A report from the Indianapolis Star. “IndyStar sat down with Jim Litten, who has 50 years of real estate experience. ‘We’re seeing tremendous price escalation. Prices last year went up about 16% in our market. I don’t see that moderating a bit. I can remember five years ago, what we’re experiencing (now) was a common occurrence in the San Francisco, California, market. I thought, ‘We’ll never see that happen here in Indiana.’ Well, you got to be careful what you say, because that very thing has happened right now.’”
The San Francisco Chronicle in California. “A stunning swath of Bay Area land on the southeastern tip of the Tiburon Peninsula has received a whopping $32 million price cut a year after a feud over access to trails on the property. At the time, the land was listed for $95 million by Sotheby’s, but after 18 months and no sale, the big price cut this week is looking again to entice buyers. That came after an initial price point of $110 million, meaning the list price is now $47 million lower than originally offered.”
The Boston Globe. “Falling inventory and rising interest rates have combined to slow the region’s housing market this winter, with sales dropping and meteoric price growth showing signs of reaching a plateau. That’s according to figures from the Greater Boston Association of Realtors, which tracks sales in 64 cities and towns in Eastern Massachusetts. It’s a sign that prices, which have shot up since the housing market re-opened in the spring of 2020, may finally have grown too rich for local buyers, especially when coupled with mortgage interest rates that — while still low by historic standards — have jumped on average six-tenths of a point since late December.”
“‘It’s unclear if prices have reached their ceiling, but we’ve certainly seen more buyers pumping the brakes, rather than overextend themselves financially,’ said GBAR president Melvin Vieira Jr., an agent at RE/MAX Destiny in Cambridge. ‘A steady rise in interest rates this year could also stifle market activity and limit how much home one can buy.’”
The Orlando Sentinel in Florida. “Home prices in Orlando fell last month, the first dip since September, despite inventory hitting another record low, according to the latest housing report. Jeremy Wood, an agent with Keller Williams Heritage Realty in Altamonte Springs, says the price drop might be coming from property appraisers putting the kibosh on overzealous sellers. ‘Someone might list their house at $500,000, but the appraisal comes in at $420,000,’ he said. ‘When the appraisal comes in, the lender can only go that high. People are negotiating prices still over appraisal but less than asking price.’”
From Bloomberg. “The 15-room Manhattan condo where exiled Chinese tycoon Guo Wengui has lived for years is on sale for $45 million, about $23 million less than it was purchased for in 2015. The potential loss is yet another example of the turnaround in fortunes for Chinese investors who once fueled New York’s luxury real estate market. Ultra-wealthy tycoon Whitney Duan was involved in the purchase of a condo in a skinny skyscraper on Park Avenue that is now facing foreclosure, while city records show an entity linked to HNA Group sold properties at a loss in Extell’s One57 building.”
From Yahoo Finance. “‘The ideal situation between now and the summer would be that a huge surge of sellers come forward looking to sell in the spring 2022 market,’ said Shaun Cathcart, Canadian Real Estate Association’s senior economist. ‘If that were to occur, similar to 2021, we’d likely see a massive number of sales take place which would get a lot of frustrated buyers into homeownership, and we’d likely see some cooling off on the price growth side if those offers are spread across more listings.’”
“Rate hikes could also dampen investor appetite for real estate. The Bank of Canada is widely expected to raise its key overnight rate on March 2nd. ‘We have a fundamentally-strong housing market that has been allowed to overheat by too-loose policy,’ said BMO senior economist Robert Kavcic. ‘It’s going to take higher interest rates to alter the market psychology, cool excess demand and price growth. That day is fast approaching.’”
From Stuff New Zealand. “Buyers waiting for a sign that the property market was turning a corner may have received it. The Real Estate Institute’s latest figures show that the number of properties changing hands in January this year was 28.6 per cent fewer than the same time last year. Across New Zealand, 3665 homes were sold last month, compared to 5135 last year. Month-on-month, the drop in sales was 48.2 per cent. On the West Coast, sales were down 55.4 per cent, in Northland they were down 36.6 per cent and in Canterbury 36.4 per cent.”
From Voxy on New Zealand. “In terms of the January month, this is the lowest sales count since records began in 1992 for Nelson, Otago, Taranaki and Manawatu/Whanganui, and the lowest for Tasman since 2000. ‘Many point to access to finance, exacerbated by changes introduced in December to the Credit Contracts and Consumer Finance Act (CCCFA) – currently under review, as having a major impact. This is a sentiment echoed in a survey conducted at the end of January by economist Tony Alexander in collaboration with REINZ, which noted that the predominant concern for buyers is no longer availability of stock but rather financing.’”
“‘While hard evidence is lacking in terms of the impact of the CCCFA, data from Centrix, a New Zealand credit reporting agency, found the percentage of home loan applications that were approved dropped from 39% in October to 30% after December. The longer-term impact will be seen in the numbers of buyers in the market in coming months.’”
The South China Morning Post. “A spate of auditor resignations at Chinese property companies is reigniting concerns about financial transparency in an industry facing a credit squeeze and more than US$60 billion of bond redemptions this year. PwC quit its role at Hopson Development on January 27, citing inadequate access to necessary information, while Deloitte stepped down at China Aoyuan a day earlier, exchange filings showed. Shimao Group’s mainland unit will change its auditor, Shanghai Certified Public Accountant, for the first time in 27 years on January 24.”
“‘Changing auditors just ahead of year-end results, without clear explanation, could imply a deficiency in internal controls,’ said Gao Fan, a credit analyst at S&P Global Ratings. ‘It bolsters our view that Chinese developers need to increase their financial transparency.’”
“Chinese developers have struggled to access new funds as the loan and bond market froze for the highly geared firms. Many have resorted to selling their projects or prized assets at discounted prices. While China’s economic slowdown is not as severe as in 2015, the contraction in the US$1.7 trillion housing market is comparable to the severity seven years ago, according to BCA Research.”
“‘Across the sector, earnings delays are seen to be probable as auditors evaluate builders’ money circulation and liquidity,’ Citigroup analysts wrote in a research note in January. A prolonged delay could hurt its credit standing and the market’s perception of its governance, S&P added.”