A report from Business Insider. “‘To be expected, with rates rising as quickly as they have, we were going to see a slowdown in prices, but certainly we are now seeing the market slam on the brakes very quickly here through the summer months,’ says Andy Walden, the vice president of enterprise research at mortgage data provider Black Knight. Black Knight’s data shows that home prices have pulled back from their recent peaks in popular markets like San Jose, Seattle and San Francisco by 5.1%, 3.8% and 2.8%, respectively.”
The Montana Free Press. “Real estate agents working in Helena, the Flathead Valley, Bozeman and Billings generally said homes are still selling, but that properties are typically seeing fewer offers and staying on the market longer than they were last year, trends that give buyers more negotiating power. Additionally, sellers are in some cases finding they need to dial down ambitious list prices — a sign the market may be reaching a plateau. Missoula’s median single-family home sales price dipped slightly in July, declining to $525,000 — $37,500 less than the June median.”
The Daily Independent in Arizona. “Some Phoenix homebuilders reported a spike in cancellations of new home contracts as the local housing market adjusts to less demand and more supply. Over the last few months, the cancellation rate has jumped to around 30% to 35% in the Phoenix metropolitan statistical area, said Steven Hensley, housing analyst at Zonda.”
“‘We have seen an uptick in cancellations in the new home market,’ Hensley said. Richmond American Homes— another Phoenix homebuilder — announced a sizable spike in home sale cancellations. ‘Cancellations as a percentage of beginning backlog increased 400 basis points to 9.7% from 5.7%,’ the July regulatory filing said.”
“‘After several consecutive quarters of increasing prices and strong demand, we experienced a noticeable decline in sales activity in the second quarter of 2022,’ said David Mandarich, the company’s president and CEO. ‘We believe this was a natural reaction to the rapid rise in mortgage rates and reduced consumer confidence that took place during the quarter, and one that will likely require some realignment by industry participants.’”
The Sequim Gazette in Washington. “Marguerite Glover, co-owner of Peter Black Real Estate, said the market has slowed down but ‘things are still selling.’ She said, ‘It’s taking a little bit longer. Before we would sell in hours and now it’s a few weeks.’ Mariia Bush, a loan consultant with Caliber Home Loans, said some buyers got discouraged during the pandemic as they were outbid by multiple offers, and sales well above asking prices. ‘Now the market isn’t as competitive,’ she said. ‘Sellers are willing to entertain offers.’”
“Glover said in recent years for homes ‘with a three-bedroom, two-bathroom house on an acre, people could ask anything they wanted. Now with interest rates up it’s getting more realistic.’”
The Denver Post in Colorado. “A big chill continued to descend on metro Denver’s housing market last month as home sales fell sharply and the number of listings continued to soar, according to the Denver Metro Association of Realtors. There were more than twice as many homes available at the end of July as at the end of April. Prices are also starting to come down in a more noticeable way. The median closing price of a single-family home sold in July was $650,000, which is down 3% from June.”
“‘With all those uncertainties looming over potential buyers, a housing bubble should not be one of them because housing prices are based on supply and demand,’ said Andrew Abrams, chairman of the DMAR Market Trends Committee in comments accompanying the report. ‘Our supply is relatively low… While prices may go down and days in the MLS may go up, we are still far away from a bubble.’”
The Dallas Morning News in Texas. “One of the largest iBuyers in the nation is now offering homes for sale on its website before widely listing them to the public, a move aimed at helping buyers avoid price negotiations and bidding wars. The company has an appraisal price match guarantee as well. If a customer buys an Opendoor Exclusive and the home appraises for less than the purchase price on contract, the company will reduce the price by up to $50,000 to match the appraised value. As of the first quarter, homes sold using an iBuying service made up 5.1% of the Dallas-Fort Worth market and 1.3% of the national housing market, according to Zillow.”
Palo Alto Online in California. “The median price of a single-family home in Palo Alto dropped to $3.55 million in the second quarter of this year, representing a 13% decline from a record-breaking $4.1 million in the first quarter. Many of the open houses for entry-level homes priced below $4 million in Palo Alto had almost no visitors in recent weeks. Absorption ratio, the percentage of active listings that go into a pending sale during the same period, is a relatively real-time indication of the hotness of the market. In the first quarter, the ratio was 73% for single-family homes in Palo Alto. The ratio went down to 43% in May and 23% in June. It now takes more than two weeks on average to sell a property, compared with eight days in the first quarter of this year. Many of the entry-level homes are not selling at all.”
The Sacramento Bee. “The 2022 real estate cool down hit most of California in June, as sale prices dropped throughout much of the state. According to the California Association of Realtors, the median sale price of a single family home in the state dropped 4% in June compared to May. The biggest drop was seen in the Bay Area, where the median sale price was down 7%. Most of the Sacramento region saw price drops in June. Sacramento County’s median sale price of $560,000 was 3.4% lower than the previous month. Placer County prices were down 2% between May and June and El Dorado County saw a 1.9% drop.”
“‘We’ve seen a massive change with housing inventory,’ local appraiser and market analyst Ryan Lundquist wrote. Lundquist’s data also show that roughly 47% of listings in the region have a price reduction.”
