then you’re actually going to require a hard landing [anyway].’”
From Bloomberg. “New Zealand’s central bank delivered its biggest interest-rate increase in 22 years, signaling that policy makers around the world may need to step up efforts to get inflation under control. The Reserve Bank’s Monetary Policy Committee lifted the official cash rate by half a percentage point to 1.5% Wednesday in Wellington, the first time it has delivered an increase of that magnitude since 2000.”
From ABC News. “Australia’s largest bank, CBA, this week lifted fixed rates by up to 0.50 percentage points for owner-occupiers paying principal and interest, and up to 0.90 percentage points for some investors. ‘This is the fourth time CBA has hiked fixed rates this year,’ RateCity research director Sally Tindall said. ‘People who fixed at the start of the pandemic for a couple of years could get the shock of their lives when they realise how far fixed rates have risen already.’”
From Bloomberg. “The biggest investors in China’s junk property bonds reduced their exposure for the first time in months, a turning point after they previously doubled down through distress and default risks. The move underscores how even long-term supporters of China’s beaten-down property bonds may be losing enthusiasm for bargain hunting. While policy maker vows for broader market support helped spark a rally in junk dollar bonds — most of which are from developers — from mid-March, the securities still lost about 18.6% last quarter in the worst tumble in more than a decade. That came amid a wider global bond sell-off, as central banks look to tighten policy to combat surging inflation.”
“BlackRock’s Asian High Yield Bond Fund lost 26% over the last 12 months. The Fidelity China High Yield Fund has lost 28% over the same time period. A UBS China High Yield Fund, managed by Briscoe, is down 46%. For all three, 2021 was the worst calendar year for performance since inception.”