A report from Money Wise. “Austin real estate agent Lilly Rockwell says the market has already started favoring buyers and that she just helped a client negotiate a purchase for under list price. ‘It’s fabulous. Finally. Tons of choices, very little competition,’ she tweeted Thursday. Buying down your mortgage rate means making an upfront payment to your lender to reduce your long-term interest costs, and seller credits can help cash-light buyers take advantage of the option. ‘I plan to deploy this strategy myself on a listing I have coming up next week and provide some rate buydown information to just proactively address concerns about interest rates,’ Rockwell said. ‘It’s crazy how quickly the tables have turned!’”
From the Naples used shack sales people in Florida. “During a meeting to review the May 2022 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), long-time Naples broker Bill Coffey, Broker Manager of Amerivest Realty Naples, remarked that, ‘May had the highest number of new listings than any May in the last three years.’ Fellow brokers who also analyzed the May report are pleased with this trend as it will lead to more options for summer buyers. New listings during May pushed the inventory of homes for sale up 58.6 percent to 2,046 properties compared to 1,290 properties in May 2021.”
“‘Inventory has been rising since December,’ said Jeff Jones, Broker at Keller Williams Naples. “By the end of May, our inventory in Naples has nearly doubled since the same time a year ago. And if you include the 889 homes that had a price reduction in May to this inventory mix, then we’re in good shape heading into summer. Price reductions are basically like new listings because the home’s new price point becomes a new opportunity to a larger pool of buyers.’”
The Greeley Tribune in Colorado. “The housing market moderation, likely caused by interest-rate increases and general economic uncertainty, has begun to show in Northern Colorado and the Boulder Valley. May home sales, as reported by the multiple listing agency in the region, show the quantity of homes sold on par with April — either slightly up or slightly down — but in all but one community, median prices are down.”
“Greeley/Evans saw 144 sales, down from 196 the prior month. The median sale price was $450,000, down from $452,800 the month prior, but 21.6% over the median in May 2021 of $370,000. Sales in Fort Collins were up in May over April, 241 compared with 216. The May median dropped slightly, to $619,900, from the $620,500 recorded in April. It was 16.1% above the May 2021 median of $533,718. Boulder, which has led the region in home prices, saw 53 homes sell in May, down from 57 in April. The median price dropped from $1.675 million in April to $1.508 million in May, which is still 22.7% higher than the May 2021 median of $1.229 million.”
“Estes Park, a tight-knit resort community, saw 26 sales in May, up from 21 in April. The median sales price of $850,000 was above the $763,500 median of April and 29% better than the $659,000 median of a year ago May. Longmont, which recently reached the 100,000 population mark, saw 87 sales in May, up from 71 in April. The median price dropped to $630,000 from $663,000, but 13.5% up from the $555,000 recorded in May 2021.”
“Finally, Loveland/Berthoud sales were up over April, 218 versus 176. The median price dropped to $560,000 in May from $596,500 in April. This year’s May median was 12% above the $500,000 set in May 2021.”
From WDBJ on Virginia. “Realtors in the New River Valley say the housing market is starting to cool off. Some homes that would’ve gotten up to 10 offers a year ago, are only seeing one to three now. ‘During the pandemic, there was unprecedented buyer demand and we think that that was pretty much fueled by the historically low interest rates,’ President of the New River Valley Association of Realtors Kelly Griffin said. ‘This most recent rate hike, I think the one in mid-June, was really the one that has cooled everything down considerably.’”
From Mansion Global. “During the four weeks in June, an average 6.5% of homes for sale each week had a price drop, a record high since Redfin began to track the data in 2015. Redfin data show that pending home sales in the previous four weeks were down 13% from the same period last year, the largest decline since May 2020. ‘Homebuyers are worried about interest rates, having to go back to the office, getting laid off and wondering if they can get a better deal by waiting out the market,’ said Caroline Loudenback, a real estate agent at Redfin Seattle.”
From USA Today. “‘The unusual market conditions of the pandemic have come to an end,’ Lawrence Yun, the chief economist for the National Association of Realtors told USA TODAY. ‘The sellers just need to understand that whatever last year’s price was, they cannot just boost up prices by another 20%. They would not find buyers using that philosophy.’”
“In data Redfin shared exclusively with USA TODAY, sellers on average, dropped their price by 4.7% nationally last week.. In more than 80% of the metros tracked by Redfin, the price drops were in the 4 to 6% range. Total existing-home sales, which includes completed transactions for single-family homes, townhomes, condominiums and co-ops, fell by 9% year-over-year in May. Pending home sales, a future-looking indicator of home sales based on contract signings, dropped 14% in May, according to NAR’s Pending Homes Sales Index.”
“Nationally, the inventory of homes actively for sale on a typical day in June increased by 19% over the past year, the largest increase in inventory in the data history, according to a report by Realtor.com. That translated to 98,000 more homes actively for sale on a typical day in June compared to the previous year. Chad Snow, a real estate agent from Salt Lake City, Utah, says he’s seen a strong rise in inventory over the last eight weeks.”
“There were 6,367 active listings this May compared to 5,031 last May. Nearly half (48%) of homes for sale in Provo, Utah and Tacoma, Washington, had a price drop in May, according to a Redfin analysis. In Salt Lake City, Utah, which saw a 56% appreciation in home prices in two years, from $356,000 in May 2020 to $556,000 in 2022, for instance, 46% of the homes listed this year reduced their asking price, says Snow.”
