A report from My Northwest in Washington. “‘This was a good time for price correction,’ outlined Juliet Beard, a Seattle real estate broker. ‘Homes were inflated in Seattle and this is the bubble.’ The most significant home price change is in Seattle, where prices are still up year-to-year, but down as much as 14% month-to-month. None of the realtors we spoke with wanted to be associated with the concept that crime continues to hurt the central Seattle market. They echo the position that until that is under control, the housing market will continue to decline.”
Sarasota Magazine in Florida. “‘The broad thought is that we’re moving toward a more normal market,’ says Adam Hancock, owner of The Sunshine State Company. ‘What we’re seeing day to day is if homes are priced appropriately and the home fits the price, they’re still going fast. But we’re not correcting to 2019. Whatever that new median price is, we’ll level off, but we’re not going to go back to what it was three-plus years ago. There’s still plenty of buyers, but people buying out of scarcity was out of whack and now there’s more of a wait-and-see attitude.’”
Arlington Now in Virginia. “Bad news sells… keep that in mind as you get your daily/weekly dose of headlines that the housing market is collapsing under the weight of high interest rates and overinflated prices. With that said, I’m not about to deliver a rosy picture of the Arlington real estate market. Have Prices Gone Down? The short answer is ‘yes,’ prices have come down from their 2022 peak. By how much? That is a very difficult question to answer and there’s no reliable way for us to know at this point.”
“The prices we saw in the first half of this year are out of reach, in most cases. We’re just experiencing a more dramatic version of seasonality because of the sharp interest rate increases that have paralleled the traditional seasonal slowdown and because of where we’re coming from — insane demand for nearly two years.”
The Real Deal on New York. “Rupert Murdoch’s One Madison unit recently topped Manhattan’s luxury contracts, but the condo traded at a $2.5 million loss. Unit 57A, which asked $16 million, sold for $12.5 million, public records filed Monday show. The sale came in $3.5 million below ask and $2.5 million less than the $15 million the media mogul paid for it in 2014.”
The Union Tribune. “San Diego County’s median home price fell for a fourth month in September, down 6 percent from its peak in the spring. Mauricio Perez-Vazquez, an agent with Twenty Four Seven Realty, said some sellers understand that the market is on the decline, but it is OK because home prices have appreciated so much in the last few years they don’t feel bad about selling right now. However, he said some sellers are having a hard time accepting their home isn’t worth as much as it was a few months ago. Almost all of Southern California saw price drops from August to September. Orange County dropped the most, 3.5 percent, to a median of $950,250. It was followed by Los Angeles County, dropping 2.3 percent to $806,000; Ventura County down 2.2 percent to a median of $762,500.”
The Orange County Register in California. “Real estate agents are having ‘the talk’ with their clients, trying to explain that a two-year run of bidding wars and overpaying for homes ended last summer. ‘We try to educate (the sellers) the prices aren’t where they were last year,’ said Manny De Silvia, an agent with Century 21 Now Realty in Corona. But sellers are reluctant to lower their prices. ‘Their attitude is, if they really want my house, they can pay for it,’ De Silvia said. ‘I try to explain that what you bought last year for $700,000, with the (higher) interest rates you can only afford a $400,000 home now if you want the same payment.’”
From Fortune. “‘Housing’s stunning downfall in one chart: Prices have plunged in 51 of these 60 cities, and there’s much further to fall,’ a new report by Fortune’s Shawn Tully, answers that question. The top three cities that have seen the biggest declines: ‘San Jose suffered the biggest fall, tumbling 10.8% through September from its apex in April. The next top losers from their record highs are San Francisco (-8.5%) [and] Seattle (-8.2%),’ Tully writes.”
From Forbes. “So far, mortgage rates have skyrocketed from less than 3% during the pandemic to a 20-year high of nearly 7%—pushing affordability to the worst level in decades and effectively ‘taking a wrecking ball to the housing market,’ says James Stack of InvesTech Research. ‘The message today is eerily similar to [the] warning in 2005,’ says Stack. ‘It would be difficult to argue that the U.S. housing market isn’t heading for a hard landing.’”
From CBC News in Canada. “It was a housing project with promise: a subdivision of unique homes in picturesque Meaford, Ont., advertised as “Mike Holmes Approved.” Mike Holmes is a contractor and television personality known for rescuing homeowners from botched construction jobs. In 2016, Myles Johnson and Andrea Hart of Toronto, who were looking for a place to retire, bought in. But things didn’t go right, according to Hart and Johnson. The couple said after their home was finished in 2018, they discovered it was riddled with defects — including mould and structural problems — which they say the builder didn’t adequately address. ‘It’s been a nightmare,’ said Johnson, 70. ‘[Our retirement plans] just sort of imploded and you just sort of say, ‘What in hell happened?’”
The Evening Standard. “The political and economic chaos raging in the UK is boiling over into the London property scene as chains collapse, buyers put plans on hold and the capital’s housing market regresses into a pre-Covid state of malaise. Author Bex Burn-Callander, 39, is feeling the real effects of this turbulence. She has always lived in London but is now trying to sell her £550,000 three-bedroom Lewisham flat with roof terrace to buy a multi-generational house in Yorkshire.”
“Burn-Callander is a carer for her mother, who lives in Pimlico on the other side of London, so with her husband Patrick and their two small children, they are moving north to buy a bigger place all together. ‘The plan is to sell both our homes and buy a place together around York,’ the author says. First, they must sell the two flats, in very different parts of the capital, which has got harder since the mini budget. ‘It’s a nightmare. We listed our property more than two weeks ago and haven’t had a single viewing. Our estate agent, Sebastian Roche, says the market is ‘extremely challenging,’ she says. ‘It seems like no one is looking to buy now because mortgage rates are sky-rocketing — everyone is waiting for a bit of political stability.’”
Stockhead on Australia. “This morning, Sydney home values are down over 10% – or about $116,500 on average – since prices in the City that’s Pretty topped out at the record average highs of February earlier this year. The property data firm has Melbourne values down some 6.4% since January, while BrisVegas home values have fallen 6.1% in just four months. Hobart is down -4.7%. Canberra is depressing. And it’s down -4.4%. Ha!”
“And while Sydney property is still ‘highly overvalued’ it doesn’t classify as a property bubble according to UBS and their annual global property thingy. UBS, BTW, after studying up house price growth across 25 of the world’s most capital cities, came to the utterly shocking conclusion that it’s possible the global housing boom is coming to an end. It’s not the answer to Life, The Universe and Everything, but it’s very close to 42.”
From Bloomberg. “Profits and losses aren’t usually thought of as a consideration for central banks, but rapidly mounting red ink at the Federal Reserve and many peers risks becoming more than just an accounting oddity. The accounting losses threaten to fuel criticism of the asset purchase programs undertaken to rescue markets and economies, most recently when Covid-19 shuttered large swathes of the global economy in 2020. Coinciding with the current outbreak in inflation, that could spur calls to rein in monetary policy makers’ independence, or limit what steps they can take in the next crisis.”
“‘The problem with central bank losses are not the losses per se — they can always be recapitalized — but the political backlash central banks are likely to increasingly face,’ said Jerome Haegeli, chief economist at Swiss Re, who previously worked at Switzerland’s central bank. RBA Deputy Governor Michele Bullock said in response to a question last month about the Australian central bank’s negative-equity position that ‘we don’t believe that we are impacted at all in our capacity to operate.’ After all, ‘we can create money. That’s what we did when we bought the bonds,’ she noted.”