A report from the Tribune in California. “When will the San Luis Obispo County housing market return to normal? Housing prices have seen ‘enormous growth’ in the past couple of years, Cal Poly finance professor Ziemowit Bednarek said, increasing as much as 20% in the first quarter of 2021 and 18% in the first quarter of 2022. ‘We’re not going to see price reversal, home prices going back to what they were pre-pandemic,’ Bednarek said. ‘That’s not going to happen, at least not anytime soon. I don’t think it ever will happen, actually.’”
“Richardson Properties Realtor Lindsey Harn agreed. ‘I don’t see housing prices dropping,’ said Harn, who’s been selling homes in SLO County for 12 years. ‘One of the nice things about the Central Coast is we are a small enough market and we are kind of insulated,’ Harn said. ‘So if there were a dip in prices to an extent, there’ll be a whole set of new buyers looking to fill in.’”
The San Jose Spotlight. “What’s driving the soaring increase in mortgage payments in America’s 10th largest city? The easy answer is supply and demand, but that’s not all. Brett Caviness, president of the Silicon Valley Association of Realtors, attributes the increase to ‘a combination of rising prices in the real estate housing market, paired with rising interest rates.’ Caviness called a monthly mortgage payment north of $9,000 ‘very reasonable.’”
“Most first-time homebuyers are young tech workers in their 30s who earn a high salary but haven’t saved enough to make a large down payment, said Julie Wyss, a South Bay realtor with Compass. Despite the demand, Wyss thinks the market is at a standstill. Wyss, who has been a realtor in the area for 15 years, said her 10 active listings in the South Bay haven’t drawn much interest. She said rising interest rates and lack of liquidity are starting to impact sales. ‘Open houses are dead. We’re doing $100,000 reductions every two weeks. Just nothing,’ Wyss said.”
The Press Enterprise. “The typical Californian renter in these big six metro areas can expect to pay an average $3,190 a month to the landlord, assuming mid-2022 rents increase at a 4% annual rate. Meanwhile, a California homebuyer can expect to spend on average $5,054 a month in the same five-year period. This expense includes making house payments on a 5.5% fixed rate, no-money-down mortgage; paying property taxes at a 1.5% annual rate; paying down 8% of the mortgage balance, and tax savings worth an assumed 20% of interest and taxes paid.”
“The result is a $1,863 savings per month for renters — or $112,000 extra paid by owners over five years. And if this math does not hit home hard enough, so to speak, consider that a hypothetical California buyer in mid-2022 needs 17% appreciation — after 6% closing costs — to sell five years from now and break-even vs. renting.”
“San Jose: $3,641 a month spent on rent over five years, No. 1 among the 50 U.S. metros. A homeowner will pay $8,317 monthly in net house expenses, also No. 1, for a house that cost $1.7 million. That’s $4,676-a-month renter savings or $280,500 over five years. So home prices must appreciate 23% over five years to break even. San Francisco: $3,551 rent, No. 2 nationally, vs. $7,291 on a house, No. 2, for a $1.5 million residence. That’s $3,739 a month saved by renters or $224,400 over five years. So home prices must appreciate 22% over five years to break even.”
“Los Angeles-Orange County: $3,229 rent, No. 5 nationally vs. $4,546 on a house, No. 3, for a $948,000 residence. That’s $1,317 a month saved by renters or $79,000 over five years. So home prices must appreciate 15% over five years to break even. San Diego: $3,314 rent, No. 4 nationally vs. $4,489 on a house, No. 4, for a $936,472 residence. That’s $1,175 a month saved by renters or $70,500 over five years. So home prices must appreciate 14% over five years to break even.”
From KSFN. “FRESNO, Calif. — The housing boom born out of the pandemic is now going through a cooling-off period. The real estate frenzy that excited sellers and frustrated buyers over the past two years has settled down. Linda Leonard of Guarantee Real Estate says homes are starting to stay on the market longer. As a result, sellers are having to lower their listed prices because demand has died down. ‘Since mid-June, 25% of the homes on the market have had a price reduction. Now imagine two months ago, almost every home – as long as it was in good condition – was going at asking or over,’ says Leonard.”
