A report from the Wall Street Journal. “The bubble has room to grow before it bursts, according to John Burns Real Estate Consulting. But it is inflating fast. Bruce McNeilage began building houses to rent out around Nashville, Tenn., in 2005. These days Kinloch can borrow far more from a commercial real estate lender forging into suburban rentals. Mr. McNeilage’s problem is that others are bidding up houses and lots. ‘I am boxed out,’ he said. ‘There’s too many people chasing things and they’re willing to overpay. It’s silly money right now.’”
The Globe and Mail in Canada. “Paul Kershaw, associate professor at the University of B.C., said incomes for millennials and young Gen-Xers aren’t keeping up, and home ownership for those younger Canadians is generally down. ‘Their earnings after inflation have gone down by comparison to decades ago, while we have tolerated an economy that’s lost complete control over home prices. The conclusion needs to be if a pandemic induced recession is unable to slow down home prices in Canada, then we have to recognize that even if it’s unintentional, our housing system is designed in order for home prices to leave earnings behind.’”
“Realtor Shali Tark, who specializes in the Richmond market, said she’s already seeing signs of change. Buyers might have reached a ceiling in terms of what they can pay, and borrow. ‘I’m starting to see the shift now, back to where prices have gone up so much for certain assets that I can’t guide my clients to pay more in this market, and we have to wait and see if other properties offer better value. Also, the buyers are exhausted and aren’t able to pay more. Another one of the trends I’m starting to see for single family homes in Richmond is buyers who aren’t following through with a sale because they can’t get their financing.’”
“Some lenders aren’t willing to finance a house that has gone up $400,000 in a month, for example.”
From Bloomberg on New York. “Manhattan homebuyers are coming back to the market they left a year ago. Just don’t expect them to overpay. Of the 2,457 homes that sold in the quarter, 97 per cent closed at or below the asking price – the highest share since 2009. ‘If they negotiate a deal, they’re going to sign,’ said Steven James, CEO of Douglas Elliman’s New York City office. ‘And if they’re not going to get a deal, or if the sellers are still unreasonable, they’re not going to buy. There are a lot of offers being placed, but not all the offers are being accepted.’”
From Brownstoner in New York. “The lavish corner limestone at 17 Prospect Park West across from Prospect Park is back with a price cut. The Montrose Morris-designed Park Slope mansion has been on and off the market several times since being snapped up by an LLC in 2015 for $12.4 million. Most recently asking $12.9 million, it’s now listed for $12.25 million — that’s $150,000 less than the current owner paid for it.”
The New York Post. “‘The Real Housewives of Salt Lake City’ star Jen Shah was arrested for alleged money laundering and defrauding hundreds of elderly people in a telemarketing scam. But her alleged victims weren’t the only ones getting faked out — so were Bravo fans. The $3.9 million Salt Lake City rental actually never belonged to Shah, The Post has learned. Off of reality TV, and in actual reality, Shah’s longtime home is located in Sandy, Utah, which she owned with her husband from 2004 until she sold it at a loss in June 2020. They initially purchased the home for only $302,069. It eventually sold for $213,000.”
The Connecticut Mirror. “Last November, Nicolas Rodriguez and his wife Carmen had to scale back their hours at the medical equipment factory where they have worked for 21 years. His wife has been sick for months and needs another surgery on her gallbladder, but the high deductible for her first surgery, along with the mortgage on their Hamden home, drained their savings.”
“Anxiety cripples him. He can’t pay for the next surgery his wife needs or the mortgage for the home his three children need. Nicolas and Carmen are undocumented immigrants and don’t qualify for state health insurance, they earn too much to get help from any of the nearby hospitals’ charitable programs, and Nicolas was turned away when he sought mortgage assistance from the state.”
“‘I’m really feeling a lot of pressure about how to pay all of these bills and cover the costs,’ Rodriguez said. ‘I tapped into my savings. I’ve spent all of my savings to keep up with the mortgage. I don’t even want to think about how I’m going to make the payments in the future. I’m living day-to-day. We’re living paycheck-to-paycheck. It’s terrifying.’”
“The Rodriguez family is not alone. Across Connecticut, lower-income families are facing foreclosure at higher rates, renters are facing a wave of evictions, and a hot housing market and ever-changing banking rules are putting home-ownership further out of reach. At least one out of every 14 residential mortgages in Connecticut was delinquent or in foreclosure in February, the 13th-highest rate in the United States and well above the state’s pre-pandemic level, according to the real estate data firm Black Knight.”
“But in ZIP codes in Connecticut where more people of color live, there are much higher rates of people behind on their mortgages or in forbearance, a special agreement with the lender to avoid foreclosure, data from the Federal Reserve Bank of Atlanta show. For example, in the Hill neighborhood in New Haven, one out of every nine residential mortgages was behind in November.”
“In Southwest Connecticut, one out of every six homeowners with a Federal Housing Association mortgage — designed for low- to moderate-income borrowers — were seriously behind on Aug. 31, the seventh-highest rate of the country’s 169 largest metro areas, according to an analysis of federal data by the conservative think-tank the American Enterprise Institute. In New Haven and its nearby suburbs, one in eight FHA homeowners were behind, the 22nd-highest rate in the country.”
“Given that FHA mortgages make up 20% of Connecticut’s housing market, the number of people more than 90 days behind on their mortgages offers some insight into how profoundly the pandemic has affected the state’s lower-income homeowners, said Jeff Gentes, an attorney at the center specializing in foreclosure prevention.”
“‘This give us a sense of how pronounced the fallout will be,’ Gentes said. ‘The question is, have we provided enough income support for some people and temporary mortgage relief to stave off a housing market-triggered recession?’”
The Dayton Beach News Journal in Florida. “Realtors in the Volusia-Flagler area now outnumber the amount of active property listings by a ratio of at least 3-to-1, according to Geri Westfall Adams, the broker/owner of Geri Westfall Real Estate in Ormond Beach. At last count, the Daytona Beach Area Association of Realtors had 2,700 members, and the Flagler County Association of Realtors had close to 1,300. And that’s not counting the West Volusia Association of Realtors and New Smyrna Beach Board of Realtors.”
“When the last real estate boom crashed with the onset of the Great Recession in 2007, the number of members belonging to the Daytona Beach Area Association of Realtors plunged from 3,600 to just 1,200, recalled Geri Westfall Adams. While she doesn’t anticipate a sudden real estate market collapse this time around, she said she would not be surprised to see a large number of Realtors decide to drop out.”
“‘A lot of agents don’t even have a listing right now,’ she said. ‘If they’re not doing any sales and not getting any new listings, they don’t want to pay their dues and end up giving up their license.’”
“Maxine Johnson and her husband recently sold in Ormond Beach’s Chelsea Place community on March 28, 2021. While there have been many reports of homes being put under contract the same day they were put on the market, Jared and Maxine Johnson wound up waiting 85 days to finally get an acceptable offer on their 3-bedroom, 2-bath home. The big challenge was the fact that it sits on a small lot behind the Panera Bread-anchored shopping center next door.”
“‘We had more than one offer, but not at the same time,’ said their Realtor, Geri Westfall Adams. The Johnsons wound up selling their home for $385,000, down from their original asking price of $410,000. They bought the house brand new in 2017 for $350,000. ‘They essentially broke even after closing costs,’ said Adams.”
“Alisa Rogers, board president of the Daytona Beach Area Association of Realtors, said more homes could start to come on the market as more people get their COVID-19 vaccinations. ‘I do think that by next year or by the end of this year, we’ll see more homes on the market. We also could see some foreclosure and short-sales,’ said Rogers.”