A report from CNBC. “The inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June. In June, the number of homes for sale that had not yet been started hit an all-time high.”
From Barron‘s. “Sales of new homes in the United States dropped for a third straight month in June, even as prices dipped from their record high and supply increased, government data said. ‘Demand is mean-reverting to its pre-Covid pace, after the dash to the suburbs triggered by the start of the pandemic,’ Ian Shepherdson of Pantheon Macroeconomics said. ‘We hope that a sustained strengthening in the labor market will boost activity again later in the year, but today’s data should be the final nail in the coffin of the ‘housing boom’ narrative in the media.’”
The Review Journal in Nevada. “Las Vegas homebuilders’ sales activity slid further last month as house hunters again paid record-high prices for new construction. Many people continue to wonder if the recent slowdown in builders’ sales activity, locally and nationally, is a ‘worrisome trend’ or simply a coming-back-down-to-Earth situation, Las Vegas-based Home Builders Research President Andrew Smith wrote. ‘We tend to lean toward the latter,’ he added. As seen in Smith’s report, however, homebuilders’ sales totals kept sliding last month as prices kept escalating as buyer traffic to new subdivisions ‘steadily decreased throughout’ the second quarter.”
From USA Today. “Despite housing demand booming during the pandemic, foreign homebuyers in the U.S. have steadily declined for the fourth year in a row. Foreign buyers purchased $54.4 billion in existing U.S. homes from April 2020 through March 2021, a 27% decrease from the previous year and the lowest in a decade, according to a new report from the National Association of Realtors.”
“Both dollar and sales volume are the lowest since 2011, when the figures totaled $66.4 billion and 210,800 properties sold. China, Canada, India, Mexico and the United Kingdom were the top five countries of origin by U.S. residential sales dollar volume. Each country saw a drastic drop of 50% in dollar volume from the previous year.”
From DS News. “Real estate investors during the second quarter of 2021 purchased more homes than ever recorded by Redfin.com, which has been tracking that metric for 20+ years. Investors paid an average $439,600 per home, about 24% higher than a year earlier. One of every six homes, approximately, was sold to an investor in Q2. That is 15.9% of the market share, which is just a hair short of the 16.1% record hit in Q1 2020. ‘With housing values consistently on the rise, solid returns are pretty uch guaranteed—especially when you’re an investor who has access to extremely cheap debt,’ Redfin Senior Economist Sheharyar Bokhari said.”
From WTOP on Washington DC. “The median price of a house, row house or condo that sold in D.C. in June was $700,000, the highest median selling price for the District on record. ‘People buy the payment. They don’t buy the price. They don’t necessarily care how much a house costs, but they care about how much it will cost them per month,’ said Larry Foster, president of Long & Foster Real Estate.”
From WJLA. “Vacant properties can be found all across the District, with neighbors describing the buildings as eyesores and dumping sites. ‘DCRA says there are over 3,000 properties in the city,’ said Chairman Phil Mendelson. Mendelson is calling on the Department of Consumer and Regulatory Affairs (DCRA) to reduce the number of vacant/blighted homes across the city, by better enforcing the city’s current laws. ‘This is not about collecting more money to the city, this is about using our tax structure as financial pressure on property owners, who are letting their properties sit vacant for years.’”
The New York Post on California. “Fallen power couple Erika Jayne and Tom Girardi have been forced to slash the price of their marital home once again after three months on the market without any offers. Initially listed for $13 million on May 5, the four-bedroom and nine-bathroom mansion received its first price cut one month later to $11.5 million. On Friday, the price reduced by another $1.5 million and is now listed at $9.98 million. The home today is valued at $11 million, which means any potential buyer would be scoring a bargain.”
“The property is in high contention by the Los Angeles federal court, since Girardi has been ordered to move out in 20 days, once the mansion goes under contract, according to the bankruptcy deal cited in court documents.”
The Real Deal on New York. “The $30 million condo unit high atop East 57th Street sits empty, stripped of its furniture and possibly abandoned. The mortgage on the 72nd floor residence at 432 Park Avenue is in default, its guarantor appears to be in custody in China and the unit owner’s identity is uncertain. Now the firm that owns the debt wants to seize the 4,000-square-foot property on Billionaires’ Row, where high-end real estate purchases are often shrouded behind layers of LLCs.”
“In May, Maverick Real Estate Partners bought the $13.75 million mortgage from China Citic Bank, property records show. Just over $1 million of the principal loan has been repaid, according to the lawsuit. But exactly who owes that money remains something of a mystery — that has been the case with other high-end condo purchases on Billionaires’ Row and around Manhattan.”
