A report from the Review Journal. “LVR reported the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service during June was $480,000. That was down from the all-time record price of $482,000 in May, marking the first time since April of 2020 that local home prices declined from one month to the next. LVR President Brandon Roberts, a longtime local Realtor, sees prices stabilizing as fewer homes are selling, more homes are hitting the market and more sellers are lowering their asking prices.”
“By the end of June, LVR reported 5,746 single-family homes listed for sale without any sort of offer. That’s up 134.1 percent from the same time last year. Likewise, the 1,340 condos and town homes listed without offers in June represent a 133 percent jump from one year earlier.”
The Coeur d’Alene Press. “In recent columns, Neighborhood of the Week has been highlighting the various price cuts on homes around North Idaho. This week focuses on price changes around our sprawling, gorgeous Lake Coeur d’Alene. I also like all three recently price-slashed choices in the Mineral Ridge area, across from Higgens Point. That includes a two-bedroom, almost 1,000-square-foot cabin and plenty of lake frontage, down $95,000 to around $1.1 million.”
“A three-bedroom, 1,450-square-foot home with an amazing deck, huge windows and an incredible lake view recently sliced $26,000 off the asking price to hit just under $870,000 asking. And don’t sleep on the three-parcel listing with a lakefront cabin (accessible by boat) with two bedrooms and 500 square feet priced just under $600,000 (down $76K earlier this week).”
The Spokesman-Review in Washington. “Homebuyers in Spokane County found more available properties in June. An increase in new listings is a bright spot for buyers with 805 homes available as of July 8, a 137.5% increase over 339 homes during the same time in June 2021. Ken Sax, a broker who oversees about 770 licensees in Washington for Professional Realty Services International, said he’s seeing more price reductions on homes and rate buydowns. Tom Hormel, 2023 president -elect for the Spokane Association of Realtors advises sellers to avoid overpricing their homes.”
“Although the market will be brisk, it’s not the same playing field as last year when homes were selling within days and fetching dozens of multiple offers, he said. ‘Please don’t expect a two- or three -day sale with 15 offers,’ Hormel said. ‘That’s not the market we’re in.’ ‘A neutral, balanced market is six months,’ Sax said. ‘We have a long ways to go, but the pendulum is starting to swing the other way. For a seller, it means sell now. Because the longer you wait, I think it will equate to less of a sales price.’”
A press release. “‘The market slowdown is giving buyers more opportunities to negotiate, especially with sellers whose homes have been on the market for a while,’ said Columbia, SC Redfin real estate agent Jessica Nelson. ‘I tell my sellers that they need to price their homes realistically from the get-go. If they don’t, their home may end up sitting on the market and they may have to drop their price—possibly more than once—to attract buyers.’”
The Detroit Free Press in Michigan. “Last summer, the typical negotiation was for how much over the seller’s asking price. Today, buyers have a bit more leverage and can sometimes knock 5% or so off a listing. ‘So I’m able to negotiate for my buyers right now,’ said agent Abe Talebof RE/MAX Leading Edge in Dearborn Heights. ‘A year ago, you were negotiating up, not down.’”
Inside Indiana Business. “Indianapolis-based real estate firm F.C. Tucker Co.’s monthly real estate data shows the number of homes for sale in the 16-county central Indiana region increased about 61% compared to this time last year. The real estate firm also reports pended home sales decreased 6.4% compared to a year ago. ‘Inventory has increased yet again in June as more new listings enter the market,’ said Jim Litten, chief executive officer of F.C. Tucker Co. ‘Although home prices are still higher than this time last year, we should start to see some stabilizing trends in the coming months signaling a more even-keeled market with even more available inventory and homes spending more time on the market.’”
The New York Times. “This spring should have been a busy time for home sellers. Instead, the season was a dud, stalled by a dramatic spike in mortgage rates that stunned even industry experts with its chilling effect on the market. The frenzied environment we had become accustomed to — with its eye-popping price increases and bidding wars that left buyers dejected and sellers giddy — suddenly seemed to be a thing of the past. Markets like Tampa, Florida, and Phoenix, which saw some of the biggest price increases, may take a hit, dropping by margins of 5-10%.”
“The time has come for sellers to reset their expectations. List your house today, and it is unlikely that 24 hours from now you will get to pluck an all-cash bid that’s $150,000 over list price from a sea of contingency-free offers. ‘Those days are over,’ said Lawrence Yun, chief economist for the National Association of Realtors. ‘Don’t expect multiple offers.’”
The Globe and Mail in Canada. “531 Beatty St., No. 703, Vancouver. Asking price: $1.548-million (May 16). Selling price: $1.48-million (June 1). The owner undertook a major renovation on the unit but never lived in it due to personal circumstances. Listing agent Ian Watt says a lot of people viewed the unit and he received one offer. ‘The market is kind of soft, and not the way it was four months ago,’ Mr. Watt said. ‘Having said that, people are starting to come back to the table. A lot of people haven’t bought yet and missed out due to multiple offers. Of course, now they are negotiating, whereas before you paid over-asking.’”
The Toronto Star in Canada. “Some buyers who purchased pre-construction homes as an investment could be at risk of having to sell at a loss if interest rates keep rising, which could affect prices in the wider real estate market, according to experts. In a practice called assignment sales, some purchasers buy homes with the expectation of reselling their contract with the builder before the unit is ready for occupancy. It’s a common investment practice that allows buyers to profit on the rising real estate value of new developments.”
