A report from the Washington Post. “Q: When we bought our house nearly 27 years ago, we wondered if we were overpaying. It was the mid-1990s, and houses in our neighborhoods of choice were in extremely short supply. The math we did went something like this: If we pay X dollars for the house and then spend Y dollars to renovate (either when we bought or at some point down the line), would the house be worth at least what we put into it when it came time to sell?”
“A: You never know what is in store for housing prices in a particular neighborhood. Until quite recently, on the tiny North Shore of Chicago, houses have been selling for about what the owners paid some 25 years ago. Factor in the money spent for renovations, additions, or just simple maintenance and upkeep, and homeowners lost anywhere from hundreds of thousands of dollars to, in the case of at least several sellers we know, more than $1 million dollars.”
“‘What goes up must come down,’ is a central tenet of investing. And while you do need to live somewhere, buyers must start thinking about what will happen if they buy homes with tiny down payments, interest rates start to rise, other buyers realize they can’t afford those sky-high prices, and then those properties drop 10 percent, 20 percent or even 30 percent in value. Or more.”
From Realtor.com. “Fortunately for buyers, some relief may be on the horizon as the season quickly approaches the best time to buy. In addition to active inventory on the market, the addition of fresh listings entering the market gives buyers more options. The best week historically has added 6% more listings than the average week and 19% more than the start of the year.”
“According to the most recent realtor.com data, 2021 has already surpassed this expectation. As the year has progressed and sellers have gradually returned to the market in growing numbers, the number of fresh listings coming on the market has gradually increased, with the summer consistently bringing over 100,000 new listings to the market for 15 of the last 17 weeks. The best week also represents one of the peak weeks for price reductions throughout the year, with an average of 7.0% of homes seeing price reductions that week. Nationally, this could mean roughly 50,000 homes seeing price reductions this year, based on inventory estimates.”
From Pittsburgh Magazine in Pennsylvania. “The Pittsburgh real estate housing market is still hot, but there are signs showing that you can shop and not get burned. Historically, Pittsburgh has not fallen into the same housing boom/bust cycle that has affected other markets — until now. Driving around the East End, I saw a lot of ‘for sale’ signs go up and stay up for a lot longer than I expected. Is it because of overzealous pricing?”
The Loudoun Times Mirror in Virginia. “Sales activity slowed down modestly in the Loudoun County housing market in July. At the local level the sharpest slowdown in pending sales activity occurred in Purcellville zip code 20132 (-30.3%), Sterling zip code 20165 (-28.8%), and Leesburg zip code 20176 (-23.4%). There were 584 active listings in Loudoun County at the end of July, 44 fewer listings than last year, which is a 7% decrease. A total of 1,130 new listings came onto the market in the county in July.”
From ABC 15 in Arizona. “Buyers have taken drastic steps that include waiving inspections, writing letters to current owners, even offering tens of thousands of dollars above the asking price just to move in. ‘Good news for homebuyers is that sales are decreasing just slightly over the last couple of months,’ said Natalie Campisi, a Mortgage and Housing Analyst with Forbes. With demand down, prices could be following as the supply of homes on the market grows.”
“‘We’re seeing a little more inventory creep on market, which means people are having to get a little more realistic about their pricing,’ said Jan Leighton, President of the Arizona Association of Realtors. Leighton adds that we’re seeing signs of buyers’ fatigue.”
The Jacksonville Business Journal in Florida. “The housing market in Northeast Florida in August was very similar to that in July: full of willing buyers and not a lot from which to choose, according to the latest report from the Northeast Florida Association of Realtors (NEFAR). The median home sales price in the area was $300,000 in August, which was a slight pullback from July when the price was $303,600. The average sales price was $362,699, down from last month’s $381,499.”
“‘Buyer fatigue and summer vacations brought a slight increase in inventory in August, but it is still not enough to balance buyer demand,’ said Missi Howell, president of NEFAR. The most expensive county in the area continues to be St. Johns County with a median home sales price of $430,547 in August — down from $450,500 in July — NEFAR reported.”
“The Northeast Florida Builders Association permit report showed that in August, builders received 1,422 home permits for July in Duval, Clay, Nassau and St. Johns counties. Year to date, the four counties have seen 11,181 residential permits. With three months left to go, the permit total is close to 2020’s final number of 12,555.”
The Star Advertiser in Hawaii. “Home sales continued to mostly boom in August on the neighbor islands, though some steam came out of prices in a few market segments. Data from real estate agent trade associations showed that the number of single-family home and condominium sales last month on Kauai, in Maui County and on Hawaii island rose between 9% and 216% while median sale prices mostly were higher but slipped in a few instances when compared with a year earlier.”
“Perhaps most notable was the single-family home median sale price on Kauai, which took a break from a seven- month run at or above $1 million. In August the figure was $910,000. That represented a 21% gain from $750,000 in the same month of 2020 but was down 30% from the $1.3 million record set in July.”
