A report from Money Wise. “‘It’s becoming increasingly clear that the real estate markets are headed for a correction,’ says George Ratiu, senior economist with Realtor.com. In Austin, for example, buyers are regaining bargaining power as sales last month fell 20% and new listings rose by the same amount. ‘When we look at the data across the Austin housing market, it reinforces what we see on a national scale: a combination of cooling demand from the tremendous surge in mortgage rates and rising prices with a noticeable increase in supply,’ Ratiu says.”
Community Impact in Texas. “Local real estate professionals say a more stable housing market could be on the way as data from the Austin Board of Realtors shows median home prices in Round Rock, Pflugerville and Hutto fell slightly in June. The three cities’ combined median price in June remained lower than the city of Austin’s at $615,000 and higher than the broader Central Texas market’s at $475,000. Notably, both those markets experienced similar price drops from May to June.”
“The report also shows a dramatic increase in home inventory, with Round Rock, Pflugerville and Hutto having 933 active listings in June, compared to 498 in May and 309 in June 2021. ‘These numbers are a breath of fresh air for a housing market that has been holding its breath,’ said ABoR President Cord Shiflet. ‘The Austin market is by no means balanced, and it still favors sellers, but buyers have more bargaining power now than at any point since before the pandemic.’”
The Orlando Sentinel in Florida. “For months, residents of Kingswood Manor say squatters turned this house into an ongoing party, a high volume of cars coming and going at all hours, trash strewn about the property and loud gatherings on the front lawn that shattered the peace in one of Orlando’s oldest subdivisions. ‘Squatter houses are definitely something I’m dealing with a lot,’ said Deputy Jacob Snavely of the Orange County Sheriff’s Department. ‘This is a big problem in Orange County. And with foreclosures going up and rental prices going up, it’s definitely expanding.’”
The Press Herald in Maine. “Barbara and Frank Galardo decided to sell their Portland home – a 2003 colonial in a ‘fantastic’ neighborhood – in April. The market was red hot, and it was the perfect time to sell. The house hit the market on June 1, Barbara Galardo said, ‘but by then the cooling process due to rising interest rates and gas prices had already begun.’ Their house sold, and sold quickly, but it wasn’t the dozen-offer, above-asking-price sale that has characterized Maine’s real estate market for the last couple of years. Real estate professionals say this is becoming the norm.”
“Her agent, Laura Sosnowski sent out a ‘coming soon’ notice that the house would be listed in three days. Four hours later, two people showed up at the door, interested in buying that afternoon. Ultimately, Galardo declined and decided to go through with the scheduled open house. ‘Our big fish may have gotten away,’ she said, but the house still sold within five days.”
“Real estate agents across Maine have said they’re experiencing a slowdown in their market areas, said Madeleine Hill, president of the state real estate association. ‘We are beginning to see homes staying on the market for weeks instead of days, price adjustments and fewer buyers competing for new for-sale listings as rising mortgage interest rates have cooled some segments of buyer demand,’ she said.”
From KRDO on Colorado. “State officials created a program to help tenants who struggled to pay rent during the COVID-19 pandemic, and now a similar program is in place for homeowners. Randi Davis, an administrator of the program in El Paso County, said that the state is currently processing applications from February and March, so we could be seeing just the tip of the iceberg — because experts have said that a rising foreclosure rate is a sign that the area’s hot housing market is about to cool off.”
“Davis said that she’s been seeing 10 to 15 new foreclosures filed every week, and that the county is now at 455 foreclosures for the year — three times more than last year.”
Bisnow Washington DC. “Arlington County leaders are preparing for a difficult economic environment for multifamily development. ‘We feel fantastic about the long-term residential in the corridor, we feel great about the long-term retail that’s here as well, but it’s going to be a white-knuckle ride over the next eight months to next year,’ Mill Creek Residencial Managing Director Muffler said.”
The Marin Independent Journal in California. “After breaching the $2 million mark in April and May, the median price of a detached home in Marin slipped to $1.875 million last month. At the same time, the number of all homes sold in Marin — including detached residences, townhomes and condos — fell by more than 25% in June over the prior year. ‘The real estate market in Marin County is clearly slowing down,’ Bob Ravasio, an agent based in Greenbrae said in an email. ‘And, as it continues to slow down, we are, by some measures, in a ‘normal’ or balanced market, which is pretty good!’”
“He said sellers need to adjust to the trend and price their homes accordingly because multiple offers are decreasing and competition is slowing. ‘The craziness of the last two years is declining rapidly, but the bottom is not falling out by any means,’ Ravasio said. ‘If you are thinking of selling your home, the key right now is to price it appropriately, not necessarily what the neighbor got four months ago with 10 offers, but a more ‘normal’ market price.’”
