A report from Honolulu KHNL in Hawaii. “The good news is that the supply chain disruptions that was causing havoc in the building industry will likely ease over the next year. ‘We had a big spike because you could gouge your buyers simply on supply and demand. Now that’s lightening up,’ said real estate expert Ricky Cassiday. ‘And I think it’ll continue to lighten up because as we go forward.’ The jump in interest rates is cutting into developers profits, forcing some to rethink their plans. Developer Stanford Carr said some developments won’t survive. ‘Some projects may no longer even be feasible especially affordable housing projects,’ said Carr.”
From Market Place. “Houston prices are down 4.5% from their highest point earlier this year. LaTisha Grant executive managing broker at TAS Realty Group in Houston, joined Marketplace’s Amy Scott to talk about what she’s hearing from buyers and sellers. Scott: How about sellers? You know, we got used to a seller’s market, and they’ve been raising prices and, you know, cashing in a lot of equity. Are people starting to have to get a little more realistic and maybe lower their asking prices?”
“Grant: Yeah, they’re kind of crying. They’re not happy about it. But they’re absolutely not only getting realistic about their asking price, but they’re also having to get realistic about doing repairs. So now they’re like, ‘Well, do I have to do that?’ and I’m like, ‘If you want to keep the offer, you may want to go ahead and make those repairs.”
The Ahwatukee Foothills News in Arizona. “Recent reports from the leading analyst of the Phoenix Metro housing market as well as national housing experts suggest that homebuyers and sellers are facing a volatile fall. Neither Cromford Report nor analysts of national mortgage trends last week painted much of a rosy picture for either group. The Cromford Report also noted that the trend in successful rates declined to 70.4% in August – ‘the lowest we have seen for late August since the year 2010. Any new sellers need to be realistic: 30% of listings fail to sell these days. At the end of March, the percentage was less than 8%. Listing agents now need to focus on marketing instead of worrying about how to handle the deluge of offers in the first few days.’”
“It also saw a decline in the number of ‘coming soon’ listings, prompting it to note, ‘It is no longer a matter of great excitement that your home is shortly to be listed for sale.’”
The Norman Transcript in Oklahoma. “The Norman housing market is no longer the frenzy seen in recent years due to increased interest rates, and local experts say while it may still be a sellers market, the pendulum could be swinging back to buyers. In recent weeks, realtor Cody Simmons said he’s had sellers ask, ‘Why hasn’t my house sold after multiple showings?’ ‘I say, well this is normal for your house to have several showings and not receive an offer — that’s a normal market in my opinion,’ Simmons said.”
Bisnow Washington DC. “Peter Loftus said he got to know the Uber and Lyft drivers that stopped in his neighborhood personally before the pandemic. But today, those familiar faces have melted away, ‘We had a fleet of drivers that we were in touch with, and they all, after the pandemic, they just disappeared,’ said Loftus. Ryan Gordon, owner of taverns The Queen Vic and Granville Moore’s on H Street, cautioned that other factors, including fears about crime, could partly explain the decline in foot traffic, but he has seen ride-share prices spike in the neighborhood. ‘When the [dinner] rush is gone, we definitely see a downtick in the people that are coming to H Street,’ Gordon said. ‘It looks ghost town-ish.’”
A press release. “Home sales were down 18.4% in the Mid Atlantic, as mortgage rates have continued their upward trend, according to the Bright MLS August Housing Report released today. ‘The Mid Atlantic housing market slowdown of 2022 that began earlier this year marches on,’ said Dr. Lisa Sturtevant, Bright MLS Chief Economist. ‘While inventory ticked up in July, supply shrank again in August. We have a long way to go to declare a buyers’ market in the region, as months of supply still lingers just over a month. However, as we head into the fall market, buyers should expect to find more options and will potentially have more leverage on price, as sellers are readjusting their expectations.’”
The Triangle Business Journal in North Carolina. “The company behind one of the largest housing developments in Johnston County has filed for bankruptcy in what the project’s developer describes as a ‘pause’ in development at the site. NRP Ventures out of Chapel Hill filed for Chapter 11 restructuring on Sunday. The petition – signed by company president and sole shareholder Ray Perkins, Jr. – estimated NRP Ventures has between 1 and 49 creditors, between $1 million and $10 million in assets, and between $10 million and $50 million in liabilities.”
The Berkshire Eagle in Massachusetts. “The man behind several Berkshire County residential housing ventures has defaulted on mortgages of two Pittsfield projects. Development rights for both properties will be sold at two separate foreclosure auctions next week. Two limited liability companies owned by David Ward of LD Associates of Lenox have defaulted on the commercial mortgages obtained for The Pines at Bousquet Mountain, off Dan Fox Drive, and Woodmonte Estates, located off West Street near Berkshire Community College.”
The Denver Business Journal. “Median prices for a single-family in the Denver metro area have dropped for the fourth straight month, according to the newest report from the Colorado Association of Realtors (CAR). At $620,000, that median price for Denver-area homes has fallen by $40,000 since April’s record high, but it’s still up by approximately 10% from August 2021. Likewise, the condo/townhome market has also seen a decline in median pricing to $405,000, a $38,000 decrease from this April.”
