A report from Yahoo Finance. “Around 42% of homes sold in the final three months of 2022 included some kind of concession from the seller, Redfin data found. A separate study found that 13.6% of sellers also slashed their listing price to attract buyers. Fortunately, price reductions are becoming more and more common – and asking for a price cut isn’t frowned upon. In fact, some agents are encouraging it. ‘Instead of waiting for listing prices to drop, buyers are actually submitting offers with big discounts and making the seller make a decision and that seems to be working,’ said John Downs, senior vice president at Vellum Mortgage, noting that there’s been an uptick in price reductions in the Washington, DC area.”
The Augusta Free Press. “Home buyers are seeing more options as the housing market cools in Virginia. ‘Sales activity in the Commonwealth’s housing market has been cooling for 13 consecutive months now. This is largely due to mortgage rates doubling over the past year, causing many to delay their home search,’ Virginia REALTORS® Chief Economist Ryan Price said. ‘We’ve been seeing fewer new sales contracts each month. Homes are taking longer to sell, and sellers, on average, are not getting their asking price.’”
The Chicago Tribune. “The Illinois housing market is continuing its correction to where it was before the pandemic. Prices and sales are now lower than they were at this time last year, with another drop in December, according to Illinois Realtors. Chicago median home sale prices in 2022 remained the same as the prior year at $335,000, according to Illinois Realtors. But in December, prices were down 8.1% compared with the same month in 2021.”
The Miami Herald. “Home sales in Miami-Dade County plummeted in 2022 compared to the prior year, the strongest indication the frenetic homebuying spree that defined South Florida during the ongoing coronavirus pandemic finally has ended. Buyers and sellers are on different wavelengths here and in many parts of the United States, said Mariya Letdin, a business professor at Florida State University. The high prices and annual slowdown in sales volume exemplify their disconnect.”
“‘If a seller is patient, they will not transact at prices that fall below their expectations. If sellers see the reality doesn’t match expectations, they will wait,’ Letdin said, noting that the higher median prices in South Florida are the result of ‘sellers refusing to list at lower prices. … They can do that for a few months, before reality sinks in.’”
Community Impact in Texas. “In December 2022, home sales in the Central Austin region decreased over 54% year over year, according to ABoR data. The median sales price in Central Austin decreased almost 10% year over year, with the median home price at $647,500 in December 2022 compared to $749,500 in December 2021, according to ABoR data. The median sales price in the city of Austin dipped 4.5% to $525,250 in December 2022. ‘Even with the inventory gains made in 2022, our region still needs more housing,’ ABoR President Ashley Jackson said. ‘This need could be exacerbated as builders and developers continue to recover after overextending themselves nationally, and increasing interest rates lessen people’s buying power.’”
The Columbian in Washington. “The median sale price for residential homes in Clark County continued falling last month, dropping from $514,000 in November to $479,900 in December, according to the most recent Regional Multiple Listing Service report. Living Room Realty broker Scott Cotrell thinks it makes sense to buy now. ‘If they buy now, regardless of what they can afford, it’s always going to be better than renting because rent tends to always go up,’ Cotrell said. ‘If you lock in a mortgage rate, it’s locked in for that life of the loan, and you know how much your expenses are going to be.’”
From Market Watch. “Prices of homes sold fell on a year-over-year basis in 18 of the 50 most populous metro areas in the U.S., with San Francisco leading the way. In San Francisco, selling prices were down 10.1% from a year earlier, Redfin said. That sale-price decline was followed by that of nearby San Jose, Calif., where prices fell by 6.7%. Austin, Texas, saw home-sale prices drop by 5.5%, and Detroit by 4.3%. Phoenix, a boomtown earlier in the pandemic, saw home-sale prices fall by 3.7%. The monthly payment for a median-priced home is $2,262, Redfin said. Monthly mortgage payments are up 30% from a year ago.”
The Deep Dive in Canada. “Private mortgage lenders in the GTA are beginning to feel the heat of rising interest rates. So much so, in fact, that borrowers with private mortgages who cannot keep up with their payments are being forced to sell their homes— a legal term referred to as the Power of Sale process. According to Toronto mortgage broker Ron Butler, most of these cases involve Mortgage Investment Corporations (MICs), which compile funds from investors and lend it to real estate borrowers. However given that interest rates rose from near-zero to 4.25% in less than a year, some of these lenders are beginning to panic.”
“‘The combination of that and the drop in house values in Ontario has motivated many of the private lender organizations, or simply individuals who do private lending, to say, ‘I gotta call in the mortgage’, added Butler. He explains that the majority of such mortgages have a duration of one year, and if the lender is unable to pay the full balance on the loan on the renewal date, ‘they’re just simply saying, ‘well we have to get the money back, so we’re going to put you into power of sale.’ Likewise, homeowners who hold a mortgage from a ‘B lender’ are also facing a crisis if they’re up for renewal, as they already face higher interest rates to begin with since they didn’t qualify for mortgages from major banks. In such instances, ‘the increase in payment was so substantial as to become almost unmanageable,’ Butler added.”
