A report from CNBC on New York. “Manhattan real estate sales fell 38% in the first quarter, according to new reports. The big question for brokers, buyers and sellers is where the new ‘bottom’ will be in Manhattan. The average sales price fell 5% to $1.95 million and the median sales price fell 10% to $1.075 million, according to the report. Brokers say the biggest challenge for deals is the wide gap between buyer and seller price expectations. Sellers have trimmed prices, but not enough for today’s bargain-hunting buyers. The average discount from the initial list price to sales price in the first quarter price was 7%, up from 5% in the fourth quarter, according to Serhant. ‘Weary buyers were still in a strong position to negotiate,’ according to Coury Napier, director of research at Serhant.”
The San Francisco Chronicle in California. “San Francisco median home sales were down 14.5% in February, according to recent Compass data, and previous months saw the largest year-over-year median price declines in the city since 2008-2009, according to Compass chief market analyst Patrick Carlisle. While the market didn’t dip quite as much in the East Bay, home prices are still down 12% year over year. Sarah Marcus, a Redfin agent who specializes in Oakland, Berkeley and Alameda, said the beginning of a new year is always slow, but 2023 has been much worse than previous years.”
“Struggling First Republic Bank was a ‘big lender in the area,’ and some buyers and sellers are ‘waiting in limbo’ to see whether those loans get funded, Marcus said. Other prospective buyers have gotten a second preapproval letter should their First Republic letter not pass muster. ‘We’re all just holding our breath,’ she said. ‘… It’s stressful for everyone.’”
Bisnow Los Angeles in California. “After nearly nine months of closing deadline extensions, the KBS Realty Advisors-created real estate vehicle KBS REIT II has sold Union Bank Plaza at a 50% loss. The property sold to Waterbridge Capital for $104M, KBS Western Regional President Giovanni Cordoves confirmed to Bisnow. The buyer also assumed about $6M in capital obligations to existing tenants, Cordoves said. KBS bought the tower for $208M from Hines in 2010. The property has weathered a challenging market for office space, especially Downtown, where office buildings have faced foreclosures and big-name landlords have defaulted on hundreds of millions of dollars in debt.”
The Epoch Times. “The month of March witnessed the fastest withdrawal of funds from commercial banks in U.S. history. According to data released by the Federal Reserve, a staggering $360 billion was withdrawn from banks across the country in the past month alone. To put this into context, not a single monthly decline in 2008 exceeded $100 billion. The recent withdrawals have dwarfed those of the past, bringing total bank deposits down by almost $1 trillion since the highs in April 2022.”
“According to JPMorgan analyst Nikolaos Panigirtzoglou, about $7 trillion of the total $17 trillion deposits remain uninsured, which could be behind the capital flight into government bonds and money market funds. Despite the perceived safety offered by U.S. Treasurys, Panigirtzoglou argued that the poor performance of bonds throughout 2022 is largely to blame for today’s banking crisis.”
“Some have posited that the blame goes back further and is rather a consequence of decades of loose monetary policy by the Fed. Adam Kobeissi, author of the newsletter ‘Kobeissi Letter’ wrote in his April 3 issue that the unprecedented bank withdrawals are ‘the product of ‘free’ money and zero percent interest rates.’ While these policies were implemented to stimulate the economy and mitigate the effects of the COVID-19 pandemic, their long-term consequences are now becoming apparent.”
From Moneywise. “Since January 2022, the Bank of Canada has raised interest rates from a low of 0.25 to 4.5 per cent. It’s been a wild ride for those looking to buy. Home sales fell by 40 per cent from February 2022 to February 2023. According to the Canadian Real Estate Association, the benchmark price for a detached home in Vancouver was $1,813,100 in February, a decrease of 12 per cent from the previous year. Meanwhile Toronto saw a decrease of 17.9 per cent, with the medium home price sitting at $1,095,617 in February 2023. That’s still substantially more than the national average home price of $662,437 — which declined 18.9 per cent from the previous year.”
From Gulf News. “The UAE housing market feels weird. In Dubai, the lift in prices was off a lower base as prices had fallen to below replacement values in many instances. Nonetheless, the speed of the rise, along with recent weakening of the dollar, implies there is a downturn in prices. It is already underway in certain segments, which has been masked by the rise in offplan activity, which itself is accounted by their overall value rather than the down payment. The ‘buy anything’ rally is largely over, which is not to say that there are not bargains available. For the most part, however, there appears to be a fall in aggregate demand that is working its way throughout the system.”
The Taipei Times. “Unsold presale houses totaled 47,108 units in northern Taiwan as of last month, accounting for 27.7 percent of the overall volume for sale, heaping price correction pressures on developers, a report by My Housing Monthly said. The upcoming ban on transfers of presale house purchase agreements, which the government is still fine-tuning to settle details such as when and how to implement it, would add difficulty to their digestion, the magazine’s research manager Chen Tsai-chi said. Property transactions, including presale house contracts, tumbled 28 percent year-on-year in the first two months of this year, government data showed, as economic uncertainty and interest rates hikes drove potential buyers to the sidelines.”
“Projects in Gueishan and Jhongli districts and elsewhere in Taoyuan have been waiting for buyers for extended periods and might become the targets of price concessions given relatively heavy supply, Chen added.”
The South China Morning Post. “Hong Kong’s depressed office-rental market is showing signs of bottoming out, with agents fielding more leasing enquiries and rents expected to edge up by the end of the year, according to market players. The reopening of the border with mainland China has resulted in a significant increase in enquiries, according to Hongkong Land, Central’s biggest landlord. ‘Leasing has been quite active recently,’ agreed Fiona Ngan, head of office services at Colliers. ‘Landlords have greater confidence and are panicking less.’”
News.com.au in Australia. “A number of Porter Davis customers could be left with nothing because the collapsed building company did not purchase insurance even after they paid their deposits, liquidators have sensationally revealed. Said Jahani from Grant Thornton made the bombshell admission during an online webinar for affected customers on Tuesday morning, which was overloaded as more than 1000 people tried to watch. ‘What a joke. Trying to get in now,’ one person wrote on Twitter. ‘Me too. Webinar is full. S**tshow,’ another said.”
“According to The Age, one of the customers unable to get into the meeting was the owner of a Clyde North property that caught fire on Monday. Police said on Tuesday they were investigating a suspicious fire at the under-construction Porter Davis home, after firefighters were called to the property on Monday afternoon. The devastated homeowner told The Age they had been due to move in next month. ‘When we arrived, the firefighters were there … we could only see smoke and that the roof was collapsed,’ the mother of three told the newspaper. ‘I didn’t even want to look.’ The family are now left paying off two mortgages. ‘Every moment, we are crying,’ she said. ‘We are absolutely frozen, we don’t know what to do.’”
The Sydney Morning Herald in Australia. “Richard Williams, a Porter Davis customer, paid a 5 per cent deposit of $40,000 and signed a new home contract in February after being reassured by Porter Davis staff that he was covered for domestic building insurance. Williams said he was shown a certificate of currency for construction and liability that he was told covered him and his partner for domestic building insurance. ‘That was false. They blatantly lied to us. We lose everything. We won’t get any money back,’ Williams said. ‘Because there was so much paperwork at the time I didn’t twig.’”