A report from KMOV in Missouri. “While winter is a slow time of year, St Louis realtor Cathy Shaw Connely said inventory remains fairly low, despite rising interest rates. ‘Yes, it’s going to affect the amount of house they can buy but prices have dropped as well,’ she said. Those who entered into bidding wars over the last few years, many offering tens of thousands of dollars over the asking price, may not see their return soon, if ever, she said. ‘Those buyers, I can’t see where they’re getting out of it what they put into it, at least right now.’”
KATU Portland in Oregon. “Tim McBratney is a mortgage lender with PacRes Mortgage. McBratney said things have changed since this time last year when a house would list on Saturday and have five offers by Sunday. ‘Sellers are highly motivated right now and we’re seeing sellers willing to pay some concessions such as helping with closing costs. I’ve had sellers pay all of the closing costs, and even additional to buy down the interest rate for a buyer,’ he said.”
KXYZ Detroit in Michigan. “‘Not too long ago, we’re talking eight months ago to a year ago, we’d put a house on the market and it would sell in 10 days and I would receive maybe five offers,’ said Gaston Munoz with Munoz Realty. Munoz says just months ago the average home was selling tens of thousands dollars over asking price as well. However Gaston says low inventory is driving up home prices and higher interest rates significantly slowed things down in the last few months. ‘I think now it’s changing to a buyers market,’ said Munoz. ‘A lot of people are scared of buying a house because the interest rate keeps going up and that is a mistake because now you can buy the house cheaper than you could 6 months of a year ago.’”
The Anchorage Daily News. “This is still a seller’s market, said Larry Burke, president of the Alaska Realtors board. But sales volume has slowed from last year and homes are beginning to sit on the market longer, for a month, he said. Also, for the first time in a few years, sellers are increasingly offering concessions on homes, such as providing help with closing costs or at times reducing the asking price, he said. ‘We’re getting back to a normal market,’ Burke said. ‘It was not normal during the pandemic.’ Now, homes are selling close to their asking price, and multiple offers on homes have become rarer, said D’Ette Owen, president of the Anchorage Board of Realtors. ‘It’s been going through a correction now for the last six months, but it’s not a harsh correction,’ she said.”
The Texas Standard. “It’s not all doom and gloom – and some bright spots may continue into 2023. Adam Perdue, economist with the Texas A&M joined the Standard. ‘Well, so back in December, we heard from Arbor that the city of Austin pricing has already declined on a year-over-year basis through November. And so Austin is the one that’s most at risk just because it saw the highest price appreciation from 2020 and 2021.’”
The San Francisco Chronicle in California. “Real estate in the East Bay was a tale of two markets in 2022. In most respects, the power has shifted to buyers. ‘Houses with inherent flaws — located on busy streets, funky layouts, no off-street parking and/or in need of repairs — are taking longer to sell, need price reductions,’ real estate agent Caitlin Crawford of the Grubb Company told SFGATE.”
From Deseret News. “The music stopped. The lights shut off. The party was over. ‘The cops came,’ quipped Dejan Eskic, senior research fellow at the University of Utah’s Kem C. Gardner Policy Institute, one of Utah’s leading housing experts. ‘The cops came and busted everyone.’ In early 2022, ‘momentum was slowing’ from 2021, but then ‘the faucet just got turned off.’ ‘2021 was on fire, and in 2022 it’s an empty concert hall,’ he said. If rates had risen to around 4.5%, ‘the train would still go. It would slow, but it wouldn’t be stopped like it is now.’”
“After prices peaked in May, Salt Lake County’s median single family home price hit $650,000. As of November, that figure was down to $569,000 — 14% lower than the May peak but still 4% higher than in November of 2021. They do expect 2023 to be a challenging year, especially for homebuilders that leaned hard into speculative building in 2021. ‘Then the rates hit and they were left holding the bag,’ Eskic said.”
From Fortune. “The fear of further price declines underpins many investors’ decision to remain on the sidelines. ‘From December onwards, the expectation from my side is we’ll have another 10% to 15% decline [in home prices] nationally,’ Tejas Joshi, director of single-family residential at Yieldstreet, tells Fortune. Yieldstreet, which owns over 600 U.S. homes, has put their money where their mouth is. In the second half of 2022, Joshi says Yieldstreet reduced its homebuying levels by more than 90% in the face of falling home prices. ‘We’re pretty much on pause across all [home buying] strategies,’ Joshi tells Fortune.”
From CBC News in Canada. “The price of buying a home in Ontario dropped from its lofty heights during the past year. CREA’s benchmark figure for Ontario has since fallen by nearly 20 per cent, but even that sharp decline only takes prices back to the level they were at in September of 2021. One the supply side, many property owners are reluctant to list their properties given how the prices dropped, yet many investors could be forced to sell due to the higher carrying costs of those high interest rates. RBC economist Robert Hogue noted that Toronto-area prices have fallen 18 per cent from their peak and said ‘any further depreciation is likely to be more incremental.’”
The Star Phoenix in Canada. “Nicole Burgess, CEO of the Saskatoon and Region Home Builders’ Association has seen the issues from two sides of the market. First, sales of new homes screeched to a halt in the third quarter of the year with ‘deals are collapsing’ due to soaring interest rates, she said. Banks are not honouring mortgage preapprovals because interest rates have risen so quickly that the arrangements no longer apply.”
