A report from CNBC. “‘I think over the next quarter or two there will be some price discovery as we match up mortgage payments with pricing,’ said Doug Bauer, CEO of Tri Pointe Homes. ‘The consumer, really, it was mid-June that we saw this kind of pullback, that pause. I kidded our sales people the other week that they’d gone from order takers to financial therapist.’”
“‘We have to work harder to sell homes. We have to be more nimble,’ Pulte CEO Ryan Marshall said on a conference call with investors. ‘Home price appreciation has slowed, stopped, or, through the use of incentives, is taking a couple of steps back. Through much of the second quarter, incentives were mostly tied to the mortgage, but this is now expanding to include discounts on options and lot premiums.’”
From ABC 11 in North Carolina. “New home sales have dropped 8% from May to June and more than 17% from June of last year. ‘We are seeing some price reductions, which we haven’t seen that in a couple years now,’ said Compass Realtor Danni Dichito. Ashton Woods recently slashed prices by $20,000 on a number of available townhomes in one development. Other builders are offering as much as $10,000 toward closing costs. ‘It’s been a huge shift, especially throughout COVID. No incentives were being offered to buyers,’ said Dichito.”
From Fox 5 in Georgia. “The deal Is off! Last month alone, it happened 60,000 times nationwide, and it’s happening in Atlanta as well. Just earlier this year, FOX 5 real estate expert John Adams was talking about sellers putting up a for sale sign and getting maybe 10 offers for full price or even above. Now things have changed. Home sales are getting canceled at the highest rate since the start of the COVID-19 pandemic. Buyers aren’t just canceling contracts in Atlanta, they are doing so in record numbers. During the month of June, the U.S. contract failure rate was about 14%. But here in metro Atlanta, we saw contracts fall apart at a might higher rate of 22%, and Adams can’t tell you why.”
The Dallas Morning News in Texas. “When Lori Buckley of Euless logged onto work for her job at First Guaranty Mortgage Corp. on June 24, she wasn’t expecting it to be the last time. She was among more than 400 employees who unexpectedly lost their jobs with the mortgage lender on that day in June, and the company filed for bankruptcy a week later. A few minutes later, her access to the company’s computer system was terminated. Just before the call, Buckley said she was in another meeting to discuss an expansion of the company’s non-qualified mortgage loans.”
“Jay Davies, a senior loan officer based remotely in North Carolina, had been with the company since July 2021 and said he was terminated from the company in not one, but two mass layoffs this year. Up until April, Davies was on a team focused on refinance loans and said it felt like ‘swimming upstream a little bit.’ He was trying to get more purchase loans into his pipeline, reaching out to real estate agents he had worked with in the past.”
“‘It was getting increasingly more difficult to get the refinance [loans],’ Davies said. ‘Not to the point where I felt like the company was in trouble, I thought it was more like, from my own bottom line, I needed to find different streams of revenue.’ In April, he and about 300 other employees lost their jobs, Davies said. ‘I think we all were in shock,’ he said. ‘We had been digging pretty hard to continue to put loans in and find different ways to do things.’”
A press release. “Popular migration destinations where home prices soared during the pandemic are most likely to see the effects of a housing downturn amplified and home prices decline year over year if the economy goes into a recession, according to Redfin. ‘Boise’s market is already turning around, as a lot of the people who moved to Idaho during the pandemic are either moving back to their hometowns or cashing in and moving to more affordable places,’ said Boise Redfin agent Shauna Pendleton. ‘Sellers are asking me if the cash buyers from California are still around, hoping they’ll swoop in and offer to buy their home for more than the asking price–but that’s not happening much anymore, and the cash buyers who are in the market are often offering below the asking price. I don’t expect home values to plummet, but we do need to come down from the clouds at some point and sellers need to adjust their expectations to the new reality.’”
From KPCW on Utah. “‘Well, there for a while, properties would go on, you’d have multiple offers, they would just move quickly,’ said Rene Wood, President of the Park City Board of Realtors. ‘Now sellers need to understand is taking a little bit longer. And they’re kind of panicking, because it’s not happening as quickly as it was their neighbors sold and, you know, had 10 offers in two days. And now that’s not happening.’”
Hawaii Real Estate Dreams. “Kona condo inventory held in the 20s for six months, starting in October of last year. Then in April they moved into the 30s for two months, and now they have moved to 43. That’s double from just a few months ago. House inventory also climbed again this month to 90 in all price points. The really good news for buyers is that inventory under a million is climbing as well. Condos went up to 40 available and houses to 21… yay!”
“Pending sales are telling… in April houses and condos combined had 167 pending sales, today that number is only 116 with inventory not as much of a factor since that is increasing. For the first time since January of 2021, available inventory has risen over the pending sales, a factor of pendings dropping and inventory increasing. This is another sign we are in the midst of a big shift in our market, from a sellers’ market to a buyers’ market, and I would say it is already here and we just don’t know it yet.”
The Bay Area Newsgroup in California. “The Bay Area’s once-scorching pandemic housing market continued to cool in June, with home prices plunging to the largest monthly drop for this time of the year in at least three decades. In June, the median price of existing single-family houses in the nine-county region declined 7% from the previous month — from just over $1.5 million to $1.4 million, according to data for the California Association of Realtors. That’s the steepest May-to-June dip ever recorded in the association’s regional home sales data, which dates back to 1990.”
