A report from the San Diego Reader in California. “Like a flock of birds changing flight abruptly and in unison, so could go the real estate market. One Sunday, a few months ago, I held an open house for one of my listings in Mount Helix. The comparable sales supported a list price of $1.2M. Knowing the fervor of the market, we pushed the envelope and listed at $1.4M. Some 200 people came through the open house and at one point, in the middle of the crowd, a man loudly demanded that I ‘shut down’ the open house for his $1.6M cash offer right there and then.”
“Of course, I couldn’t stop the open house and multiple bids flowed in. The sellers accepted an offer for $1.8M making it the highest selling home in Mount Helix history for a house under 3,000 square feet. But now the wind is shifting. Though home prices are at an all-time high – the median price for a home in San Diego is an eye-popping $975,000 – signs are emerging of a cooling market. Days on market are increasing. Price reduction announcements are filling inboxes and when a home generates multiple offers, it’s not quite as many as before.”
The Associated Press. “Price drops are becoming increasingly common, particularly in hot migration destinations, according to Redfin. In Boise, ID, where home prices are up 62% in the past two years, 41% of home-sellers dropped their price in April, the largest share among the 108 metropolitan divisions included in Redfin’s analysis. That’s up from 10% a year ago. Cape Coral, FL (33%), New Orleans (32%), Baton Rouge, LA (31%) and Sacramento (30%) rounded out the five markets that are driving the national rate of price drops to its highest level since October 2019.”
“More than 20% of home sellers dropped their price in April in seven of the 10 most popular April migration destinations (Cape Coral, FL; Sacramento; North Port, FL; Tampa, FL; Atlanta, GA; San Antonio, TX and Phoenix). ‘Conversations with prospective sellers are longer and more emotional now than they were just a few months ago,’ said Boise Redfin real estate agent Shauna Pendleton. ‘If your home has been listed for several days with little or no interest from buyers, it’s time to consider dropping the price. If you do have to drop the price, you are far better off doing one large price drop instead of a series of smaller price drops. A larger number of drops is often interpreted as desperation and encourages buyers to wait even longer or make a lower offer.’”
The Naples Daily News in Florida. “For the first time in two years the ‘snowbirds’ have flown the coop. Seasonal residents are leaving southwest Florida, headed north for the summer. With the mass exodus of seasonal residents, many wonder if this means the scorching hot housing market is going to cool down with inflation now at an all-time high? It is still a seller’s market but that has started to even out. We aren’t seeing the large offers over asking price or bidding wars as much as we were a few months ago. With rate increases and mortgage requirements for appraisal sellers need to be aware of what the buyers purchase abilities are.”
“Buyers also expect a home to be ‘lipsticked’. They aren’t expecting a fully redone home, but fresh paint, newer carpets and curb appeal are expectations that buyers have.”
From WTVF in Tennessee. “When Sarah Bendorf found her Nashville home for sale , she acted quick. It’s been under construction ever since. ‘But we were thinking we’d be able to refinance when we were done- low to mid three’s- and it would still be plenty affordable,’ said Bendorf. In the end of April she locked in a conventional mortgage at a 45 day rate lock. ‘If we’re not finished [with construction] in a couple weeks and can close on that conventional loan at 4.75- now interest rates are in the high five’s and makes it unaffordable,’ said Bendorf.”
“She’s not alone. ‘We are seeing our interest rates come back from a historical low rate from the past couple of years and it’s starting to stabilize out,’ said Detorie Vaughn Walker, a realtor with The DM Group. That stabilization, he said, could be the reason Nashville’s red-hot market is slightly cooling off. ‘And when we say there’s like a slowdown, what we’re saying is instead of seeing ten offers on a house that we list, we’re going to see maybe two to three,’ said Walker. ‘Or instead of being on the market 24 hours, you might be on the market for a week.’”
From Banker and Tradesman. “Owners who are just now putting their homes on the market appear to be an optimistic bunch. Whether they are too hopeful remains to be seen, but the signs are pointing to a slowdown that could stop the march of ever-higher prices. Even the new-home sector is seeing demand wane. Builders report that traffic has declined to its lowest point since last summer. And the share of adults planning to buy any house, new or existing, within the next year has fallen for three straight months, the National Association of Home Builders reports.”
“‘The decline is evidence that the COVID-induced boost to housing demand is past its peak and is now softening,’ says the NAHB’s Rose Quint.”
“According to new research from Clever Real Estate, a third of potential sellers, fearful of missing out on huge profits, have moved up their plans. And nearly half of them fully expect to sell for more than their asking price. Forget the fact that almost 30 percent also expect to accept an offer within two weeks of listing. The question is: Have they already missed the boat? According to Redfin, 15 percent of sellers dropped their asking price during the four-week period ending May 1.”
From Summit Daily in Colorado. “The past year has seen an unprecedented period in Summit County real estate history, with skyrocketing prices and a flurry of local and national buyers scrambling to capture the limited available inventory. And with the first hints of a recession now on the national horizon, many sellers are wondering if this is the right time to cash in on the momentum, before circumstances change.”
