A report from the Union Tribune in California. “San Diego County’s home price has now dropped five months in a row. The median home price was $775,000 in October, said CoreLogic on Tuesday. It reached an all-time high of $850,000 in May. Jan Ryan, an RE/MAX agent based in Ramona, said she typically has four to six homes in escrow at any given time. Now she has none. Ryan said she is seeing many potential buyers struggling financially with higher interest rates, and many sellers are having a hard time accepting that sales prices are lower now.”
“Here’s how the San Diego County price changed by home type in October: Resale single-family home: Median of $842,000, with 1,392 sales. It is down from a peak of $950,000 in April. Newly built: Median of $840,000, with 203 sales. This figure combines single-family homes, townhouses and condos. Down from the peak of $890,500 in August. Almost all of Southern California saw price drops from September to October. Riverside County had the biggest drop, down 2.7 percent for a median of $545,000.”
The Daily Democrat in California. “Buying a home in Woodland is becoming less attainable for young adults and other prospective owners as mortgage rates rise to their highest level in decades. Ryan Lundquist, who runs a Sacramento appraisal blog, agrees that Woodland is much more affordable than Davis. The median home price in Woodland is around $570,000. That same-sized median-priced house in Davis is around $890,000, according to Realtor.com.”
“Lundquist said the market started to see a drastic change this past spring. ‘Honeymoon market – that ended in April,’ Lundquist said. ‘We are in a different arena right now where prices have been going down. The market is starting to lose steam in a lot of places in the Sacramento region…It was almost like when mortgage rates went below 3%. It was like a steroid for the market. Buyer demand went crazy.’”
News 12 in Arizona. “The Valley’s new home market is changing. Builders are offering up big incentives to get inventory into the hands of buyers.This is all happening when not too long ago buyers were competing with multiple offers. Goodyear’s Estrella community is one in the Valley filled with new houses and deals. NFM lending’s Ryan Sandell added new builds are a good buy because they understand the current market and they’re traditionally quicker to react than resale properties. So, as new home prices are dropping, incentives are being offered for sales. The lender said now is the time for buyers to go in with a plan and execute it.”
“‘You can ask for things and that’s the beauty of it,’ Sandell said. ‘I think we lost that. We became order takers on the new home sales or retail side or even lending. Now we get to go have fun with our jobs and negotiate and do what’s best for people.’”
The Dallas Business Journal. “New home prices dropped slightly in DFW North Texas builders offered more discounts and other buyer incentives, said Ben Caballero, CEO of HomesUSA.com. Selling pressure on DFW builders increased in October as inventory last month rose for the sixth straight month, with local Multiple Listing Services data showing active listings in October totaling 6,770 homes vs. 6,249 for September. ‘As inventory goes up and the pace of new home sales continue to slow, Dallas area builders are seeing a more normal real estate market – quite a change from August 2021 when new homes were flying off the shelves,’ Caballero said.”
“Average new home prices were lower in all four of Texas’ largest housing markets. The pace of new home sales slowed in October in DFW, with the three-month moving average for time on market last month increasing to 57.7 days versus 50.3 days in September. DFW pending new home sales reported to the MLS increased last month. In October, the three-month average of pending new home sales in Dallas-Fort Worth was 1,769 compared to 1,659 in September.”
From WTOP News. “The D.C.-area housing market has been slowing since summer, and the drop-off in activity in October was a wake-up call for sellers. There aren’t many buyers right now. ‘The slowdown for the Washington, D.C.-area housing market in October was dramatic. We saw a year-over-year decline in sales activity that was a bigger drop than we saw back when the pandemic hit. Back then, we saw sales grind to a halt, but the decline we saw in October was even more dramatic than that,’ said listing service Bright MLS Chief Economist Lisa Sturtevant.”
From Inside NOVA. “Sellers who found buyers for their homes in October across Northern Virginia received, on average, less than full asking price, confirming that the market is shifting if not entirely to buyers, then a certain way in their direction. For most of the pandemic era, when the local homes market titled heavily in favor of sellers, homes would sell for higher than listing price. But in October, with the exception of Falls Church, that was not true: The average sales price in Alexandria represented 98.53 percent of listing price, down from 99.48 a year before. In Arlington, the rate of 96.98 percent was down from 97.8 percent.”
“In Fairfax County, the rate of 97.95 percent was down from 99.42 percent. In Loudoun County, the rate of 98.14 percent was down from 100.17 percent. In Prince William County, the rate of 98.15 percent was down from 100.17 percent.”
Bisnow New York. “New projects in New York City are stalling as developers struggle to stitch together deals, experts said onstage at a Bisnow event this week. Sellers hoping they can wait out market volatility might find their properties are worth less than in previous years, according to Fairstead Managing Director David Murstein. ‘Appraisals right now are still looking back into a period of time where markets were strong,’ he said. ‘But once more distressed or realistic trades start happening, you’re going to see appraised values come down, loans come down … it’s going to make it hard to refinance.’”
From Bloomberg. “The Federal Reserve isn’t the only one tightening credit. Commercial banks are too. The proportion of US banks tightening terms on loans for medium and large businesses and for commercial real estate rose last quarter to levels usually seen during recessions, according to a Fed survey of lending officers. Lending standards for credit cards and other consumer loans also became more restrictive, as the Fed raised interest rates and the economic outlook darkened.”
“‘The tightening in standards by senior loan officers goes part-and-parcel with significantly higher rates and a shrinking balance sheet by the Fed,’ said Joseph Lavorgna, chief US economist for SMBC Nikko Securities America Inc. ‘They’re basically self-reinforcing.’”
