A report from the Orlando Sentinel in Florida. “Real estate experts say some buyers have dropped out of the hunt. Los Angeles-based real estate investor André Stewart says that more of them should think about holding off. ‘The prices are going to have to come down,’ he said. ‘The prices aren’t the real values of those homes.’ Stewart points to a property he was watching near Clearwater that went from $550,000 in December to asking $900,000 in July. ‘Nothing can support that,’ he said. Even with the market shifting, Stewart said it will be a while before buyers can negotiate fair prices for homes. ‘[Sellers] aren’t ready to take a $100,000 haircut yet because they don’t think they have to,’ he said.”
The Quad City Times in Iowa. “‘We’re turning it back into a healthy market,’ said Kendra Mulcahy with Ruhl & Ruhl Realtors of Davenport. ‘Making any kind of correction from the crazy market (we were in) to being where we (are,) its a better market for buyers and sellers,’ said Sharon Smith, CEO at Quad City Area Realtors. ‘Last year was such a crazy, off-the-charts year, that you just don’t keep going up like that. That was a time in history that does not come around a lot.’”
From KIRO on Washington. “‘Buyers and sellers are reevaluating their one-year plan or two-year plan,’ said Adriano Tori, CEO of RexMont Real Estate. In turn, would-be buyers are stuck as renters and would-be sellers are becoming landlords. Nelya Calev, a real estate agent with John L. Scott Real Estate, said she had a client who recently pulled their listing and opted to rent the property in response to the housing market changes. ‘It didn’t make sense for him to drop his price to where it would sell because of what he paid for it, so we ended up pulling it off the market, renting the home and then we’ll just reevaluate everything a year from now,’ Calev said.”
From CNBC. “Home sellers are getting nervous, as the once-hot housing market cools fast. One in 5 sellers in August dropped their asking price, according to Realtor.com. A year ago that share was just 11%. The average home sold for less than its list price for the first time in over 17 months during the four-week period ended Aug. 28, according to Redfin. The supply of homes for sale is also rising fast, up nearly 27% from a year ago, even as fewer sellers decide to list. Pending sales in July, which represent signed contracts on existing homes and which are the most recent sales data available, were nearly 20% lower than July 2021, according to the National Association of Realtors.”
The Denver Channel in Colorado. “The pendulum is swinging in the Denver metro housing market, now favoring buyers more than it has the past two years. It’s now sellers who are trying to sweeten the pot for buyers. Seller concessions were unheard of six months ago. Now, they are very much part of the homebuying equation in metro Denver and Colorado. ‘Sellers are now willing to work with buyers to make the deal close,’ said Kelly Fogel with HDS Mortgage.”
From Mansion Global. “After a California couple lost bids on 10 homes in a year and a half, real estate agent Kristin Halton thought her clients might be on the verge of giving up. ‘They were getting tired,’ said Ms. Halton, an agent with Douglas Elliman in Newport Beach, California. But this month—just when they were about to call it quits, they found a house they loved. The couple was up against competing offers—but this time, only two others, rather than the dozens of people they’d competed with earlier in the year. They won the offer.”
“It’s a sign that the U.S. housing market is finally turning in buyers’ favor, after months of a hot seller’s market. The luxury market seems to be cooling faster than the overall market, making this fall an ideal time for buyers to strike. Across all price points, the number of properties with price reductions was up 9.7% year over year. But in the top 5% of the market, the number of properties with price reductions was up by 95% on average. ‘The overall market is seeing price cuts—but not nearly to the extent that the luxury market is,’ said George Raitu, an economist for Realtor.com.”
“Buyers will have the best luck in so-called pandemic boomtowns. Boise Idaho, is one such city. In July, 70% of houses for sale dropped their asking price, compared to 30% the year before. The number of single-family homes sold around Boise decreased 33%, and inventory had nearly doubled, according to the Intermountain Multiple Listing Service. And in certain Phoenix ZIP codes, like central and affluent North Scottsdale, the number of homes for sale have more than doubled year over year, according to the Realtor.com report, with median listing prices declining as well.”
“As more condo projects come onto the market around Miami, inventory will increase, and the seller’s market could become a buyer’s market, said David Siddons, an agent with Douglas Elliman in Miami. Mr. Siddons has already been able to use the cooling market to a client’s advantage. Earlier this summer, he had been working with a client who had made a deal to purchase a condo priced over $10 million from a developer. Seeing the market move, he went back to the developer and asked him to shave $1 million off the price. ‘The original conversation was: ‘You’re out of your mind,’ Mr. Siddons recounted. But a month went by, and the developer called back. He took the lower price. ‘I think there’s an awareness with developers that they can’t just keep asking whatever they want in perpetuity,’ Mr. Siddons said.”
The Detroit News. “Home Point Capital Inc., the Ann Arbor-based mortgage lender, is laying off hundreds of people as lenders face increased competition in a shrinking mortgage market. The company that does business as Homepoint is laying off 217 people in November at two offices in Ann Arbor, according to a worker adjustment and retraining notification filed with the state of Michigan on Wednesday. Spokesman Brad Pettiford says the layoffs are happening across the organization and beyond Michigan, though no specific total number of people affected was provided.”
“The layoffs follow Detroit-based Rocket Mortgage, the country’s top mortgage lender that’s a part of Rocket Companies Inc., offering a second round of buyouts to a small percentage of its employees. Rival United Wholesale Mortgage Holdings Corp. in Pontiac has been adamant that it won’t lay off workers, though its workforce has declined from more than 8,000 people to more than 7,000 people in recent months with the company citing ‘natural attrition.’”
