A report from Yahoo Finance. “The buying frenzy of vacation homes witnessed during the pandemic is largely over, as intensifying home prices rapidly cool demand. Demand for vacation homes tumbled for the second month in a row in March. ‘The pandemic-driven surge in sales of vacation homes is coming to an end as mortgage rates rise at their fastest pace in history, causing second-home buyers to back off,’ Redfin Deputy Chief Economist Taylor Marr said in a statement. ‘When rates and prices shoot up so much that a vacation home starts to look more like a burden than a good investment and a fun place to bring your family on the weekends, a lot of prospective buyers have second thoughts.’”
The Orlando Business Journal in Florida. “A few months ago — thanks to the frenzied housing market activity resulting in homes quickly disappearing off the market — Orlando house hunters were willing to give their first-born child with their offer, Realtor Deanna Armel said.Today, that has slowed a bit, the owner and broker of Kissimmee-based Armel Real Estate Inc. told Orlando Business Journal. ‘It’s been a slow transition from craziness. Instead of 25 offers, I’m getting five.’”
From WCAX. “The housing market in Vermont is so tight, that some buyers aren’t even paying inspectors to walk through before putting in an offer. Michael Hickey, the president of the Vermont Association of Realtors says the housing market does seem to be cooling. Previously they would see 12 offers on a home, now it’s more like six. Previously a house would last on the market for a weekend, but now it’s lasting a week.”
From KDKA in Pennsylvania. “A local realtor said there is a glimmer of hope for people looking to buy in Pittsburgh. ‘Inventory is ticking up. Last month, we were around 2,800 homes and right now at 3,500 homes,’ said Bob Friend with Howard Hanna.”
From This Is Reno in Nevada. “We have all heard about it, and now we get a front-row seat to a real life, unscripted Master Class on residential real estate supply and demand. I am a student, just as you are. The market is changing. Supply is super low; demand is high, and the market is on fire, or it used to be! 30 days ago, listings at all but the highest price levels received several offers over asking price in a weekend, and buyers made concessions like skipping most inspections and paying the sellers closing costs to be competitive.”
“Assuming a buyer with good credit wanted to finance a median-priced home in Reno/Sparks with 10% down, the monthly payment increased by $700. That number has a real impact on household budgets and loan underwriting. Today, 13.4% of active MLS listings in Reno-Sparks have a price reduction. Demand is dropping.”
From WFAA-TV in Texas. “Lisa Moya King of Sotheby’s said she’s starting to see a few indications of market ‘softening.’ In ZIP code 75228 in East Dallas, King said she’s seen some price decreases and homes sitting on the market for not just days, but a week or two. And in ZIP code 75233 in southwest Dallas County, King saw a $50,000 price reduction on a five-bedroom, three-bath house.”
The Washington Post. “‘In places like Phoenix, where home prices have shot up by more than 30 percent in a single year, a price decline of 5 percent or 10 percent, if it were to occur, would not create financial stress. Just as a stock price zooming up 30 percent and then giving up some [of the gain] does not cause any financial stress,’ Lawrence Yun, chief economist at the National Association of Realtors said. ‘Only sustained large price declines would be trouble, as happened during 2008 to 2012 with the mortgage implosion and foreclosure crisis.’”
The Akron Beacon Journal in Ohio. “A winning basketball coach with a national house-flipping business is now without a coaching contract as private investors, including a fellow coach at Copley High School, are accusing him of not repaying millions of dollars in loans. ‘My understanding is that people would invest or loan him money — different words can be used. But he was going to use those (funds) to purchase and flip houses,’ said attorney Kyle Shelton, who is representing Senk in the half-million-dollar lawsuit. Shelton said he’s been approached by other investors who also are considering filing lawsuits against Dente for outstanding loans.’For some reason that’s not known to me, he stopped paying on them.’”
From WMAR in Maryland. “A Pikesville man is facing up to 30 years in federal prison for fraudulently getting federal loans on two homes in southeast Baltimore that ended up falling into foreclosure. Philip Abramowitz and others pleaded guilty to conspiring to defraud the Federal Housing Administration by getting an FHA-insured loan in 2016 and 2017 for two houses in the 100 block of North Potomac Street, near Orleans Street. He misrepresented himself to get FHA-insured loans for two of his relatives, who claimed they would be living at the Potomac Street homes.”
“Both properties ultimately fell into foreclosure, after the family members failed to pay down the mortgage. One of the homes, 163 N. Potomac, was rented out for a year before eventually getting foreclosed on. The second home was never used as a primary residence and mortgage payments were never made on it.”
From CTV News in Canada. “Following the collapse of Epic Alliance, one investor learned they were the landlord of a property that no longer existed.Sharon Moormann, a property manager with Western Premium Property Management Inc. had to break the news to many out-of-province landlords that homes they assumed were in good condition — and turning over a profit — were actually in disrepair, vacant, or in one case, didn’t exist any longer. ‘There was a house that had burnt,’ Moormann told CTV News.”
