A report from Market Place. “‘Mortgage payments are going to be higher. They’re up more than 40% now from what they were last year for the median-priced home,’ said Daryl Fairweather, chief economist at Redfin. Demand is starting to fall, Fairweather said. ‘We are seeing more homes having price drops. We’ve also noticed a drop in competition for two months now.’ ‘People should not anticipate another double-digit price appreciation. Those days are over,’ said Lawrence Yun, chief economist at the National Association of Realtors.”
From WFXT Boston in Massachusetts. “‘There’s no 80 to 100 people at an open house there’s only 30 now,’ said Jonathan Libman, who works at Fairway Independent Mortgage Corporation. ‘You’re seeing some pricing adjustments out there,’ said Libman.”
From WFLA Tampa in Florida. “‘Homes that would have received 10 offers several months ago are now getting two or three. That’s because the jump in mortgage rates has forced a huge pool of first-time buyers to drop out,’ said Elizabeth Rodriguez, a seller’s agent with Redfin. Prices are reportedly dropping, leading to ‘some relief from competition,’ according to Redfin agent Rin Barrett. Some of the homebuyers who had been outbid ‘are starting to get their offers accepted.’ He said some are settling for a home that needs work or might not be located exactly where they want, but they’re taking the opportunity ‘because a few months ago even those seemed impossible to win.’”
From WESA in Pennsylvania. “‘One of the only silver linings of the housing market in 2021 for homebuyers was that mortgage rates fell to record lows, and many people were able to get a 30-year loan with an annual interest rate under 3%,’ Zillow senior economist Jeff Tucker said. ‘Those days are long gone now.’”
“‘We are an extremely affordable place to live,’ said Jarrett, who serves clients throughout southwestern Pennsylvania. ‘So you have people moving in from the West Coast, and you’re showing them a half million dollar home, a three-quarter million dollar home, whatever it is. That home would be several million dollars from where they’re coming from. So they’re thinking, ‘Oh, this is great.’ The problem is it’s our own yinzers that we have here living in Pittsburgh that are [getting outbid].’”
The Atlanta Business Chronicle in Georgia. “Competition for metro Atlanta home listings decreased in April, giving respite to buyers and real estate agents worn thin by intense bidding wars. In some cases, buyers have paid premiums north of 20% for their homes. ‘This market is driving out a lot of buyers who could have qualified for a reasonable purchase price but no longer do,’ said Annah Bailey, a loan officer with Homestar Financial Corp.’s Marietta office.”
From Reuters. “Permits for future U.S. homebuilding tumbled to a five-month low in April. ‘Higher mortgage rates would at a minimum create uncertainty over the path of housing demand and discourage builders from taking out speculative housing permits,’ said Isfar Munir, an economist at Citigroup in New York.”
From Richmond Bizsense in Virginia. “Business appears to remain strong among the area’s busiest homebuilders as the region’s housing market begins to show signs of a relative cooldown. HBAR CEO Danna Markland said many builders put holds on or capped home sales in certain communities to balance out their production levels. She added that some builders are now opting to build solely on spec to better manage those levels and price fluctuations. ‘That is a far departure from summer/fall 2020 when spec inventory was unheard of,’ Markland said.”
From Mortgage News Daily. “Construction activity continues to operate near its best levels since before the housing meltdown more than a decade ago. Building permits technically dropped 3.2% from last month, but that’s after an upward revision of 1.2%. More importantly, despite the drop, the outright pace of 1.819 million units per year means the last 5 months been over 1.8 million. January 2021 was the only other month over 1.8m going back to 2006. The story is similar for the next construction phase, Housing Starts (a measure of when construction actually begins). Starts held fairly steady at 1.724m, making April the 4th best month since 2006.”
The Globe and Mail in Canada. “BMO chief economist Doug Porter reported that the Toronto housing market is softening very quickly. ‘Notably, the market that reported the lowest ratio in the country just happens to be the largest market — Greater Toronto. The GTA sales-listings ratio plunged to just 45% in April, which is suddenly getting into buyers market terrain. And, it compares to an average of over 70% in the prior 12 months (firmly sellers market). Decades of history show that this ratio is an excellent leading indicator for average transactions prices, leading prices by about three months. And what the ratio is now telling us is that prices are about to go from 20%+ gains to a sudden stall. And that’s assuming the sales/listings ratio doesn’t fall further in coming months.’”
The Delta Optimist in Canada. “Metro Vancouver home prices are falling, Oakwyn Realty Ltd. broker Steve Saretsky told BIV. He said he is seeing some homes in areas such as Coquitlam’s Westwood Plateau that have sold for about 15 per cent less than similar neighbouring houses did a few months ago. Saretsky has also seen some homebuyers consider walking away from their deposits and cancelling purchase commitments. Those buyers have to be told of the risks of such a move, which could scuttle several real estate transactions and invite lawsuits from others involved to compensate for any lost money.”
“‘It’s interesting to see that we went from having everybody freaking out, just frothing at the mouth to get into the housing market four months ago, to all of a sudden, having them say, ‘Oh, hey, maybe I should walk away from a deposit,’ he said. ‘It’s a pretty big change.’”
“Saretsky dismissed the REBGV’s benchmark index as an unreliable indicator of the current market because of its algorithm for determining what constitutes a benchmar’k property. You won’t see price declines in that home price index for six months, minimum,’ he said. ‘It’s a lagging indicator. It looks in the rearview mirror.’ Saretsky is convinced that the Bank of Canada will be too aggressive at raising rates, thereby causing a recession. ‘I think they will go too far,’ he said. ‘They didn’t see 2008 coming.’”
From ABC News in Australia. “There are signs Tasmania’s real estate market has started to soften. ‘The amount of people coming through open homes is significantly less than say, six to 10 months ago,’ said Hank Petrusma from real estate firm Eis Property. ‘The frenzy has gone and the market appears… to have levelled out a little bit. ‘If you go back 12 months ago, it’s nothing like having 60, 80 [buyers] through a property and that sort of frenzy of eight, 10, 12 contracts,’ he said. ‘From a buyers’ perspective that was not pleasant [and] that’s certainly right now no longer the case.’”
“‘There are not as many people out there as there were before; people are being a bit more selective, he said. ‘I think even a year ago people would buy anything and everything. Now they’re being a bit more selective, taking their time to make observations and comparisons, whereas 12 months ago, if you didn’t buy you wouldn’t buy so people were desperate to get inside the real estate market.’”
From Stuff New Zealand. “Rahul Srivastav says he broke down in tears when he received an email saying the construction company building his family’s first home, Jonesy Construction Ltd, had entered liquidation. He and his wife, Ritika Srivastav’s new home in the Wellington suburb of Newlands now has a ‘temporarily closed’ sign outside it, and despite having paid off nearly all of the construction cost, the couple do not know whether they will receive their home, or get their money back.”
“Srivastav said he had paid roughly $474,000 already for the house, under a progressive payment regime. ”We are in a situation we never wanted to be. We trusted that guy, and it’s not just me,’ Srivastav said. ‘ I broke into tears to find out that my dream to own a house is shattered. I am finding the situation extremely stressful, having sleepless nights since then.’”
“Srivastav said he had joined 31 other affected buyers on a WhatsApp group, and many were in a worse position, having paid large amounts towards builds that were less complete. Srivastav said he was an unsecured creditor, and he did not know what would happen to his home. ‘We are on fire. Savings gone, loan amount drawn, rising inflation and interest rates. Being first home buyers, we must pay rent, mortgage, day care and rising living cost, yes petrol too,’ Srivastav said.”