A report from Realtor.com. “The red-hot housing market has been brought to its knees by soaring mortgage interest rates. ‘No one wants to catch a falling knife,’ says economist Yelena Maleyev of KPMG US. ‘No one wants to buy in a market when prices are falling. You want to wait it out.’”
From CNBC. “New U.S. home listings in the month, through Nov. 6, were down 17.5% compared to the same period a year earlier, according to Redfin, a real estate brokerage. The typical sales price, $359,000, was down over 8% from its $392,000 peak in June, according to Redfin.”
The Boston Herald. “The Massachusetts housing market kept rapidly cooling through October, according to newly released Massachusetts Association of Realtors reports. Single family home sales plummeted 22% for the month compared to October 2021, the reports detailed, while prices took a steeper 4% tumble from September. Prices have been on a modest downward trend since summer, going from the $626,000 median single-family home price peak in June to $547,000 last month.”
From Boston.com. “Amid this climate, sales have gone off a cliff. ‘Sellers are increasingly cutting prices and offering concessions to attract a greater number of buyers,’ the Massachusetts Association of Realtors said. Drilling down into the town-by-town sales numbers, the median condo price in Boston proper was down 6.8% year over year in October, steady in Cambridge, and 5.4% less in Quincy. In Newton, the median single-family home price slipped 4.7% year over year, while next door in Needham, prices plummeted 33.7%. That’s based on six fewer home sales, but let that sink in.”
“‘The market has started to normalize. The days of waiving home inspections, multiple offers with intense bidding wars, and properties selling before they’ve been listed or shown are over,’ said Melvin A. Vieira Jr., GBAR president. ‘Buyers now have room for negotiation and are proceeding much more cautiously. As a result, we’re seeing more price adjustments and longer listing times before a sale. The rapid, double-digit annual price gains that were occurring as recently as this spring have come to an end.’”
The Orlando Sentinel in Florida. “Orlando’s housing market has slowed to a crawl with home prices and sales essentially flat in October and inventory continuing to inch up, according to a new report. Inventory rose 3.5% to 7,128, the eighth straight month of increases and more than double the amount year over year. Inventory has been clawing its way back from a historically low point over the past two years, something Altamonte Springs-based real estate agent Joseph Pacholski says is gradually returning Orlando’s market to normal.”
“Slow is something of a watchword these days, Pacholski said. Where once homes were getting multiple offers the first day they were listed, ‘those days seem to have disappeared,’ he said. Homes spent an average of 38 days on market in October, according to the association report, up from 31 days in September and 20 days at the peak of the market in June. ‘The sellers are frozen in time,’ Pacholski said.”
From Candy’s Dirt. “Amid the backdrop of high inflation, elevated mortgage rates, and slowing sales activity, severely limited housing inventory will prevent large home price drops for most of the country next year, according to NAR Chief Economist Lawrence Yun. ‘For most parts of the country, home prices are holding steady since available inventory is extremely low,’ Yun said. ‘Some places are experiencing price gains, while some places, most notably in California, are seeing prices pull back.’”
From Fortune.com. “Back in July, Redfin paid $610,000 for this two-bedroom single-family home in Las Vegas. Just weeks later, Redfin put it back on the market with a $674,900 price tag. However, it was too late: Las Vegas was already slipping into a home price correction. Fast-forward to November, and the property remains unsold with a $499,900 list price—or -18% below its purchase price. Flippers and homebuilders are scrambling to move inventory in markets like Las Vegas—where home values are down -6.93% since its 2022 peak.”
“Among the country’s 400 biggest housing markets, 219 have seen home values fall off their 2022 peak. The average decline being -2%. High-cost markets along the West Coast. Places like San Francisco (where home values are down -8.18%), Santa Cruz (-7.58%), and Seattle (-6.28%). According to John Burns Real Estate Consulting, those markets are hyper mortgage rate sensitive. In many cases, they’re hit by a double whammy: Not only are their high-end real estate markets more rate-sensitive, but so are their tech sectors. Between March 2020 and May 2022, Austin saw its home values soar 75.36%. Since, it has taken a -10.21% hair cut.”
Bisnow Dallas Fort Worth in Texas. “By nearly all measures, Dallas-Fort Worth’s retail market is on the upswing. But toiling behind the scenes is a scrappy gang of tenants, landlords and brokers scrambling to make the numbers work as rising costs threaten to snuff out deals. Now, as consumers tighten their belts, those rates are increasingly unsustainable. ‘Inflation is cannibalizing disposable incomes,’ RSC Real Estate Advisors Managing Director Ed Coury said. ‘If you’ve just opened a new store, and you overpaid, or you paid based on very elevated sales expectations, you could be sitting there going, the consumers are not shopping like they were. They’re spending their money elsewhere.’”
“Solutions for getting cash-strapped tenants through the door have become essential as inflation intensifies and interest rates go up, said Phillip Hooks Jr., a partner at retail brokerage and development firm Advisors Commercial Real Estate. As demand wanes and the delivery of new product slows, Hooks expect rents to come down, which will provide much-needed cost relief for all parties involved. ‘I think it levels out,’ he said. ‘There’s still a lot of deals being done in the marketplace right now. But once those deals are finally executed, you’ll start to really see a slowdown.’”
From CBC News. “Canada’s housing market continued its slowdown last month, with the volume of home sales down by more than a third compared to the boom times of last year — and prices down by almost 10 per cent since then, too. The Canadian Real Estate Association, which represents Realtors, said Tuesday that the national average selling price of a home that sold in October went for $644,643. That’s down by 9.9 per cent compared to the same month a year earlier, and down by even more from the peak of $816,720 in February 2022.”