“When investors learned the company was shutting down during a 16-minute zoom call in January, more than 500 properties in Saskatoon went from ‘hassle-free’ investments to headaches. Moormann said the company wasn’t prepared for the influx of homes that were vacant — which according to affidavits filed at Court of Queen’s Bench from former Epic Alliance employees, made up roughly 60 per cent of Epic’s inventory. ‘Many of (the houses) are sold. Many (investors) have turned it back into a rental. ‘The market did get a little flooded,’ she said.”
The Globe and Mail in Canada. “As the real estate market cools the once ubiquitous claim of ‘sold over asking’ is giving way to ‘bought under asking.’ Take for example the social media post shared by Russ Willer, with the Willer Real Estate Group, on April 28, for 179 Lawrence Ave. W., in Toronto: ‘Our buyers were able to secure their first home for 250k under the asking price – what a heck of a deal!!’ The house in question – a charming three-bedroom, two-storey brick home a short walk to the elite private all-girls’ school Havergal College. – was listed for $1.595-million it sold for $1.35-million.”
“Without an offer day, he was able to make the case to the seller’s agent: ‘I don’t want to be insulting, these are the costs; this is what I think it’s worth. And this is about $50,000 more than the appropriate price.’ They said no. And then I get a call back [from the Lawrence Park house sellers] about two weeks later: ‘Are you guys still willing to do this?’ Mr. Willer was only too happy to close the deal, but notes that it’s perhaps the first time in five years he’s received such a call, dating back to the last major price correction in Greater Toronto Area real estate in 2017.”
“‘The people that are speculating and looking for short-term gain … those are the people that are really going to have trouble; those people pushing themselves and taking on two or three loans,’ he said. But the reality that the peak is long gone hasn’t set in for everyone. He recalls one recent meeting with a potential client who bought a condo in 2017 for $2-million and demanded he list it for $3.5-million, when comparable sales in the building weren’t even $3-million. ‘She said ‘I need to make at least a million dollars, otherwise I’m not selling.’ Okay, bye! I’m fortunate to be in the position where I don’t need to waste my marketing dollars. When you’re ready to be a serious seller, I’m here for you.’”
The Daily Mail. “Upmarket suburbs close to Australia’s big cities are suffering the biggest decline in house prices with more interest rate rises expected. In the other markets, where overall prices are still rising, some upmarket suburbs with seven-figure price tags are now suffering a decline, with inner-city houses in Hobart, Perth and Brisbane falling in value. CoreLogic head of research Eliza Owen said wealthier suburbs that benefited from the boom were more likely to suffer a bigger downturn.”
“‘These are also areas that have experienced some of the most extraordinary gains through the cycle, and have been a bellwether for other parts of the market historically,’ she said. At Beaconsfield, just 5km south of Sydney’s city centre, median house prices have plunged by 8.5 per cent in three months, or $168,263, to $1.808million. Nearby Darlinghurst saw its mid-point house price plummet by 8.3 per cent, or $206,944, to $2.282million.”
From News Talk New Zealand. “Tauranga’s Oceanside Homes is in liquidation with a $518,000 shortfall, leaving two homes unfinished and a long list of creditors. The first liquidator’s report was out yesterday. Many builders had increasing stock credit with their merchants which put those outlets under pressure. ‘With the triple CFFCA rules, buyers can’t get access to credit and can’t commit to buying apartments or buildings off the plan. They can’t get a long-term commitment for financing. So it makes it even the buying market now so much more difficult. House prices are coming off because people can’t get access to credit,’ said Andrew Bayly, National’s building and construction spokesman.”
“Bayly said developers two years ago could have got a project away with 50 per cent of people buying off the plans. But now banks were saying they’re not going to lend to developers on that basis. ‘So where do they go for money? High-priced property lenders but most of them can’t get money so an increasing number of developments are coming on to the market.’”
From Bloomberg. “Hundreds of people took to the streets of the largest city in China’s Henan province this week, calling on authorities to ensure the return of tens of billions of yuan invested in what could be one of the nation’s largest financial scams. Protesters gathered outside the local office of the China Banking and Insurance Regulatory Commission on Monday in Zhengzhou city, carrying signs that read “Return my savings,” according to half a dozen people familiar with the matter, who asked not to be named discussing a sensitive subject. The crowd was dispersed by police and told to return home as soon as possible, the people said.”
“‘Waiting is very painful since we haven’t received any response on how regulators will deal with our savings,’ said Chris, who bought about 400,000 yuan ($59,693) worth of deposit products from one of the banks. ‘What’s worse, we are quite concerned that our savings would be regarded as illegal investment products.’ Chris asked to only be identified by her first name as she fears reprisal for speaking publicly.”