“Mark Morris, a lawyer at legalclosing.ca, said falling home values are wiping out the potential for assignment sales. That will force those pre-construction buyers to close at a time when rising interest rates make the carrying costs of the homes prohibitive. In some cases, assignment sellers have agreed to buy multiple units, making it all the more difficult to close on their purchase agreements.”
“If it’s a matter of forfeiting a 20-per-cent deposit, Morris expects those who aren’t able to sell on assignment will simply walk away when it comes time to close on the unit they agreed to purchase. ‘It is a growing problem and it is something that is on the horizon,’ he said. Pre-construction values set the price floor for the entire category of homes, including resale condos, so if those who bought to sell on assignment experience widespread financial distress, the pain will be contagious, Morris said.”
From News.com.au in Australia. “Struggling construction titan Metricon has listed more than 50 display homes for sale as collapse fears continue to grow. In May, reports emerged that Australia’s biggest builder was on the verge of ruin, as claims the company was facing serious financial problems spread. Those industry-wide problems have already seen Gold Coast-based Condev and industry giant Probuild enter into liquidation in recent months, while smaller operators like Hotondo Homes Hobart and Perth firms Home Innovation Builders and New Sensation Homes, as well as Sydney-based firm Next have also failed, leaving homeowners out of pocket and with unfinished houses.”
“It comes after it recently emerged that Australia recorded a staggering 3917 liquidations or administration appointments across all industries during the 2021-22 financial year. The construction sector led the charge, representing 28 per cent of all insolvencies. According to consumer credit reporting agency Equifax, ‘small-scale operators in Australia’s construction industry could well be the canary in the coal mine for the difficulties that lie ahead for this sector.’”
From Vietnam Express. “The tightening of credit for property development has had a major impact on the market and could cause an industry crisis this year, experts fear. Since 2020 developers have been dependent on bank loans as the government imposed stricter rules for bond issuance, and the latest tightened policy on credit is a ‘knock-out blow’ to an already weakened market, Huynh Phuoc Nghia, a senior consultant at Global Integration Business Consultants said. Developers jacked up prices amid the property fever last year and earlier this year and now get to choose whether to continue with that or try to meet the actual demand there is with appropriate prices, he said.”
“A price drop has already been occurring. Tran Khanh Quang, CEO of developer Viet An Hoa said since May prices have been cut by around 10 percent. In the next six months there could be more developers seeking to dump their inventories for cash, meaning they could sell at even lower prices or even losses, and this could lead to a crisis, he said.”
“Data from his company shows that in the last three years 80 percent of property buyers have been investors buying for profits and not for housing use, and of them 70 percent used bank credit. This means they would soon have to sell their assets even if it means losses, Quang added.”
From Bloomberg. “The China Evergrande Group suffered its first rejection from local creditors to extend a bond payment deadline, in a development that marks growing impatience with the distressed builder at the centre of the nation’s property debt crisis. Holders of a puttable yuan-denominated bond from the firm’s main onshore unit Hengda Real Estate Group rejected a plan to further extend payment past a July 8 deadline by six months, according to a Shenzhen stock exchange filing Monday. The company had held a meeting last week to seek creditor approval, but more than 90% of the voting holders rejected the proposed extension.”
“‘This is the first time it failed to extend an onshore bond and will constitute a default,’ said Li Kai, CIO at Beijing Shengao Private Equity Fund Management Co Ltd. ‘It will create a new path for restructuring and will have implications in pricing of real estate bonds, especially extended bonds. We expect more onshore defaults from here.’”
The Telegraph. “In recent weeks, things have soured for burgeoning fintechs. The technology industry has endured a bleak few weeks. Venture capital has dried up, with many companies slashing their valuations and axing jobs. Klarna, the Swedish ‘buy now, pay later’ specialist, has plummeted to a market valuation of just $6.5bn following its latest funding round, from $46bn this time last year. Its global headcount has reduced by 10pc – around 700 job losses.”
“Other fintech companies have also laid off staff in recent weeks, including London-based trading platform Freetrade, which cut 15pc, and Nuri, the German digital bank, which let go one-in-five employees. One City analyst says: ‘If it was raising money now, I’d be gobsmacked if it didn’t take a discount. The valuation you’d seek today is a lot lower than one you could have sought in January.’”
“Tom Bull, head of fintech growth at EY, says the broader fintech sector has for years benefited from rock bottom borrowing costs to drive growth. That trend, combined with a vast amount of capital to prop up tech firms, has gone into reverse. ‘In a strong wind, even a turkey can fly,’ says Alfonso Marone, UK head of technology, media and telecoms at KPMG.”
“Crypto-asset trading on Revolut’s app has also become a significant revenue stream and digital currency markets have gone into freefall, forcing players to slim down. Coinbase, one of the world’s biggest crypto companies, has cut nearly 20pc of staff, while Robinhood let go almost 10pc in April. The City analyst adds: ‘You only have to look at Robinhood in recent months to see that crypto money has gone out the door. The problem with so-called super apps is they risk being all things to all people. I’m on the fence about whether this is a model that can work.’”