A report from Realtor.com. “The real estate game is at a stalemate that shows no signs of budging anytime soon, with neither buyers nor sellers willing to make the first move. Buyers have little incentive to lead the way. Meanwhile, home sellers—who, a mere year earlier, enjoyed packed open houses and bidding wars—are now battling to stand out from hordes of other sellers, as the pool of available homes soared 70% higher for the week ending Feb. 11 compared with the same period last year. ‘January data shows that the share of home sellers making a price reduction was more than twice as large as one year ago,’ notes Realtor.com® Chief Economist Danielle Hale. Indeed, 15.3% of sellers in January slashed their prices compared with 6% a year earlier.”

“Home sellers should size up the glut of homes on the market and, rather than price high and trim that number later, price their homes affordably right as they hit the multiple listing service—and catch a buyer’s eye from the get-go when their listing is fresh and in demand.”

The Los Angeles Times in California. “Stephen Jackson finally called off his search in 2021 when someone outbid him for a Tarzana condo by $25,000 — and paid in cash. When his roommate decided to move in October, Jackson chose to look again, this time seeking deals swirling in the crosscurrents of the real estate fallout. Last month, he made an offer on a two-bedroom condo in downtown L.A. that had languished on the market for 72 days. At $20,000 below the $450,000 list price, his offer — the only one — was accepted. ‘All my friends were shocked I bought a home right now, and I was like, ‘Why wouldn’t you?’ Jackson said.”

“Overall, L.A. County home prices have fallen 3% to 14% since the peak in pricing last year, according to a review of various platforms that track prices in different ways. Given the uncertainty, would-be home buyers have much to ponder. If they buy now and prices keep falling, they might not have enough equity to sell and could be vulnerable to a foreclosure if they lose their jobs.”

“Jeff Lazerson, president of Mortgage Grader in Laguna Niguel, said he thinks buyer skittishness is why many deals fall apart in escrow. ‘They are worried,’ Lazerson said of buyers. ‘It’s, ‘If I wait six months, will the price be lower?’”

Silicon Valley in California. “An eye-catching office tower proposed for a prime site in downtown San Jose near the footprint of Google’s future transit village awaits final city approval even as the tech industry slump haunts the region. Google, however, recently revealed that it has launched a reassessment of the timeline for when it would begin and complete the first phase of the new transit-oriented neighborhood. San Jose officials have told Joint Venture Silicon Valley that sales tax revenue, specifically in the downtown district of the Bay Area’s largest city, is only at about 35% of what the revenue was prior to the pandemic, according to Russell Hancock, president of the think tank.”

“The rise of remote work — and the exit of employees from their regular offices — has eroded the respective economic bases of the downtown districts in San Jose, Oakland and San Francisco, according to a report that’s part of the newly released 2023 Silicon Valley Index. Numerous office workers simply are no longer present in many offices that are located in downtown areas. ‘We are seeing the effects on our downtowns,’ Hancock said during a recent presentation to discuss the index. ‘The downtowns are where we are seeing a crisis.’”

From The Street. “Elon Musk Grieves the Demise of San Francisco. The billionaire, often critical of the mecca of tech, is saddened to see downtown San Francisco emptying out. The billionaire entrepreneur has a complicated relationship with the mecca of tech. He criticizes her very violently because she represents, according to him, the bastion of the ‘woke mind virus,’ which he has made mission to defeat.”

“‘So city of SF attacks companies providing beds for tired employees instead of making sure kids are safe from fentanyl,’ the billionaire posted on Dec. 6 with a link to an article about a dad who revealed that his 10-month-old baby suffered an accidental fentanyl overdose at a San Francisco playground. ‘Where are your priorities @LondonBreed!?’”

The Fort Worth Report in Texas. “Price increases abating? Home inventory up? In January, the median price of a home in Fort Worth was $320,000, down $20,000 from December. What is up, notes Bart Calahan, 2023 president of the Greater Fort Worth Association of Realtors., is the housing inventory. Those are good signs for Realtors and for buyers, he said. ‘From my viewpoint, the market is stabilizing, which hopefully means the volatility is behind us,’ said Calahan.”

The Real Deal on Florida. “An oceanfront home in the Altos Del Mar neighborhood of Miami Beach traded for $20 million, a 20 percent discount off the initial asking price. The property last sold in 2016 for an undisclosed price. The home has been on and off the market for two years. It was listed for $25 million in March, and the asking price was reduced to $24.5 million in July. Price cuts are becoming more common due to the market slowdown, brokers say. In December, a hedge funder sold his waterfront Miami house for $14.5 million, about 27 percent less than the initial asking price of nearly $20 million.”

