A report from the Jax Daily Record in Florida. “In St. Johns County, which has been the longtime market leader, the median price fell from $526,500 in January to $510,000 in February. In February 2022, the median price in St. Johns County was $480,000. It peaked at $575,000 in May 2022. In Nassau County, the median price dropped from $382,635 in January to $366,000 in February. It was down from $410,000 in February 2022 and down from a 2022 high of $417,513 in November. Inventory was up 174.8% over the year to 4,811 homes on the market compared with 1,751 in February 2022.”
Rough Draft Atlanta in Georgia. “Increases in mortgage rates are bringing prices down for the short term in metro Atlanta. Home prices in greater Atlanta in December 2022 were 5% above their December 2021 levels and 9.5% below their June 2022 peak.”
Commercial Appeal Memphis in Tennessee. “February saw a continued trend of fewer homes sold and an overall decrease in median home sales prices year-over-year. The median sale price for local homes dropped 7.8% in February 2023 ($184,500) compared to February 2022 ($200,000). The local market did see an increase in inventory, with 2,760 active listings in February of 2023. That’s up from 2,690 in January and 1,914 in February 2022.”
WTVM Birmingham. “If you’re looking to sell, you’re probably not thrilled that the market has cooled since the pandemic. Real estate professionals in central Alabama say you cannot compare this market to what we were seeing in 2021 and early 2022. Stephen Nix, with Knox Realty in Gardendale, said, ‘What we saw in 2021 and 2022 was not normal, that was not normal at all.’ Stephen and Jecca Nix are a husband-and-wife real estate team. They say what happened during the pandemic, was ‘the perfect storm’ for sellers. Jecca said, ‘Don’t compare it to the pandemic year or the year after because we’re just not going to see that again.’”
Main Line Today in Pennsylvania. “This time last year, the Main Line housing market was in a tizzy, with multiple bidders competing for a limited number of listings. These days, cooler heads are prevailing. Some sellers are quickly reducing asking prices. Here are a few recent examples: In Haverford, a five-bedroom, five-bath home on three-quarters of an acre with a sunroom, pool and pool house was reduced $135,000 to $1.96 million. ‘There isn’t that same feeding frenzy,’ says John Bell of RE/MAX in Chadds Ford. ‘We tell people not to expect 10 offers and $100,000 above asking. If the house is move-in ready and in a desirable location, you might get two offers and $10,000–$20,000 over asking.’”
Shoshone News Press in Idaho. “Our local MLS median single family home is $479,450 down 6.2% over last year. Last year’s pendings are a little understated due to over bidding, therefore when the pending’s close we should be at or below last year. Once these close in the next few months prepare yourself for the Chicken Little news that the real estate sky is falling with headlines proclaiming, ‘OMG Home Prices Are FALLING!’ It is not time to panic.”
The Washington Post. “Employees at start-up Flow Health didn’t get their paychecks Friday morning. When deposits didn’t go out, those in human resources were confused. But Alex Meshkin, the CEO of Flow Health, said he immediately knew what had gone wrong. The company uses another start-up called Rippling to run its payroll process. ‘I said, ‘I guarantee you they’re in Silicon Valley Bank. We’re screwed,’ he said.”
Market Watch. “Samir Kaji, who worked at Silicon Valley Bank for 13 years before cofounding Allocate, said he believed SVB was not at risk of insolvency before its depositors started the mad digital run on their deposits. He said that the bank, which was entrenched in the startup/VC community, benefited from a strong community, ‘which works when it’s going well.’ But he said that what happened in the last two days was equivalent to a stampede running out of the building threatened with fire. ‘But in fear of being the last one out, someone trips on a candle, and sets the building ablaze,’ Kaji said.”
From Bloomberg. “The problems that triggered SVB Financial Group Inc.’s death spiral were hiding in plain sight in the firm’s earnings reports. That’s according to short seller William C. Martin. ‘They had bought all these mortgages at the top of the market and were sitting on a massive unrealized loss,’ he said. ‘And it was sitting there in plain sight. There were a number of other banks and insurance companies with similar issues, but I haven’t seen anyone anywhere near the scale of Silicon Valley Bank.’”