“Paddy Kehoe, a real estate agent with Compass in the East Bay, said active sellers now have to be more thoughtful about how they put homes on the market. ‘If it is marginally overpriced it’s not going to sell,’ Kehoe said. ‘Today, you have to know 100% what the price should be.’”
From KRON 4 in California. “There’s been a 90-percent jump in foreclosures in the Bay Area since last year. ‘What’s happening is lenders, who granted forbearance during COVID, are now requiring them to come up with all the arrears from the forbearance period, in addition to making their monthly mortgage payment,’ Jason Estavillo, of Estavillo Law Group told KRON 4. He says mortgage companies are requiring homeowners to make a balloon payment, saying to lenders, ‘Even if you make your monthly payment, we’re not going to accept it, until you come up with the arrears.’”
From Curbed New York. “At the weekly foreclosure auctions in Brooklyn, decades are undone in the space of a few minutes. Drew has a lot of friends; the auctions can feel as much like a social club for self-identified entrepreneurs as a staging ground for what might be the worst event of a person’s life. I asked him what brings people to the courthouse, week after week. ‘People come here for opportunity,’ he said. ‘Or out of desperation,’ countered Jonathan, another regular who arrived in New York from Trinidad as a teen and says he flipped his first house in less than 60 days after getting into the game. Jonathan didn’t have much sympathy for people on the losing end of the transaction. ‘How do people lose houses in this market? Does that make sense to you?’ But Drew, glancing at my notebook, was more contrite: ‘People have financial troubles,’ he said.”
The Sudbury Star in Canada. “Sudburians are – on average – paying just over 40 per cent of their monthly income on mortgages — much lower than residents in London (62 per cent), Kitchener-Waterloo (63 per cent), and Hamilton and Barrie (76 per cent). The average homeowner in the Greater Toronto Area is paying all of their monthly income on the mortgage, the report said.”
From CTV News in Canada. “A new report by RBC forecasts housing sales will drop about 40 per cent in the next year, while real estate prices will fall about 12 per cent overall. ‘We are currently down 18 per cent in that time already here in Simcoe County, so does that mean we’ve already reached the floor from their prediction? It’s really hard to say,’ said Luc Woolsey, president of the Barrie and District Association of Realtors.”
The Globe and Mail in Canada. “122 White Spruce Cres., Vaughan, Ont. Asking price: $1,997,000 (May, 2022). Previous asking price: $2,199,500 (April, 2022). Two Toronto buyers set out this spring in search of a new property with a specific list of demands – but a price below $2-million. They visited five options, and the best fit was this five-bedroom house in the Valleys of Thornhill neighbourhood, but it was over their budget. In May, the asking price was dropped below their threshold and their offer $67,000 below that was accepted.”
“‘They saw it back then when it was $2.2-million and really felt they couldn’t afford that kind of number,’ Vadim Vilensky, the buyers’ agent said. ‘It was a crazy time in the area where everything had been selling for over $2.2- or $2.3-million, so we had to be a bit patient finding the right moment to go in with an offer and make it happen.’”
The NL Times. “After years of outbidding being the only way to buy a house in the Netherlands, home seekers can now haggle for a lower price again, brokers said to the Telegraaf. ‘We see that the market is turning. Bids are declining. Viewings are declining. Brokers and consumers just have to get used to it again,’ Gijs van Wijgerden, director of Makelaarsland, said to the newspaper. ‘Our job is getting more fun again. It is no longer just submitting an offer.’”
From ABC Business. “A fast-growing mortgage boycott across dozens of cities in China has prompted some property suppliers to cease their bank loan repayments, raising fears the escalating situation could trigger a further downward spiral in the sector and even threaten the country’s financial stability. Hundreds of landscapers, sculpture-makers and construction companies have expressed their anger that they have been bled dry because some debt-saddled developers did not pay their bills while they continued to service or help build apartments, Chinese media Caixin reported.”
“The ABC has seen one joint statement, circulating on social media, signed by a group of contractors and suppliers of Evergrande in Hubei Province saying they are ‘broke,’ have ‘lost hope’ and will stop paying all loans and arrears. ‘We have been struggling for more than a year, we have sold our assets and cars, and have exhausted our credit cards to pay the bills,’ said the letter, which was addressed to the provincial banks and authorities in Hubei. ‘Now the whole industry is panicking.’”
“Some critics say Beijing’s “three red lines” scheme — which was introduced about two years ago in order to reduce debt within the industry, curb runaway property prices and lift construction standards — has gone too far. ‘Initially it would be potentially a positive thing, it would help prevent the risk of a market bubble,’ Rebecca Choong Wilkins, Asia politics and government correspondent for Bloomberg said. ‘But part of the issue with developers was they did have this extraordinary access to very cheap credit or what was the equivalent of quite cheap credit in the offshore market. So many global investors actually have quite a lot of exposure to Chinese developers via their corporate bonds. And this was once one of the most profitable corporate bond trades in the world that has since been demolished by this crackdown.’”
The Daily Mail. “Avocado growers are pleading with consumers to eat their produce up as Australia is overloaded with the popular fruit, sending prices to an all-time low. Increases in supply have caused a drop in prices at the register to around $1 each – almost 50 per cent compared to the five-year average. The report concluded a significant maturing of trees in the past season, primarily in Western Australia and Queensland, has lead to the national oversupply. A bumper crop in Western Australia was a turning point, with the state’s estimated production up a staggering 265 per cent.”