A report from Yahoo Finance. “To say home refinancing activity is a sliver of what it was two years ago is no exaggeration. ‘Lenders are hurting. We still see layoffs on a monthly basis,’ Jason Sharon, owner and broker at Home Loans Inc., told Yahoo Finance. ‘Applications are nowhere [near where they’re] needed to sustain the current workforce.’”
The Washington Examiner. “The number of job openings in construction collapsed in January. The construction industry reported just 248,000 job openings in January. That is a decrease of a whopping 240,000 jobs from the month before and represents a 37.4% decline from a year ago, according to the Bureau of Labor Statistics. The plunge shows that construction jobs are evaporating as old projects come to a close and aren’t being replaced by new ones, while soaring mortgage rates have led to a dramatic pullback in home sales. ‘Today’s construction job openings number was simply shocking,’ said Anirban Basu, chief economist for Associated Builders and Contractors.”
The La Jolla Light in California. “La Jolla-based Silvergate Bank, which grew fast by catering to cryptocurrency traders, said March 8 that it is winding down operations and will liquidate amid mounting losses, customer defections and regulatory pressure. The bank’s parent company, Silvergate Capital, announced after markets closed that it had voluntarily decided to cease operations as the ‘best path forward’ given its deteriorating situation. Bloomberg News reported late the day before that officials of the Federal Deposit Insurance Corp. were at the bank’s headquarters in an effort to salvage the institution, but that apparently was not a viable option.”
The Lookout in California. “Santa Cruz County’s housing market is slowing as properties stay on the market for longer and fewer homes are being sold countywide. The Santa Cruz County Association of Realtors shows the median price of a single-family home fell an annualized 4.7% in Santa Cruz, from $1.6 million in February 2022 to $1.525 million in February 2023. Median prices fell 7.4% in Watsonville, from $810,000 to $750,000. Jennifer Watson, president-elect of the Santa Cruz County Association of Realtors added that she doesn’t expect those types of low interest rates to return anytime soon: ‘If we do have rates that low, then something bad happened.’”
“Some current sellers aren’t willing to reduce their asking prices enough to compensate for the changing market conditions. Some of our inventory is stuck with the peak pricing. Owners are asking the price that it may have sold before, but the market isn’t what it was last year,’ said Marvin Christie, president of Anderson Christie Real Estate. ‘I hate to say it, but it’s unrealistic sellers.’”
From Bisnow. “The office market is filled with incredible opportunities for tenants, but brokers are limited by firms unwilling or uncomfortable making long-term real estate decisions during a period of financial instability and uncertainty around the future of remote work. JLL’s Hugh Scott said in San Francisco, rents for ‘non-view’ spaces have dropped 20%-30%, free rent concessions are up 30%-40%, and security deposits for spaces dropped 50%, all in a market where seven-to-10-year leases, once standard, are being supplanted by deals for as few as five years.”
“‘I have a client who had average office space, and they offered to give it away to a tenant who would just have to pay operating expenses, and they simply couldn’t give it away,’ said JLL Executive Managing Directors Bart Lammersen.”
KIRO in Washington. “Home prices are falling in King County, according to the Northwest Multiple Listing Service. New numbers show median homes prices are at $800,000 even in King County — down 6.73% from last year, or $57,750. Snohomish County homes fell by 7.4%, to a median price of $690,560 at the end of February. Condos are seeing much bigger price drops across the board in King, Snohomish, and Pierce counties, all plunging more than 11% year-over-year. ‘Prices haven’t come down so much that it’s a fire sale, by any means,’ said Shonna Peterson, a broker with The Warmack Group. ‘We’re still in a very, very favorable market for sellers.’”
KDVR in Colorado. “Denver is still very much a seller’s market, according to the February housing market report from the Denver Metro Association of Realtors, but buyers are still sitting on the sidelines. The median sales price for a Denver metro single-family home is $600,000, up from $595,000 in February. This includes 11 counties along the Front Range from Boulder to Douglas counties. Prices have been sliding since last April when they reached an all-time high of $680,000 for a single-family home. Since then, homes have cost roughly $10,000 less each month.”