The Times Union in New York. “The famed rococo stone mansion on North Broadway hit the market last September for $17.9 million. More than five months later, after one contract to purchase the palatial property fell through, Palazzo Riggi’s listing price has dipped by nearly $6 million. The new listing price for the home owned by Saratoga Springs socialite Michele Riggi dropped to $12 million last Thursday. Listing agent Margie Philo added that Riggi decided to reduce the price as she looks to downsize after the death of her husband Ronald Riggi. She also recently lowered the price of her Lake Placid estate, known as ‘Casa Del Paradiso,’ from $31 million to $15 million.”

From WTOP News. “Signs point to more for sale and more bargaining power for buyers. More for sale doesn’t necessarily mean more home sellers, but more residential properties sitting on the market longer. In January, the typical home that sold had been on the market more than twice as long as sales from a year earlier. ‘Thirty days is now the typical days on market. That means we are going to start to see inventory buildup as these homes linger on the market — and that will bring more choices for buyers as we head into the spring,’ said Lisa Sturtevant, chief economist at mid-Atlantic listing service Bright MLS.”

“That inventory buildup has already started, as the number of active listings in the D.C. metropolitan area in January — 5,177 — was 42.4% higher than January 2022, according to Bright MLS data. The ‘months of supply’ figure is currently 88.9% higher than it was a year ago. ‘You are going to find a little bit more choice. Buyers are certainly going to have more leverage, both on price, as well as asking for seller concessions around home inspections or even closing costs,’ Sturtevant said.”

From CBC News. “Home sales in January were the lowest for the month since 2009 and down 37.1 per cent compared with a year ago, the Canadian Real Estate Association (CREA) said. The drop came as January sales also fell on a month-over-month basis, as they dropped three per cent compared with December. ‘The market we are in is a bit of a roller-coaster these days,’ said Varun Mathur, a real estate broker. ‘A lot of sellers are kind of in a wait-and-watch mode. They would like to get the prices their neighbours got last year. They realized they might not get it right now; a lot of them are not compelled to sell.’”

“The housing market is still in correction mode, said Robert Hogue, assistant chief economist at RBC in Toronto. ‘Activity wise, I think we’re probably not that far. It’s simply because — well, in large part because — we can’t fall that much lower,’ he said. ‘We are at fairly depressed levels, something along the lines of what we saw back during the global financial crisis of [2008] or 9, if we exclude the lockdown period of the spring of 2020. But in terms of prices, we think the bottom is a little bit further away, and probably at best around summer time and maybe a little bit later because the market is still adjusting to higher interest rates.’”

“With new listings up and sales down in January, sales-to-new-listings eased back to 50.7 per cent, CREA said. The actual national average home price was $612,204 in January, down 18.3 per cent from January 2022.”

The Telegraph. “Wealthy homeowners are slashing hundreds of thousands of pounds off their asking prices to sell properties as the downturn hits the top of the housing market. Six in 10 homeowners selling property worth £1m or more in January were forced to cut their asking prices before they could find a buyer, according to analysis by Hamptons estate agents. This share has soared from 39pc in June to hit its highest level since January 2021, when the whole of Britain was in the third Covid lockdown. It was far higher than the 45pc average across the whole market.”

“High mortgage rates have brought a wave of distressed sales – particularly among landlords in London – just as buyers have seen their borrowing power dramatically reduced. James Waight, of John D Wood estate agents, gave the example of a house in Chelsea, West London, that had an asking price of £5m and was reduced to £4.5m before it went under offer – a drop of £500,000. He added: ‘In another case, we had a flat that we reduced from £995,000 to £950,000, but that still didn’t trigger interest, so we reduced it again to £895,000.’ Mr Waight said the property then got multiple offers – but only after a 10pc price cut.”

“Mr Waight said: ‘There is a big issue in the buy-to-let sector, particularly among accidental landlords, as landlords get hit by higher mortgage rate.’ Buy-to-let investors coming to the end of fixed rate deals must remortgage at rates that are double what they are used to. David Hill, of Marsh & Parsons estate agents, said: ‘Some people are definitely struggling. High mortgage rates mean their profits have diminished rapidly.’”

