A report from the Colorado Springs Gazette. “Sellers are slashing asking asking prices on hundreds of homes for sale in neighborhoods throughout the Pikes Peak region. Price reductions of thousands and even tens of thousands of dollars are common, Realtor.com’s website shows. ‘Whether it’s new homes or resales, we’ve seen a big shift from a seller’s market to a buyer’s market,’ said Chad Thurber, board president of the Housing & Building Association of Colorado Springs.”
“‘You may look at somebody and say, gosh, my neighbor sold for $680,000, I should be able to get $680,000,’ said Dean Weissman, a real estate agent in Colorado Springs. ‘In the height of the market you would have, but you probably are now going to get $650,000. But if you look at year-over-year, it still appreciated. It’s still tremendous appreciation. What’s gone is the fluff money.’”
“Large institutional investors who’ve purchased hundreds of Colorado Springs-area homes are another potential housing-market landmine, said Patrick Muldoon, broker/owner of Colorado Springs real estate company Muldoon Associates. In many cases, they paid top dollar in order to beat all offers, which helped drive up prices across the market, Muldoon said. If they determine they’re not getting enough of a return on their investments because rental prices are falling, institutional buyers might cash out and begin to dump properties, he said. ‘We’ve got economic issues out there that we really need to be following closely,’ Muldoon said. ‘Sure, maybe it’s not a subprime mortgage crisis (which helped trigger the Great Recession), but when you’re running debt that we’ve never seen, you’re running inflation that we haven’t had, you’re running sentiment that we haven’t seen since then, those are canaries in the mine for me, as a person going back to 2008.’”
From Business Insider. “Opendoor CEO Eric Wu says the company’s algorithm didn’t predict housing market shifting so quickly. The quick market shifts rivaled those of the housing crisis of 2008, he said. ‘We’ve seen a once-in-a-40-year move in home prices on top of a move in velocity that we’ve actually never seen in housing,’ Wu told Ben Thompson. According to Wu, Opendoor tested previous market conditions, but the speed of the most-recent shift was far greater than previous shifts — including the 2008 financial crisis.”
“‘We did have models that said that’s possible, but we didn’t say it was likely,’ Wu said. ‘There was uncertainty about where the rates would end up and buyers just sat out. That was a shift that we hadn’t seen before in any of the back testing and any of the data that we analyzed from previous home price depreciation, even the [Great Financial Crisis].’”
The Orange County Register. “Californians in 19 metro areas took out 177,566 mortgages from July through September. That’s the second-slowest slowest three months of the century. It’s also a stunning 63% nosedive from the year-ago period, making this the biggest 12-month drop on record. Yes, this home-loan crater is deeper than anything we witnessed during the bubble-bursting housing meltdown of the mid-2000s. By the way, this is not some California-only trend. Every U.S. metro tracked by Attom saw fewer mortgage deals cut in the past year. The nation, minus the California metros, had 1.8 million mortgages made this summer – a 44% drop over 12 months, also the largest decline on record.”
Bay Area Newsgroup in California. “Add tech company layoffs to the list of headwinds facing the Bay Area housing market. Prices in San Francisco fell 7% to $1.7 million, while an Mateo home prices tumbled 10% to $1.9 million. In the region’s other Silicon Valley county, Santa Clara, prices were flat year-over-year at $1.6 million — but were down 4.4% from the month before. ‘We have clients who have been in and out of looking at buying,’ said Silicon Valley realtor Mary Pope-Handy. ‘One of them works at … Facebook, and they said. ‘I didn’t get laid off, but it doesn’t look like a good time to make a big purchase.’”
WFAA TV in Texas. “Dallas-Fort Worth home sales broke a new record in October, falling 27% from the same month a year ago as higher mortgage rates continue to pour cold water on the housing market. October was the third straight month of declining home sales across DFW, and the percentages of the drops are growing. Home prices are up year-over-year but down for the third straight month.”
“Many of my buyer clients are waiting right now instead of buying, said Todd Luong, an agent at Re/Max DFW Associates. ‘Because of the higher interest rates, they cannot afford the hundreds of extra dollars they would have to pay each month. The longer they wait, the more leverage they will have with sellers because homes are sitting on the market longer and inventory is slowly increasing, especially as we head into the holiday season.’”
“Listings in the office Luong works in are getting 1.4 showings per week on average, he said. ‘It currently takes about 18 showings before one of our listings will sell,’ Luong said. ‘If you do the math there, you will quickly see that the days of sellers getting 20-plus offers on the first weekend are long gone now.’”
