A report from the New York Post. “The nation’s housing slump dragged on into January as home sales fell for the 12th consecutive month to the slowest pace in more than a dozen years. The median home price is down around 13% since it peaked in June last year. ‘Inventory remains low, but buyers are beginning to have better negotiating power,’ said Lawrence Yun, the NAR’s chief economist. ‘Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.’”
Hawaii Business Magazine. “January statistics for Oʻahu’s residential real estate market paint a stark picture of a market in transition: Sales of single-family homes and condominiums dropped by more than 50% from January 2022 and median prices slid back too. The median price of a single-family home, which crossed the $1 million threshold in August 2021 and remained there through all of 2022, dropped last month to $970,000, while the median condo price dropped to $495,000, according to the Honolulu Board of Realtors.”
“The Pearl City-ʻAiea, where the median single-family home price of $850,000 in January 2023 was down 24% from January of last year. But the median price this January was still 12.4% higher than in January 2020. Areas with less fluctuation include the ʻEwa Plain, which includes ʻEwa Beach and Kapolei, where the median single-family home price in January was $810,000, a 12% decline from last year but up 20% from 2020. The median condo price for that region dropped 21% to $546,000 in January but was still up 6.8% from January 2020.”
“‘It’s no longer where every neighborhood, the next house that comes on is listed higher than the last sale,’ says Chad Takesue, COO of Honolulu real estate firm Locations. ‘That was occurring back in 2020, 2021. Now you have some neighborhoods where the next house that comes on is listed lower than the last sale, so sellers are starting to adjust down. The normal market is generally five to six months of remaining inventory. So we’re still in a seller’s market overall. It’s just that some neighborhoods are exhibiting different qualities.’”
Community Impact in Texas. “After several years of mostly consistent yearly increases, the median home sales price in the combined Round Rock, Pflugerville and Hutto market dropped in December 2022 in comparison to December 2021. In these three cities, home prices fell by more than 7% from December 2021 to December 2022. ‘The [COVID-19] pandemic [caused] the most unusual market I’ve ever seen,” said Rob Tiemann, who develops the Blackhawk master-planned community in Pflugerville. ‘Nobody has ever seen anything like it. Prices went up at unprecedented rates, and the interest rates were super low. Well, now interest rates are up.’”
The Wall Street Journal. “The number of big office landlords defaulting on their loans is on the rise. Five to 10 office towers each month join the list of properties at risk of defaulting because of low occupancy, expiring leases or maturing debt that would have to be refinanced at a higher rate, according to Manus Clancy, senior managing director with data firm Trepp Inc. ‘Commercial real-estate markets are currently in a recession,’ said Owen Thomas, chief executive of Boston Properties Inc., one of the country’s largest office building owners, on an earnings call earlier this month.”
“Loan officers are steering away from new mortgages backed by office buildings unless they are fully leased for long periods of time by creditworthy tenants. ‘It’s like you’re taking a career risk’ by making an office loan, said Clancy.”
Connecticut Public Radio. “It’s a great time to need office space in Greater Hartford-and a not so great time to own it. That’s according to a report from commercial real estate services firm CBRE, Inc. It says at the end of 2022, there was roughly 7-million square-feet of unrented office space in and around Hartford. That’s nearly a third of the region’s total available office space, and it represents a roughly 20% jump in vacancies since right before the pandemic started.”
“Metro Hartford Alliance CEO, David Griggs says he’s put together a team of local businessmen and politicians to consider solutions to the problem. Among solutions they’ve discussed are turning office buildings into multi-use spaces, turning them into strictly hotels and turning them into apartments or condos. ‘But we need to be careful with that too,’ Griggs said. ‘Because if we took that five million square feet that you mentioned and turned it all into residential, we’re going to ruin our residential real estate market in a heartbeat.’”
Hoodline in California. “Google’s ultra-ambitious Downtown West development in downtown San Jose is facing some obstacles that have thrown the long timeline for the housing and office project into reassessment mode. Although Google is not saying exactly why they are reevaluating the timing of the project, it most likely has to do with the company’s recent decision to slash jobs and reduce office space. Google has also hinted toward unloading office space as thousands of employees continue to work from home. The project near Diridon Station and SAP center, which was approved by San Jose in 2021, also includes 4,000 new housing units, 15 acres of outdoor space, and 500,000 square feet of retail space.”
“Fears over long delays are concerning because Google has acquired so many prime pieces of property for the Downtown West project that would inevitably sit empty and could be a magnet for blight. ‘We certainly don’t want to see acres of dormant construction sites for an extended time and hope the project will pick up shortly,’ Alex Stettinski, with the San Jose Downtown Association, told the Mercury News.”
