A report from the Shawnee Mission Post in Kansas. “Full tilt. With no emergency brake. That’s how some have described the pace of the housing market in 2021. But with cooler fall air just around the corner, we are starting to feel an ever-so-subtle cooling in the housing market, too. Some sellers are slightly behind the times and are pricing their homes like it’s still May. Those homes may sell for less than the list price.”
From Seacoast Online on New Hampshire. “In a sign that Strafford County’s white-hot real estate market might be cooling somewhat, both current sales and pending sales were down in July. ‘There are not as many buyers coming to open houses,’ said Lee Ann Parks, president of the Dover-based Strafford County Board of Realtors. ‘Where we would have 30, it is more like eight to 10. Some of it is summer vacation; however, some is buyer frustration.’”
“Lately, analysts have wondered whether the current market can continue to sustain itself. There are some indicators that the hot market might be cooling, as more inventory has come online and as frustrated buyers have decided to step away for a while. The Home Buying Institute, in a July 29 report, declared: ‘It’s official: The real estate market is slowing down. We’ve seen a decline in home sales, an increase in inventory, and other indicators that suggest the housing market is slowing,’ the institute’s report said.”
The Phoenix Business Journal in Arizona. “While it’s not even close to becoming a buyer’s market in the Valley, there is light at the end of the tunnel for people trying to purchase a home. ‘What we can tell you is that the market has cooled from its crazy insane cry-yourself-to-sleep market — but it doesn’t mean it’s cold,’ said tina Tamboer, senior housing analyst for The Cromford Report.”
“The housing supply in homes priced between $400,000 and $800,000 has gone up 138% since February, she said. ‘But it’s still low. We were so low it’s not hard to go up 138%,’ she said. ‘We have seen an increase in supply and seen price reductions every week.’”
“Greg Hague, CEO of 72Sold, said buyer fatigue is contributing to more homes on the market. Now, buyers are starting to see more homes coming on the market. ‘All of a sudden, you’re not as inclined to fight over a house,’ Hague said.’If they can’t get a fair buy or a good deal, they just move on. That’s very balanced-market thinking we’re starting to see at this point.’”
“As the market begins to show signs of cooling, sellers might want to consider coming down on their prices if they’re serious about selling their homes, agent Aaron Carter said. ‘Sellers are getting greedy,’ Carter said. One seller had priced a home in Scottdale McCormick Ranch $150,000 over comps. ‘They are being very bold and brazen to say, ‘No, I want my price.’ In reality the market is starting to shift.’”
The Toronto Sun in Canada. “They were supposed to cool a scorching housing market by decreasing the pool of qualified buyers but more than two months after being introduced, new mortgage stress test requirements may not be working quite as expected. Romana King, director of content at Zolo.ca, a brokerage that compiles multiple-listing data, offers this example: A buyer makes an offer on a home that would require a $500,000 mortgage. At today’s variable rate of about 2.45 per cent, that buyer would need to fork out $2,227 a month but would need to qualify for the 5.25 per cent stress rate, which works out to a monthly payment of $2,980. That’s a difference of more than $750 per month. ‘The only way to make up that difference is for the buyer to make a larger down payment or the seller to reduce the ask price,’ King says.”
“‘However, the actual demand is still very high and increasing and perhaps, if we must have these stress tests, they should be adjusted or flexible to accommodate different income brackets and made easier for first-time homebuyers to become owners. Currently, the tests make it more difficult,’ says Jacky Chan, president of BakerWest, a Vancouver-based company which specializes in the sales and marketing of new master-planned communities. ‘Stress tests will temporarily and artificially affect and manipulate the ability of buyers, which should decrease activities but in reality, we have not seen the number of transactions nor prices coming down, which clearly tells us that the real issue or solution is in supply, and we should avoid tampering with the demand. It is quite challenging to artificially force a desirable property market into becoming undesirable.’”
From Essex TV in the UK. “The latest research from the homebuying platform, Yes Homebuyers, has highlighted a potential drop in UK house prices over the coming year and analysed exactly what the pounds and pence impact will be for homeowners and sellers. On a local authority level, it’s the boroughs of London that are going to see the most severe price drops. Nowhere will be hit harder than Kensington & Chelsea where the average house costs more than £1.3 million.”
“Matthew Cooper,Managing Director of Yes Homebuyers, commented: ‘The housing market has enjoyed a real boom since early 2020. But, what goes up must come down, and house prices are no different. They are currently so inflated through high demand and lack of supply, that it would take a miracle for them to remain this high for any extended period of time. This means we’re facing an inevitable drop and those looking to sell their home would be wise to act quickly instead of waiting. With some house purchases taking up to 500 days to complete, it could even be that time has already run out to sell for a high price on the open market.’”
The Malaysia Reserve. “Signs of financial distress in the country are getting more prevalent and clearer as the COVID-19 impact bites deeper into Malaysia’s economy, resulting in rising unemployment and shrinking incomes. This means some property owners may have to offload properties to stay afloat. Christopher Tan, 47, is one of many property owners who have had to let go of their properties during the pandemic. As global travel came to a halt, Tan, who resides in Singapore, lost his job as a pilot in June last year.”
“To sustain his livelihood with his wife and two children, he had no choice but to offload his apartment in Cyberjaya last August. ‘It was a difficult decision to make but that was the fastest way to get some cash although it was at a loss. I bought that apartment for RM826,000, but sold it at only RM450,000,’ he said.”
The Vietnam Express. “Landlords are struggling to repay bank loans after the Covid-19 pandemic has caused demand for leasing properties to plummet. In the last six months all of Tung’s savings have gone into paying bank loans he had obtained for his VND18 billion ($782,000) shophouse in HCMC’s Binh Thanh District. He made the purchase in 2019 with a 30 percent loan, a ratio considered safe then. Tung had hoped to pay by leasing the house to businesses, but the pandemic put paid to those plans.”
“Business tenants started to leave en masse as lockdowns and social distancing meant no revenues. Tung brought down the rent by 15 percent, then 30 percent and even 50 percent but still could not find new tenants. Since the end of last year his shophouse has been mostly vacant, and he has even had to borrow from friends and family to pay the banks. ‘Earlier this month I borrowed money with high interest rates for the first time to repay banks.’”
“Quang of District 2 faces a similar plight. The rent for his premium three-bedroom apartment plummeted by 40 percent to $850 by the end of the first quarter. His last tenant, a foreigner, moved out after their income fell, and Quang now has zero income from it but still has to pay the monthly bank installment. The bank has repeatedly warned him it could foreclose on his mortgage if he fails to make regular payment.”
“Nguyen Hoang Hai, chairman of property developer VNO Group, said those who borrow from banks to invest in real estate have been ‘living in a nightmare.’ He estimated that 70-80 percent of theseowners have bank debts, but most get little or no rental income. People who borrowed 30-50 percent of their property value are struggling, while those who borrowed 70-80 percent have mostly lost them, he claimed.”
“He forecast the market would not recover until next year. ‘Banks need to lower loan interest rates for these investors for the next three to six months or roll over their debts.’”