From Curbed New York. “It took three years and a $10 million price cut, but Steve Mnuchin has finally sold his apartment at 740 Park Avenue. The buyer purchased the apartment for $22.5 million, according to city records. Mnuchin’s apartment was first listed for $32.5 million in 2018 and went through several price cuts, most recently to $25.7 million.”
The Los Angeles Times in California. “‘This house will last forever,’ developer Mohamed Hadid once said about his 30,000-square-foot mega-mansion perched in the hills of Bel-Air. ‘Bel-Air will fall before this will.’ An L.A. court disagreed in 2019, declaring the massive, unfinished structure a ‘danger to the public’ and ordering it to be torn down. Now, the infamous estate on Strada Vecchia Road will be auctioned off to the highest bidder. The auction is the latest, and perhaps final, chapter in a saga that stretches back years filled with criminal charges, government investigations and heated courtroom battles.”
“The doomed home hit the market this year for $8.5 million, with proceeds of the sale going toward its destruction. In court, Hadid’s attorneys said the cost of the tear-down would be $5 million. ‘Essentially, the buyer is getting a piece of dirt in one of the most prestigious markets on the Westside,’ said Todd Wohl, co-founder of Premiere Estates Auction Co., which is handling the sale. ‘The market will decide what it’s worth.’”
The Province in Canada. “If you saw COVID-19 as a golden opportunity to flip a house, your timing was impeccable. Prices soared, flippers cleaned up. Real-estate insiders and observers say the party is probably over. For awhile, at least. ‘I think in the past year-and-a-half since (COVID), house-flipping has been as popular as ever,’ Adam Major, managing broker at Holywell Properties, said. ‘As prices rise, it is easier to make a profit so provided you bought before the summer of 2020 it has been easy money.’”
The Global Times in China. “Secondhand housing markets in several major cities from Beijing to Shanghai to Shenzhen in South China’s Guangdong Province have been hit hard, as regulators moved to tighten regulations to both stabilize the market and prevent major financial risks. With transactions dropping significantly, an increasing number of real estate agents are quitting their jobs, according to several real estate agents focusing on sales of secondhand homes.”
“In Shanghai, a total of 18,000 secondhand housing transactions were made in August in Shanghai, down 40 percent on a yearly basis, the biggest drop so far in 2021, financial news site stcn.com reported on Monday. The sharp drop came after the municipality implemented a new price-evaluation policy targeting local secondhand housing at the beginning of August, according to the report.”
“Analysts noted that real estate market risk and local hidden debt risk are the two major risks that need to be prevented. The sales slump in the secondhand housing market has also hit real estate agencies hard, as many agents have not been able to complete a deal for a long time. A Beijing-based real estate agent told the Global Times that nearly half of his colleagues in his district have quit their jobs. ‘Some agents have been under pressure for not completing even a single deal, so they choose to leave the job,’ he said.”
From Macau Business. “The housing rental market struggles to find its place, influenced by the decrease in number of non-resident employees and gaming-related workers, with rents now 30 percent lower over pre-pandemic period. A 2,000+ square feet four-bedroom flat in casino-hotel-housing complex ‘L’Arc’ would be rented out for as much as MOP55,000 (US$6,875) a month just two years ago. But a recent rental transaction of a similar flat in the same project has made many people in the real estate industry drop their jaws — the latest cost was only MOP17,500 a month. And this is not an isolated case.”
“‘More landlords [this year] are willing to ink contracts for 1-2 years or even three years at a lower price level, as they have to pay mortgages and cannot let their units stay empty forever,’ says Lily Hong from Midland Macau. ‘The rental demand in areas like NAPE and Cotai only just collapsed in the post-pandemic era.’”
The South China Morning Post. “After dangling rebates and freebies to attract buyers, Thai developers are trying out a new strategy to trim their inventory of unsold homes by auctioning them online at deep discounts. Some 120 flats in several projects across the Southeast Asian country will be made available for bidding next month. The flats are expected to be offered at 20 to 40 per cent below their selling prices.”
“The apartments range from studio units to penthouses, starting from HK$388,000 (US$49,893). Among the projects in Bangkok to be included in the promotion are the Maru Ladprao 15 in Chatuchak and Hyde Sukhumvit 11 in Khlong Toei, and Manor Sanambinnam in Nonthaburi district outside the Thai capital. The auction is seen as an attempt by developers to overcome excess supply as buyers disappeared amid an economic slowdown caused by the Covid-19 pandemic. Aseries of political crises and street protests preceding the public-health crisis have also conspired to drive away foreign investors, compounding the industry glut.”
“‘Bangkok has an oversupply of flats where the developers are very keen to actually sell off a certain percentage of stock at a considerable discount,’ said Dave Loo, founder and chief executive officer of the auction site. The developers may contact unsuccessful bidders after the end of auction to offer them some alternative flat units that suit their bidding prices. As such, developers may be able to close more sales as ‘there is a leeway for more negotiations,’ Loo added.”