A report from the Tampa Bay Times in Florida. “Real estate economist Ken H. Johnson said he’s concerned by the rhetoric the real estate industry is pushing about rising home prices. ‘It’s leading individuals to think ‘OK, everything’s rosy. Housing prices only grow to the sky,’ Johnson said. But that’s not true. The faster home prices rise, the riskier it gets, he said. ‘Things are going to get a little rocky.’”
“For Plant City homeowner Sharon Sorensen, buying a house in this market was ‘taking a gamble.’ She and her husband ended up paying $12,000 out of pocket to cover the appraisal difference plus $3,000 for the closing costs on a $315,000 home they bought in east Hillsborough County in December. ‘We’re hoping that this is the type of investment that will give us a return but we also want to put money away for retirement,’ said Sorensen, 57. ‘But this money is coming out of it.’”
From TC Palm in Florida. “Over 60 Zillow-owned homes have been listed for sale on the Treasure Coast since June 1, according to market data. Ten were still available as of Feb. 2. Zillow is selling some homes for significantly under the area’s average sale price. For example, the average single-family sale price in the 34894 ZIP code during the fourth quarter last year was $362,006, according to market data. Half the Zillow-owned properties in the area were up to 32% cheaper – at $260,000, $312,648 and $331,214.”
“‘I think that (Zillow) was purchasing high, and because they ended up being wrong about the way the market was going to pan out, they’re just dumping properties now,’ said Tracey MacLeod, with Premier Realty Group based in Stuart.”
The Spokesman Review in Washington. “Spokane County’s wild housing market slowed in January, providing potential homebuyers with slightly more properties from which to choose and fewer competing offers. The county’s median closed home price was $380,000 in January, a 20.6% increase compared to the $315,000 median in January 2021, according to the Spokane County Association of Realtors. However, the median home price last month declined $10,000 compared with the $390,000 median in December 2021.”
“‘We’ve been slowing down a little bit this last quarter, and I think this is a number we were kind of anticipating,’ said Rob Higgins, executive officer of the Realtors association. ‘The market slowed a little bit, but there is still high demand and the critical thing is low inventory.’”
The International Business Times. “Mortgage demand fell more than 10% during the last week in a sign that prospective buyers are pulling back from the market ahead of an expected interest-rate hike by the Federal Reserve. The Mortgage Bankers Association released its latest data on Wednesday that suggested heightened activity since the start of the year. However, the MBA found it is 12% lower than the same period last year.”
“Joel Kan, MBA’s chief economist, wrote that mortgage rates continued to edge higher with the 30-year, fixed-rate climbing to 3.83%. He added that ‘growing inflationary pressures’ were spurring central banks worldwide to begin turning off the tap on the billions of stimulus dollars they pumped into the economy at the height of the pandemic. ‘Purchase activity slowed after the previous week’s gain. Both conventional and FHA [Federal Housing Authority] purchase applications saw proportional declines,’ said Kan.”
From Socket Site in California. “The number of homes on the market in San Francisco, net of all new sales, both pending and closed, ticked up another 10 percent over the past week to 760, representing 65 percent more homes on the market than at the start of the year with typical seasonality in play (despite some industry misanalysis making the rounds in December).”
“While listed inventory levels are still 19 percent lower than they were at the same time last year, they’re now 50 percent higher than they were prior to the pandemic; nearly 150 percent higher than they were in February of 2015; and the year-over-year gap in listed inventory, which was up to 50 percent this past September and averaged over 30 percent last month, continues to drop with a slowdown in sales activity.”
From Bloomberg. “As we all know, millennials are America’s most economically cursed generation. Now that they’re hitting their 30s and 40s, they’re not even cool anymore. And the housing market might be about to stick it to them once again. In its foolish haste to analyze, this newsletter suggested this could be a way for millennials to wreak a bit of economic vengeance on the world by helping push home prices even further past the moon.”
“But what if it’s actually just another trap for the broke generation? Americans think this is the worst time ever to buy a house, according to a recent poll. Gary Shilling has many, many charts validating that sentiment Interest rates are rising, and housing affordability is approaching rock-bottom.”
“One silver lining is that home builders are starting to ramp up supply. Oops, it turns out that silver lining is actually a sharpened katana dropping on the neck of anybody buying a house right now, with all this new supply hitting just as soaring costs crush demand. That’s not to mention the rising odds of a Fed-induced recession, which would be the third one of those since the millennium began.”
“Ugh. Once again, our apologies to the millennials. If it helps, please enjoy this photo of a puppy named Beyonce in a coffee mug.”
The Globe and Mail in Canada. “The number of homes in Toronto has increased at a faster pace than the city’s population over the past five years, according to new census data that provide a fresh look at the mismatch between housing supply and demand in the city. The number of private dwellings in the Toronto area rose by 7 per cent, to 2,394,205, between 2016 and 2021. Meanwhile, the area’s population grew by 4.6 per cent, to 6,202,225 residents, according to the census figure.”
“These new numbers call into question the often-cited idea that a shortage of homes is a major reason the city’s housing prices have soared to record highs. The typical home across the country is 41 per cent more expensive than it was in January, 2020. In Toronto, the typical home price rose 52 per cent over the past two years.”
“‘The fact that the number of dwellings has risen strongly, and even faster than the overall population in both the past five and 10 years, suggests that a big supply response is not going to magically solve this issue all by itself,’ said Douglas Porter, chief economist with Bank of Montreal. ‘Policy makers will also need to address the demand side.’”
The Sydney Morning Herald in Australia. “Investors from retirees to single mothers on low incomes fear losing their properties after their strata levies jumped from under $2000 per quarter to more than $10,000 for building repairs they had no say in approving.”
“Hundreds of owners who paid about $200,000 for each apartment in the UniLodge student accommodation building on Broadway have been ordered to pay the levy by strata managing agent Bright and Duggan, which a tribunal appointed to take full control over the owners’ corporation. The building had become run down and repair and maintenance works were necessary for its structural integrity, Bright and Duggan said.”
“One of the owners, Sandeep Khera, whose quarterly levies increased from $1147 in August to $9688 in December last year, said a majority of more than 580 student apartment owners had signed a document, often without reading the fine print, giving UniLodge an irrevocable power of attorney. This had allowed it to vote on behalf of the majority of owners at annual general meetings of the owners’ corporation.”
“Mr Khera said a $2.2 million proposal to repair the clock tower was among building projects he hoped could be delayed ‘as we are bleeding under these exorbitant levies’. Alan Sedghi, 67, said he now has to pay about $40,000 per quarter in levies for four UniLodge apartments he bought for more than $200,000 each to fund his retirement.”
“‘It looked on paper like a good investment and something I wouldn’t have to worry about, but it has turned out to be the complete opposite,’ he said. ‘It’s devastating.’”
“In his 17 years as a real estate agent, Mark Roberts from McGrath, who Mr Sedghi asked to sell the units, said he had never seen strata levies as high. ‘These levy figures are astronomical,’ he said. ‘He’s got no hope of selling it. With those fees he couldn’t give it away.’”
“Varun Marwah, 38, an army reservist who also works as an air quality consultant, paid $240,000 for his apartment 18 months ago as an investment for his eight-year-old twin daughters. ‘I have had so many sleepless nights over this,’ Mr Marwah said. ‘Legally, the levies have a leg to stand on and we cannot challenge them because all the voting rights have been given to Bright and Duggan as the owners’ corporation.’”
“Mr Marwah said it was ‘a lose-lose situation for owners’ some of whom were severely distressed. ‘People feel hopeless, bullied, cornered, extorted and helpless,’ he said.”