From WRAL. “UNC-Chapel Hill’s Dr. Greg Brown pointed out: ‘It’s going to be, certainly, interesting to watch the train wreck that is Silicon Valley Bank right now.’ He said that before news of the seizure broke. ‘I mean, we know that the VC markets have cooled off, we know that tech, in general, has cooled off,’ said Brown. ‘So I think the question we should be asking ourselves is, ‘Is this more fallout from a tech bubble bursting, that may have very little to do with interest rate policy or broader economic trends?’”
From Fortune. “Investor Jeremy Grantham believes stocks are in a speculative bubble that is slowly deflating. The era of ultralow interest rates and ample liquidity in the market, which had pushed stocks to dramatic highs during the pandemic, is over. Fed officials have long ‘engaged in policies that drive up the prices of assets, other things being even, and create spectacular overpriced bubbles,’ Grantham said before the SVB collapse. ‘They then break because that’s what bubbles have to do. They simply break off their extreme overpricing, and we pay a very tough price.’”
Info-tel in Canada. “There are a lot of gloomy real estate stories around these days. The skyrocketing prices also peaked last year, reaching $1,129,000 for a typical single-family house in the Central Okanagan in March 2022. That dropped by about $150,000 by January of this year. ‘That was the challenge of the first six months with the increased interest rates,’ said Taylor McFadyen, a realtor. ‘A lot of the sellers were still thinking it was top of the market: ‘My neighbour’s home sold for $2 million so mine is worth $2 million.’ It’s a psychological thing. Some people who purchased a property for $300,000 20 years ago are looking to sell for $1.8 million while the market value might be $1.6 million. They’re still doing pretty good.’”
The Globe and Mail in Canada. “As homeowners and investors struggle to cover increased mortgage payments and other debts, there’s been a noticeable spike in the number of short-term rentals. Vacation rental operator Deana Steele has heard from more than 40 investors since the start of the year who want to rent out vacation rental units. Her Keys to Kelowna Properties firm brings short-term rentals online, and she focuses on the high-end market. Right now she’s seeing a glut of all kinds of investors trying to cover their costs by turning to vacation rentals.”
“While the luxury market for short-term rental is thriving, average investors are having a tougher time, she says. Even though short-term rentals can command rents that are up to four times that of long-term rentals, that’s not always enough to cover their new financing. A lot of them are dealing with construction delays that have them completing at a higher rate, says Ms. Steele.”
“‘All these enquiries are coming in, and I can’t save them, the market is so saturated,’ she says. ‘The delay in closing for the new construction was really damaging to their projections. The only way to make up for those numbers is short-term rentals. It’s a huge loss to go long term,’ she says. ‘At the moment, most people I speak with don’t want to sell, because they do see there will be some long-term gains but they realize there will be some short-term subsidies from their income to cover these properties, so it’s a little stressful.’”
“Ms. Steele has a client with a two-bedroom townhouse whose investor owner is looking at $5,500 in carrying costs, including the speculation and vacancy tax he will be required to pay on his vacation rental. There are other taxes, financing costs and utility bills. The start-up cost of furnishing and stocking the unit is around $52,000, she says.”
“In response to the new supply of short-term rental units, a lot of new operators are coming into the market, she says. ‘I think we are going to see another surge of listings come on as one last kick at the can for these investors, to make it work.’ She’s focusing on the luxury market because so many mansions sit empty ’90 per cent of the year.’ ‘All of them are for personal use … they are sitting vacant.’”
The South China Morning Post. “Authorities will not slash land prices but will equally seek to avoid rocketing valuations, Hong Kong’s finance chief has said, vowing to stick to the government’s goal of providing a sustainable and stable supply of housing. Financial Secretary Paul Chan Mo-po offered the reassurances on Saturday as he shrugged off the result of the government’s first land sale of the year where a prime commercial plot in Mong Kok was bought for HK$4.73 billion (US$602.5 million), or 35 per cent less than the low end of its valuation.”
“‘We can say that the government does not have a high land price policy, which had drawn criticism in the past. But we won’t sell land at dirt cheap prices either,’ he said in a televised interview.”