“Those bidding wars are long gone. Leonard has noticed the Valley’s housing inventory has increased. ‘Some buyers that I’ve been working with these last few weeks have actually been able to get homes under the list price, and that was unheard of within the last two years,’ says Leonard.”
The Lookout. “After 11 years of a rising market, home prices in Santa Cruz County have leveled off in recent months, and have even begun dropping across the board. Multiple listing service (MLS) data shows a two-month decline in home prices in the county. March saw median prices of over $1.6 million for single-family homes. That fell to just over $1.4 million in April, and to about $1.25 million in May. Local realtors have also noticed many properties remaining on the market for much longer than has been typical.”
“Celeste Perie, a local broker and owner of Schooner Realty, describes this moment in local terms, noting that prices are lower on average, but within the uniqueness of this market. While prices are dropping in many areas of the country, Santa Cruz is a special case. She sees tangible differences in how potential buyers are approaching offers. ‘Six months ago, we had 10 really good offers on a listing and now we might have one or two,’ she said. ‘There may be one unicorn that wants to pay over the asking price, but that still indicates that we’re going back to a buyers’ market. We kind of have a recession-proof market — it dips, and then it comes to a high. I think we’re in a dip at the moment,” she said. “We have a unique place to live with the ocean and the funkiness, and people are going to continue to want to be here and I see that fueling our market.’”
“‘There’s absolutely a shift happening in the market, and that’s especially compared to the market’s crescendo that we saw in February and March where the markets reached the peak of their peak,’ said Sereno Group Regional Vice President Tom Brezsny. ‘If you might have gotten 10 offers on a property then, it may be only five now; and if you might have gotten five offers then, you might get only two or three now.’”
“Marvin Christie, co-owner and president of Anderson Christie Real Estate, explains that change. ‘The prices and frenzy we’ve seen over the last two years has been unreasonable, and that’s disappeared by every account,’ he said. Christie points to the sharp interest rate increase — from about 3% to nearly 6% in a matter of months — that has likely caused much hesitancy among buyers. ‘To be able to borrow money for 30 years at 3% interest is, by all indications, ‘free money,’ since the inflation rate has almost always been higher than 3%,’ he said. ‘That’s very low and people got comfortable with it.’”
“Christie — appropriately speaking from the site of a slow open house in Rio Del Mar — said he thinks things will pick back up given the historically high demand for housing in the area, even if properties are currently spending far more time on the market than usual. ‘We’ve seen a real pause in the market and we always do at this time of year, but this is much slower,’ he said. ‘I’m feeling as though the market is already picking back up; however, I don’t think that we’ll be back into that frenzy we had.’”
Santa Clarita Magazine. “I closed six homes in May. I consider that a wonderful month helping buyers and sellers. I love what I do, it’s one of my many passions. Realtors, sellers and buyers got used to homes selling with multiple offers, over asking, within days of coming on the market. In the beginning of June I listed two houses in Castaic. I always do Open Houses. The first weekend I had an Open House. I set up my signs, flags, brochures and all the goodies I normally have. I was ready and now waiting for the stream of buyers, and lookie loos.”
“I’m waiting, looking out the window thinking, ‘This is not normal. No one is coming.’ A few hours later two people showed up. That was it. Sunday another Open House, same thing, I had five people come through. This continued every single weekend. Buyers have disappeared and sellers are shocked.”
“But, guess what else I’ve been experiencing? Sellers starting to offer help. I actually have a wonderful, smart buyer that thinks this is still a good time to buy. They don’t like the interest rate, but they’re renting a house and are done with that. They’ve saved their down payment and are in the market looking for a home. Last Thursday I showed them five houses, Friday one. Guess what’s happening? Every house I showed the sellers agents have called me wanting feedback, telling me they’ll credit closing costs, help pay points to lower interest rate for my buyers and willing to drop their price. Now the tables are turning.”
