It’s Friday desk clearing time for this blogger. “In early October 2021, Zillow recorded its most active week buying homes in Phoenix. Then suddenly it stopped buying. John Wake, who has been a realtor around Phoenix since 2003, had one question: ‘What the hell happened?’ In Phoenix, nine in 10 homes Zillow bought were put up for sale at a lower price than the company originally bought them. If each of those homes sold for Zillow’s asking price, the company would lose $6.3 million. ‘Put simply, our observed error rate has been far more volatile than we ever expected possible,’ CEO Rich Barton admitted. ‘And makes us look far more like a leveraged housing trader than the market maker we set out to be.’”
“Action News Jax counted 58 Zillow-owned Jacksonville-area homes up for sale on the company’s website. ‘That was a Zillow home, and now this is a Zillow home,’ David Shilby said, pointing to two houses on his cul-de-sac. His neighbor, Janet DiPalma, worries about property value. ‘It’s a very quick flip, they replaced the carpet, went on the market real fast, it’s sat there for quite a while now,’ she said. DiPalma says the Zillow home on her street has sat empty for four months. She worries if it stays unsold any longer, its price will drop — ultimately bringing down the property value of her home.”
“‘We’re starting to see a shift in our market,’ said Jeffrey Wills, president of Boise Regional Realtors. ‘While homes still sold for near record highs for the last few months, we haven’t seen the same month-over-month price jumps, and properties aren’t flying off the market quite as fast as they were this spring and summer.’ Inventory fell by 8% in Ada, with 1,145 active residential listings. But fortunately for those looking to live in Canyon, supply surged from 480 active listings in September to 745 in October, a 55% increase.”
“Home sales in northeast Tennessee were down in October. October’s average sale price of $240,732 was down $9,455 from September and is also less than it was in August. Currently the region has 1.7 months of inventory. ‘Our area hasn’t seen that balance for almost two years,’ said NETAR President Kristi Bailey. The housing market is still moving forward, just at a slower pace, she added. ‘That normalization is expected to continue into next year.’”
“A number of indicators shows the Texas housing market frenzy is over, said Luis Torres, a research economist for the Texas Real Estate Research Center at Texas A&M University. There is enough supply for homebuyers after more than a year of buyers frantically buying houses in a market where housing prices are over 30% higher statewide than one year ago, according to data from the research center. Now that home prices are stabilizing, homebuyers need to pay close attention to the market going forward, Austin real estate broker Eric Bramlett said.”
“‘Since 2021 pricing has stabilized, the numbers to watch will be spring 2022 sold price numbers and appreciation, at which point we’ll have an indication of what [the] ‘new normal’ will be,’ Bramlett said.”
“As we outlined last month: Purchased for $8.5 million in June of 2016, the ‘sumptuous’ Palo Alto home at 1117 Hamilton Street, returned to the market listed for $8.95 million in September of 2017. Reduced (twice) and relisted for $6.988 million in September of 2018, finally resold for $6.65 million at the end of 2018, down 21.8 percent ($1.85 million) on an apples-to-apples basis from the second quarter of 2016. And having returned to the market priced at $6.988 million [this past September], 1117 Hamilton Street remains listed for sale. The list price for 1117 Hamilton Avenue has since been reduced to $6.588 million, a sale at which would now represent a one (1) percent drop in value for the ‘Mediterranean masterpiece’ since the end of 2018.”
“The property market’s high tide could slowly be turning, agents say, as more homes hit the market, stricter stress tests on borrowing kick in, the RBA signals rate hikes earlier than expected. Nowhere is that more evident than in Sydney, where clearance rates slipped below 80 per cent for the third week in a row and there was a 32.4 per cent spike in new listings in the past four weeks, Domain figures reveal. ‘Newer listings are coming on [faster] than they are being purchased,’ said Nicola Powell, Domain’s chief of research and economics.”
“While Dr Powell said Melbourne still had heat left in its market due to its prolonged harsh lockdown, Nelson Alexander’s director Arch Staver believed it had already shifted. ‘We are following Sydney, there is no question. We, as a firm, have consistently been up in the 90 to 95 per cent clearance rates. That shifted this weekend, dropping down to 75 per cent,’ Mr Staver said. ‘I genuinely believe this is a shift in our Melbourne market.’”
“After enduring more than a year of COVID-affected rents, investors have listed their properties in droves, helping add to supply, Mr Staver said. But the stricter stress test applied to borrowing had also brought buyer activity forward as buyers tried to avoid having to reapply for pre-approvals under the new rules, though it had also left them more discerning than ever before, he said. ‘I’ve never known buyers to be as discerning as they are. If their expectations of price haven’t been met by vendors, that explains the 25 per cent that is not selling. When a vendor has an overly ambitious price, buyers are just going to pass by their property.’”
“The protest broke out southeast of the Forbidden City. ‘Open the gates!’ the crowd chanted outside a government building where residents can lodge complaints to local authorities. The focus of anger that late October day in Beijing: China Oceanwide Holdings Ltd., a real estate developer whose financial troubles have spilled out of the boardroom, across trading floors and, now, into the streets of China’s capital.”
“What began at Evergrande, the troubled giant teetering toward a potentially calamitous default, has started to spread. At least four developers that sold complex investments to tens of thousands of Chinese investors through wealth-management units are dropping bad news: Sorry, we can’t pay you back on time. The fury — at the companies and government authorities alike — is building.”
“In Shenzhen, hundreds of angry investors have stormed the headquarters of both Evergrande and Kaisa. Similar scenes have played out in Shenyang. ‘It’s having big trouble like Evergrande,’ said Mikala Xiao of her family’s investment made through an Oceanwide unit. ‘They don’t care about us, no matter how hard we complain,’ said Xiao, who’s now in Denmark but has joined WeChat groups of investors lobbying authorities for a solution. ‘We tried everything we could but nothing helps to get the government to take action. I couldn’t sleep well for many months.’”
“For years, investment products sold to individual Chinese savers — and often to employees and their families — were a key funding instrument used by almost all major private property companies. Investors will likely have to absorb some losses ‘now that the music has stopped,’ said Larry Hu, head of China economics at Macquarie Group.”
“Like many WMP investors, Xiao is still trying to figure out where her family’s money went. She says an Oceanwide unit, Minsheng Wealth Management Co., missed payments on about 6 million yuan of products she owns with her sister. ‘I have no idea what’s going to happen next and how long it will take to get our money back,’ Xiao said.”