From DS News. “As the housing market downshifts, sellers will need to adjust to three emerging distressed disposition trends going into 2023. This trend is already emerging in the second half of 2022 as buyers at foreclosure auction bid more conservatively to hedge against slowing home price appreciation and even a possible home price correction in some local markets.”
“The foreclosure sales rate, which represents the percentage of foreclosure auctions that result in a sale to a third-party buyer, dropped just below 50% in the third quarter of 2022—the lowest level since Q2 2020. That’s according to data from the Auction.com marketplace, which accounts for close to half of all foreclosure sales nationwide. the retail housing market is now quickly cooling in response to skyrocketing mortgage rates, causing distressed property buyers to recalibrate their calculations for maximum bid at foreclosure auction. ‘You have to be careful about fixing and flipping that you’re not catching a falling knife,’ said Paul Lizell, a Florida-based real estate investor and coach who purchases distressed properties from Auction.com.”
“‘It was different the last several years because you’re in a rising market … that makes it a little easier because you’re buying off today’s numbers,’ said Atlanta-area investor Tony Tritt, who contends that some bandwagon investors of the last few years have been overpaying for homes purchased at foreclosure auction. ‘(Now,) I give myself some room in case it goes down.’”
“Public record data from ATTOM Data Solutions shows investors purchasing 10-plus properties a year accounted for 9% of purchases at foreclosure sale in the first nine months of 2022, down from 12% in 2021 to a new record low since 2000, the earliest year data is available. By comparison, 52% of foreclosure auction sales went to these buyers at the peak of the last foreclosure crisis, in 2009.”
The Globe and Mail in Canada. “6845 19th Sideroad, Schomberg, Ont. Asking price: $2,648,000 (September, 2022). Selling price: $2.5-million (October, 2022). While this five-bedroom house roughly 60 kilometres north of Toronto was primed and staged for guests, agent Andrew Ipekian spread the word that it was coming to market. Though the sellers asked for $2.648-million, they accepted a $2.5-million offer after about two weeks. ‘There were several homes , including one across the street that’s been for sale for almost a year,’ Mr. Ipekian said. ‘If the price isn’t compelling, the home is not selling. So you want to make sure you’re pricing correctly.’”
From Devon Live. “Property prices across the UK are predicted to plummet in the coming months, as the buying bubble looks to burst. Housing experts say soaring mortgage rates are likely to push house prices down over the next 12 months, causing a significant slump in the market. Gavin Brazg, Founder of PropCast said: ‘Although a lot of Devon is still in a sellers’ market, we are seeing big drops in demand, pushing those locations further towards a buyers’ market. More properties are also coming to market.’”
“Devon estate agent, Alex Coates agreed there was evidence of a slowdown in the local housing market. He said: ‘There is no doubt that the number of transactions has dropped off, but this isn’t because Devon is becoming less appealing. Buyers flocked to Devon during the pandemic, especially second home owners and young families looking to relocate, causing a bidding frenzy for about two years.’ He added: ‘We always knew this level of activity wasn’t going to be sustainable.’”
From Domain News. “It’s an ill wind, as they say, and while some property owners have been hit hard by the slump in the value of their homes this year, buyers can rejoice at picking out homes in suburbs that are more affordable now than they were in 2017. And they suddenly have plenty of choice. The latest Domain House Price Report shows that there are no fewer than 138 suburbs around Australia where home prices are cheaper than they were five years ago, mostly units but a few houses.”
“Top of the list are apartments in Sydney’s bijou beachside suburb of Little Bay, 14 kilometres south-east of the CBD, where prices have tumbled 25.3 per cent from a median of $1,091,000 to just $815,000. Other Sydney suburbs which have recorded large drops in unit prices since 2017 are Blacktown in the west (down 18.3 per cent), Glebe in the inner west (down 18.1 per cent) and Eastwood on the upper north shore (down 17.3 per cent).”
“The next worst-hit suburb after Little Bay, however, is Perth’s inner-south-eastern suburb of Victoria Park, on the Swan River. There, the median unit price has dropped by 23.2 per cent in the last five years, down from $410,000 to $315,000. Other West Australian suburbs with the biggest unit price drops since 2017 are Maylands in the north (down 21.8 per cent) and Mount Lawley in the city (down 19.5 per cent).In Victoria, a suburb that has become more affordable now than five years ago is Melbourne’s Essendon North, 10 kilometres north-west of the CBD, with a 17.9 per cent fall from $472,600 to $388,000.”
“That means apartment buyers can find good value there, said Walshe & Whitelock agent Joe Pollina. ‘Units are cheaper now as they’re very hard to move in the north these days,’ he said. ‘There’s a bit of an oversupply of units there as a lot of car yards in Essendon North are being snapped up and being converted into apartments, especially along Keilor Road.’”
From India Blooms. “Shanghai’s home market might continue to witness the downtrend as a growing number of wealthy owners plan to cash out from their properties and leave mainland China, media reports said. Some 135,400 pre-owned flats were up for sale at the end of October, an increase of 7.8 percent from a month earlier, according to Fangdi.com.cn, the official website of the local housing administration bureau, reports The South China Morning Post.”
“The additional second-hand homes put up for sale have exacerbated bearish sentiment in the city’s property market. Worries have been mounting that a major policy shift after President Xi Jinping secured an unprecedented third term as leader of the world’s second-largest economy would eat into rich people’s nest eggs. Eddy Zhou, a 48-year-old Shanghai resident, told the newspaper he would dump his home worth more than 10 million yuan (US$1.4 million) as his family plans to emigrate to Portugal.”
“‘A downward trend [in home prices] is taking shape and we will have to close deals as early as possible to avoid a further market downturn,’ he said. ‘More middle class people in Shanghai and China will leave the country in the coming years as they are increasingly worried about prospects for the economy.’”