A report from KVUE on Louisiana. “There is a slight shift happening in the housing market. Realtors on the North Shore report a lot of homes returning to the market with reduced pricing, homes under $300k returning to the market due to insurance issues, and fewer people buying due to rising interest and mortgage rates. ‘Before it was like you had to buy it and make a decision within a day,’ said Lisa Martinez, a realtor with ReMax. ‘So I think it is going to correct itself and it’s going to take a little while to do that, but I’m starting to see a turn in the market and it’s not as much as the seller’s market anymore.’”
From AZ Family. “Arizona’s hot housing market is cooling down quickly. In the past 28 days, 11,845 new residential listings were added in the Greater Phoenix area, according to the Cromford Report. ‘We are absolutely in the middle of the shift,’ said Trevor Halpern, a Phoenix-based real estate agent. ‘We are see seeing a rapid cooling of our market. We are seeing a dramatic increase in the number of listings, the highest percentage in the number of listings that we’ve seen since the Cromford Report was tracking that since 2011.’”
The Herald Tribune in Florida. “For the second month in a row, the number of homes for sale in Sarasota and Manatee counties increased, a trend that indicates some cooling of the local housing market, according to a monthly report. Joe Murphy and his wife have been involved with Sarasota real estate for about 20 years. The Coldwell Banker Realty agent said in January and February, the number of new homes entering the market every day was in the single digits. Over the past week, he’s seen 30 or 40 each day come to market.”
From ABC 4. “As Utah’s housing market continues changing, one housing market has seen the largest growth of inventory in the nation — Salt Lake City. According to RE/MAX, Salt Lake City saw a 110% increase in the number of available homes to purchase year-over-year. ‘Transactions naturally fell while both established and new development inventory returned to normal levels in a very short amount of time,’ says Josh Horner with RE/MAX Masters in Salt Lake City.”
“Across the U.S., inventory also grew with the number of homes for sale in May 2022 up 16.3% from April 2022. The five markets that saw the biggest year-over-year increase in 2022 inventory are: Coeur d’Alene, Idaho —111.9%, Salt Lake City, Utah —110.8% , Bozeman, Montana — 92.9% , Denver, Colorado — 81.0%, Las Vegas, Nevada — 72.6%.”
From NBC Bay Area in California. “Something had to give and it turned out to be housing prices. Zillow said back in April less than 5% of homes selling in San Jose took a price cut. By May, sellers cut the prices of more than 8% of the listed homes.”
From Eastsider LA in California. “How Low Will They Go? $56k cut City Terrace Triplex; $51k off on Mount Washington contemporary and $410k chop on Silver Lake Modern. Now asking $2,489,000.”
From Culture Map on Texas. “In a bit of good news, the Austin market saw active listings grow by a whopping 146 percent year-over-year in May, pushing the area’s housing inventory above the one-month mark for the first time in seven months. ‘This slight increase in inventory and active listings point to the market beginning to normalize,’ says Adam Perdue, a research economist at the Real Estate Center at Texas A&M University. ‘Given this growth and continued increases in prices, the sales decline appears to be more likely a supply issue than a demand one and does not indicate a bubble bursting.’”
From The Hill. “‘It’s a perfect storm right now,’ said Jerry Konter, a Savannah, Ga., residential property builder who chairs the National Association of Home Builders. ‘I don’t think I’ve ever seen this many red flags at one time in my entire career.’”
From Bisnow. “Proptech unicorns that raised boatloads of cash and went public with promises to disrupt the multitrillion-dollar commercial real estate industry have seen their valuations plummet in recent months. Six venture capital executives and four proptech startup founders who spoke to Bisnow for this story say the fundraising market today is virtually unrecognizable from last year’s. Some are struggling to raise money to keep operations going — and risk going bankrupt if the market doesn’t improve soon, insiders say. Investors and startup founders say the worst is yet to come.”
“‘Valuations have significantly dropped, and it felt like it was overnight … We’re not seeing 10% drops, we’re seeing 50-plus percent drops,’ JLL Spark partner Laurent Grill said.’There are going to be some companies that may not make it through this, and they would have otherwise because it was such a frothy market.”’