“The median price for a single-family home in Denver County decreased by 9.5% from July to August. ‘The sky isn’t falling, there isn’t some explosive market change as the market itself is always in motion, always in a state of flux and is about as reliable as a 1973 Ford Pinto,’ Denver-area realtor Matthew Leprino said in the report.”
“CAR also offers insight into what’s happening in specific cities and counties throughout Colorado. In the city of Aurora, inventory rose 40% year over year, with one particular zip code reporting a huge 128% increase. Similarly, Douglas County inventory was up as well, with 70% more homes on the market compared to August 2021, while median prices for Douglas County homes dropped for the fourth straight month. The Boulder and Broomfield counties demonstrated a common theme of big-time price reductions on listings, while other categories saw big increases. Home prices have increased 11% since the beginning of the year, and the list price-to-sale price ratio is at 104%.”
The San Francisco Chronicle in California. “Realtor.com, is laying off an undisclosed number of employees due to a recent slump in the housing market. In an email that was sent to the company’s employees and shared with SFGATE, CEO David Doctorow said slowing sales volume in the real estate market has led the company to take the ‘difficult step’ of reducing its workforce. ‘While we remain bullish on the long-term potential of what is a $200 billion addressable market, we must always take prudent steps to drive improved efficiency, including now,’ Doctorow said in the email. Realtor.com is headquartered in Santa Clara. About 200 of the company’s approximately 2,500 employees live in the Bay Area, according to LinkedIn.”
The Globe and Mail. “In no way does the sharp decline in house prices crush the idea that owning real estate builds wealth. But, wow, Canadians have put way too much faith that owning houses and condos will bring them financial success over the long term. An Ipsos poll of 18,000 people documents how much of this country’s total household assets are tied up in real estate. For all Canadians, it’s 77 per cent. It’s now clear that this rise was fuelled by two things in particular – low interest rates and pandemic lockdowns that had people reassessing their living arrangements with an eye to bigger homes with yards. The demand for homes ignited prices, which in turn stoked further demand from both owners and investor/speculators.”
“Think of this period as a freakish boom generated by circumstances that won’t likely be repeated in your lifetime. We are not in a waiting period just ahead of a new housing gold rush. Interest rates today are too high for that and unlikely to come down much in the next year. Without a vicious recession or a catastrophe like the pandemic, we won’t see rates at the 2020-21 level again.”
Stuff New Zealand. “New Zealand’s housing market’s performance through the end of winter has been weaker than expected, the Real Estate Institute says. House prices have now dropped by the largest amount in six months since the institute’s records began. Across the country, the median price for residential property dropped 5.9% year-on-year in August, from $850,000 last year to $800,000 this year. There was a 1.2% drop from July.”
“Four regions now have house prices that are lower than a year earlier. Auckland’s median was down 8.3% on August 2021, to $1.1 million. Waitakere had the biggest annual increase within Auckland, down 13.4%. In Wellington, the median was down 9.3% year-on-year, to $780,000.”
The South China Morning Post. “Hong Kong’s housing market is in a ‘depression’ according to one leading property expert, who pointed to poor sales at a prime new development in the city centre amid a backdrop of falling home prices, an interest rate upcycle and a new wave of Covid-19 infections. Only about 30 per cent, or 41 of the 137 flats on sale at Miami Quay in Kai Tak have been sold, according to agents. ‘The market is panicking amid rising interest rates and the pandemic. So it’s been much quieter,’ said Louis Chan, chief executive of the residential division at Centaline Property Agency. ‘It is Hong Kong’s problem. The entire Hong Kong property market is in a depression.’”
The Economist on China. “The 120km train ride between the cities of Luoyang and Zhengzhou is a showcase of economic malaise and broken dreams. From the window endless, half-built residential towers pass one after another for the duration of the hour-long journey. Many of the buildings appear near completion; some are finished and have become homes to families. But many more are empty skeletons where construction ceased long ago. Developers have run out of cash and can no longer pay workers and buy materials. Projects have stalled. Families will never get their homes.”
“The train ride through China’s heartland helps to explain one of the country’s biggest crises in recent memory: the public’s loss of confidence in the government’s economic model. Firms that just months ago were considered safe bets are now struggling. Take Country Garden, China’s biggest developer by sales. Earlier this year most analysts shrugged off concerns that it would come under pressure. Investors continued to buy its bonds. But on August 30th Country Garden revealed that profits for the first half of the year had fallen by almost 100%. The property market has ‘slid rapidly into severe depression,’ it noted in its earnings. The strain on Country Garden indicates that problems are no longer specific to certain developers. The entire industry is at risk.”
“Mr Liu, who has asked to be referred to by his family name, purchased a flat in Zhengzhou in 2014, making an initial 250,000 yuan ($40,000) down-payment. The home was scheduled for completion in 2017. But that day never came. Instead, he rented a flat, before eventually buying another one in an old building without an elevator. It is hardly the life he imagined for himself. Mr Liu never started paying his mortgage and has engaged in endless discussions with the property developer on getting back his down-payment. ‘There’s no use,’ he says.”