Las Vegas Business Press in Nevada. “Despite new-home sales down 39 percent from where they were at this time in 2022 because of elevated mortgage rates, Las Vegas area builders posted their best net sales numbers since June as they continue to slow price increases, according to Home Builders Research President Andrew Smith. Smith previously noted that builders started decreasing base prices in the middle of 2022. Over the past month or two, some builders have begun to ‘inch back up slightly’ while most are standing pat, he said. Summit Homes had the biggest decrease in price between December and January at 10 percent, Smith said. They were followed by Storybook Homes with a 4.4 percent decline and Tri Pointe Homes with a 4.4 percent decrease.”
The Sun Sentinel in Florida. “Q: We have to move for family reasons and put our house up for sale. It has been several months, and we are not getting much interest. Our real estate agent keeps telling us to lower the price, but I know what our home is worth. Just a year or so ago, several nearby homes sold for more than our listing price. What is going on? — Joan. A: The real estate market can change quickly. Due to the foibles of human nature, it takes some time for home sellers to realize that the housing market has cooled.”
“No matter what houses were selling for in the past, homes are only worth as much as potential buyers are willing to pay today. Many sellers feel they are losing ‘profits’ rightfully theirs and are slow to accept the new realities. If you want to sell your house now, ensure it shows well. Keep it clean and uncluttered, and make sure the landscaping looks nice. You may want to spruce it up with a little fresh paint. You will also need to accept that today’s prices are what matters, not what you could have sold it for a couple of years ago. Work with your agent to adjust the price to match what buyers are willing to pay now.”
The Financial Post. “It is smaller communities that are feeling the worst sting of Canada’s housing boom and bust, according to a new report by Desjardins economists Randall Bartlett and Marc Desormeaux. The pandemic fuelled a red-hot housing boom that swelled prices in some centres by more than 50 per cent. But that bubble deflated quickly after the Bank of Canada began rapidly hiking rates in March 2022 to tame inflation. All provincial housing markets have declined but Ontario and British Columbia, the provinces whose economies are most exposed to real estate, have seen the biggest drops, says Desjardins. Of the two, Ontario has experienced the largest correction so far.”
“Desjardins’ chart below shows that the outsized gains in pandemic housing prices stretched beyond communities close to the GTA to places further afield like Windsor, Sudbury, London, Kitchener and St. Catharines. Their declines since the peak to January 2023 have outstripped Toronto.”
The Montreal Gazette in Canada. “The lows just keep coming for Montreal’s residential real estate market.Home sales in the Montreal metropolitan area plummeted 32 per cent last month to a new February low of 2,996, according to Centris data compiled by the Quebec Professional Association of Real Estate Brokers. Property prices continued to retreat from year-ago levels as active listings surged. All property categories in Montreal experienced year-over-year price declines last month, according to QPAREB data.”
“Active listings rose 64 per cent year over year. At 15,893, they now exceed the pre-pandemic level of February 2020. Single-family homes showed the largest increase, at 85 per cent, compared with advances of 51 per cent for condominiums and 48 per cent for plexes. The glut of properties means sellers need to be more patient.”
The Australia Financial Review. “Australia faces ‘significant pain’ in the residential construction sector as rising interest rates and uncertainty ‘play havoc’ and push down building starts, Macquarie has warned. Analysts at the investment bank told clients a backlog of work ‘will likely erode soon’ and forecast that home renovation activity will fall as fixed-rate home loans roll off into much higher variable rates. Ten successive interest rate rises are triggering a faster contraction in new home construction and renovations than previously expected. Those concerns come only days after official figures showed loans for construction of new homes are dropping quickly. ‘We think the real pressure in Australian housing is still to come. The forward-looking perspective paints a worrying picture of weak front-end demand,’ wrote Macquarie’s Peter Steyn in a note on Wednesday.”
“‘Most builders are finding it difficult to make sales at the moment,’ said Robert Lynch, the executive chairman of ASX-listed home builder Tamawood, which builds in Queensland, NSW and Victoria under the Dixon Homes brand. ‘There is going to be a lull.’”
“‘We are the latest, but we won’t be the last construction group to buckle under the weight of a broken industry and way of doing business that needs urgent reform,’ Ian Carter, the founder of PBS Building said on Monday, after he put his five companies with a collective 80 residential and commercial projects into administration.”