A report from Forbes. “New home sales unexpectedly plunged much more than economists projected—and for the fourth consecutive month—in April. ‘In short, the party is over,’ Pantheon Macro chief economist Ian Shepherdson said after the report, pointing out the collapse in sales follows a ‘steep downward trend in mortgage applications’ as mortgage rates start to rise.’”
“Bank of America’s Alexander Lin pointed out homes under construction last year exceeded the number of homes built for the first time in history, while the number of homes authorized but not started reached a record high.”
From Fox Business. “Data shows the pace of new home sales fell by 16.6% in April from the month before at a seasonally adjusted rate of 591,000. Analysts surveyed by Refinitiv anticipated a dip of 1.7%. The drop is 26.9% lower than a year ago, and the lowest since April 2020. This is the fourth straight month new home sales have declined. ‘New home months’ supply jumped to 9 months, up from 6.9 months in March and the highest since 2010,’ noted Odeta Kushi, deputy chief economist at First American.”
Better Dwelling. “There was just 9 months of inventory in April, a big jump from the 6.9 months in March 2021. It’s also nearly double the 4.7 months seen in April 2021. US new home buyers haven’t seen this much inventory since May 2010.”
From KXLY on Washington. “For sale signs are up all around Spokane. Realtors say the market is transitioning from active to a slow evenly paced one. Spokane realtor Brad Spears said ‘They’re enjoying a much greater inventory.’ Spears says inventory has doubled now compared to last year. Spears also says a home will spend a longer time on the market.”
From Axios. “Looks like America’s home buying binge is winding down. ‘The buyers just stopped buying,’ said Shauna Pendleton, an agent with Redfin in Boise, Idaho. In the Dallas/Ft. Worth area, Redfin agent Robin Glaysher said five people showed up to an open house last weekend; previously there would’ve been a line out the door. ‘It’s a completely different market now,’ said Glaysher, who works with homes priced around $400,000. The change is a boon for some buyers — like those relying on FHA loans that require only 3.5% down, she said. In the old times they were often outbid by cash buyers, who have now vanished.”
From WTOP on Washington DC. “Now there are signs that the market may be settling down, according to one real estate executive. ‘We’re just getting a sense that it’s slightly cooler right now, we’re still seeing situations where the best properties are getting multiple offers, probably not as many as we had four months ago,’ said Corey Burr, senior vice president at TTR Sotheby’s International Realty. It leaves buyers and sellers adjusting to a ‘new market reality.’ During the peak of things, Burr said it was not uncommon for sellers to have a lot of offers to choose from. However, that isn’t necessarily the case anymore.”
“‘We might have typically seen four to 10 offers on some properties. And now we’re seeing maybe just one to three, but the offers are still very strong,’ Burr said. Another sign of things slowing a bit is more price reductions off list prices and more properties staying on the market past the first week and not selling until the second or third week. For sellers, Burr said that the days of getting sometimes 30% more than the asking price may be going away.”
From Morning Edition. “Some people who’ve signed contracts to buy a new construction home …And so now it’s six months or a year later, and they thought they could buy this house. But now rates are so much higher, and they can’t qualify to get a mortgage. So they can’t buy the house. I talked to Kenny Purcell, a realtor in Spanish Fork, Utah, about this. PURCELL: ‘We’ve had 10 people we’ve been working with that are canceling right now.’”
From ABC 12 on Arizona. “On the surface, it doesn’t make sense. Home prices have skyrocketed in Phoenix climbing hundreds of thousands of dollars. However, some of the companies buying and selling home after home lost millions. iBuyers, like Offerpad, OpenDoor and Zillow, used millions of dollars to buy up homes in the Valley with the hope of selling them later for a profit. However, Zillow and Offerpad lost millions nationwide and the Phoenix market was no exception.”