“That was before the Bank of Canada began its aggressive campaign of hiking interest rates to rein in inflation. The central bank has raised its benchmark rate a half dozen times since then, and the impact on the housing market has been dramatic. Average selling prices are down by more than 20 per cent since February, with prices down in just about every market across the country, or flat in a few.”
“Sid Joshi bought a townhouse in Stittsville, a suburb of Ottawa, in February for about $400,000. Prior to the pandemic, the home he bought probably would have only cost about $300,000, but he found the courage to buy because he wanted to start building equity, and he could easily afford the mortgage payment. ‘When I bought the the condo, the interest rates were 1.2 per cent, so my monthly payment was still manageable [at] $1,400 per month,’ he said.”
“But the loan he agreed to was a variable rate one, and within weeks, his payment starting going up with each Bank of Canada rate hike. He’s now paying more than $2,100 a month, and even worse for him, he thinks his home might only fetch $360,000, based on recent sales. ‘It’s very discouraging and I regret my decision of buying this property,’ he said. ‘I should have waited.’ His tale is likely familiar to many Canadians who bought during the pandemic, when record-low interest rates poured gasoline on to the red-hot housing market, driving prices higher.”
“‘This was the quietest for unit volumes since the economy was climbing out of recession in 2010,’ BMO economist Robert Kavcic noted.’Tumbleweeds continued to blow across the Canadian housing market in October,’ he said. ‘But it could be worse.’”
The Globe and Mail. “The Bank of Canada will report its first financial loss in its 87-year history in the coming weeks. The central bank is expecting total losses of between $5-billion and $6-billion over the next few years, spokesperson Paul Badertscher said. ‘Roughly estimated, the bank should return to positive net interest income sometime in 2024 or 2025,’ he added. The Bank of Canada is not alone. Central banks around the world have begun reporting large losses in recent months as they wind down pandemic-era bond buying programs, while also rapidly raising interest rates to combat high inflation.”
“The losses are an unintended consequence of the central bank’s quantitative easing (QE) program, a monetary policy tool aimed at holding down interest rates, which caused its balance sheet to balloon during the pandemic. Other central banks have already begun reporting losses – both net interest losses and direct losses from selling bonds whose value has dropped as interest rates have risen. In September, the Reserve Bank of Australia recorded an 36.7-billion Australian dollar accounting loss for the year, leaving it with a negative-equity position of 12.4-billion Australian dollars. In October, the British government earmarked more than £11-billion to transfer to the Bank of England, to cover its losses.”
“Returning to profitability means rebalancing the central bank’s mix of assets and liabilities. That could take some time. If the bank sold its assets outright, it would trigger massive losses totalling some $31-billion, according to its second-quarter financial statements. Bank of Canada Governor Tiff Macklem has said the bank intends to hold bonds to maturity and let the balance sheet shrink over time.”
From ABC Business. “Regions that became pandemic property ‘hotspots’ have led sharp falls in Queensland’s housing market in the latest quarter, new data has revealed. CoreLogic’s regional market update reported sharp declines in the price of houses in some of Australia’s most popular regional markets in the three months to October. The Sunshine Coast recorded the highest fall in regional Queensland, down 7.1 per cent, followed by the Gold Coast, where house prices dropped by 6.4 per cent.”
“CoreLogic’s head of research in Australia, Eliza Owens, said house prices across regional Queensland suffered a downturn over the past quarter, declining by 5 per cent overall from a peak in June. ‘That high-end expensive, lifestyle area of the regional Queensland market is really now leading a decline,’ she said.”
From Vietnam.net. “Some brokers are offering unprecedented prices for shophouses in a project in the southern province of Dong Nai, with prices 50 percent lower than primary prices. For example, products with an initial price of VND15 billion are being offered at VND7.5 billion, and VND13 billion products are now priced at VND6 billion. However, to get the price, buyers have to pay up to 95 percent immediately.”
“An apartment project in Thu Duc City (HCM City) is being offered for VND70 million per 1sqm. For a 70sqm apartment of VND5 billion, if buyers pay 51 percent of the value immediately, they will enjoy discounts worth VND830 million. The developer will pay an interest rate of 24 percent on early payment amounts to buyers until they receive the apartment. If buyers pay 98 percent of the value immediately, they will enjoy a discount of 45 percent.”
“For buyers of apartments of a project in the southern province of Binh Duong, they will get 1,000 sqm of land in the Central Highlands province of Gia Lai as gifts if they buy from two apartments. This policy is for the first 20 customers. Many other real estate developers in HCM City and southern provinces also offer similar policies to attract buyers. The prices offered by brokers are usually 10-20 percent lower than the original prices.”
“Also, individual investors have lowered housing prices. N, who bought a 60sqm apartment for VND2.2 billion two years ago, is offering the apartment at the same price but he has not found a buyer. Tran Khanh Quang, a real estate expert, said realtors have had to slash selling prices because they need cash, as credit and bond issuance has tightened. Loan interest rates have increased, while liquidity has decreased over the past few months. For a discount rate of up to 50 percent offered by some distributors, Dinh The Hien, a respected expert, said that real estate firms can still make a profit but speculators may take a loss.”
From Reuters. “South Korea’s housing prices fell at the sharpest rate in at least 19 years in October. In the capital Seoul, apartment prices declined 1.24%, the fastest since December 2008, extending losses to a ninth straight month. The national index for apartment transaction prices dropped 7.13% during the January-September period, on track for the biggest annual decline since that data was introduced in 2006. Over the past five years, Seoul home prices more than doubled in what began as a stimulus-fuelled search for homes and turned into a national pastime, even as heavier loan restrictions threw many millennials into financial distress.”