A report from the Los Angeles Times. “For the first time in a decade, Southern California homeowners, and those across the country, are seeing their equity fall en-masse. Justin Bragg and his wife stretched to buy a home in Boyle Heights late last year. Now, after hearing of multiple shootings at parks near their home, they wonder if they made a bad choice. Bragg, a high school teacher, feels unsafe just bringing their 3-year-old daughter to their neighborhood playground. But he worries they won’t be able to sell or find a renter who’ll cover their mortgage. ‘Are we stuck in this place?’ Bragg, 42, said.”
Pacific Coast Business Times in California. “Santa Paula-based Limoneira, with real estate development operations, in addition to its citrus growing, packing, selling and marketing agribusiness, closed the sale of its real estate development property known as ‘Sevilla,’ in Santa Maria, for $2.6 million in cash proceeds Nov. 30, the company said. The company said it recorded an immaterial loss in the fiscal first quarter of 2023.”
The Dallas Morning News. “Dallas-Fort Worth single-family home sales fell 30% from November 2021 to 2022, the sharpest decline since immediately after the Great Recession. The last home sales decline of more than 30% was in July 2010, Texas A&M records show. The median sale price of a single-family home dropped almost 9% from a record $435,000 in May and June to $396,500 in November. Shana Acquisto, president of the Collin County Association of Realtors said sellers who are on the fence about selling their homes may be ‘kicking themselves a little bit’ because they missed the best time to sell, especially if they aren’t willing to get their homes in pristine condition.”
The Waco Tribune in Texas. “Ameritex Homes President Tara Williams said pandemic-related labor and supply shortages have hampered construction progress for the company, leading to the partially completed houses that can be seen around Waco. Ameritex has permits to build between 70 and 80 houses on infill lots in developed neighborhoods, primarily in North Waco and East Waco. City planning officials expect to meet with the developer next week after local housing advocates pointed out the stalled projects throughout town, including Mike Stone, director of Grassroots Waco, which runs homebuilding and repair programs, in addition to offering financial literacy classes and other programs.”
“Stone said Ameritex has started work on all but eight of the homes it has permits for. Waco Planning Director Clint Peters said his department has the authority to void building permits if work has not started after six months. Permits do not come with deadlines for work to be completed. A trio of Ameritex lots on North 11th Street have trenches and plumbing components in the ground, no foundation, and stacks of lumber for framing waiting on standby. ‘You want to build a house to minimize all your holding costs so that you can make a better return on your investment, and the longer it takes, the less you’re going to be able to make on the house,’ Stone said.”
Bisnow Philadelphia in Pennsylvania. “Very few new construction projects have started in Philadelphia over the past three or four months, and very few look to begin in the first half of next year, multiple industry experts told Bisnow. For the vast majority, projects that have the entitlements and planning done are on hold. ‘Money costs double today from what it did a year ago,’ Tower Investments CEO Bart Blatstein said. ‘The lender pool has shrunk. Will it pass? Of course. Will it pass in a year? I don’t know.’”
“Ongoing projects are keeping construction companies busy right now, but if new starts don’t recover by the end of next year, the subsequent loss in cash flow would force construction companies to make cuts for survival. If that happens, developers would be hard-pressed to pick up where they left off.”
New Channel Nashville in Tennessee. “During the pandemic, Crossfire Cleaning was busy clearing out gutters and pressure washing. But now, business is slowing down. Small business owner Zach Hays said his clients likely don’t have as much cash flow. ‘I’m sure it’s just the recession, and everybody’s scared about what’s going to happen,’ Hays said. ‘I think everything’s more expensive, and with the rates, you can’t borrow money as easily, so people are really holding on to their money.’ To attract new clients, he’s dropped his prices 30 to 40% and is willing to negotiate. ‘We’re all pretty slow so it’s a good time to hire any contractors really,’ Hays said.”