“Chris Guérette, CEO of the Saskatchewan Realtors® Association, pointed to another housing policy that may shift in 2023. ‘To me, it’s particularly interesting to hear some of the banks talk about revisiting the (mortgage) stress test,’ she said. Those applying for mortgages must be approved at two points above the going rate, and many business sectors think that’s too high, she said. ‘There are many calling to reduce it to 1.5 or even one,’ she said. In early December, ‘we heard some banks say maybe it’s time to revisit that. If the banks are saying that, to me, that’s an indication that maybe we are not going to see interest rates lower.’”
From Bloomberg. “The drop for home prices in Sweden continued unabated in the last month of the year, suggesting that 2023 could offer little relief for an already troubled housing market. Prices across the country are now down almost 17% since a peak in the spring, according to state-owned mortgage lender SBAB. The worst slump for the market since the 1990s is nearing territory where the 20% forecasts by most economists — including the central bank — are starting to look too conservative.”
“The Nordic country is far from alone in suffering from falling property values. After booming during the pandemic, central bank interest-rate hikes have triggered a real-estate downturn in a number of nations globally, including in Canada, Australia and New Zealand. In the region, home prices are also falling in Denmark, Norway and Finland, albeit at a much slower pace. Should unemployment increase significantly ‘in the wake of the approaching recession,’ it could lead to a ‘very difficult’ situation for the housing market if combined with rising mortgage rates Chief Economist Robert Boije said.”
The Global Property Guide. “The global house price boom is now running out of steam. In Buenos Aires, Argentina, it seems that the house price fall is manageable at 7.11%, however if we adjust for inflation, real prices have actually plummeted by a whopping 49.25%. Europe’s house price boom seems to be over, with only 7 out of the 30 European countries included in our global survey showing stronger momentum in Q3 2022 compared to a year earlier. Key European markets such as UK are losing steam, while Germany, Spain and Italy’s real house prices are now falling.”
“Pacific housing markets, which were previously booming, experienced a sharp turnaround this quarter. House prices in both Australia and New Zealand are now falling, amidst falling property demand. Asian housing market conditions are deteriorating. The Middle East is weakening sharply, with notable house price falls in Egypt, Qatar and Morocco. Latin America’s housing markets continue to struggle, with huge house price falls in Argentina and Colombia. 5 of the 15 markets included in the survey and momentum is also weaker in most Asian countries.”
“The biggest y-o-y house price declines were in Buenos Aires, Argentina (-49.25%), Colombo, Sri Lanka (-31.37%), Bogota, Colombia (-15.9%), Hong Kong (-12.82%), and Riga, Latvia (-12.71%), again using inflation-adjusted figures. Other European housing markets which are also struggling include Kiev, Ukraine with house prices falling by 6.11% y-o-y in Q3 2022, Sweden (-6.09%), Denmark (-5.08%), Finland (-4.96%), Montenegro (-4.76%), Netherlands (-4.49%) and Spain (-4.1%).”
“Sri Lanka is the second weakest housing market in our global house price survey, amidst the country’s ongoing economic crisis. The average price of high-end condominium unit in Colombo fell by a huge 31.37% y-o-y in Q3 2022. Cambodia’s house market continues to struggle, amidst an oversupply of apartments. The average price of high-end condominium units in Phnom Penh fell sharply by 9.09% during the year to Q3 2022, following annual declines of 11.65% in Q2 2022, 20.43% in Q1 2022, 11.38% in Q4 2021, and 11.2% in Q3 2021.”
“Peru’s housing market woes continues with house prices falling by 6.22% during the year to Q3 2022. It followed y-o-y declines of 8.55% in Q2 2022, 8% in Q1 2022, 8.87% in Q4 2021 and 5.58% in Q3 2021. Puerto Rico’s housing market remains weak, with the seasonally-adjusted purchase-only house price index falling by 2.67% in Q3 2022 from a year earlier, following year-on-year declines of 12.67% in Q2 2022 and 6.8% in Q1 2022.”
The Associated Press. “Australia’s property downturn has picked up pace again but Melbourne is the only capital city getting close to erasing the entirety of its pandemic upswing. Home prices plummeted another 1.1 per cent in December, CoreLogic data shows, amounting to a 5.3 per cent total decline in 12 months. The annual decline is the fastest since the global financial crisis, when home values fell 6.4 per cent in 2008. PropTrack economist and report author Anne Flaherty said prices would likely keep falling into 2023. ‘While interest rates are likely to be approaching their peak, the Reserve Bank has signalled the potential for more increases in 2023,’ Ms Flaherty said. ‘Higher interest rates would further erode borrowing capacities and drive prices lower.’”
The Daily Mail. “Wendy, a homeless woman, was candid about the benefits of living on the streets in Portland, including the free meals and ability to use drugs. ‘It’s a piece of cake really that’s why you probably have so many out here really because they feed you three meals a day and don’t have to do sh*** but stay in your tent and party,’ Wendy told Kevin Dahlgren with community engagement organization We Heart Seattle.”