KUTV in Utah. “Home prices are typically measured year over year, and for a long time in Utah, they’ve risen dramatically. The drop in Weber County is obviously not a big one, and the rest of the Wasatch Front saw year-over-year price growth in October, according to the latest data. But prices are coming down as home sales plunge due to higher mortgage interest rates. ‘It’s all about the interest rates,’ said Steve Perry, president of the Salt Lake Board of Realtors. ‘It really affected everything.’”
“The median price for a single-family home in Salt Lake County was $580,000 in October, up about six percent from the year before. But prices have dropped from their peak in May. ‘Sellers are having to give concessions. Builders are giving concessions,’ Perry said. ‘Builders are doing things that they hadn’t been doing in a couple years.’”
The Fredericksburg Free Lance Star in Virginia. “Prices have become more realistic. No more bidding wars, at least for the moment. In fact, buyers in most markets can often seek a reduction in the asking price – and get it. What last spring’s real estate frenzy amounted to, at least in many cases, was panic buying. I recently talked to a lady who bought a $1 million house, sight unseen. The photos looked great and the location was right, so she and her husband outbid several other buyers in what amounted to an eight-hour bidding war. Now she is finding things she doesn’t like about the house.”
“‘If we had it to do over again, we would have added a contingency on some aspects of the house,’ she lamented. But then reality took hold. ‘But if we had, we wouldn’t have gotten the house.’ Not that the house had any real defects, but inspections don’t take into account personal taste. Now this couple is spending more money to get the things they really wanted.”
“I know another couple that just could not resist putting their house on the market when a realtor told them how much they could get for it. And they got it. Then, suddenly, they were faced with finding another home and ended up having to settle for a house that was inferior to the one they sold. Desperate, they ended up buying a house they really didn’t like.”
From Moneywise. “Real estate agents have witnessed a distinct shift in the market. They’re no longer seeing line ups to view houses or extreme bidding wars on homes. Instead, there seems to be some stabilization. ‘It’s just … adapting to change,’ notes Bradley Watson, a broker and investor in the Greater Toronto Area in Canada. ‘In a balanced market, you don’t see much price growth. Where you maybe saw your neighbor selling $100 or $200 [thousand] in some areas higher … you can’t expect that because that was the product of a very, very tight seller’s market, which we’re not in anymore.’”
“‘In the heat of the market, we’re looking at least five or 10 multiple offers and no conditions,’ Watson says. ‘In the hottest areas, we saw financing conditions were gone. Home inspection conditions were pretty much gone. I think there [were] a lot of properties with issues that were sold and buyers just accepted it.’”
Canadian Real Estate Magazine. “The real estate market in Canada is notoriously inflated, with many experts saying that the housing market is in a bubble and is set for a major correction. The price of detached homes in the GTA has gone down by 10% compared to last year, hitting $1,369,186. Very high detached home prices and steep price declines are driving the price decreases in some of Toronto’s most expensive neighborhoods. Prices are falling faster than the median annual household income. In some areas, such as the exurbs of Toronto, housing prices are actually falling faster than median household incomes.”
“Townhouse condos in Peel and York are the most reasonable, with average prices clocking in at $616,876 and $687,843. In Toronto, the typical cost was $744,092 back in August. Average sale prices in August were down around 20% since February.”
From The Local. “Property prices in France appear to have peaked, with some experts predicting falls of up to 10 percent in some regions in 2023, though new-build prices continue to rise. But, with interest rates rising, even discounted property prices may not be enough to tempt buyers in the short term – the number of mortgages approved in October was down 40 percent on the previous month, with the higher cost of borrowing blamed for the marked dip.”
“Immobiliers (real estate agents) across the country have factored in falling prices for existing properties next year as supply outstrips demand. The Fédération Nationale de l’Immobilier (FNAIM) predicts a 5 percent average decline in property prices in 2023 – with larger cities bearing the brunt of the decline after years of rocketing prices. Over the past three years, older properties have seen price rises, on average of 23 percent, according to data from national statistics provider Insee.”
