A report from Fox 13 in Utah. “Matthew Clewett bought his first home in Kaysville back in 2021. Since May, the board says those prices have dropped 22 percent. ‘It was an offer that I actually had to pay above asking price for. It was at pretty much at the top end of my budget,’ said Clewett. ‘I think I had to go $20,000 over asking.’ According to the Salt Lake Board of Realtors, the median single-family home price in Salt Lake County for January 2023 was $533,5000 — 9 percent lower when compared to January 2022. ‘We’ve had more prices, been able to get, I’d say stabilizes a little better. I mean people hear the word fall, like their prices are crashing. [I] wouldn’t say prices have been crashing, but they’ve come down a lot,’ said Rob Ockey, president of the board.”
The Union Tribune in California. “January is typically a slow month for home sales in San Diego — but it’s never been this slow.Resale single-family: Median of $820,000, with 1,027 sales, and down from its peak of $950,000 in April. Resale condo: Median of $600,000, down from its peak of $663,000 in May. There were 517 sales. Newly built: Median of $849,500, with 101 sales. This figure combines single-family homes, townhouses and condos. Down from the peak of $890,500 in August. ‘It’s squeezing everybody,’ Raylene Brundage, an agent who sells in several North County communities, said of real estate agents, who are coming off several years of more work than they could handle.”
KTVU in California. “Small mom-and-pop rental owners say they’ve been victimized by Alameda County’s eviction moratorium with some owed more than $100,000 in back rent. ‘There is just no reason for them not to pay their rent and just take advantage of the moratorium, which was really meant to protect people with low income, not people with high income like them,’ Fremont landlord Dorothy Wang said. ‘I am angry about the situation. I’ve felt very hopeless for two years.’ She needed Sinha and his family to apply for government rental assistance but calls and requests went unanswered. The application was denied. But documents show that they purchased a new home in Union City, yet are still staying rent-free in Fremont.”
“Wang’s story is not unique. Ami Shah and her husband temporarily planned to rent-out their Fremont home. A couple signed a lease that said no subleasing was allowed. After several months, the payments stopped coming and they learned their property was posted on Airbnb. ‘They were making money off our property by putting our property up on Airbnb,’ she said. ‘Just thinking about the hundreds of strangers coming in and out of my property…that’s scary, frustrating, saddening – everything all at the same time.’ Even with the lease not allowing subtenants, the Shahs said it took months in an intense legal battle just to get their home back. Their place was trashed and condemned.”
KIRO in Washington. “Seattle’s once-sizzling housing market has cooled off a lot. Nelya Calev, a Bellevue-based realtor, remembers even a year ago when buying a house in King County quickly turned into a bidding war. But that was then. This is now. Calev says prices have dropped, too. ‘From the height of the market, which was in May, they came down 15%,’ she said.”
KING TV in Washington. “Three unusual deaths over the past eight days in Ballard have some people on alert, but a local leader says crime is actually down in the area. Five days ago, a young child was found dead under bushes in the 5300 block of Shilshole Ave NW. Last Monday, a business owner on 15th Avenue NW shot and killed a robbery suspect. He was also shot by the robber and is in serious condition. ‘Ballard has certainly changed,’ said Paige Wager, who’s owned Ballard CrossFit for 15 years. ‘We lock the doors when people aren’t around.’”
The Dallas Morning News in Texas. “The rate of year-over-year single-family home price growth in D-FW was at or below about 10% from the Great Recession to January 2021, according to the S&P CoreLogic Case-Shiller Index. Local home prices peaked in June 2022 and have since declined about 7.6%, the index shows. National prices have dropped 4.4% from their June peak.”
WGN in Illinois. “Currently listed for a whopping $29,999,995 — a 40% reduction from its original ask of $50 million — a French-inspired mansion in Chicago easily claims the top spot for expensive real estate in Illinois (even out-doing Michael Jordan’s estate which is still for sale). According to a Chicago Tribune‘s Elite Street, the owners spent $65 million to build the mansion, with that including land costs.”
The Detroit Free Press. “For the first time since going public in 2020, Dan Gilbert’s mortgage business is seeing red. Rocket Companies, the publicly traded corporate parent of Rocket Mortgage, reported Tuesday a net loss of $493 million in the fourth quarter on $481 million in total revenue. It was the firm’s first quarterly loss since going public in August 2020, back during the thick of a mortgage refinancing boom that was highly profitable for Rocket. Rocket executives have been furiously cutting expenses as revenues have dropped, including several rounds of employee buyouts.”
Go Banking Rates. “While many buyers and sellers are anxiously waiting to see what happens next, Ruth Shin, CEO of PropertyNest, based in Brooklyn, New York, said a complete housing market crash this year is unlikely. ‘It is not currently a great market for sellers and is turning more and more into a buyers’ market, with the peak yet to come,’ she said. ‘Mortgage rates and interest rates are still high, as are the prices.’ More significant price drops might happen, but she said that probably won’t happen until mid-to-late summer. ‘The conditions, while at times extreme in the past few years, are nothing like they were leading up to the housing crash in 2008,’ she said. ‘There is a bubble to burst but not at the same dramatic level.’”
