A report from the News & Observer. “Summer has warmed up in South Carolina, but the same can’t be said for its housing market. To some realtors, the higher interest rates and the higher sales prices themselves have begun to finally slow demand in the state and Columbia. ‘I think that is an accurate depiction … there is a slight slowdown,’ said Karen Yip, owner of Yip Premier Real Estate in Columbia. Brad Allen, CEO of The ART of Real Estate in Columbia, said he had also started seeing a shift in the market. ‘Homes are sitting a little bit longer now and I’ve even seen a few price reductions,’ Allen said.”
From CNBC on New York. “The rental market in the Hamptons is facing an unexpected chill this summer. Median rental prices in the first quarter fell 26%, according to Jonathan Miller, CEO of Miller Samuel. Brokers say some owners are slashing prices by 30% or more just to fill their properties. ‘There is a tremendous amount of inventory and people are not renting it,’ said Enzo Morabito of Douglas Elliman. ‘And it’s across all segments, from the very low to the very top of the market.’”
“‘The assumption that rents would be sustainable at these elevated levels has been proven to be false,’ Miller said.”
The Shore News Network on Florida. “United States Attorney Roger B. Handberg announces the return of an indictment charging Evelisse Hernandez (40, Kissimmee) with four counts of bank fraud and four counts of aggravated identity theft. According to the indictment, Hernandez, in her capacity as a licensed mortgage loan officer, created and executed a mortgage fraud scheme targeting the financial institution where she worked. To ensure that otherwise unqualified borrowers were approved for mortgage loans, Hernandez falsified the borrower’s income through completely fabricated or inflated monthly child support payments on mortgage loan applications that she signed and certified to the financial institution’s underwriting department.”
The Orange County Register. “A unique, low-entry mortgage may be a salve for high Southern California home prices, offering one option that most affordable housing loan programs don’t address. The loan, a first that I’ve ever seen, is offered through Community Development Financial Institutions and doesn’t care what applicants look like or where they want to live. The minimum combined loan amounts range from $150,000 to a maximum of $3.5 million. (The first loan cap is $3 million and the second $500,000).”
“The income portion of this particular mortgage application is a blank slate. Volatile, irregular or transitional employment (due to COVID, for example), cash businesses, retirees, seasonal or gig workers and even recent immigrants may qualify. Proving the ability to repay is a non-starter. This is NINJ (no income, no job) with a small down payment.”
The Toronto Sun in Canada. “For the most part I get it — Toronto real estate is brutal, almost intolerably so over the past two years of the pandemic. And, of course, underscoring all of this is the near-religious belief in the idea that it’s OK to leave it all on the dance floor and spend every penny the bank will give you because real estate will only ever go up, up, and … up. The love notes in my inbox are certainly not helped by the inescapable reality that there are few people as widely reviled as real estate agents.”
“And now, as all signs point to a sharp market correction underway, no one knows how long it will last or where the bottom could be. Now anger meets fear. And all the while there are cringey agents all over social media posting videos of themselves, none-too-subtly flexing their fancy cars and conspicuous consumption, declaring ‘now, now, now’ as the best time to buy. It’s unclear if they are simply unaware of the shifting market or if it’s possible that they’re just in complete denial, but of course it’s easy to think it’s their greed talking.”
From What Mortgage on the UK. “There are signs of the housing market starting to slow down, according to Zoopla, which has revealed evidence more buyers are being forced to knock down their asking price. Average new asking prices were around 9% below the original, said the property website. According to Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, the fact sellers are being asked to knock ‘tens of thousands’ off their asking prices and sales were taking longer provided strong evidence the market had hit its peak.”
“However there is another factor showing price growth was slowing – down valuations. This is where the mortgage lender’s valuation, carried out after a sale has been agreed, is lower than the asking price. She added: ‘The brokers I’ve spoken to say another key sign of a slowdown in price rises is the number of mortgage valuations that are coming in under the asking price. The mortgage company has to carry the can for any overpricing, so they’re the ones with a keen eye on the objective value of a property. If an estate agent, buyer and seller are all getting carried away, it’s the valuer who brings reality crashing down on them. Valuers have been thinking that houses are over-priced for a while.’”
From Bloomberg. “A sharp slowdown in Swedish commercial property transactions has become the latest sign that the sector’s golden era of rising real-estate values and cheap financing is coming to an end. Deal volume in the Nordic region’s biggest economy slumped by more than 60% last month to about 10 billion kronor ($1 billion) after a record year in 2021, according to data.”
“The Swedish market has seen ‘a number of participants pulling out from negotiations in May,’ according to Arvid Lindqvist, the head of research at Catella Corporate Finance Sweden. ‘Sentiment has changed quite markedly over the past month and it’s becoming more difficult to get financing,’ Lindqvist added.”
From Stuff New Zealand. “A total of 92 companies in the building sector have gone into liquidation in the year to May 23, according to figures from the Ministry of Business, Innovation and Employment. Chief executive of Master Builders David Kelly said it was possible the sector was experiencing a short spike in liquidations, but it was likely to be part of a broader trend towards the later part of another boom-bust cycle.”
“One of them is Cladtech Plastering Ltd – a family-run Christchurch plasterer focusing on residential properties operating since 2014. The husband and wife who owned and operated the company said disruption started with Covid-19 delays and snowballed. The couple have not been named to avoid undue stress. The late payments created a cash flow issue, which required the company to take out business loans. The pair sold a number of personal items. ‘We decided it’s either keeping these, and we wait for someone to close the doors and take everything, or we sell them and use them to pay,’ the wife said.”
From All Homes on Australia. “The property market has weakened since last autumn’s boom, but with plenty of competition around for the most outstanding homes, agents say it has turned into a more normal market. In Melbourne, Barry Plant executive director Mike McCarthy said buyers were quick to adjust once they saw other properties passing in, and may not bid as strongly, meaning sellers needed to look at very recent results to work out where their home sat rather than relying on nearby sales from late last year that may no longer be achievable.”
“The Agency chief executive of real estate Matt Lahood said a normal property market was one where there was a buyer for each seller, rather than numerous buyers willing to overextend themselves to win the competition for a property. ‘This thing about having 10 people register and the first bid hitting the reserve that we’d been seeing, we all knew that was unusual,’ he said. ‘People potentially may be re-rated with their buying power as the interest rates continue to rise. They might have a loan application for $1 million today [and] in another [period of time] that $1 million becomes $900,000.’”
The Bamboo Works. “Co-working operator UCommune International Ltd., dubbed the ‘the Chinese WeWork,’ recorded a massive loss of 2.13 billion yuan ($333.7 million) for 2021, the company said. Huge losses in the past years indicate that UCommune’s transition efforts are still falling short. The company has seen losses grow since 2018 and has accumulated 3.92 billion yuan in net losses and has not yet turned a profit.”
“Investor patience is running out. UCommune, which listed on the Nasdaq in November 2020 through a special purpose acquisition company (SPAC), has seen its share price tumble, closing at $3.34 earlier in May, giving the company a valuation of $14.6 million. To avoid being forced to exit the market for a share price consistently below $1, the company combined 20 common shares into one on April 21. So, its share price is already 98% below the closing price on the day of its listing in 2020. Investors who bought in early have suffered major losses.”