A report from the Daily Democrat in California. “Tom Doyle bought a house in southwest Woodland for $675,000 last year in October. Doyle said that his family had been paying attention to the housing market, but it is very different from the market in Northern Michigan. They hope that the home they purchased will continue to increase in value. ‘From what we’ve been looking at, we’ve looked at houses well above what we paid and we looked at houses lower paid, and I think the value for money for the home that we got is we could very well [have] a tremendous upturn right now,’ Doyle said.”
From Fox 4 Now in Florida. “Right now- the beach markets are in high-demand. Most notably, Sanibel Island. Cape Coral has been a hot spot destination as well, with new homes popping up every few blocks. In fact, over the course of the last seven days, Jay Richter, Managing Broker with John R. Wood Properties, says there have been 542 new listings, with more than 1,000 pending sales. That’s about a 53% hike.”
“‘You really have to know what you’re getting into and you’re hoping, if you’re overpaying, that the market is going to continue- there’s no promises on that,’ said Richter. ‘I just sit there and look at the six things and I was the guy, six months ago, saying that this isn’t going to continue because we’d never seen this. Being here almost 30 years and I’ve never, ever seen this.’”
From WINK News in Florida. “Realtors are sounding the alarm on skyrocketing home prices. Fewer affordable housing options are making it difficult for families to make ends meet. However, future homeowners can do a few things to ensure that they get the home of their dreams. Realtors say that by putting in multiple offers, having patience, and paying cash if possible to make your bid more attractive, you’ll stand out and beat other offers. Xuxa Santiago is currently house hunting and says homes can be off of the market in the blink of an eye. ‘I mean houses on Zillow, you can heart it and five hours later pending sale. It’s impossible,’ Santiago said.”
From WHSV in Virginia. “The Harrisonburg-Rockingham area housing market is continuing to surge as the end of the year approaches. ‘Over the past six months or so, we’ve seen instead of five to ten offers on a house, maybe two or three offers, so things are cooling a little bit. But cooling off in this market, is going from an extremely strong seller’s market to a still very strong seller’s market,’ said Scott Rogers, an associate broker with Funkhouser Real Estate Group.”
“One thing that has contributed to the strong housing market, is the historically low mortgage interest rates that’ve been seen over the past few years. ‘Buyers should enjoy them as long as they last, and sellers should be cognizant that if interest rates do start to go up, eventually that’s going to cut into some of the buying power that a purchaser would have in the market as they have to pay more on a monthly basis for the house they’re attempting to purchase,’ said Rogers.”
From News 9 in Colorado. “Ouray voters approved a 15% excise tax on short-term rentals by narrow margins. It appears to be the highest tax on vacation rentals in the state. Vacation rental owners and managers were among the loudest opponents against Ouray’s tax. Before the council voted to put the tax up to voters, Premier Vacation Rentals Chief Executive Officer Chris Bettin discouraged councilors from doing so and said his company would consider legal remedies against it.”
“‘Maybe it’s just a tipping point issue. People say, ‘Gosh, we haven’t done anything about affordable housing and we need to do something,’ Bettin said. ‘They probably do need to do something, but I wish they hadn’t done this.’”
“Ouray resident Cindy Carothers, who advocated for the tax, said businesses’ struggles to hire employees put housing in the spotlight. ‘All you had to do was walk around town in the summer and businesses were open five days a week, they had no workers, they couldn’t bring people in, and places that were ordinarily open seven days a week were not,’ she said. She said the passage of the tax shows residents don’t want to let people ‘come in and use Ouray as an investment’ without supporting the city’s infrastructure and housing needs.”
From WFAA. “It’s been one wild house party in Texas — that might be over now. But predictions are that Texas will still have an after-party. It’ll just be a whole lot more chill. Now, let’s back it up just a bit to July 2021, because except for San Antonio, that is the month the median home hit a high point in the major metros in Texas. Since then, prices have ticked down (again, in all but San Antonio).”
“The Texas A&M Texas Real Estate Research Center asks whether the pandemic housing frenzy is over. And then, the research center answers its own question, saying housing sales growth and housing price growth have peaked and are slowing.”
