A report from Market Watch. “KeyBanc analyst Edward Yruma completed an analysis of 650 homes in Zillow’s inventory, or about one-fifth of the homes owned, and found that 66% are currently listed below the purchase price at an average discount of 4.5%. Of the 650 homes Yruma analyzed, the cities in which the company had the highest percentage of homes that were listed below the purchase price were San Diego at 94.3%, Phoenix at 93.4% and Mesa, Ariz. at 92.6%.”
From Vox. “Looking at this past quarter, Opendoor and Zillow were posting net losses (-$144 million and -$59 million, respectively). iBuyers are providing a service. It’s not clear they’ve really figured out how to make money.”
From Patch. “The Northern Virginia housing market is cooling off, with many sellers who put their houses on the market in late summer and early autumn finding they may have waited too long to get the price they wanted. Buyers are not offering as much money for homes as they were in late 2020 through July 2021. With the calendar flipping to November, houses are staying on the market longer, and sellers in many areas of Northern Virginia are dropping their prices. Housing inventory grew nearly 15 percent in the Northern Virginia region in September.”
From Bisnow New York. “Related Cos. has all but entirely bought out its development partner on a Hudson Yards mixed-use project. The company picked up a 99.99% share in 506 West 36th St., 512 West 36th St. and 511 West 35th St. from Spitzer Enterprises for $77M, a price tag $11M lower than what Spitzer paid for the properties in 2013.”
From Market Watch. “Billionaire Charlie Munger says he’s unfazed by criticism of a University of California, Santa Barbara, residence hall partially funded by his $200 million donation and stands by his vision for the project — where 94% of the student rooms won’t have windows. Munger, vice chair of Berkshire Hathaway pledged his financial support for the building on the condition that the school follow his architectural plans for the project.”
“Munger’s plans have come under fire in recent days. An architect consulting on Munger Hall resigned in protest this week, saying that the ‘basic concept of Munger Hall as a place for students to live is unsupportable from my perspective as an architect, a parent, and a human being.’ The Santa Barbara Independent first reported the resignation of Dennis McFadden, the architect.”
“McFadden criticized the proposed building plan for going against ‘evidence-based design principles’ and said it seems to largely ignore the documented benefits of natural light, fresh air and views of nature. ‘Rather, as the ‘vision’ of a single donor, the building is a social and psychological experiment with unknown impact on the lives and personal development of the undergraduates the university serves,’ McFadden wrote in the resignation letter.”
“Munger shrugged off charges that billionaires are too influential. ‘You’ve got to get used to the fact that billionaires aren’t the most popular people in our society,’ he told MarketWatch. ‘I’d rather be a billionaire and not be loved by everybody than not have any money.’”
From Realtor.com. “For decades, a home equity line of credit has been a common way for homeowners to finance a renovation. In a nutshell, a HELOC works as a second mortgage or lien on the home. Homeowners use their HELOC as a credit card of sorts, paying interest only on the money they withdraw for renovations. So why has this financing option lately become harder to find?”
“According to real estate experts, the pandemic has lenders fearful of a repeat of the 2008 housing crash. Back then, many homeowners defaulted on their mortgages, prompting a wave of foreclosures and bankruptcies. Depending on other debts, there was often little or no money remaining for the issuer of the HELOC. The bank holding this second lien was often left holding the bag.”
The East African. “Borrowers will be required to provide additional security in the event the value of collateral on loans, mainly land and building, depreciate during the loan period to cover for default. Kenyan borrowers with collateral whose value has depreciated will now be required to provide additional security as banks move to tighten lending terms. The latest tightening of the lending standards comes as it emerged that the country’s top lenders are heavily exposed to the real estate sector by holding collaterals estimated at over $37.1 billion, raising fears of massive losses should there be a property bubble in the economy.”
“According to the Kenya Bankers Association (KBA), lenders will carry out frequent revaluations of charged properties and in the event that the value of the property is found to be below the value of the loan, the borrower will be required to provide additional security. According to KBA, banks will only accept the property as collateral whose value is several times bigger than the value of the loan being applied for.”
The Korea Herald. “South Korea’s financial authorities have called on local banks to take action to ensure a stable supply of credit loans and tighter supervision of household debts, officials said Sunday. The nation’s major lenders recently suspended mortgage lending to slow down the growth of household debt under pressure from the financial authorities.”
From City News on Australia. “Despite Canberra now being the second most expensive capital city to buy a house for the first time since 2005, the top end of the market is cooling, says Domain’s September quarter property report. ‘Canberra’s soaring housing prices, reaching $1 million median house price, highlights the booming property market and strong demand present, likely to represent those buyers who had previously been unable to secure a home earlier in the year,’says Domain’s Nicola Powell.”
From News.com.au. “It’s becoming increasingly likely that interest rates will increase earlier than expected and this could see house prices drop by up to 20 per cent for every 1 per cent increase. Experts believe it is becoming more likely the Reserve Bank of Australia (RBA) will be forced to increase interest rates earlier than expected due to rising inflation. ANZ senior economist Felicity Emmett said last week’s inflation report had prompted a rethink of Australia’s outlook over the next year or so.”
“Ms Emmett said it was possible that an interest rate rise of just 1 per cent, could see house prices fall by 20 per cent, with RBA modelling showing prices could drop by as much as 30 per cent.”
From Reuters. “Chinese developers’ shares and bonds stumbled on Tuesday on worries over spreading financial contagion, as sources said one of the country’s top 20 homebuilders is seeking a new extension for its onshore debts. Fujian province-based Yango Group Co. Ltd. has been in talks with investors to discuss the extension of payments on yuan-denominated asset-backed securities that holders can redeem this month, three sources familiar with the matter told Reuters.”
“Yango Group’s bonds fell sharply for a second day, with Duration Finance quoting its 12% March 2024 bond down almost 58% on the day to less than 13 cents, yielding nearly 160%. Its Shenzhen-traded April 2024 bond fell more than 20%, triggering a trading halt. November 2022 and 2023 bonds issued by Evergrande unit Scenery Journey fell more than 12% to about 20% of their face value ahead of coupon payments totalling $82.5 million this weekend. Bonds issued by developers Yuzhou Group Holdings Co, Ronshine China Holdings and Zhenro Properties Group also fell more than 10%.”