The Georgian Straight in Canada. “Earlier this year, Vancouver realtor Adam Chahl talked about the frustrations of buyers in the hot housing market. Chahl’s client at the time had lost in a bidding war, wherein a total of 42 buyers submitted offers for a detached home in Burnaby. ‘I wonder if we’re going to see almost a buyer’s fatigue set in, where people say, ‘You know what? Forget it. We’re not going to shop anymore. We’re just going to wait and see what’s going to happen till things calm down,’ Chahl told Straight in a phone interview in March.”
“Chahl knew what he was talking about. A recent report notes that real-estate markets across Canada are showing ‘signs of moderating nationally.’ Guess what are the things causing the decline? ‘The current market slowdown, partly due to buyer fatigue, has started to manifest in the housing market, with fewer buyers ready to engage in bidding wars,’ Statistics Canada stated in a report dated July 21, 2021.”
“These trends are reflected in B.C. The B.C. Real Estate Association has reported that sales and prices across the province dropped for the third month in June after the market peaked in March 2021. In its July 21, 2021 report, Statistics Canada projected that home prices may see more declines. ‘Further decreases in home prices may be observed in the fall if the number of sales continues to decrease faster than available listings,’ the agency noted.”
From Business Daily Africa. “Defaults on mortgages jumped 48 percent to Sh70.5 billion in the year to March, pointing to widespread distress in real estate in the wake of Covid-19 economic hardships as property auctions pick up. Latest Central Bank of Kenya (CBK) data shows that mortgages recorded the highest growth in non-performing loans (NPLs) from Sh47.5 billion in March last year, reflecting the struggle by investors to find buyers for their houses amid dwindling returns.”
“This has seen workers who took mortgages on the strength of their pay slips default. The slowdown in real estate is hurting property developers who are finding it difficult to sell units that were built on loans. Banks that had gone slow on property seizures last year following the pandemic have stepped up debt recovery efforts to clean up their loan books, leading to a spike in auctions.”
“But the auctioneers are not selling as fast as they are repossessing due to the minimum bid price, leaving a glut of repossessed vehicles, land, houses and office equipment as cash-strapped buyers seek to buy the properties cheaply and at outsized discounts.”
From Domain News in Australia. “Despite rents generally soaring across the country over the last five years, there are still spots in most capital cities where it’s possible to find rents that have actually fallen since 2016 – and sometimes spectacularly. Rents in one suburb of a city plunged by nearly half over the period, in another they fell by over one-third, and in another by over a quarter, according to the latest quarterly Domain Rent Report.”
“The disruption and economic changes have caused some rents to rise, and others to absolutely plummet. Those seeking the biggest bargains could do a lot worse than checking out houses in the city centre of Darwin, for instance, where rents are, on average, an astonishing 42.7 per cent cheaper than they were five years ago. Today, they sit at just $430 a week.”
“But the next city to endure such heart-warming – or heart-breaking – falls, depending on whether you’re a tenant or a landlord, is Sydney. Even though rents have hit dizzy levels in some suburbs, in others, they’ve hit rock bottom. Units in Millers Point, for instance, in the newly bijou area of the city after Housing Commission tenants were moved on, have crashed by 33.8 per cent to $660 a week. In the south west’s Canterbury-Bankstown, Bass Hill rents have fallen by 29.1 per cent to $433, and in North Ryde on the Upper North Shore, they’re 29 per cent cheaper at $477.”
From Stuff New Zealand. “Queenstown ratepayers could be stung for more than $120 million to fix a leaky apartment complex. The body corporate for owners of the Oak Shores apartments launched legal action against the Queenstown Lakes District Council in 2015 over water and structural issues at the waterfront site.The estimated repair costs for extensive building faults – including to balconies, roofs, cladding and bathrooms – have since ballooned to about $120m. The owners are also seeking costs for lost rental returns, and moving, storage and cleaning costs, which could bring the total bill to $140m.”
“Body corporate chairman Graeme Kruger said the situation had been ‘horrific’ for the 74-odd owners. ‘It’s broken owners’ hearts.’ The 84 units were owned by a mixture of New Zealanders and people from overseas, and many had been forced into mortgagee sales, he said. Some apartments purchased for $1.2m were sold for $460,000, while other owners simply walked away. Kruger had been forced to sell his New Zealand home and move to Australia in search of a higher paying job to meet the costs. ‘I’m not a corporate investor.’”