A report from the Philadelphia Inquirer in Pennsylvania. “For most families, owning property is the primary way they build wealth. As prices start to cool off over the next few years from sky-high growth, some people may find that their homes are worth a little less than what they paid, but that’s not necessarily something to worry about, said Jacob Channel, senior economic analyst at LendingTree. Real estate is a long game, and those who hold on to properties for the next 10 or more years should still come out ahead, he said.”
“As prices continue to rise and homeowners build equity, aspiring buyers also need to be able to afford to purchase the homes that go on the market, which can be increasingly difficult. Wage growth hasn’t kept pace. In the Philadelphia metropolitan area, wages grew 2.8% annually over the last five years, according to a National Association of Realtors analysis. During that time, home sales prices grew 6.7% annually. ‘Home ownership is good, but if only the wealthy already and those who have higher income can tap into that, we need to find ways to widen that accessibility to home ownership,’ said Gay Cororaton, senior economist at the National Association of Realtors.”
The Mountaineer in North Carolina. “In Haywood County, the median home sales price for 2021 was $311,000, a 19.7% jump from $259,900 in 2020.Compared that to 2017, when the median sales price was $194,000, a 60.3% price hike. ‘What’s really driving the market in Haywood in short-term rentals,’ said Tom Mallette of the Mallette Real Estate Team with Better Homes and Gardens Real Estate. ‘A lot of those folks consider themselves investors. They’re buying those homes in hopes of getting a return on investment.’”
From Deseret News in Utah. “In a matter of six years, the annual income needed in order to afford the median-priced home in Salt Lake County has nearly doubled.In 2015, the median-priced home in Salt Lake County cost about $248,400. The annual income required to buy a home with that price tag was about $58,100, according to the Salt Lake Board of Realtors. Now fast forward to 2021. Homebuyers needed to earn over $100,000 a year — $101,400 — in order to afford Salt Lake County’s median-priced home of $460,000, the board said in a report. Despite soaring prices, the board says ‘there is no sign of a housing bubble.’”
The Connecticut Mirror. “Preliminary state data shows that fewer building permits for new housing were granted in 2021 than in every year since 2011, further contributing to Connecticut’s housing shortage. ‘[The] new housing market sector is not performing as [well] as previous years,’ said Kolie Sun, a researcher with the DECD. She’s been collecting this data for 20 years. Greg Ugalde, a Connecticut-based builder, predicts that Connecticut may continue to see low numbers of new housing units, but he said that shouldn’t come as a surprise. The state has been recording low production numbers since the 2008 housing market crash.”
“‘When you look at the number that we have today, we are still struggling to get Connecticut back to where we need to be. We have never really recovered from the last recession,’ Ugalde said.”
From Inside Nova in Virginia. “Blame omicron, blame the holidays, blame the arrival of winter, blame a lack of inventory – heck, blame all four if you’d like – but homebuyer interest cratered across the region in December, according to new data. But in Arlington, things remained, if not red-hot, at least reasonably warm. The decline suggests that many prospective purchasers have found homes during recent months, while others may have decided to hold back for a variety of reasons, from the general seasonality of the market to pricing getting out of hand.”
“The T3 data show a ‘significant decline in buyer activity compared to the very busy market earlier in the year,’ Bright MLS analysts said. ‘Prospective buyers are becoming discouraged by a lack of options.’ Buyer interest in the higher-priced single-family and condo markets took some of the biggest hits.”
From BK Reader in New York. “More than two dozen people turned out last weekend to support longtime Brooklyn resident Victoria Stennett in her dispute with Emigrant Bank and to call out the bank’s alleged unfair and racist lending practices. Stennett, founder of the My Black Money Matters organization, has been embroiled in a legal battle with the bank. The bank is now demanding nearly $4 million from Stennett, or has said it will seize both her Amersfort Place, at the center of the dispute, and another property she owns. ‘They are just predatory lenders,’ Stennett told BK Reader.”
The Guardian. “Banks in New Zealand are rejecting home-loans over minor frivolous spending, including a $187 Kmart Christmas shop and a daily drink bought at a corner store, and money spent on pets or petrol, pushing the government to investigate whether banks are overreacting to new finance rules designed to protect vulnerable borrowers from predatory lenders.”
“‘One in five mortgage loan approvals appear to have been hit by the new CCCFA regulations. Consumers that were previously approved are no longer,’ Centrix managing director Keith McLaughlin said, adding that this amounts to a decrease in lending of $1.9bn from November to December.”
The Daily Telegraph in Australia. “Tenants prioritising space over accessibility during the Covid pandemic has driven up rents for houses, while unit rents have dropped, a new report shows. PropTrack director economic research and report author Cameron Kusher said the underperformance of units dragged Sydney rents over the past year. ‘The pandemic has driven a desire for more space at home, so renters have shown a strong preference for houses as opposed to units,’ Mr Kusher said. ‘The lack of migrants, particularly students, coming to Sydney has had a big impact on demand for unit rentals. With more supply of unit rentals on the market, prices have fallen.’”
From Bloomberg. “Fresh turmoil rocked Chinese property bonds on Monday on concern over the true scale of the industry’s hidden debts, deepening a selloff among higher-rated firms. A Logan Group Co. note due 2023 sank 14.1 cents to a record low 62.9 cents after Debtwire reported the developer could be on the hook for $812 million of guarantees on outstanding obligations due through 2023. Country Garden Holdings Co.’s bond due 2024 tumbled 12.9 cents to 67.7 cents, extending last week’s selloff for the country’s biggest developer.”
“Mounting concerns about the transparency of China’s better developers is forcing bondholders to question the liquidity of firms whose finances appear sound. More debt would mean more creditors, some of whom could demand early repayment. There’s also the risk that hidden liabilities like trust loans, private bonds or high-yield consumer products receive preferential treatment over money owed to offshore creditors. China Evergrande Group, Kaisa Group Holdings Ltd. and Shimao Group Holdings Ltd. have all faced such obligations.”
“‘Risks across the Chinese property sector are rising, evident from difficult refinancing conditions for even the most well-regarded firms,’ said Wei Liang Chang, a macro strategist at DBS Bank Ltd. Greater clarity on the disclosure of liabilities as well as asset sales are crucial to shore up confidence, he added.”
The New York Times. “Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants. Stringent regulations on everything from internet businesses to after-school tutoring companies have set off a wave of layoffs. Kang Shiqing invested much of his savings nearly three years ago to open a women’s clothing store in Nanping. But when the pandemic hit a year later, the number of customers dropped drastically and never recovered. He finally closed it in June. ‘We can hardly survive,’ he said.”
“The building and fitting out of new homes has represented one-quarter of China’s economy. Heavy lending and widespread speculation have helped China erect the equivalent of 140 square feet of new housing for very urban resident in the past two decades. This autumn, the sector faltered. The government wants to limit speculation and deflate a bubble that had made new homes unaffordable for young families.”
“There have been faint hints of renewed government support for the real estate sector in recent weeks, but no sign of a return to lavish lending by state-controlled banks. The financial distress of Evergrande ‘is a signal that money will be pushed from real estate to the stock market,’ said Hu Jinghui, an economist who is the former chair of the China Alliance of Real Estate Agencies, a national trade group. ‘The policies can be loosened, but there can be no return to the past.’”