From KTVB in Idaho. “For the first time since October 2014, the median sales price for homes in Ada County has dropped year-over-year. The median price during the month of November 2022 was $525,000, down 2.5% compared to November of 2021, according to Intermountain MLS. That price is also 6.5% less than the median for October of this year. The number of homes sold in November in Ada County, 548, was 39% lower than a year ago. Of those, 380 were existing/resale homes and 168 were new construction. The decrease in sales of existing homes (44.9%) was sharper than the decrease in sales of new construction (19.2%).”
“‘To attract the buyers who remain in the market, sellers are adjusting prices accordingly or offering buyer incentives like closing cost credits to buy down the interest rate,’ said Boise Regional REALTORS president Becky Enrico Crum.”
The Chatham Daily News in Canada. “Brantford is among the Ontario communities that have seen some of the largest declines in property values after they skyrocketed earlier in the pandemic, according to the Royal Bank. Prices in Brantford have seen an 18 per cent decline. Cambridge prices are down 22 per cent, and London 18 per cent. Kitchener-Waterloo, Kawartha Lakes and Hamilton/Burlington have all had a 17 per cent drop in prices. While Toronto’s decline has been 11 per cent, prices are expected to fall further.”
The Toronto Sun in Canada. “And just like that, with the most recent 50 bps hike, any hope that what we have been looking at the past nine months was to be but a blip should be extinguished forever. To suggest this is a been-there-done-that type situation glosses over the truth of just how unaffordable Toronto has become. And it’s no longer just Toronto. Since 2020 alone, prices have absolutely flared in the suburbs and exurbs. Million dollar mortgages in Bancroft, Ont. simply weren’t a thing the last time around.”
“Stories abound of people who, in pursuit of a whole new lifestyle, made the big move only to regret it. Turns out that baking sourdough and connecting with friends on Zoom could grow old eventually. So when the market stats show 40% declines in average sale prices in areas outside of the city, you’re seeing the impacts of that bubble bursting. The demand was never real.”
“The consequences for buyers now upside down on their mortgages, however, are absolutely real. The people selling at a 40% loss aren’t doing so because they want to; circumstances are forcing their hand. Hopefully the worst is now over, but for some the consequences of participating in that bubble-producing market frenzy will be catastrophic. For some this may turn out to be a blip. For many others it will be life altering.”
From Fortune. “The phone just won’t stop ringing, beams Zach Bradford, the CEO of Bitcoin mining company CleanSpark. The calls are from other mining bosses—and they’re panicking. After Bitcoin crashed and energy costs spiraled over the summer, mining firms that took out expensive short-term loans to buy hardware during the bull run now teeter on bankruptcy. Lenders are breathing down their necks, and the miners need quick cash. But only a handful of companies are buying mining rigs these days.”
The Washington Post. “When Miami Mayor Francis Suarez unveiled an 11-foot, 300-pound black fiberglass reproduction of the Wall Street bull last spring, he hailed it as a symbol of the city’s arrival as the ‘capital of crypto.’ The value of bitcoin has plummeted, a blow to Miami residents who bought into Suarez’s call to invest in digital currencies. MiamiCoin — the city’s own cryptocurrency — is now essentially worthless. ‘A bunch of con men, selling imaginary coins and magic beans is not that interesting of a story,’ said Billy Corben, a documentary filmmaker and longtime skeptic of Suarez’s embrace of bitcoin. ‘But the fact is the government, and its elected officials were complicit in it, and dragged the city in it.’”
From ABC News. “Tens of thousands of Australian investors with superannuation and savings tied up in cryptocurrency remain in suspense, as a major Australian broker collapses into voluntary administration. Digital Surge froze the trading accounts of its 30,000 clients last month. This means people with money in the broker cannot access their funds. Now, a month later, the Brisbane-based cryptocurrency broker has entered voluntary administration. Voluntary administration is generally something a company does when it is either at risk of insolvency or is already insolvent.”
“Kamal Jain has all of his superannuation – more than $150,000 – sitting frozen in a Digital Surge account. ‘I lost everything,’ he said. ‘It’s a big setback and there’s nothing I can do.’ ABC News has spoken to other distressed investors in Digital Surge who have hundreds of thousands of dollars wrapped up in the scheme.”