From CTV News in Canada. “House prices in Toronto have been generally high for quite some time now, notes Desmond Brown, a real estate agent with Re/Max Hallmark Realty Ltd. in Toronto. This is something most residents have come to expect by now, he says, although he is seeing a slight cooldown in the market. ‘We’re still seeing sale prices going over asking, however, we’re not getting as much activity,’ he told CTVNews. Brown points to a property he recently sold that had 53 showings but only three offers as an example. ‘We’re not getting as many multiple offers per property…maybe from buyer fatigue or just not as many people are out looking [for houses] at this time of year.’”
From Stuff New Zealand. “The record-smashing profits earned by The Block NZ contestants this year are huge, but experts say they could represent the last flash in the pan for this market cycle. In the Real Estate Institute’s latest figures, the national price was strong, but the house price index had dropped in some areas. That inconsistency was a sign something was going on in the market, said CoreLogic head of research Nick Goodall. ‘When prices are not consistent across the board, it means not all properties are selling automatically or well now. Unlike a few months ago when anything would sell well.’”
“The headwinds for the market were strong, but the prospect of higher mortgage rates and tighter lending conditions could make for an extra bit of desperation for buyers, Goodall said. ‘People want to secure a property before the situation changes, so they are motivated to pay more now because they won’t be able to borrow as much in future.’”
The Sydney Morning Herald in Australia. “Homebuyers who have used low interest rates to drive house prices to all-time highs and take on record levels of debt are being warned they face a steep increase in repayments, with the Reserve Bank signalling it wants the official cash rate to eventually climb to 2.5 per cent. While trying to play down the immediate threat of a rate rise, RBA governor Philip Lowe on Tuesday made clear the bank measured success by getting the cash rate – currently at a record low 0.1 per cent – back to 2.5 per cent if not a little higher.”
“‘We’re trying to get interest rates up over time. If we’re successful, interest rates will go up. People borrowing today need to remember that,’ he said.”
“Dr Lowe said he would hope to get official interest rates back to a ‘neutral rate’ of at least 2.5 per cent, if not 3.5 per cent. An increase to 2.5 per cent would lift the repayments on a $750,000 mortgage, the current average loan for an established house in NSW, by $1004 a month or $12,048 a year. At 3.5 per cent, home loan repayments would climb by $1468 a month or $17,616 a year.”
“On the average $634,000 Victorian mortgage, a 2.5 per cent cash rate would increase repayments by $849 a month or $10,188 a year. At 3.5 per cent, monthly repayments would be $1241 higher while over a year they would be almost $15,000 more expensive.”
From CNBC. “Highly indebted property developer China Evergrande will likely default because the company has essentially lost its main business, S&P Global Ratings analysts said in a report Thursday. ‘The firm has lost the capacity to sell new homes, which means its main business model is effectively defunct. This makes full repayment of its debts unlikely,’ the analysts said. ‘We still believe an Evergrande default is highly likely.’”
From Bloomberg. “China’s property market crunch is making it difficult for local governments to cut an estimated $6 trillion of hidden debt even as Beijing shows more determination in cracking down on the problem. A downturn in the property market won’t make it an easy task. Land sales, which account for about 40% of local governments’ revenue, have tumbled since August, putting pressure on public finances.”
“What is hidden debt? Local governments, under pressure to shore up growth in the wake of the global financial crisis in 2008, went on a borrowing binge to fund infrastructure projects as part of China’s 4 trillion yuan ($626 billion) stimulus package. Before a new budget law was introduced in 2015, regional authorities weren’t allowed to borrow directly. Instead, they were encouraged by Beijing to use state-owned companies now known as local government financing vehicles, or LGFVs, to raise money through bank loans, and later, bond issuance.”
“The debt doesn’t appear on the balance sheets of local governments, yet carries an implicit guarantee of repayment with public money. Most of the debt is owned by local banks, so the surge over the years has led to moral hazard and risks to the financial system. ‘About half of the debt will be repaid, and the other will be transformed into on-balance-sheet debt,’ Zhang said Zhang Yiqun, a member of the Society of Public Finance of China.”