A report from Business Insider. “Flippers are facing the music as the housing market begins to show signs of cooling down. Austin Rutherford told his 700,000 followers he will likely take a loss on a recent flip in Ohio. Fellow TikToker Jeremy Mathis says he’s factoring in 10% price drops to prospective deals in Miami. Rutherford purchased the Hilliard, Ohio home last year for $248,000 and says he put in between $5,000 and $10,000 worth of work. Now, he’s receiving offers for only $260,000, which after closing costs and agent fees will likely put him in the red. ‘I’d rather take the loss and move on and go find another deal and make it back rather than try and make some money with a whole bunch of headaches,’ he told Insider.”
“Florida-based Mathis purchased a 3-bedroom, 3-bathroom property in Fort Worth, Texas for $340,000 in June and spent $45,000 on renovations. Mathis and his brother were hoping to get $450,000 for the home based on projections from June. Instead, they listed in October and have subsequently dropped the price about every 10 days, where they’ve now lowered the ask to $399,000. At this point, Mathis says they just want to get rid of it. It’s a much gloomier picture compared to last year, Mathis says, when ‘people were getting above asking price when the houses were not fixed up.’ ‘We’re not in that market anymore,’ he told Insider.”
The Rogersville Review. “Buyers are regaining some bargaining power as the local housing market continues slowly readjusting. It’s still very much a sellers’ market in the NE Tenn. – SW Va. area and, given current conditions, will be that way for a while. But prices have been flat since May, when they peaked at $250,000. Last month the median was $232,000. What’s happening is some sellers are looking at the market and recognizing that the price growth rate has run out of steam. They see they’re not going to get as much as they could last year, but what they can get is still pretty good compared to what they paid.”
“Last month 289 contracts went to closing at a price that was below the asking price. The average discount was $16,887. That’s in line with the discounts in September ($17,193) and August ($16,575).”
Click Orlando in Florida. “Between economic uncertainty and booming interest rates, the once red-hot housing market is starting to cool off. A monthly mortgage payment on a $350,000 home with today’s 7.2% interest rate, which is the bank national average, is around $800 more compared to when rates were 3.5%. ‘The increase in the valuations from last year, I don’t want to say they’re a wash, but you have to take everything into consideration,’ said Kristin Mazza, a real estate consultant for Keller Williams Heritage Realty. ‘A $400,000 house that really sold for $475,000 last year may be selling for $385,000 today.’”
WPBF in Florida. “‘We’re seeing a little bit of shock. The interest rates have consistently been going up since about May. And they’ve been going up over and over, as the Feds increase the overnight interest rates. And it’s impacted the markets,’ said Kevin Kent, broker associate in Palm Beach Gardens. ‘You’ve got to be a lot more realistic when you’re putting the property on the market. You can’t be pulling comps from things that sold in March or April.’”
The Oklahoman. “Home sales and pending sales plummeted while the supply of houses on the market soared in October, as upheaval in housing kept heaving, leaving many buyers and sellers both in the lurch. Asking prices, however, aren’t as firm, as sellers are quicker to reduce them to attract more attention from home shoppers. Many sellers are still learning that the market has shifted, said Heather Davis, a real estate agent.”
“‘They’ll go on the market, then have a really big price reduction within a week, and I think it’s because people are doing this let’s-try-it price, and then not selling in the first week, and they realize they’ve overshot, and when they get it to the price that was in line with the comps it’s selling within that first week,’ Davis said.”
The Daily Journal in Indiana. “An ‘overheated’ housing market has cooled down in Johnson County and across the state. Inventory in Johnson County increased by 127% in October, compared to October 2021, according to housing data from F.C. Tucker Company. Pending home sales are down 31%, compared to this time last year. These numbers mean the market is balancing itself out, and that is not a bad thing, nor a sign of a market crash, said Victor Perr, an area Realtor with F.C. Tucker.”
“Perr, for the first time in two years, has had very few showings on some of his listings, and no offers, as well. He also has spoken to a number of real estate agents who are also seeing more pending offers fall through, for various reasons — another occurrence that was almost unheard of two years ago. For the past two years, homes have also been selling over asking price, because of the competitiveness to outbid other buyers. So, many sellers are still listing their homes at higher prices, and then having to drop in order to sell, said David Brenton, an area veteran Realtor on the south side of Indianapolis.”
“Sellers six months ago could list a home for $260,000, and expect $275,000. Now, with fewer offers coming out, sellers likely would now have to drop the price to sell it for around $240,000, Brenton said. ‘Did the market really drop, or did the market just quit having over-list price offers?’ Brenton said.”
“Homes are still selling, just not as quickly, which is not bad, Brenton said. An increased inventory with slower sales is not a reason for concern — even in Johnson County where new subdivisions are building out with hundreds of new homes, Brenton said. In Johnson County, 316 homes were listed as of Friday, and 216 additional homes were pending. Of those, 59 of the pending are new homes and 104 of the active listings are new, he said. ‘It’s not a gloom and doom situation by any means. I mean, Johnson County is in a good spot,’ Brenton said.”