“‘The Bay Area economy started the second quarter strong in April and early May but took a big downturn in June,’ said Kathy Schlegel, a Marin agent with Golden Gate Sotheby’s International Realty. Schlegel said she saw the number of new listings in Marin rise by 27% last month as sellers tried to catch the tail of the rapid rise in home values and demand over the last few years. ‘Many sellers who have waited to sell are now listing their homes to take advantage of their increase in equity due to the high appreciation levels of the past several years,’ she said.”
The Orange County Register in California. “Owners had 20% more homes for sale in Los Angeles and Orange counties inventory in June than 12 months earlier — No. 27 of 50 big metros, says Realtor.com. Inland Empire supply rose 72% — No. 5 of the 50. Price cuts: 15.1% of L.A.-O.C. listings had price reductions — No. 18 in the nation, Realtor.com says. Meanwhile, 19.8% of I.E. listings had price cuts, — No. 7 of the metros.”
The Globe and Mail in Canada. “According to HouseSigma A.I. generated data (which uses MLS and real estate board statistics), the median price of homes in Delta dropped by 28.3 per cent between February and June, followed by Surrey at a 23.4 per cent decrease and Maple Ridge about the same. Vancouver home prices dropped 11.7 per cent and West Vancouver by 11.4 per cent. North Vancouver only saw a 5.6 per cent drop. Overall, Metro Vancouver saw a 13.5 per cent decrease in median home price. Cancellations of listings in Greater Vancouver have gone up by 139.2 per cent since February, according to HouseSigma data.”
“‘People who were fighting to buy houses and putting in stupid prices, now they are saying, ‘the market is going down, I’m going to wait.’ Really? Because you can now buy with subjects, and we don’ t get the unicorns right now,’ says real estate agent Patricia Houlihan , referring to that one buyer who will throw ‘crazy’ money at a property.”
The Daily Mail. “Australia’s most powerful banker repeatedly misled borrowers by implying interest rates would not rise until 2024 before mortgage costs skyrocketed at the fastest pace in almost three decades – something unlikely to hit his own purse strings. Average borrowers are now facing a $1,060-a-month surge in their mortgage repayments by Melbourne Cup Day, compared with what they were paying in May – an added cost bound to hit millions of families hard. But the bank balance of the man responsible, Reserve Bank of Australia governor Philip Lowe, is unlikely to suffer.”
“OCTOBER 2021: ‘It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.The central scenario for the economy is that this condition will not be met before 2024.’AUGUST 2021: ‘The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. The central scenario for the economy is that this condition will not be met before 2024’. JUNE 2021: ‘It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently.’This is unlikely to be until 2024 at the earliest.’”
“Australian borrowers since May have copped three consecutive monthly rate rises – the steepest pace of monetary policy tightening since 1994. This is despite Dr Lowe, as recently as October 5 last year, declaring the cash rate would stay at a record-low of 0.1 per cent until 2024 despite inflation in the June quarter of 2021 climbing to 3.8 per cent. This was triple the March quarter’s 1.1 per cent annual increase.”
From Time Magazine. “A mortgage boycott in China is ‘still multiplying’ and threatens to ‘become much more widespread,’ according to analysts who say the homeowner protest is already affecting 235 property developments in 24 of China’s 31 provinces. It is common for homeowners in China to start making mortgage payments on new properties before they are finished, with their payments helping finance the construction. But many projects are facing delays.”
“‘The boycotts appear to reflect growing concern among home buyers about the ability of indebted developers to deliver the homes they have sold, as well as some discontent about declines in new home prices, which have left many buyers sitting on paper losses,’ Julian Evans-Pritchard, senior China economist at Capital Economics, said in a note.”
“The scale of the problem is huge. Construction halted on around 13 million apartments during the past year alone, according to Capital Economics, and up to $220 billion in mortgage loans are tied to unfinished residential projects, according to a report by Australian bank ANZ. The growing boycotts threaten to worsen the problem, creating a vicious cycle where already struggling developers become even more strapped for cash.”
“Michael Pettis, a senior fellow at the think tank Carnegie Endowment for International Peace, and a professor of finance at Peking University, says that over the past decade Chinese people have bought property with the conviction that prices would only ever rise. ‘That conviction has been shattered,’ he says, ‘and we know from the history of previous property bubbles that once that happens, it is very hard to keep prices from dropping a lot more.’”