It’s Friday desk clearing time for this blogger. “Hawaiʻi’s luxury home market experienced a 22% decline in the number of sales last year compared with 2021. ‘It’s not quite as doomsday as people think,’ Hawaiʻi Life CEO Matt Beall says of 2023.”
“Keith Eatmon finally had a buyer for the house on Francis Place. A real estate agent with Roswell-based Solid Source Realty GA LLC, Eatmon listed the Grove Park home in August. Eaton and the family listed it for an ‘investor price’: $329,000. With mortgage rates rising and buyer demand dwindling, the house sat on the market for months. After a price cut and a dip in rates, the house picked up interest. A real estate investor agreed to the new asking price — $275,000 — and took it under contract in late January.”
“Then Microsoft confirmed it had stopped work on its planned 90-acre East Coast hub in Grove Park. That was Feb. 3, during the due diligence period. The buyer saw that news and canceled the contract. ‘A lot of people were buying on speculation,’ Eatmon told Atlanta Business Chronicle. ‘Oh, Microsoft’s coming. It’s going to be worth so much. There’s going to be so much growth,’ and all of that. But, they pulled the plug.’”
“The median sale price of a Memphis-area home last month was $175,000, down from $195,375 in January 2022, a more than 10% dip. Monthly sales volume also dropped by almost 32% from January 2022. ‘January is always a slow month, and this one was no different,’ said Carmen Prince, the association’s 2023 president. ‘But there are still good opportunities out there.’”
“The Thurston County housing market has dramatically changed in the past six months, as January data shows. Sales and median price fell from January 2022, while inventory shot higher, according to Northwest Multiple Listing Service data. The median price of a single-family home was lower last month than it was in January 2022. The median price fell 1.03 percent to $475,000 from $479,950 in 2022, the data show. It is down even more from December, when the median price was $497,500. The county’s median price peaked at $525,000 in June 2022.”
“The West Michigan market is leveling out, with instances of 10-plus offers hitting $30,000 or more over asking disappearing. Some in West Michigan are now selling below listing, but home prices should still increase. ‘Now it seems that well-priced homes might have an offer or two to compete with, and others will end up sitting on the market for a while and eventually drop their price some,’ said Joshua Schaub, Icon Realty Group broker.”
“Real estate markets throughout the East Bay have experienced significant changes since 2019 — and more are on the way. The median sales price for a single-family detached home in Pleasanton during March 2022 was more than $2 million. By December 2022, the median sales price had dropped to approximately $1.5 million. ‘Faced with significantly less purchasing power due to larger monthly payments, buyers backed off making aggressive offers,’ said Steve Medeiros, 2023 president of the Bay East Association of Realtors. ‘Starting in June 2022, homes began sitting on the market longer as buyers hit the brakes.’”
“Local lawmakers in suburban Maryland are backing a fresh wave of rent control legislation that would set rent caps far below the increases the market has seen in recent years. ‘These restrictions on rights, these burdens placed on providers, are making it less attractive to be in the business,’ said Dean Hunter, CEO of the Small Multifamily Owners Association. ‘They’re selling, they’re getting out.’”
“The problems plaguing downtown Portland show up as empty storefronts. The current vacancy rate for commercial buildings is about 26-27%. Homer Williams was a driving force behind the Pearl District and the South Waterfront. ‘We will see, I think, this year office buildings being auctioned off.’ ‘It’s already the reality,’ Vanessa Sturgeon with TMT Development said. ‘I mean, we have 20% of downtown Portland is in foreclosure or pre-foreclosure at this point.’”
“A real estate developer with a number of large properties in Vancouver is seeking creditor protection, citing approximately $700 million in outstanding debt. Coromandel Properties Ltd. filed a petition in B.C. Supreme Court asking for more time to seek equity from existing partners or new partners. The petition goes on to say the developers have ‘insufficient cash flow to complete development of the projects, have been unable to refinance their existing debts and liabilities or sell assets at sufficient prices to avoid loss … As a result, the development work on the various properties is in jeopardy.’ The petition says without CCAA protection, Coromandel will not be able to explore restructuring ‘and may be forced to liquidate its assets on a fire sale basis.’”
“The swing is bringing about some grisly comparisons: The Toronto Regional Real Estate Board reports that sales in the Greater Toronto Area tumbled 44.6 per cent in January compared with the same month last year. The average price stood at $1,038,668 in the GTA in January, which marks a 16.4-per-cent decrease from $1,242,793 in January, 2022. Munira Ravji, real estate agent with Royal LePage Signature Realty, met with the owners of one semi-detached house in the Trinity-Bellwoods neighbourhood in April and estimated that the house would sell for about $1.7-million, based on recent sales of comparable homes. But by the time the homeowners were ready to list in November, she recommended an asking price of $1.5-million based on the softness in the market.”
“‘Showings were few and far between,’ she says. The house eventually had two buyers competing and still sold far below asking at $1.364-million. She advised the seller, ‘if you wait another month, you might not even get this price,’ she recalls.”
“Cluj-Napoca recorded an almost 5% decrease in apartment sales prices, according to new data revealed by real-estate experts from Blitz. ‘At the beginning of 2023, the Blitz index for the municipality of Cluj is on a downward trend,’ reads the analysis. ‘Real estate experts think that January is the month with the fewest transactions, and prices have undergone an important correction, given the market situation.’ For rent, trends are showing a positive march toward price correction. Specialists believe that they will gradually decrease until early spring. ‘However, the decrease was not only located in Cluj but also in the rest of the cities presented in Romania, the market, therefore, registering a normal price correction, after a period with record prices,’ the same source said.”
“Two Australian companies have collapsed after being caught up in the failure of a high profile property developer called Dyldam Developments, which went under last year owing more than $280 million. Its liquidation was handled by Cathro & Partners, which said in a creditors report that Dyldam ‘grew into one of the more well-known high density apartment developers in the Sydney metropolitan area’ before its downfall in January last year. The latest collapses are part of a horror time for the construction industry, which saw dozens of companies fail in 2022 with the grim news also continuing this year.”
“Headline news about a big jump in negative home equity may look scary at first sight. After all, the data indicates a 22-fold increase from a year ago, to an 18-year high of 12,164 cases. Last time Hong Kong had a real property slump because of the severe acute respiratory syndrome (Sars) outbreak in 2003, there were 105,697 such cases. Negative equity is only a niche problem and a result of an average 15 per cent drop in home prices last year. As a result, banks have been writing down the value of properties held as collateral in mortgages for clients.”
“‘Buying the house in 2021 might be one of the biggest regrets of my life,’ says Kim Myung-soo, a 33-year-old whose home in Jamsil, eastern Seoul, has fallen in value by about $400,000. His wife is 33 weeks pregnant and Mr Kim does not know how he will repay the mortgage. He had planned to wait for prices to rise before selling the property to pay off the loan.”
“Mr Kim is not alone in his worries. Across the rich world, property markets look precarious. Few are in as bad shape as South Korea’s. House prices fell by 2% in December alone, the biggest monthly drop since official figures began in 2003. The slump has been particularly brutal for apartments in Seoul: prices are down by 24% since their peak in October 2021. In a downturn, some landlords are forced to make firesales to reimburse departing tenants, having invested in risky assets, including more housing, and lost the money. Stories about sudden defaults and vanishing ‘villa kings,’ owners of dozens of rental properties, proliferate.”
“Most countries are not as exposed as South Korea. But some, including Australia, Canada, the Netherlands, Norway and Sweden, share the same mix of high household debt and frothy property prices. All began raising rates after South Korea, and have further to go before the pressure feeds through. They are in for a rocky ride.”