From ABC 7. “Strip club employees who talked to ABC7 News and dancers in the business say the expected post -pandemic recovery never materialized. Some strippers are predicting a recession, with many citing empty strip clubs and poor bookings as indicators of stormy econmic times ahead. ‘I can speak for our dancers who work for multiple agencies and in the strip clubs because they have to get enough work and they’re still not making enough money,’ says Asshley, (her stage name was requested to be used to protect her family) a dancer for 10 years.”
“‘It’s been bad,’ says Brandon, co-owner of SinCal Party Entertainment and Asshley’s husband. The couple has been in the adult entertainment business together for 10 years. ‘Normally, as we come into spring and summer, it’s busy for bachelor and bachelorette parties,’ he said. ‘Everybody wants to throw their parties. As the year progressed, it just hasn’t happened, it has only gotten worse. It has gotten slower, where we as business owners have had to look at other forms of revenue, trying to start other businesses just to keep ourselves afloat, let alone all of our strippers. It’s terrifying.’”
“Based in California, the couple manages an agency that dispatches more than 50 strippers across the state. Many of the dancers at their agency also worked at strip clubs and have reported similar difficulties. ‘You have all these girls in the strip clubs who are used to heavy traffic, that have no traffic,’ Asshley said. ‘So they’re reaching out to agencies hoping that our broader net and what we serve as our service area being broader that they’re going to be busier, have more work, and it is just not the case for the strip clubs and the agencies. Strippers really have taken a huge hit.’”
The Marina Times. “Over the last several months, we’ve been reporting that while San Francisco’s residential real estate market has been extremely hot, there were some early signs that things might be cooling off a bit. Now we have some proof. The sky isn’t falling, but for the first time in years, buyers have the upper hand in some transactions. ‘We are definitely moving into a more balanced, equal footing between buyers and sellers. Especially when it comes to condos, where there’s a buyer’s advantage or market,’ said Marcus Miller, broker at Helm Real Estate.”
“‘We’re seeing more units coming to market, both single family homes and condos. Meanwhile, the stock market is being hammered, inflation and the cost of living are impacting consumer confidence, and the cost of real estate financing has increased significantly — all of which has cooled activity in our marketplace,’ he said.”
“Ted Andersen, with the San Francisco Business Times, reported in mid-June that active residential inventory in San Francisco is rising, but the number of listings accepting offers was down by double digits year-over-year, with condos most affected. Comparing May 2022 with May 2021, the number of listings accepting offers was down 22 percent, with houses down roughly 19 percent and condos, co-ops, and TICs down 24 percent.”
“If nothing else, all of this should tell buyers in San Francisco that opportunities are now out there, especially in the condo market. Miller said that many buyers have given up searching for a home, assuming a ‘wait-and-see’ position. He described one condo listing that languished on the market, even though it would have sold immediately just a few months ago. It remained unsold even after two price reductions.”
“SFGate published a great piece recently, entitled, “The Hater’s Guide to the Bay Area real estate market”). Drew Magary, a writer from the East Coast, visited the city for a week to tour houses and talk with market analysts and agents. He writes, ‘I wanted to figure out whether it’s possible to live in San Francisco if your income is less than that of Klay Thompson’s, and what your home will look like if you do manage to find a place.’”
“The piece is funny, irreverent, candid, and insightful. His conclusion? ‘There is the upside of San Francisco itself. There is no better city in America to be f—ed in than this one. If you live here, you know that innately. If you don’t live here, and I do not, you’ll grasp it very quickly,’ he writes. ‘This is the second-most densely populated city in America for a reason: because its citizens decided that San Francisco is worth any price, even if their apartment only has enough room for a f—ing daybed.’”