A report from Click Orlando in Florida. “A market once saturated by bidding wars is now seeing fewer buyers closing deals. In Orlando, home sales dropped 18.3%, with the Orlando Regional Realtor Association reporting 2,717 homes had been sold in September — 607 fewer than were sold in August. According to the Orlando Regional Realtor Association, in August, the median price was $377,750. In September, that price dropped to $365,000. ‘We are starting to feel the impact of these rising interest rates in the Orlando housing market,’ Team leader at Keller Williams Classic Realty Shonn McCloud said. ‘Buyers are pulling back a little bit more.’”
The Boston Globe in Massachusetts. “Sales are down. Prices are leveling off. New listings are plummeting. A report out Tuesday from the Greater Boston Association of Realtors shows that it is all but certain now: the region’s long-hot housing market is cooling off fast. Only 1,092 homes were sold in September in the 64 cities and towns GBAR tracks, a 12.7 percent drop from the same month last year. Condominium sales slid by 39.6 percent, from 1,207 sold in September 2021 to 729 last month.”
“Perhaps even more indicative of how quickly things are cooling, the median price of a single-family home in the region was $763,000 in September. It was the third straight month prices have ticked downward, since an all-time high of $899,950 in June.”
WTKR in Virginia. “These days, there are a lot of questions surrounding housing in Hampton Roads. Christy Allen, an associate broker and realtor, said it’s an ‘interesting time’ for home buying. ‘A year ago, if you listed your house you may have had 20 offers. You were not offering closing cost assistance, you were not offering any concessions to the buyer, where now sellers are a little more willing to help the buyer out. We are back to negotiating. We’re back to asking for home inspections,’ she said.”
The Review Journal. “Southern Nevada apartment rents dipped in recent months as vacancies climbed, a new report shows, in more signs of Las Vegas’ slowing housing market. Overall, the change in Southern Nevadans’ rent checks has changed considerably this year, and prices are expected to keep sliding. The average vacancy rate during the third quarter was 7.5 percent, up from 3.6 percent a year earlier, the association said. the rental market overall has hit the brakes amid a broader slowdown in Southern Nevada’s housing market. With buyers facing a sharp jump in mortgage rates this year, home sales have plunged from 2021 levels, inventory has skyrocketed, and sellers have been slashing their prices.”
Multi-Housing News on Arizona. “Phoenix’s economy has been in expansion mode since late last year. Consequences of the recent substantial supply volume reverberated in rent growth—moderating since the start of the year and up just 0.3 percent on a T3 basis through July, to $1,690—and pushed occupancy down 110 basis points in the 12 months ending in June, to 95.3 percent. Developers delivered 7,701 units in 2022 through July and had another 34,700 units under construction. Meanwhile, investment activity exceeded $7.5 billion, above the volume recorded during the same period last year, with the price per unit surpassing the $300,000 mark following a 48 percent annual increase.”
From Yahoo Finance. “There are some signs the market may be cooling off. Yahoo Finance contributor Vera Gibbons joins us with the details. ‘While we are seeing rent growth continue to rise in some of those peripheral markets outside of the core cities, like Cambridge, Massachusetts, Fremont, California, Tempe, Arizona to name three, we are seeing an overall leveling off, or plateauing, if you will, in rents in many of the other markets throughout the country. I was speaking to the CEO of Zephyr, and he said that in over half of the cities he actually follows, he is, in fact, seeing a plateauing of those rents. Places like Nashville, Tennessee, a lot of the Florida markets, for example, they’re coming down.’”
“‘I was speaking to one renter who said her previous landlord, she couldn’t even get him on the phone to fix a leaky faucet, and it went on for, like, four months. And she said she’s since moved into a different location, has a different landlord. And the landlord now is so anxious to get her to stay that she’s even bringing her fresh flowers. So–‘”
From Candy’s Dirt in Texas. “In July of this year, I published a piece warning of a coming washout in the mortgage industry. A quick check of the list of mortgage layoffs, merges, and closures reveal the wave I predicted has occurred. I still caution against overreaction and believe this is simply our industry making a U-turn. Banks, lenders, and brokers amassed staff and salespeople for years as demand for mortgages grew, and this dramatic downturn in real estate has forced our companies to make painful decisions.”
“Offers on existing homes have fallen drastically, and days on market have increased to more than one month in most local markets. Despite this, home prices seem to be holding on stubbornly to the gains made in the past two years. Anecdotally, I’m seeing builder ads offering $30,000 or more in incentives, a signal they are feeling the slowdown.”
The San Francisco Chronicle in California. “San Francisco’s downtown economic core has been struggling since the start of the pandemic, and there is one idea to help it that just won’t die: Convert empty office buildings into housing. But if creating housing from office space is such a good idea, then why hasn’t it happened? Local developers generally say it’s too expensive and difficult here — even though it can cost less than bottom-up construction in some cases. ‘In the end, San Francisco is going to have to figure out why people should come there,’ said Karen Chapple, director of the School of Cities at the University of Toronto, ‘and that means rethinking itself entirely, probably.’”