The Guardian. “In the summer of 2020, when British society emerged from months of Covid lockdown, the UK housing market reopened and began booming. Fast forward to today and the situation has changed dramatically: in December the average UK house price fell for the fourth month in a row, with experts expecting a further slowdown in a struggling economy. Bank of England policymakers have raised interest rates nine times in the past year and are forecast to do so again when they next meet. Borrowers re-fixing their mortgages are among those hit hardest in the cost of living crisis.”
“Claire and her husband James upsized from their three-bedroom mid-terrace former council house in central Hertfordshire to a £600,000 five-bed in a Cambridgeshire town in spring 2021, in the belief that mortgage rates would remain low. ‘We stretched our budget to move to our dream house. Monthly payments have just increased by £370, after we rushed to re-fix for five years at just under 4% in November,’ Claire says.”
“The couple, who have two children, have a household income of just over £60,000, and do not qualify for any government help apart from the £400 energy grant. Every time they talk about it ‘it becomes a bit less of a joke,’ says James, a middle manager in a tech company who currently works mostly from home. He also fears being asked to return full-time to the office. ‘If I would have to do the 80-minute one-way commute to work in Hertfordshire again, just the fuel costs would blow us financially out of the water. When we bought, it was inconceivable to me that interest rates would be going up this much. I’m not sure we’d be able to weather another big financial change. Retrospectively, I feel it was quite irresponsible for the bank to lend us this much, and I know they would have lent us more.’”
“Barbara and her husband, John, decided that their three-bedroom house was becoming ‘claustrophobic,’ and upsized to a period property twice the size in central Plymouth. ‘We came to the awful conclusion that the only way to avoid financially struggling in future was to sell our home before we got into trouble.’ Barbara and John put their home on the market last month, and have already had to reduce the price. ‘We are likely now to make a loss upon sale. We are so angry and upset with the government that we have ended up here.’”
From The Local. “It’s an usual situation in the German housing market. For years, property prices only ever went in one direction: upwards. According to the latest survey from property portal ImmoScout24, asking prices, have fallen by as much as ten percent in some areas of the country.”
“‘The last few months have been characterized by a phase of waiting and speculation on falling prices,’ said Dr. Gesa Crockford, Managing Director of ImmoScout24. ‘In the current situation of excess supply, prospective buyers have the momentum on their side. The fact that prices are now falling shows that the market is working.’”
“Over the course of five years average prices for houses and flats have gone up by an astounding 63 percent. The price hikes have been particularly dramatic in metropolitan areas like Munich, Frankfurt and Berlin – but even these high-demand areas don’t appear to be immune from the current downwards trend.”
“Out of Germany’s metropoles, Hamburg saw the biggest price correction over this period, with the price of existing houses and flats dropping by 8.5 percent and 6.2 percent respectively. The drop in asking prices also reflects a more longer term trend, with the price of housing falling year-on-year in all sectors in Hamburg – especially in the case of new-build flats, which fell by 8.8 percent.”
“Berlin also saw a drop in asking prices towards the end of the year, with new-build flats going down by 6.6 percent and existing flats dropping by 5.3 percent. Munich, which often tops the charts as the most expensive city in Germany, saw the biggest decline in new-build houses between the third and fourth quarter. These dropped by seven percent to an average asking price of €10,153 per square meter, while existing houses fell by 3.8 percent to €8,535 per square metre on average. For people looking for a flat in the Bavarian capital, both new-builds and existing properties fell by more than four percent in the fourth quarter.”
“The steepest drop of all, however, was in the North Rhine-Westphalian capital of Düsseldorf, where the asking price for existing houses dropped by an average of 10.3 percent at the end of the year.”
Stuff New Zealand. “Data from CoreLogic identified the properties that had changed ownership most often in the last decade. It pinpointed six properties, all in the south of Auckland, that have been sold seven times since the start of 2013. One on Roscommon Rd in Clendon Park, sold for $345,000 in 2014, $505,000 in 2017, $456,521 in 2019, then $520,000 four days later, and $590,000 in 2020. Another, on Massey Road in Mangere, sold for $621,000 in 2014, $661,000 in 2015, $800,000 in 2016, $870,000 in 2017, $900,000 in July 2020, $995,000 in November 2020 and $1.37 million in April 2021.”
“One on Kayes Road, in Pukekohe increased in price over the years from $275,000 in 2014 to $970,000 in 2021. For those who lost money when they sold, the median time they had owned the property was 1.3 years. Auckland had a 2.8-year median hold period for loss-making sales, Hamilton one year, Wellington and Tauranga 1.3 years and Christchurch 2.3. ‘Unexpected increases in costs – most likely through mortgage rate increases – could force investors to sell because they don’t have the cashflow to service the mortgage or they want to cut their losses,’ Infometrics chief forecaster Gareth Kiernan said.”
“He said rapid house prices rises would no longer be a driver for sales activity and there were other factors that could dampen quick buy-and-sell activity. ‘The downward pressure on prices and reduced numbers of buyers in the market are also likely to make people wary of undertaking renovations and not being able to make a profit or even get their money back.’”