“‘Once it became apparent that interest rates were going to continue to rise … panic set in,’ said Nick Durham, senior associate at a proptech VC firm. Alpaca VC General Partner Ryan Freedman said investors made a mistake during the last cycle by placing tech-sized valuations on companies that don’t have the profit margins or scalability of a tech company. But he said even for high-margin software companies, this is still a difficult time to raise money. ‘The reality is everything’s getting punished right now,’ Freedman said.”
The Globe and Mail. “The average Canadian home has shed 12.9 per cent of its value in just three months, according to the latest Canadian Real Estate Association report. That’s almost 1 per cent a week. If you’re selling a home and not getting any bites, your blood pressure is probably rising – especially if you need the equity from that home to buy a new one. For those in such a pickle, one solution is a bridge loan. That’s where a lender loans you enough money to cover your down payment on a new purchase. But here’s the problem. If you don’t have firm purchase and sale agreements on both your new and existing homes, mainstream lenders usually won’t offer you a bridge.”
“And here’s where it gets tricky. Nonprime bridge lenders usually only lend 75 per cent to 80 per cent of your property to be mortgaged. Although sometimes they’ll secure their bridge mortgage to both properties. Barring a dramatic turnaround in home prices, more Canadians than ever will face problems bridging their purchase and sale. That’s on top of the fact home appraisals are now routinely coming in below estimates.”
“‘The real horror show today is that we’re running into roughly 1 in 30 purchasers in the GTA where the sale of their existing home simply fails,’ says veteran mortgage broker Ron Butler, of Butler Mortgage. Buyers are defaulting on unconditional purchase obligations because they’re financially tapped out. You’ll hear more tales of buyers walking away from deposits, and getting sued, in the months to come.”
From Bloomberg. “As central banks around the globe rapidly increase interest rates, soaring borrowing costs mean people who were already stretching to buy property are finally reaching their limits. The effects are being seen in countries such as Canada, the US and New Zealand, where once-hot residential real estate markets have suddenly turned cold. An analysis by Bloomberg Economics shows that 19 OECD countries have combined price-to-rent and home price-to-income ratios that are higher today than they were ahead of the 2008 financial crisis — an indication that prices have moved out of line with fundamentals.”
“In March, Jonathan Milne decided it was time to sell a family home in the Auckland suburb of Onehunga and purchase a larger house nearby for NZ$2 million ($1.3 million). He and his wife, Georgie, were optimistic of a speedy sale and a good price for their old home, which was valued by the local government at NZ$1.8 million. Milne’s house was meant to be sold in May via auction, a popular method of home sales in New Zealand, but not a single bidder showed up for the event.”
“‘What we didn’t anticipate was that it would be so hard to market and sell our house,’ said Milne, the 47-year-old managing editor of a news website. ‘We knew that every week that passed would knock another NZ$100,000 off the price.’ At the end of last month, they accepted an offer that Milne described as ‘dramatically’ below the government valuation.”
“The housing market in Canada has turned so fast some buyers are losing money on their properties before the sales even close. ‘People are actively trying to get out of deals,’ said Mark Morris, a Toronto-based real estate lawyer who cited one example where a property’s assessed value came in C$200,000 ($155,000) less than the purchase price agreed to only a couple months before. That left the buyer willing to give up their C$100,000 deposit to avoid closing, he said. ‘I’m called several times a day by various people who feel that they’ve paid too much.’”
“Mabel Melendi could tell the housing market in Cape Coral, Florida, was slowing after a week went by and she still hadn’t received any inquiries or offers on a newly constructed home she listed in mid-April. Just three months ago, she received a bid on a similar property within three days of putting it on the market.”
“But after three price cuts — knocking the asking price down to $425,000 from $510,000 — and more than two months after the initial listing, she was still looking for buyers in mid-June. One offer that came in over Memorial Day weekend fell through after the buyer couldn’t qualify for a large enough mortgage. ‘Most of the people don’t qualify for what they used to qualify for before,’ Melendi said.”