“‘When the interest rates got up over 5%, the buyers kind of stopped,’ he says. ‘I feel like a number of those price drops were sellers and agents that thought the market was still hot or hotter than it than it is.’”
From Bloomberg on New York. “An elegant 5,500 square-foot home set on nearly four acres in Bridgehampton came onto the market almost exactly a year ago with an asking price of $21.9 million. After what Zillow shows is three price cuts, it’s down to $17 million and is still unsold. One hamlet over, in Wainscott, a massive 10,000 square foot mansion on about 14 acres overlooking Georgica Pond hit the market last year for $70 million; its price was subsequently cut more than 14%, to just under $60 million. It also has yet to find a buyer.”
“The Hamptons Covid-era buying frenzy is a thing of the past. ‘The market is transitioning,’ says Jonathan Miller, president and chief executive officer of the appraiser Miller Samuel. ‘What’s happening in the Hamptons seems to be happening throughout the country.’”
“Even the richest buyers have tended to take out loans. ‘I find it’s at almost every price level,’ says Corcoran broker Gary DePersia. ‘After the contract is signed, no matter what, they’re getting financing. They don’t want to take the money out from where they have it to buy a house.’ And so the end of cheap mortgages has, brokers say, begun to impact the spending habits of those who don’t need one.”
“The market could slide further before it stabilizes, since sellers have yet to recognize buyers’ new reality. ‘The inventory doesn’t match buyers’ expectations,’ says Douglas Elliman broker Martha Gundersen. ‘Let’s say they were getting a 2% mortgage, now they’re getting 5%, and there’s a disconnect for what their monthly costs will be.’ Sellers, meanwhile, ‘are still looking at the most expensive’ comparisons when they go to price their house. Inventory, meanwhile, is set to rise. “There will be more [houses] coming onto the market, and as more comes on, [sellers] will have to take a price concession,’ says Paul Brennan, a broker with Douglas Elliman.”
The LA Daily News in California. “In this changing market, clever math and creative solutions can help get things moving. Literally. If you’ve had your house listed for sale recently, after the increase in interest rates, the decrease in demand, the rising gas prices, inflation, and threat of a recession, you know things have changed. You are not the sellers of six months ago, calling all the shots, juggling multiple offers, negotiating a free rent back for two months while you make all the improvements to your next home, wondering what you’ll do with all the extra money you’ll have since you received offers tens of thousands above your asking price.”
“Oh no, that ship has sailed, at least for now. You might want to huddle up with your agent and look back at the one or two offers you did receive, which were probably lower than your list price. Sharpen your pencil and see how you can make the numbers work, call the buyers’ agents and see if they’re still interested. They probably have tried a few times to make a deal and many not have found a seller they can work with. You never know! They’re probably in the same boat with you, riding the market down, ever so slowly.”
“Get with your agent and go back to the house you wanted to buy and reopen negotiations with those sellers. If they are still on the market, maybe they’ve already reduced their price and may be willing to give it another try with you, maybe even at a lower price than the last try. Remember, you’re all in the same boat, riding the same market, responding to the same conditions. See if they will come down by an amount commensurate with the lower price you might be accepting.”
The Globe and Mail. “Some feared Canada’s banking regulator would put the smackdown on home equity lines of credit (HELOCs) in its long-anticipated regulatory update on Tuesday. After all, the Office of the Superintendent of Financial Institutions (OSFI), the Financial Consumer Agency of Canada (FCAC) and the Bank of Canada have been warning about HELOC overborrowing for years. Instead, OSFI put that fear to bed. OSFI did make one key change, however. It limited the readvanceability of readvanceable mortgages – and that’s going to force some borrowers to make adjustments.”
“Effective late 2023, OSFI’s new rules will prohibit this reborrowing on readvanceable mortgage portions that exceed 65 per cent of your home value. Clearly, this is far from a catastrophic curtailing of borrower credit. OSFI, to its credit, took a measured approach, likely for two reasons. One, real estate prices in some regions are in free-fall, and heavy-handed credit tightening might have driven prices down harder. That could defeat OSFI’s purpose of fostering financial system stability.”
The Toronto Sun in Canada. “I think we can all safely say that Toronto’s pandemic real estate boom is officially over. It isn’t a consensus we arrived at easily, to be sure, but even the denialists have finally come around to admit that what we are now seeing is far from the seasonal slowdown or simple ‘market recalibration’ one might remember from the Beforetimes. The market has pretty much ground to a halt with sales falling off a cliff. Average sale prices in some parts of the GTA are down over 20% from February’s peak. I’m not being dramatic or sensationalistic, that’s quite literally what the data shows.”
“And given the froth of the past several years, I’m not sure anyone should be surprised. What has been surprising to me, however, is how quickly this came on. Sure, there were signs this winter that buyer sentiment was shifting almost in lockstep with heightened anticipation of interest rate hikes, but this is not that.”
“The sellers who have gotten used to being in the driver’s seat are going to have to accept that this new reality is just that — their new reality. February prices are long gone. Offers will likely include conditions. And for those who have to sell right now, it will likely be a tough pill to swallow, particularly if they are depending on the proceeds to close on another property.”
“So yes, things aren’t great at the moment and will almost certainly get worse before getting better. And for those likely to be the most affected, the buyers who bought-in over the past two years and will be upside down on their mortgages for a while, we should all wish them well as they hunker down and ride this out. For everyone else, let’s stop treating real estate like a national religion and return our focus to the things that matter again.”