“Jean Jameson, of Foxtons estate agents, said: ‘A few more landlords are coming in to pick up the distressed landlord stock. They know that because they are buying from a distressed seller they can knock off 10pc or 20pc.’ But there are also distressed sales across the market. Mr Jameson added: ‘It’s absolutely across all of our divisions. Maybe not all of them have to sell today, but there are homeowners who can’t afford the mortgage rates, and the cost of living crisis means people are really stretched across everything.’”

From ABC Business. “Life sure can throw some unexpected curveballs. Just ask yourself this: How on earth did a mild mannered, softly spoken, incredibly polite intellectual with a permanently fixed boyish grin become an object of derision? That’s the incredible, true life tale of the transformation of Philip Lowe. Once the celebrated governor of the Reserve Bank of Australia, he’s now regularly portrayed as the evil mastermind behind our impending economic downfall, steering a generation of young Australians towards financial doom.”

“He’s not entirely blameless for his situation, given the mistakes and missteps he has made. Not the least of them was putting a date (yes, with qualifications in place, but a date, nonetheless) before rates finally would rise. And there have been numerous other failings within the RBA over a long period of time. Its forecasting has been abysmal for years and, prior to the pandemic, it failed to lift inflation into its target band, leaving the economy running too cold. Then, in the aftermath of the shutdowns, it under-reacted to the inflation spike.”

“Worst of all, it allowed its reputation to be shredded by an ill-fated attempt to muscle interest rates lower — an episode that backfired spectacularly. But if there is something even more remarkable about all this, it is that Dr Lowe is in very good company. The RBA isn’t an outlier in this department as almost every other central bank around the world has been almost as bad. That raises some important questions. Is the era of all powerful, unelected central banks drawing to a close? Has monetary policy dominance run its course and will governments work their way back into the frame when it comes to economic management?”

“They’re questions unlikely to be answered, or even asked, by the federal government’s inquiry into the running of the RBA — to be handed to the Treasurer next month — which is being run by a, you guessed it, a central banker.”

“According to Dr Lowe, at least 75 per cent of our inflation problem is from external forces: supply issues we can’t do anything about and that rate hikes won’t fix. Then, last Friday, under questioning before a Parliamentary Committee, the governor dropped this bombshell. ‘Our models are not well suited for supply shocks,’ Dr Lowe said. ‘It just can’t deal with supply shocks.’”

“That’s hardly comforting. Essentially, the RBA governor has admitted he is flying blind. And the RBA, in an effort to restore professional credibility, is being goaded into ever more action by money markets and other central banks. Already, worrying signs are emerging. Westpac warned on Friday that almost half its home loans were written using mortgage rate stress tests that soon will be exceeded. ANZ chief executive Shane Elliott had a similar warning, that the buffers his bank had built in were being breached and that we now ‘were at a very difficult pivot point.’”

“Until now, home loan defaults have been low. But that may change once an estimated 880,000 households suddenly find themselves paying massively more for their mortgage in the next few months. All up, 1.2 million Australian households will find themselves in this predicament during the next two years.”

“Shortly before he became deputy governor a decade ago, Dr Lowe addressed a room full of economists eager to discover just what the candidate most likely was all about. He didn’t mince words. ‘The unfortunate reality is that in the area of forecasting, it is normal for forecasts of economic activity to be wide of the mark,’ Dr Lowe said. They thought it was pretty funny. As it turned out, he was entirely on point. From that moment on, the RBA forecasts about Australia’s economy ended up so wide of the mark that it really wasn’t funny at all.”

“So, let’s just take stock of where we are. With a shocking record on forecasting, the RBA has just admitted its models are ill-equipped to handle the kind of inflation crisis we are enduring. Close to one million households are facing peril in the next few months as their loan repayments double in the wake of an unprecedented rise in interest rates. But the RBA now is warning of even more tough action in the months to come. A double or nothing bet? Or a time for thought and caution? Dr Lowe’s legacy, and the reputation of the institution he runs rests on the decision.”

“Across the globe, central bankers are nursing bruised egos. Their reputations — from Jerome Powell, the chairman of the US Federal Reserve down — are in tatters. When inflation began to soar in late 2021, they all sang in unison. They even used the same lyrics. Inflation was transitory, they said, a natural reaction to the sudden reopening of the economy. By the time they realised inflation was entrenched, it was almost too late and they were forced to act with undue haste with a monetary wrecking ball that now is wreaking havoc across the developed world.”