The Phoenix Business Journal in Arizona. “Citing a lack of loan production, a 34-year-old Valley financial services company will exit the mortgage business. Ron Martin, the president of Phoenix-based Suburban Mortgage Inc., said in an email to the Business Journal that the operation isn’t shuttering but will focus on its insurance business going forward. ‘After 34 years we decided to conduct an orderly wind-down of our mortgage business,’ he stated. Suburban Mortgage’s decision to close comes on the heels of other mortgage lender layoffs throughout the Valley. A robust housing market in 2020 and 2021 caused firms to hire more employees to keep with demand. As experts say the market has cooled off with mortgage interest rates rising, some of those firms might be overstaffed while fewer transactions are coming in.”
“Scottsdale-based VIP Mortgage Inc. — the top mortgage lender and broker in the Valley — let go of 26 employees at the company. Michael Metz, operations manager for Scottsdale-based VIP Mortgage Inc, said that was because of increased rates have caused refinance volume to plummet, and purchase volume has dipped because of concerns about housing inventory and payment affordability.”
“Over the past few months, large banks such as Wells Fargo & Co. and JPMorgan Chase & Co. have pulled back on their mortgage lending. In June, JPMorgan confirmed it was cutting more than 1,000 employees from its home-lending unit as a result of cyclical changes in the mortgage market.”
From Bloomberg. “Citigroup Inc. joined rivals in trimming the ranks of its mortgage workforce as rising interest rates continue to crimp demand in the housing market. Mortgage application volume has plummeted by more than 50% this year and US pending home sales in July fell to the lowest level since the start of the pandemic. Wells Fargo & Co. is weighing how to shrink its vast mortgage empire, including through job cuts.”
The Windsor Star in Canada. “The average monthly sales price of Windsor area homes fell $37,355 in August compared to the previous month while listings lingered longer on the market as sales plummeted 42 per cent compared to 12 months ago. The average sales price in August was $520,634 compared to $557,989 in July. Average monthly prices have plummeted 28 per cent, or over $203,000, from the peak price of $723,739 in March. August’s average price was also eight per cent lower than the average of $568,253 for August 2021.”
“Even drawing prospective buyers to look at homes is proving a new challenge. Manor Realty broker/general manager Rob Agnew said it’s not uncommon for homes to have no viewings or offers for lengthy periods. The pool of buyers has been diminished, he added, because many can no longer pass the mortgage stress test with the higher interest rates.”
“‘The buyers have scattered to the sidelines and are waiting to see what’s happening with interest rates and whether prices will drop further,’ Agnew said. ‘The number of buyers has dried up dramatically. There are few if any multiple offers anymore.’ Agnew said there’s been a shift in the way homes are being priced and marketed. Listing prices are more closely aligned to where they are expected to sell. ‘You’re see us going back to the old-fashioned ways of doing business,’ Agnew said. ‘Homes are being priced closer to what is fair-market value.’”
From Reuters. “Australia’s housing market downturn is squeezing many home sellers into a double bind: They’ve taken out a mortgage for a new home but are holding out for a good deal on their old place, forcing them also to hold a bridging loan to cover their previous mortgage. And with prices now falling at their fastest pace in four decades, a sharp reversal from the 25% annual price rises seen just a year ago, the durations of those bridging loans are doubling or even quadrupling from their typical three-month span.”
“‘I think there are people who have been caught out,’ said Julie Buchanan, a seller’s agent in Sydney who recently extended a marketing campaign for a high-end property to three months from six weeks, due to lukewarm buyer interest. ‘A lot of them have had to have their price expectations revised,’ she said. ‘If they can’t get the price then bridging finance is something they use to get them over the line. Then they’re potentially holding two properties.’”
“Joe Bennett, a senior lending relationship executive at bridging lender ASCF, said inquiries had risen with interest rates, and the average term of a loan written by his company had ballooned from three months to between six months and a year. ‘Historically when markets are hot they only want that loan for three months because they knew – and it was realistic to assume – that they could list their property this Saturday and have it sold by the following Saturday,’ Bennett said. ‘That’s not happening now.’”
The South China Morning Post. “No one in the financial sector is feeling the pinch more than the small lenders, which account for about a quarter of the country’s total banking assets. This could spell trouble for millions of individual savers, analysts warned. Some 20 per cent of the 45 regional and rural banks listed on stock exchanges suffered a plunge in profits in the first half of 2022, while some saw their non-performing loan ratios deteriorate. It was the poorest half-year performance in years.”
“Li Min, a teacher in Anhui Province, recently opted to withdraw her three-year fixed term deposit of 200,000 yuan due in 2025 early from Bank of Liaoshen, forfeiting some 20,000 yuan in interest. ‘Who knows whether I can get my money back,’ said Li. ‘I do not want to bet my savings. I do not want to be like those miserable protesters in Henan province.’”
“Bank of Liaoshen, the worst performer, booked a negative 1.23 per cent net interest margin, according to calculations by the Post based on data released by the banks. That means the interest the bank is paying on deposits is too high to be covered by the loan interest it receives, leaving no possibility of making a profit. ‘Such a funding structure is no different from drinking from the poisoned chalice,’ said Lee Kaichung, financial institution analyst with Pengyuan Credit Rating International, a Hong Kong-based rating agency.”