From CBC News. “New numbers from the Canadian Real Estate Association confirm what buyers, sellers and owners have known for a while: the housing market is in a funk. Prices are down on an annual basis, too, with the average selling price of a home listed on the MLS system going for $640,479. That’s down by 6.6 per cent compared to a year ago, and down by more than 21 per cent from the all-time high of $816,720 reached in February. That was before the Bank of Canada began its aggressive campaign of rate hikes to rein in runaway inflation.”
“Uncertainty in the rental market is one reason why Earl Hypolite and Naomi Zitt-James say they’re looking to buy a house of their own, sooner rather than later. The couple rents an apartment in downtown Toronto, but with a seven-month-old baby and a large dog, they feel it’s time to make the leap. While they have no imminent plans to buy, they have been looking at properties outside the city, where prices have come down a lot. ‘I’m feeling a lot better now that I know that the prices have come down a little bit,’ Zitt-James said. ‘I just feel a little sad for those people that went in and got those houses only to have it come down.’”
The Jamaica Observer. “Head of litigation at Myers, Fletcher & Gordon Gavin Goffe said, ‘as lawyers who have a practice which touches and concerns real estate, we’re concerned about regulation. Not the fiscal regulation but in terms of the construction business and how that particular business is regulated or is not regulated. We have a construction boom and we don’t have a booming regulator who is at the wheel making sure that we don’t end up with what we’re all afraid of, which is a burst bubble. The likelihood of this construction bubble bursting is made greater by the fact that we don’t really have the kind of laws, regulations and enforcement of those laws and regulations as we ought to have.’”
“He continued, ‘When we have these high interest rates, it also affects the developers, the cost to borrow to fund that development goes up. There’s only a limited extent to which they [developers] can pass on this increased cost to the consumers. The fact is that these apartment buildings which are where the market is right now are already so expensive there’s only so much more that they can go.’”
“‘So where do they go to find/make the super profits that they have been making for the last five years?’ the lawyer asked. “They’re gonna cut corners to try and make sure that they finish the buildings quicker so that they can start servicing their debts quicker. They’re going to use the Chinese because we all know that the Chinese have a reputation of doing things much quicker than Jamaican construction labourers. That has its own ripple effect in terms of employment,’ he pointed out.”
“He also disclosed that inflation pressures are also causing developers to be dishonest. ‘They’re also going to lie. Have you ever seen an advertisement for an apartment and it says they are selling one bedroom, two and a half bathroom and you wonder how that make sense? It’s because they intend to convert it into a two or three bedroom unit but if they were to tell that to the regulator they wouldn’t get approval because it would breach density requirements. If you have a three-bedroom unit then you have to have more parking, more amenity space, things like sewage all of those things are affected by the number of rooms that you might have, so they lie,’ Goffe explained.”
From Bloomberg. “Even in Sweden few people knew much about Castellum AB. Yet the hurried sale of 40 million shares in the property company earlier this month is now seen by some as a harbinger of things to come in the European property market. The seller, M2 Asset Management AB, cited falling market prices that affected its ‘ability to fulfill its financial commitments’ for the decision. The dumping of the stake by a major shareholder, is just the latest episode in a tumultuous year in which Sweden’s property companies have seen their stock market values halve.”
“There is little expectation of any respite. The sector is facing $10 billion in debt repayments next year, with refinancing demands of about $41 billion by the end of 2026, according to data compiled by Bloomberg. The funding squeeze faced by Sweden’s property companies stems from their floating-rate bonds and near-term maturities in an environment with rising interest rates.”
“Anders Kvist, a senior adviser to the director of the Swedish FSA, said the watchdog has been warning about the high levels of debt in commercial real estate companies for at least four years. ‘Falling property values could trigger a domino effect,’ Kvist said. ‘If property values fall, the available security on the loan decreases. This can lead to demands for more collateral and in turn force distressed selling.’”
The South China Morning Post. “China’s frustrated middle class are feeling the pinch. They are cutting back on luxury items, but rather than investing the wealth they now have at their disposal, they are instead hanging on to it amid feelings of nsecurity. ‘I always comforted myself with the fact that the appreciation of a house in a big city in China is more certain than anything else,’ said Lin Xiaoxia, a Shanghai-based operations director. ‘But now that houses and monthly household income are starting to decrease, investing abroad or even buying gold [exchange-traded funds] is no longer practical for ordinary middle-class people.’”
“‘It’s horrible to see the property price even just slightly drop or freeze when your family is earning about 35,000 yuan (US$4,870), but have to pay 40,000 yuan of mortgage payments monthly. And it’s happening to me,’ Xiong said. ‘And the more horrible thing is that it will very possibly last for years in future.’”