CTV News in Canada. “The average price at which houses sold in Windsor-Essex has declined by nearly 25 per cent over the past five months, according to the Windsor-Essex County Association of Realtors (WECAR). Updated numbers showing a consistent decline of the average home selling price month-by-month since March. At the time, houses in Windsor-Essex sold on average for $723,739. According to WECAR, that number dropped to $557,989 in July — a decline of $165,750 or 23 per cent.”
“For real estate salesperson Sandeepp Sampath Kumar, the current state of the market has given buyers more leverage, allowing them to place conditions on their offers. ‘In 2021 and early 2022, most offers were all firm with no conditions,’ says Kumar.”
Global News in Canada. “Residential home sales in Metro Vancouver have seen more than a 40-per cent decrease, comparing July 2021 to this year and a nearly 25-per cent decrease in just one month. The Fraser Valley Real Estate Board said there has been more than a 50-per cent decrease in sales comparing July 2021 to this year and a 22-per cent decrease in home sales from June to July.”
“‘The weaker demand resulted in prices dropping for the fourth consecutive month, most notably for detached homes which ended the month with a benchmark price of $1,594,400, down 3.5 per cent from last month and by 10.2 per cent since peaking at $1,776,700 in March,’ Lilian Choi said, Fraser Valley Real Estate Board’s communications manager.”
From News.com.au in Australia. “A Sydney builder has ‘vanished’ leaving homeowners ‘distressed’ as they have poured hundreds of thousands into unfinished houses and face never being able to complete them. However, the owner of Ajit Constructions, Amarjit Khakh said he is currently on a family holiday in Europe and is doing his best to try not to go into liquidation. Neeraj Sikka and his family are one of the impacted homeowners, who have been building an $885,000 home in the suburb of North Kellyville, which was meant to be completed by June this year. Instead, the 46-year-old has been left with a half-built house that has no roof and has been exposed to months of rain leaving the floorboards mouldy and black, said Mr Sikka.”
“Mr Sikka said he has paid out $387,000 to Ajit Construction – 40 per cent of the project price – but has no idea what is happening with his home and as a result his health has suffered. ‘I am very distressed. I can’t sleep at night. I’m talking to a psychiatrist and I’m on blood pressure medication right now,’he told news.com.au. ‘I’m writing emails at three at night with no respite and I’m so deep in debt I borrowed $800 from someone to pay bills. I can barely breathe sometimes I get so anxious from anxiety attacks. My family is so distressed. I have constant fights at home. I don’t have money and had to borrow money from friends and my wife feels like it’s pretty insulting – we both work and I have gotten her into this mess and it’s no fault of mine.’”
“‘I’m wondering how we are going to get out of this thing,’ he said. ‘I might have to end up with nothing as I owe money to the bank, I can’t pay every week, I can’t sustain the $1500 every week and for the last so many months nothing is happening on site. I really don’t have any money. I am really ashamed. I never thought in my whole life this would happen to me while living in Australia. I’ve been here for close to 17 years.’”
“Another family that had been saving their whole life for their first home was Manish Agrawal’s. They signed up to build a double storey duplex, with four bedrooms in each, for $698,700 with Ajit Constructions in July last year in the suburb of Schofields, which was renamed to Nirimba Fields. But the married man said despite paying $152,000 for construction, including $12,000 directly to suppliers for window frames and bricks, he only has a slab and partition wall on his property.”
“‘I’m stuck so badly. No one is working on my site and we can’t go to another builder until I have the certificates and they are not co-operating with me,’ he said. ‘I’m looking for another builder and I’m in touch with a couple of builders who are asking for minimum of $150,000 to $260,000 more to complete the project. It’s such a huge amount of money which I don’t know how I will arrange as it’s unlikely the bank will fund the difference.’”
“Then there’s Reza Thebuwana who has already paid $297,000 to Ajit Constructions for a single storey, four bedroom home in Nirimba Fields. The IT worker, who has three kids, signed up with the company in March 2021 to build his $330,000 home.There are no kitchen fittings and the electrical work and plumbing hasn’t even started, while the bathroom is also missing tiles, he added.”
“Mr Thebuwana describes his situation as a ‘living nightmare.’ ‘This builder told us that they would hand over the house in April 2022, so given the short period we moved into a two-bedroom apartment and have been living in this temporary location for nearly two years now with two fully grown kids and a newborn,’ he revealed. ‘It’s very difficult, it’s a big toll on the children, I feel so bad for them. It’s not ideal living conditions for staying such a long time.’”
“Then there’s Ashish Kandoi who had Ajit Constructions agree to pay $3200 a month if his house wasn’t finished by February this year in an email seen by news.com.au. Yet the house remains incomplete and he said he still hasn’t seen a cent, he said. He’s paid $330,000 to the company but currently has a house that he claims is missing various work, has gaps between the windows and bricks and no appliances, he said.”
“‘It is not liveable, because there is no electricity or water in the house so obviously we can’t live there,’ he said. ‘A lot of work is half done and a lot of work has been done wrong, but at this stage I want the house to be completed rather than getting a perfect house.’ The dad-of-one claims there have just been ‘false promises’ to get the house finished. ‘I lost all hope when no work happened for two months,’ he added.”