A report from the Keene Sentinel in New Hampshire. “What broker A. Ranger Curran and others agree on is that the pandemic-fueled frenzy — where there were five to 10 offers in a week and buyers were willing to pay sometimes as much as $20,000 to $30,000 or more over asking price to win the bid — is likely over. ‘Those days are gone,’ Curran said. With buyers being less aggressive and offers not as plentiful on a single property, homeowners are also pulling back and do not appear as eager to sell. Cindy Westover of Galloway Real Estate in Walpole said some price reductions are coming, which were not in evidence during the pandemic. ‘I think that is a good thing,’ she said. ‘I think people took some real risks offering $20,000, $30,000 or $40,000 above asking price.’”
The Roanoke Times in Virginia. “‘Where we were seeing multiple offers on essentially every listing, we’re not seeing that as much anymore,’ said Kelly Griffin, president of the New River Valley Association of Realtors. ‘We’re still seeing lots of buyers out there that are in the market or coming into the market, so there’s some properties that are getting that much interest, but we’re just not seeing the level of frenzy that we were seeing during the pandemic, 2021 specifically.’”
My San Antonio in Texas. “Those with vested interests in the Austin housing market have swapped emotional places over the last six months. Sellers and landlords, once jumping for joy at the leverage with which they could insist on all-cash offers right now, and, by the way, waive the appraisal please and I’m not fixing anything, have come back down to Earth.”
“It’s impossible to argue with the numbers. Following a high of $550,000 in May, median home prices in Austin fell to $537,000 the following month, and for the rest of the year, continued to fall. In December, the most recent data available, that number was $525,250. Ashley Jackson, president of the Austin Board of Realtors, calls the current Austin housing market a ‘stabilization,’ rebuking the notion that six months of a downward trend means the housing market is over.”
“During the pandemic, Jackson says, she had buyers who were offering as much as $100,000 over asking prices for homes. ‘We don’t have to do that right now,’ she says.”
The Los Angeles Times in California. “New data reveal that if not a buyer’s market, then the Bay Area is a more buyer-friendly market. Homes are, relatively, cheaper — and a similar pattern may be manifesting in Los Angeles. Now a changing economic climate and disruptions in the tech industry have cooled the housing market; in December, San Francisco’s sale-to-list ratio dropped to 99.8%, indicating that more buyers were beginning to pay below the asking price. In Los Angeles, the sale-to-list ratio peaked at 105% in April. That has fallen to 98.5%. ‘Now the interest rates are high and people can leave the Bay Area for other parts of the country,’ said Daryl Fairweather, chief economist for Redfin. ‘Demand has significantly slowed down, and now homes are getting zero or one offer, and sellers have to accept bids that are less than listing price.’”
Multi-Housing News. “Two of the most significant cities for condominium development, New York City and Miami, are currently experiencing very specific issues. For instance, Florida’s Building Safety Act is changing the parameters of owning, managing and building condominiums in the Sunshine State, while NYC is feeling the pressure from potential customers’ reduced buying power. Listing inventory for condos in the Big Apple has been on a downward trajectory for the past six quarters, while the median sales price declined year-over-year for the first time in five quarters, according to a fourth quarter report by Douglas Elliman. Manhattan’s condo sector has slowed from the last couple of years’ frenzy, Francis Greenburger, CEO of Time Equities Inc., also noticed. It has resulted in a market where there are now more lookers than buyers. ‘We have found that buyers have reduced their buying power by nearly 50 percent—which is a significant decrease,’ Greenburger told Multi-Housing News.”
“Andrew Barrocas, CEO of MNS Real Estate, is also seeing the impact of high interest rates on the condo market, particularly at lower loan amounts. ‘This can be a successful market…When we can show someone that they can get the same apartment that sold last year for $1 million for $900,000, it can offset some of the other challenges in their minds,’ Barrocas said.”
“The Building Safety Act, which requires statewide recertification of condominiums over three stories tall, is pressing Florida condo owners and managers to update their properties. Greg Main-Baillie, executive managing director for the Florida Development Services Group at Colliers, told MHN.: No buyer would want to get near condo buildings tied up in disputes with contractors and unfinished work. We’re anticipating a lot of surprised condo owners looking to sell once they realize the upcoming increase in the cost of ownership,’ Main-Baillie mentioned.”
From Market Watch. “They were like haute couture for the real-estate world. Investors in a new model of mortgage bonds created over the past decade to finance trophy commercial real estate and star property owners are about to find out what higher mortgage rates mean as a mountain of debt comes due.More than $45 billion of loans on some of the nation’s most recognizable office buildings, hotel chains and other commercial properties are set to mature through 2024, debt that was tucked away into bond deals known as single-asset, single-borrower (SASB) securities, according to a tally by DBRS Morningstar.”
“Now, owners of many of these office towers, hotels and multifamily developments soon face big, balloon payments to satisfy their debts in cities and towns across the nation. Weekly office occupancy rates for the New York and San Francisco metro areas were still pegged below 50% in early February, according to Kastle System’s 10-city national average. ‘Right now, rates probably are in the high 5s to mid 6% range,’ said Anuj Gupta. chief executive officer of A10 Capital and a veteran commercial real estate lender. ‘I do think the real-estate market has already capitulated to a new reality,’ he said.”
The Calgary Herald. “The Prairies’ resale real estate markets are leading Canada’s housing market, a new study shows. TD Economics published a recent report noting that Alberta, Saskatchewan and Manitoba resale real estate markets are outperforming the overall Canadian market, but they have still faced challenges. It points to the average price dropping from peaks achieved in spring 2022 by about six per cent for these markets compared with the national average of roughly a 20 per cent decline. TD also pointed to stronger — though still declining — sales in these regions with activity down 20 per cent in Saskatchewan and Manitoba from the peak of early spring 2022. That compares with the national average of about 40 per cent decrease. Alberta also saw sales fall 40 per cent from the peak.”
The Malta Independent. “While developers and estate agents insist that there is no risk of the property bubble bursting, economists have expressed a different view, saying that the situation should be keenly monitored because the chance of this happening is well and truly there. Daniel Gravino, economist with the University of Malta’ states that property prices have been increasing these past years, averaging 10% per annum between 2016 and 2019. As a consequence, many people, especially first-time buyers, are being priced out of the market. Whereas in 2013 an average-sized apartment would sell for nine times the average annual salary, today that figure stands at 12 times the average salary. Orthodox thinking states that this increase cannot continue indefinitely meaning that prices may well decrease at some point, said Gravino. We need to ascertain and monitor the causes for the initial increase in prices to determine whether a bubble can, in fact, burst.”
News.com.au in Australia. “House prices in Sydney fell in January by 1.2 per cent with the average sale now below the $1 million mark for the first time in two years. Overall, house prices in Sydney are down by 13.8 per cent year-on-year and nationally by 7.2 per cent. Following the RBA’s rate hike, research from comparison website Canstar found that for the average Australian on a $500,000 mortgage, their monthly repayments would jump by $969 per month or $11,628 per year if banks passed on the rate. For homeowners stuck with a $1 million home loan, they’ll be shelling out an extra $1939 a month, which is $23,268 over the next 12 months.”
“In speaking of the rates decision, RBA governor Philip Lowe said bluntly in a statement along with the announcement: ‘Global inflation remains very high.’ Mr Lowe hinted that this wouldn’t be the last rate rise of the year. ‘The Board is seeking to return inflation to the two to three per cent range while keeping the economy on an even keel, but the path to achieving a soft landing remains a narrow one.’”