“The boss of the L’Adresse network of agencies predicts a drop could be as high as 10 percent. In fact, prices are already falling in Paris, Lyon and Nantes, while the market in and around Bordeaux has stagnated, according to agents. In Paris, prices are already falling down nearly 2 percent year-on-year to October, according to Fnaim – a situation unlikely to be helped by the expected 50 percent hike in property taxes.“
“In Lyon, Toulouse, Nantes, too, prices are dropping while they have stagnated in Bordeaux, Fnaim added. It said that difficulties in accessing borrowing will inevitably end up forcing sellers to lower prices. The reason – oversupply. For the first time since Covid-19, the Bien’ici property site has noted a sharp increase in supply – with an jump of 12 percent in property for sale year-on-year and, at the same time, a sharp drop in demand, with searches dropping 15 percent on average, and 29 percent in searches specifically for houses. Prices are falling, too, in a number of Brittany departments, but falls – Notaires de Bretagne has said – are mainly confined to larger urban areas.”
Vietnam Express. “Thousands of Vietnamese investors have been shocked to see their investments disappear after bottom-fishing FTT tokens, having no clue that FTX, once the world’s second-largest crypto exchange, would go bankrupt. Hanoi resident Thanh Tuan invested $1,000 in buying FTT after seeing the token’s value drop from $22 to $4 on November 8-9, hoping to sell them for a profit when the price went up again.However, on November 16, the value of FTT tanked to around $1.6. Worse still, almost no trading was taking place because there were only sellers and no buyers. Today, the 32-year-old investor regrets his decision and is afraid he might be left with nothing.”
“Tram Anh of Da Nang still refuses to believe that her savings of nearly ten years have vanished. The 30-year-old said she joined the crypto market in 2017 and chose FTT as her go to token since she trusted Bankman-Fried’s vision. She had deposited roughly $3,000 worth of USDT (popular stablecoin pegged to the US dollar) in cryptocurrency exchange FTX. She also invested a ‘heavy chunk’ of money in ‘promising’ FTX-related projects like Solana, Near, Aptos and others. However, these are currently selling for three to five times less than they did before FTX declared bankruptcy.”
“Vietnamese investors are frustrated that the FTX platform has halted withdrawals. Many went to the official FTX Telegram account for the Vietnamese community, with nearly 10,000 members, to vent their anger. However, all they found was a pop-up message that said the group had been deactivated and questions should be directed to the worldwide support staff. Many left the group, realizing that nothing could be done.”
From Bloomberg. “Once seen as the world’s go-to economic crisis fighters, central bankers are now desperately trying to contain a problem they allowed to happen: inflation. That’s eroded their credibility in the eyes of investors and society at large. Officials have offered mea culpas. US Federal Reserve Chair Jerome Powell acknowledged in June that ‘with the benefit of hindsight, clearly we did’ underestimate inflation. Christine Lagarde, his counterpart at the European Central Bank, has made similar concessions, and Reserve Bank of Australia Governor Philip Lowe said in May that his team’s forecasts had been ’embarrassing.’ In October, South African Reserve Bank Governor Lesetja Kganyago warned at a monetary policy forum that it takes a long time for central bankers to build credibility—but that it can be lost abruptly.”
“Central banks’ independence is harder to justify after such a failure of ‘analysis, forecasts, action and communication,’ Allianz SE’s chief economic adviser, Mohamed El-Erian, tweeted in October. The tragic result, he says, is ‘the most front-loaded interest-rate cycle that we have seen in a very long time, and it didn’t need to be.’”
“The first step for the newly humbled monetary policymakers is getting prices back under control without creating economic havoc. Next they must transform the way central banks operate. For some experts, that means three things: paring down their mission, simplifying their messaging and preserving flexibility. ‘Do more by trying to do less’ is how former Reserve Bank of India Governor Raghuram Rajan describes his advice to central bankers.”
“Rajan says central bankers simply lost sight of their primary role, which is maintaining price stability. ‘If you told them, ‘That is your job, focus on that and leave all this other stuff aside,’ they would do a better job,’ he says.”
“Stephen Miller, a former head of fixed income at BlackRock Inc. in Australia who’s now at GSFM Pty, says he’s been poring over spreadsheets of economic indicators such as the Federal Reserve Bank of Cleveland’s consumer price index measures in a way he hasn’t done for more than three decades. The reason: He doesn’t trust the forecasts and guidance coming from central banks. ‘For me, the alarm bells started ringing on inflation long before central bank language changed,’ Miller says.”
“And broken promises can do real harm to investors’ confidence. GSFM’s Miller cites RBA Governor Lowe’s failed guidance as an example. ‘Phil Lowe saying no rate increases to 2024? Those kinds of messages are dead,’ says Miller. ‘Markets can no longer take central bankers at their word,’ given that they’ve pretended to be ‘all-seeing.’”