The San Francisco Chronicle in California. “Key indicators in the San Francisco housing market hit historic markers in January, revealing a downturn the region hasn’t endured in more than a decade, reports show. January saw the highest average number of days on the market for both houses and condos since 2012, according to the most recent Compass housing report. While a home might have been snapped up in under 30 days in January 2020, spaces are currently languishing on the market for more than 45 days.”
“Overbidding is also no longer the norm. The percentage of home buyers paying over the list price was down to 31% last month, the lowest it’s been since 2012. That number was at 73% in April 2022. Redfin also reported a much slower January for the San Francisco market. Home prices were down 8.3% year-over-year, and just 208 homes sold in January, down from 317 in 2022. Median days on market have ticked up as well, up to 68 days for both houses and condos, according to Redfin data.”
From Muskoka 411. “Statistics released by the Canadian Real Estate Association show national home sales were down on a month-over-month basis in January 2023. The actual (not seasonally adjusted) number of transactions in January 2023 came in 37.1% below the second-best January ever in 2022. The January 2023 sales figure was the lowest for that month since 2009. The Aggregate Composite MLS® HPI now sits 15% below its peak level, reached in February 2022. Looking across the country, prices are down from peak levels by more than they are nationally in many parts of Ontario and some parts of B.C., and down by less elsewhere.”
“The actual (not seasonally adjusted) national average home price was $612,204 in January 2023, down 18.3% from the same month last year. The national average price is heavily influenced by sales in Greater Vancouver and the Greater Toronto Area, two of Canada’s most active and expensive housing markets.”
ABC News in Australia. “Dan Phillips bought a unit in Hobart’s outskirts last year, just as rates started to climb. ‘By the time I moved in, I’d had more letters about rate rises, than I’d had months living in the property, which was pretty confronting,’ he says. It has been a stressful time for many home owners, after nine consecutive interest rate rises. The National Debt Helpline has seen a 28 per cent jump in calls for help in January, compared to the same time last year.”
“While it’s tempting to ignore the situation, it’s better in the long run if you act early. Obviously, a good first step is to contact your lender and ask for the lowest possible rate, or to consider refinancing with another lender. Dan Phillips has also cut back all his expenses to afford his repayments. ‘I’ve got a pretty tidy little spreadsheet with a bit of budgeting on there. I’m always looking for specials and that kind of thing, cutting coupons,’ he explains.”
From Vietnam.net. “In July 2022, Nguyen Thanh Cuong, 34, completed the purchase of an apartment at Flora Fuji project developed by Nam Long Real Estate. The 65 sq m apartment with two bedrooms sold for VND2.5 billion. Cuong had to borrow money from relatives and many friends to buy the apartment, because his savings were not sufficient, and he could not access bank loans with high interest rates. ‘I earn VND15 million a month and it’ll take me 166 months, or 14 years, of no food and expenses, to buy an apartment,’ he explained.”
“Le Xuan Nghia, a member of the National Advisory Council for Financial and Monetary Policies, said according to the International Monetary Fund’s (IMF) standard formula four years ago, a Vietnamese needed 35 years to buy an apartment, but the figure has increased to 57 years.”
From Reuters. “A downturn in South Korea’s home prices is causing pain in the country’s unusual rent-free rental system that benefited landlords and tenants alike during a long surge in residential property prices. In the ‘jeonse’ scheme, tenants put up a deposit typically worth as much as 70 per cent of the home’s value, then live without paying rent for two years until the landlord returns the full amount. This was a win-win for residents and owners for years as home prices rose and interest rates were high: The loan tenants paid to raise their deposit was cheaper than rent and landlords got an interest-free loan to deploy as they pleased.”
“But median house prices have fallen 12 per cent and jeonse prices 7 per cent over the two years to January after surging 37 per cent and 24 per cent, respectively, over the preceding four years, according to Korea Real Estate Board data. Overextended landlords are failing to return deposits, hitting younger tenants especially hard and threatening to undermine trust in the system.”
“Yoo Ha-jin, 28, regrets not getting insurance for her jeonse deposit when she signed in March 2021. Her bankrupt landlord told her in December the property would be auctioned and she could expect to get around 45 per cent of her deposit back at most. That means she will owe at least 33 million won (US$25,000) for the loan she took out on her jeonse contract expiring next month. ‘I thought I would be just fine as long as I could get a jeonse deposit loan from the bank,’ Yoo told Reuters.”
“‘It is frustrating there is really no one to blame,’ said Yoo, the stranded jeonse tenant. ‘I just think maybe I could have avoided this kind of trouble, had I had enough money to purchase my own house.’”