A report from Bloomberg. “Zillow, which acquired more than 3,800 homes in the second quarter, will stop pursuing new home purchases as it works through a backlog of properties already in its pipeline. ‘We are beyond operational capacity in our Zillow Offers business and are not taking on additional contracts to purchase homes at this time,’ a spokesperson for Zillow said.”
The Wall Street Journal. “‘Last year and the first half of this year, we were flat out with refis, and the phones wouldn’t stop ringing,’ said Michael Menatian, owner of Sanborn Mortgage Corp. in West Hartford, Conn. ‘That pretty much has ended.’”
The Hartford Courant in Connecticut. “The Hartford area’s red-hot housing market is losing some of its fire. ‘So, it’s definitely slowed — and I don’t mean it’s crashing — it’s slowed from the frenzy,’ said Alison Malkin, head broker at RE/MAX Essentia in Avon. ‘You’re not having bloody wars.’ While the surge in home buying — and the accompanying price gains — was welcome in a state where the home sale market struggled after the recession of the late 2000s, there is the danger that an overheated market can tank.”
The Coeur d’Alene Press in Idaho. “Fall means cooler weather, and, sometimes, cooler prices on the real estate market. East of Atlas Road and just south of Hanley Avenue — three bedroom, 1,600-plus square feet recently remodeled home in Coeur d’Alene Place — down 40K to $599,000 this month. Another home nearby and close to Bluegrass Park with three bedrooms and about 1,350 square feet dropped 26K to $399,000 to start the month and promptly changed its status to ‘pending.’ Strong proof that strategic price cuts work, baby.”
The Desert Sun in California. “A one-year-old, $1.5 billion company is quietly establishing a new way to commercialize the Coachella Valley’s residential real estate market. Pacaso is buying high-end Coachella Valley homes and selling shares in them to investors. The company says the fractional ownership approach makes second-home ownership achievable for a wider range of people, democratizing access to real estate investment and wealth-building.”
“At one home in the Historic Tennis Club neighborhood in Palm Springs, which Pacaso has named ‘Amber’ (the company names all of its properties), this has translated into one-eighth shares selling for $509,000 each, for a total of slightly over $4 million ‘whole home value.’ This price includes roughly $480,000 in ‘Pacaso service fee(s).’ Property records show Pacaso purchased the home in February for $3.35 million.”
“Whether or not Pacaso is found to be a timeshare operation in the St. Helena case, real estate experts said the company and its owners could face several major challenges in the years ahead. ‘As we fast-forward five years, there will be examples, invariably, of things that may have gone south,’ said UCLA real estate and accounting professor Eric Sussman. ‘Stop and think about everything from acquisition, ownership, management, disposition, financing, the sort of lifecycle of transactions and events that happen over time with a real estate asset. Think about all of the issues and challenges that can happen in each of them — and that is when you have a single owner.’”
“Timeshares are notoriously difficult to sell due to a weak market of secondary buyers. This can leave owners trapped paying ongoing — and often growing — expenses for an asset they no longer want.”
The Real Deal on New York. “The price of one of the three retail properties that Ruben Brothers recently acquired from Vornado Realty Trust was just $50 million, less than half of what the real estate investment trust had paid for it, according to property records. The Upper East Side stretch of Madison Avenue has long been one of Manhattan’s most expensive shopping districts, known for sky-high rents and luxury brands. But the pandemic-driven downturn accelerated the troubles of street-level retail stores, and landlords have taken a big hit.”
From Global News in Canada. “‘Prices are normalizing (in Edmonton),’ said Tom Shearer, broker at Royal LePage Noralta Real Estate. ‘There’s realistic pricing happening right now. ‘”
From Caixin Global. “On Oct 7, dozens of homeowners gathered at the sales office of a new residential development in Nanyang demanding refunds. The value of their homes depreciated at least 30 per cent in less than a year since purchase. The average price of housing in a neighbouring project by the same developer dropped more than 40 per cent. Nanyang, a city of nearly 10 million people in central China’s Henan province, is a microcosm of the real estate market in China’s third- and fourth-tier cities.”
“The sector is feeling the pinch of reference price mechanisms set by city governments that limit the amounts that financial institutions can loan to home buyers. In February, Shenzhen set reference prices for pre-owned properties in 3,595 residential compounds and prohibited banks from processing loans at amounts higher than the reference prices. Since then, sales of pre-owned homes in the city declined every month to 1,765 units in September from a normal range of 5,000 to 8,000 a month.”
“Other provincial capitals like Sanya, Chengdu and Xi’an followed Shenzhen. Reference prices of most of the pre-owned properties to be included in the Guangzhou system were cut by 30 per cent-50 per cent from market prices. Many sellers found the reference prices ‘unacceptable’ and have taken a ‘wait-and-see attitude,’ which led to a sharp decline in transactions, said Huang Tao, manager at Centaline Property Agency in Guangdong.”
“Meanwhile, local governments’ land auctions received a cold response. About 27 per cent of land parcels up for sale failed to attract bidders in September, according to CRIC data, the fourth straight month the figure rose. Some cities such as Shanghai and Hangzhou in eastern China’s Zhejiang province, recently halted several planned land auctions. Less than half of the land in the latest auctions in Guangzhou city was sold, and very few lots topped the asking price.”