It’s Friday desk clearing time for this blogger. “When mortgage rates hit 7% in the fall, Austin-based mortgage broker Aaron Kovac was a little spooked. After a stunning rise in home sales amid ultra-low interest rates, ‘the market just went absolutely silent,’ the 32-year-old, who has been in the mortgage industry for six years, told MarketWatch. As the housing market slump drags on, fear has taken over. ‘This is my first time going through a decline in the real-estate market,’ Kovac said, ‘2022 has been the scariest year of my adult and professional life. It’s the same story everywhere — not just with other lenders, but also with real estate agents,’ he added.”
“Michael Burrage liked Fort Lauderdale ever since his first visit as a college student in the 1970s. Last spring, with the slowdown on the horizon, Mr. Burrage spent $13.45 million to buy three condominiums in the complex’s yacht-shaped building on the Atlantic Ocean. Now, the economic downturn is casting a cloud on this transformation: Home sales in Broward County in November 2022 were down 35% from November 2021, and real-estate listings rose for the fifth straight month. Sales and prices of luxury homes in Fort Lauderdale are declining from record highs in 2021. The average sale price of the city’s homes over $1 million dropped to $2.7 million in November 2022, according to Broward, Palm Beaches & St. Lucie Realtors, an association with several South Florida locations, down from $3.5 million in the red-hot market of November 2021. ‘I thought it was a decent investment, given what happened in other places,’ said Mr. Burrage.”
“Nearly 42% of home sellers gave buyers concessions during the last three months of 2022, according to Redfin. It’s the highest share ever recorded by Redfin, though bear in mind the data only goes back to 2020. ‘Buyers are asking sellers for things that were unheard of during the past few years,’ said Van Welborn, a Redfin real estate agent in Phoenix. ‘It took a while, but seller expectations are coming back down to earth,’ said Welborn. They realize that ‘they’re not going to get $80,000 over asking price like their neighbor did last year.’ San Diego was the city with the highest percentage of sellers giving concessions, at 73% in the fourth quarter of 2022, followed by Phoenix (63%) and Portland, Oregon (62%).”
“It’s a new year and a Las Vegas Home expert says home buyers here in the valley have major leverage when purchasing going into 2023. Jennifer Graff, the founder of New Home Experts says sellers are offering thousands of dollars in incentives. Some sellers are even offering up to 60 to 70 thousand dollars off of homes. ‘A lot of the builders have, especially towards the end of 2022, slashed prices to get those homes off of their books,’ said Graff.”
“Buyers and sellers will find themselves on a more even playing field as D.C.’s market nears more balanced pre-pandemic conditions. A ‘reset of expectations,’ says Harrison Beacher of the Greater Capital Area Association of Realtors, as everyone accepts that the intense bidding wars we saw early in the pandemic are a thing of the past. The 2023 landscape is a return to normal that not everyone wants. Buyers are longing for low interest rates, and sellers are kicking themselves for missing the early pandemic frenzy.”
“Gone are the days of homes selling within a week or two. Prices for homes in the Coachella Valley are dropping, as are sales. The most recent housing report issued by Greater Palm Springs Realtors shows the median price for a detached home in the Coachella Valley fell $26,000 between October and November, standing at $649,000 as 2022 came to a close. ‘Every city has lower sales now compared to a year ago,’ read the report. The largest percentage of sales declines are in the cities of La Quinta, Cathedral City, and Rancho Mirage, while Indio had the smallest sales decline. Sales in Palm Springs have dropped by 43% compared to last year.”
“A mostly vacant office building in Northbrook lost nearly all of its value in just over a decade. A venture of the Phoenix, Arizona-based real estate investment trust Orion Office sold an empty 197,300-square-foot office building to an unnamed buyer for about $2.5 million, Crain’s reported. It last sold in 2011 for $44.3 million, which means Orion lost about 95 percent of its investment. It’s also the latest reminder of the diminishing value of office properties in need of upgrades renovations.”
“The Greater Toronto Area capped off a tumultuous year with its ninth straight month of declining home prices and almost half the sales seen a year ago. Prices have dropped 19 per cent since March, when the declines began, and economists feel they still have further to fall. ‘There is no end in sight for the housing correction,’ Sal Guatieri, a senior economist with BMO Capital Markets, said in a note to investors Thursday.”
“When January and February 2023 numbers are released, ‘it’s going to feel like the sky has fallen,’ Ken Dekker, now president of the 3,900-member Ottawa Real Estate Board, said Thursday. In January, February and March of 2022, prices rose 20 per cent. That’s all gone and then some, Dekker said, so it will make year-to-year comparisons in the coming months look bleak. ‘The media and the public will think the sky is falling. The truth of it is that the sky actually fell last June and kept falling,’ he said. ‘It’s the worst turmoil I’ve seen in 29 years.’”
“Three investors have sought the intervention of Parliament fearing they could lose lifetime savings they put into a project by a real estate firm. In a petition filed by Alego Usonga MP Sam Atandi to the National Assembly, Josephine Awuor, Caroline Atieno and Omondi Abonyo said the company has delayed refunding their money after the housing project failed to take off. The petitioners claimed the company has been trying to sell off its properties and they fear it might dissolve with their money. ‘By the year 2018, some investors who were paying by instalment had each paid in excess of Sh3.9 million during which time it seemed the company had started to experience internal financial problems since no construction ever started,’ the petitioners said.”
“Auckland’s largest real estate agency says its average monthly sales in 2022 were the lowest since 2010. Failures to make sales had also resulted in a glut of properties sitting on the market. The agency had 4664 properties on the books at the end of December – 28% more than in December 2021. The glut was despite new listings in December being down by over 55% on the month before.”
“The Department of Statistics tells us that the total population of Malaysia in 2022 inched up to 32.7 million from 32.6 million in 2021, for an annual population growth of only 0.2%. Are developers hoping to lure foreign retirees from China and the West to fill up empty high-end condos? (Two of those three planned artificial islands in southern Penang Island appear to be aimed at the wealthy.) At present, even existing high-end tower blocks in several developed states are not fully occupied. Johor, Penang and Selangor each has a glut (overhang) of about 5,000 to 6,000 homes.”
“Why is there such a glut? If there is an overhang, it simply means developers are building homes that are too expensive or in unsuitable locations for most people. Unfortunately, this is something that many in government and in certain groups cannot seem to understand – or choose not to. Sometimes unsustainable mega-projects are selected, driven by crony interests – rather than the people’s real needs. Let’s focusing our limited financial and natural resources on infrastructure projects that will truly benefit everyone. The old days of ‘build and they will come’ are over.”