The Arizona Daily Star. “Internet-based home buyers, who entered the Tucson market two years ago with eye-popping cash offers, are powering down. Known asiBuyers, companies such as Opendoor and Offerpad have slowed down on purchasing homes in Tucson for touchups and resale. And, Redfin has closed its iBuying division, citing rising interest rates. ‘To prosper in a housing downturn that could last at least through 2023, we have to simplify our business,’ Redfin CEO Glenn Kelman said in a statement. ‘We’re closing our iBuying business, RedfinNow, because maintaining a profit with rising interest rates would make our offers on homes insultingly low.’”
“‘Most of them were using algorithms across all market and real estate is local,’ said Jodi Koch, president of the Tucson Association of Realtors. ‘Realtors are excited that these iBuyer platforms are stepping away. We’re seeing a lot of price reductions as sellers realize the market has shifted.’ Koch said the lack of housing and rising interest rates will make the price of a resale home more realistic. ‘It’s not going to be a crazy market anymore,’ she said. ‘I see 2023 as more stable and that homeowners and buyers need to — more than ever — reach out to a Realtor.’”
“The biggest benefactor is the home buyer, who will no longer likely have to compete with multiple cash offers. Stories of making 15 to 20 offers on homes — only to have them all rejected for cash — may be a thing of the past. And home sellers are expected to adjust their expectations which could help bring down the cost of a resale home.”
The Manteca Bulletin in California. “Builders at River Islands at Lathrop earlier this year sold as many as 30 homes a week. Now sales have dropped off to 6 homes a week. River Islands CEO Susan Dell’Osso anticipates the 15,001-home planned community will finish out the year with more than 600 closed escrows. In Manteca, long-time Realtor Jessie Barrett said homes are still selling, just not as fast and as many as before.”
“Barrett noted new home builders in Manteca are also offering financial incentives such as buy downs to make deals work. They are also working with resale agents. In October, Manteca’s median listing price was $625,000 and the median selling price was $550,000. While both numbers are down compared with September the median prices are still 2.6 percent higher when comparing October 2021 with October 2022. In October, Lathrop’s median listing price was $708,000 and the median selling price was $675,000. While both numbers are down compared with September the median prices are still 18 percent higher when comparing October 2021 with October 2022.”
“In October, Tracy’s median listing price was $749,000 and the median selling price was $655,000. While both numbers are down compared with September the median prices are still 2 percent higher when comparing October 2021 with October 2022. In October, Mountain House’s median listing price was $970,000 and the median selling price was $980,000. While both numbers are down compared with September the median prices are still 10.4 percent higher when comparing October 2021 with October 2022.”
From Blog TO. “Canada’s housing market downturn may be starting to slow, but property values are continuing their downward spiral. In a recent report, Robert Hogue, assistant chief economist at RBC, said that while the downturn may be coming to an end, property values are ‘still clearly coming down.’ Canada’s aggregate MLS Home Price Index (HPI) fell for an eighth straight month in October. Although the 1.2 per cent drop from September was the smallest since May, it’s now declined 10 per cent since the February peak.”
“After experiencing some of the most sizable gains in the early days of the pandemic, properties in several small Ontario cities have also felt the largest losses nationwide. From February to October, property values fell 22 per cent in Cambridge, and 18 per cent in London and Brantford. In Kitchener-Waterloo, Kawartha Lakes, and Hamilton-Burlington, the MLS HPI has declined by 17 per cent since the spring peak. While Toronto has only experienced an 11 per cent decline, Hague expects prices in the city will continue to fall in the near term.”
“On a yearly basis, home resales in Toronto were down 49.3 per cent in October, while new listings were down 11.5 per cent. ‘The market downturn may be in a late stage but it doesn’t mean things are about to heat up again,’ Hogue said. ‘We expect high— and still-rising—interest rates will continue to challenge buyers for some time. This will keep activity quiet for a while longer even if it stabilizes near current levels. We think benchmark prices will keep trending lower until spring.’”
From Bloomberg. “Sweden’s home-price decline accelerated in October, as the Nordic country gripped by the most severe housing slump in three decades shows what may lie ahead for many other developed economies. One of the pacesetters for a global housing downturn fueled by soaring inflation and central bank moves to curb price increases, Sweden has now seen home prices drop by about 14% from a peak earlier this year, according to Valueguard, which compiles the data. Prices have slid for seven straight months.”
“The slump is unusual in a country where previous corrections have been shallow and short-lived, and many young home buyers have never experienced a housing market crash. Home prices in Canada are now down 10% from the peak. In addition to Sweden, peak-to-trough declines of as much as 20% are forecast for countries including the US, the UK and New Zealand.”
“‘A lot of homes are being sold at levels around the asking price, and bidding wars are rare,’ Marcus Svanberg, chief executive of Lansforsakringar Fastighetsformedling, a realtor, said in a statement. ‘We don’t expect to see a real recovery until spring next year at the earliest.’”
“Declines are led by detached houses, which are particularly vulnerable as electricity prices soar. A report published last week by realtor organization Maklarstatistik showed that the price drop is twice as large in southern electricity zones. The central bank’s expected 18% total drop looks like a best-case outcome. Along with surging mortgage rates (doubled to 3.6% for new mortgages), that suggests higher impairments at Swedbank and Handelsbanken — followed by SEB and Nordea — with weaker revenue also likely as lending slows. A price slump of 30% or more may be needed to trigger a sizable increase in bad debt, which looks increasingly realistic.”