“Debbie Nelson, broker-owner with Nelson Walley Real Estate, suggests that circumstances have indeed changed in recent months, with the gold rush-styled surge in mountain property sales finally taking a breather. ‘We saw an incredible buyers’ frenzy from June until about mid-March – every property got multiple offers and prices were all way over list, based on less than 75 total properties on the market,’ she says. ‘Buyers were rushing to purchase, but that has completely changed. We’re now headed back to market conditions more like what they were, pre-COVID.’”
“‘It’s still a sellers’ market, but things are returning to it being a normal pre-COVID sellers’ market, and we’re seeing the super hyper activity of the last 18 months tapering a bit,’ says Ned Walley, broker-owner. ‘We now have to remind people that, even on under-$2 million sales, it may take four to six weeks to sell a home, not the three days it has been this past winter.’”
The Georgia Straight in Canada. “Home prices in Metro Vancouver have managed to stay up in the face of declining sales. Moreover, a report by Vancouver-based realty agency expects prices to generally hold steady. Dexter Realty stated that the ‘issue of supply will continue to dictate price and how much pressure there will be to come off the highs that have been achieved in the last 18 months. We might even see prices for some areas and types of homes just hover around those highs as opposed to showing much correction at all. Why would home owners sell for less if they don’t have to?’”
“Dexter Realty partner Kevin Skipworth explained that there are ‘two parts to the real estate market: activity and prices.’ He stated that a ‘change in activity doesn’t necessarily correlate to a dramatic change in prices.’ ‘Be prepared for words like ‘plunged, steep declines, slump’ when really, we should be saying ‘average, balancing and expected’,’ Skipworth suggested. The realty executive continued, ‘Many are dusting off their adjectives to try and put a label on current market trends, when in fact this market is really doing what we expected it to do in the face of rising interest rates and global challenges – and more so incredible activity in the last year and a half.’”
The Globe and Mail. “‘The average family is not buying a cottage,’ says Chuck Murney, president of the Lakelands Association of Realtors. ‘The average Canadian has been priced out.’ Median average waterfront properties in Ontario’s cottage country – the Lakelands region – now sell for an eye-popping $1.2-million, up 125 per cent from $535,000 since April, 2020. Mortgage amounts on those properties have ballooned by more than half a million dollars, based on a 20-per-cent down payment.”
“Skyrocketing values and surging interest rates have, in turn, driven up payments on those mortgages – a staggering 159 per cent in the same time frame – from $1,958 to $5,081 a month. And we’re talking just over the past 24 months, my friends. Let’s be honest here. The market’s never seen a price run-up like this. Ever. And these nosebleed prices will now be tested by up to 300-plus basis points of rate tightening and possibly even recession.”
From News.com.au in Australia. “The NSW government is racing to prepare a bailout package for Metricon as the troubled builder teeters on bankruptcy, according to a new report. Many of its customers and employees remain concerned about its future. One Queensland couple who signed a contract with Metricon for the construction of their home near Ipswich said they not received information about the status of their build, with the company pointing them to a media statement in response to questions.”
“Emily Martin told Nine newspapers she had signed a contract with Metricon in November but was unsure when construction would start. ‘Between our land deposit and house deposit we’re $38,000 out of pocket, and we’re not within a month of the build starting,’ she said.”
The New Zealand Herald. “Auckland’s market downturn is leading to quiet auction rooms and one real estate agency recently cancelled five auctions the day before they were due to take place because no one had registered to bid on the homes. The drop in auction sales is being attributed to Auckland’s slowing housing market and some real estate agencies are looking to avoid wasting their sellers’ time by cancelling auctions if bidders aren’t registered early enough.”
“Property website OneRoof reports just 23.4 per cent of Kiwi homes going under the hammer last month sold during their auctions. In the past week, Auckland real estate agency Barfoot & Thompson had even fewer homes sell: 25 out of 131 homes sold under the hammer – a 19 per cent clearance rate, according to media outlet Interest.co.nz.”
“OneRoof editor Owen Vaughan said the new data pointed to further price drops in the future. ‘The biggest concern for those who bought at market peak is whether or not their property is worth less than what they paid for it,’ he said. ‘For those who plan to be in their home for a long period and can repay their mortgage, negative equity won’t be a pressing issue. But rising interest rates and cost of living pressures will put the squeeze on homeowners and the safety valve of being able to sell in a rising market is no longer there.’”
“Ray White Manukau owner Tom Rawson said his agency had been seeking to pre-register bidders as early as possible before auctions since the middle of last year. Pre-registering allowed Rawson team to ensure all the auction paperwork is done on time, including details of proof of ID, a home loan pre-approval letter, anti-money laundering data and details of the buyer’s lawyer in case they ‘fall off the face of the earth’ after bidding. Most of the industry had now followed in their footsteps and implementing the same processes, Rawson said.”