“According to data provided to 12 News, iBuyers lost money on around 1,900 homes since 2020. Zillow lost at least $100,000 on more than a dozen homes in the Phoenix area over that time. The biggest loss was $192,612 on a home on North 50th Way in Scottsdale. Robert Miller used to own the house on North 50th Way. However, it all changed after he got a call from a friend to see what Zillow would offer. ‘It was an offer online of $585,000 which was $60,000 more than a realtor said it was at the time,’ Miller said.”
“Miller said Zillow then sent an employee out to take pictures of the home for around 15 minutes. A few days later, Zillow bumped up its offer to $662,000. ‘I love the house, I love the neighborhood, but I don’t think it was worth that,’ Miller said. Miller decided to sell. He said the process was easy, he took the money and now rents a house in the same neighborhood. Just 74 days later, Zillow sold the property for $470,000. ‘It kinda made me sick,’ Miller said. ‘My first thought was I wish I had the chance to buy it back for $470,000. I think I was one of the last ones to sell before they just collapsed.’ Miller added.’”
“In essence, the models and algorithms some companies used were wrong. Analysts wonder if the strategy would work if the market wasn’t booming the way it has over the last few years. ‘We’ve seen 50 to 60% appreciation in two years, which is highly unusual,’ Tina Tamboer, a senior analyst at the Cromford Report said. ‘They don’t work in anything other than a seller’s market.’”
From CTN News in Canada. “While home prices in Metro Vancouver remain sky-high, the price for single-family detached homes in two of the region’s fastest-growing markets have seen a significant dip recently, according to one industry group. HouseSigman uses AI to compare historical listings and estimate current values in real-time. Its latest data compared prices from February and May 17, 2022. In Surrey, the average price dropped from $1.9 million to $1.59 million – a decrease of 16.3 per cent. In Langley, the price dropped from $1.75 million to $1.5 million – a decrease of 14.3 per cent.”
From CBC News in Canada. “A couple that bought a house in Sudbury, Ont., sight-unseen with no conditions says they got swept up in a hot housing market and now have major regrets. They’re sharing their story as a cautionary tale to other would-be buyers on the importance of due diligence. Josh Keyes and Yuri Nakashima were excited to be able buy their first home in Sudbury after being priced out of the market in Vancouver. But when they walked into their newly-purchased house earlier this month, they discovered it was far from a dream home.”
“‘Once we opened the door, immediately we started realizing the terrible condition that this place is in,’ Keyes said. Keyes said he and his wife are now facing tens of thousands of dollars in repairs on a property for which they already paid about $60,000 over the asking price.”
“Not wanting to travel across the country to look at homes, the couple worked with a real estate agent at a distance, relying on listing photos to inform their decisions. Keyes said they were advised by their agent that an offer with conditions was unlikely to be accepted, so they waived a home inspection. ‘We felt a lot of pressure because all of the news just kept on saying that housing prices are going up and up, and we don’t know if there will be a turnaround. It might just continue going up and then we’ll be priced out of the housing market forever,’ Keyes said. ‘We felt like this would be our last chance to get a house.’”
“Keyes and Nakashima bought a house in Sudbury’s west end, which Keyes said looked ‘great’ in the listing photos. He said the sellers did not disclose any issues with the house. But when they entered the home for the first time after getting possession in February, they discovered cockroaches, a sewer line that needs to be replaced, gaps under baseboards, and a rotting support beam under the house. ‘The floor is caving in, it’s sinking,’ Keyes said.”
“Keyes and Nakashima said they don’t feel they were advised on proper due diligence, and don’t feel their real estate agent acted in their best interest. ‘Of course a lot of it is our responsibility. But as first time home buyers and us relying on the real estate agent to really guide us through the process, I think she is also responsible, and the seller as well,’ Keyes said. CBC contacted the real estate agent the couple worked with, but did not hear back. Keyes and Nakashima said they are considering their options, and are planning to speak with a lawyer, and possibly file a complaint with the Real Estate Council of Ontario.”