From The Hill. “When liabilities exceed assets, equity capital is negative and an entity is technically insolvent. From mid-March 2023, there will be a new addition to the list of institutions that, while losing billions of dollars a month and technically insolvent, with the benefit of taxpayer support will still be able to issue billions in new interest-bearing liabilities. That institution is the Federal Reserve. Since mid-September, the Federal Reserve has lost about $36 billion and will continue to post billions of dollars a month in losses for many months if not years to come. Fed losses have already consumed about 85 percent of its stated capital of $42 billion. It will take less than 3 weeks for the Fed to burn through the $6.6 billion of its remaining capital.”
“By any sensible accounting standard, losses reduce retained earnings and capital. Nothing is more basic. The Fed’s real capital is its stated capital of $42 billion minus its accumulated losses. The Fed magically suspends this law of accounting by booking its accumulated losses as an asset. If Fed losses accumulate to $100 billion, as they probably will in 2023, or to $200 billion or more by 2024, the Fed will report that it still has $42 billion in equity capital. Magic.”
“In reporting its recent losses, the European Central Bank canceled paying dividends and was careful to state that its losses were well covered by its reserves and so had no impact on its capital. The Swiss National Bank’s $143 billion loss in 2022 caused it to cancel its dividend payments and reduce its retained earnings.”
The New York Post. “A middle manager at Facebook parent company Meta who is making $550,000 a year took to social media to gripe about corporate belt-tightening — which could potentially sabotage their hopes to reach $1 million of total annual compensation by 2026. In a now-viral post titled ‘Angry/Worried that it’s all going to be taken away from me!,’ the anonymous middle manager wrote: ‘I’ve fought so hard to get where I am, and now it may be all taken away from me this month in the great flattening.’”
“‘Things have gone to s–t,’ the employee wrote. ‘Not just stock price but now with the great flattening my odds of survival are 50/50.’ Middle managers are fretting over CEO Mark Zuckerberg’s recent ‘flattening’ edict. The employee wrote that they were feeling buyer remorse. ‘Maybe should have went with one of my other offers,’ the employee wrote. ‘F–k this I’m so angry,’ the employee continued.”
The Globe and Mail in Canada. “7 Oliver Court., Lindsay, Ont. Asking price: $1,159,000 (October, 2022). Previous asking price: $1,299,000 (August, 2022). Selling price: $1,065,000 (December, 2022). After months on the market with no solid bites, the owners of this three-bedroom house about 130 kilometres northeast of Toronto cut their initial $1,299,000 asking price by $140,000.”
“‘With the overall slow down taking place as interest rates were increasing and stress test qualifications had increased, it was taxing on the market across the board,’ agent Kathryn Johnson said. ‘At the time we did the reduction, there were also four other properties in close proximity to this one that were on the market, also in the $1-million range.’ Inquiries picked up, with two potential buyers interested enough to start negotiations over price. In the end, one bowed out and the other shaved their bid to $1.065-million. ‘People didn’t want to compete,’ Ms. Johnson said.”
The Daily Telegraph. “Borrowers should be prepared for an average variable rate of close to 9 per cent – this is the logic behind keeping the current loan assessment buffer in place, according to the head of the Finance Brokers Association of Australia (FBAA). FBAA managing director Peter White has slammed Monday’s move by the Australian Prudential Regulation Authority (APRA) to maintain its current assessment buffer of 3 per cent despite recent hikes bringing the cash rate close to the long term average.”
“‘Many borrowers who can afford the interest rate of the day or even a little higher, are being unfairly prevented from refinancing,’ Mr White said. ‘More borrowers are becoming ‘mortgage prisoners’, locked into a situation where they can’t access a better deal because they don’t meet the inflated assessment rate. Others may be forced into selling their homes because the excessive buffer rate holds them prisoner to their current lender as rates rise. It’s time borrowers stopped paying the price for the rapid rise of rates.’”
Radio New Zealand. “Wellington, Dunedin, and Auckland were the softest of the main centres, with Hamilton and Tauranga seeing smaller falls. National home values were 8.9 percent down on last year to an average of $944,077, with a nearly 20 percent drop in Wellington and 11 percent drop in Auckland leading the market down. Corelogic NZ chief property economist Kelvin Davidson said the larger drop in home values was unsurprising and continued the weakening trend that had been in place for the past 12 to 15 months.”
“‘Despite mortgage rates being at or close to a peak, the RBNZ’s grim outlook for inflation and the economy more broadly was always going to weigh further on property values,’ Davidson said. ‘February’s 50 basis point hike in the official cash rate is also likely to restrain demand.’”