It’s Friday desk clearing time for this blogger. “Raymond Martin and his wife listed their home in Austin, Texas, for sale for $1.1 million in early May. They figured selling the four-bedroom, three-bath house would be ‘a walk in the park.’ Instead, the Martins have yet to receive a single offer and have lowered their asking price to $899,000. Raymond Martin noted that shortly before listing his Austin home, a neighbor sold their similar-sized home for $100,000 over the $1 million asking price. The couple is living in a new home in Florida while patiently trying to sell the Austin property. ‘Clearly, the market’s kind of stalled,’ he said.”
“Rising inventory helped moderate median home prices in Fort Worth, which dipped from $367,000 in May to $363,000 in June. Median home prices declined even more in Parker County, dropping from $473,900 in May to $450,000 in June. ‘We are at that time of the year when we see home prices at their peak, but recently we’ve seen more price reductions,’ said Shannon Ashkinos, president of the Greater Fort Worth Association of Realtors. ‘This could be indicative of sellers continuing to try to overprice and the market making an adjustment,’ Ashkinos said. ‘But it’s likely we’re headed toward a normalized market. The question is, what does that look like now?’”
“Data company Clever Real Estate has ranked Orlando as the number one city in the country with the highest vacancy rate. But the good news, according to local real estate broker Antonio Srado, is the market seems to be cooling due to inflation and higher interest rates. ‘Now we’re starting to feel some stabilization. Some properties are staying on the market longer and prices are dropping, not substantially, but prices are dropping as a result of that,’ Srado said.”
“Prospective home buyers are already noticing the impact on the housing market with the return of price reductions on some real estate listings around Sioux Falls. ‘It’s been a couple years. We just haven’t seen it,’ broker Tony Bachman said. ‘Everyone had been pricing their home according to what the neighbor sold their home for two months ago. Now we actually probably need to pull back a little bit.’ While the rapid increase we saw in home prices last year may be slowing down, agents say competition is still incredibly high, especially in the first-time home buyer market. ‘There were six people bidding on a $300,000 house,’ said mortgage banker Dave Kelley.”
“According to the South Carolina REALTORS, compared to this time last year, home sales have declined in the state by 13%. Sharon Bishop has been an upstate realtor for 27 years. As of lately, she’s been pretty busy but, she says there’s been a slight shift. To get sales back up, now sellers are offering more. ‘And then we are seeing some builders offer incentives and some of the sellers are also offering some incentives like closing costs, whereas before maybe they wouldn’t have done that,’ Bishop said.”
“The real-estate market is changing drastically, according to the Salt Lake Board of Realtors. In Salt Lake County, total home sales (condos, single family, etc.) for June fell to just 1,344. That’s the lowest June sales in a decade. For the past three quarters, homes were selling in just six days, but now the average ‘days on market’ is 21 days. There are now three times the normal inventory of properties for sale than pre-pandemic number. I just helped some sellers go under contract on their home after a three-day negotiation. In order to seal the deal, sellers paid $12,000 in the buyers’ closing/mortgage costs and agreed to pay the buyers’ rent for 30 days after close of escrow, as they await their new home to be finished so they can move. I haven’t seen sellers pay closing costs in at least two years. Now with the slowdown, buyers might be able to pay the asking price—not $100,000 over ask!”
“‘The Arizona housing market is experiencing one of the most rapid reversals in real estate history,’ said Greg Hague, CEO of Scottsdale-based 72Sold. ‘Fast rising interest rates have depressed buyer demand, and a dramatic increase in homes for sale has made buyers more cautious and price sensitive,’ he said. ‘This is why the latest stats show the median price of Phoenix metro homes decline by almost 5% in the past two months.’”
“‘A period of recalibration is now front and center in the Phoenix housing market,’ said Steven Hensley, market advisory manager for Zonda. Pointing to Redfin data, Hensley said the percentage of active listings with price drops reached 44% in June, the highest level experienced in over three years. ‘This suggests that resale home values are already adjusting to demand after rapidly rising interest rates, which began in March, pushed affordability to its brink,’ Hensley said. ‘When today’s interest rates are factored in, the typical ratio of monthly payment to local income is now the highest in recent history. Builders continue to offer incentives, primarily towards financing, which means net base prices are falling. A price correction appears imminent, but we are hesitant to suggest that a crash is coming. If home prices fell 10% between now and the end of the year, prices would be in line with where they were at heading into 2022.’”
“San Diego’s real estate market has been on an upward trajectory for the past two years. The median price for a single-family home was $590,000 in March of 2020. This year it rose to $850,000 … $1 million by some estimates. But that high was short-lived. Real estate prices are down 2.9% this month, making the median price of a home $825,000, and some people are speculating that with rising inflation and interest rates, the median price could drop even farther. ‘Markets are always going to ebb and flow,’ said realtor Alexander Ciullo. Ciullo admitted that the amount of time each listing stays on the market has lengthened in the past month. At the height of the housing market, homes would sell in four to five days, said Ciullo. ‘Now we’re looking at 10 to 21 days,’ he added.”
“Cancelled property listings are increasing across the Greater Toronto Area at a rapid rate. Slate Realty Inc., found that sellers scrapped 2,822 listings in June, a 643-per-cent spike from 380 cancellations in January. ‘Many sellers are still operating under the impression that this is a seller’s market, so they are listing too high and not seeing any action,’ Alex Hood, a Strata realtor, said in the report. ‘At the same time, rising inflation and interest rates are making buyers feel uncertain about the trajectory of the market, which is causing them to be more conservative with their bids.’”
“Is Belgrade a party town or a polluted Gotham? This city of some 1.7 million people, once capital of federal Yugoslavia and now Serbia, has changed rapidly over the past decade. ‘Housing is being commodified and perceived as any other good,’ Iva Cukic, co-founder of the Ministry of Space NGO told BIRN. ‘It is being treated as an investment and not a way to get a roof over a family’s head. It’s a speculation bubble. There are serious concerns also about money being laundering through construction.’”
“The seasonally adjusted average home price in Canada was down nearly 8% in June from a peak earlier this year. In New Zealand, prices had slipped 8% in June from their peak in late 2021. Prices in Sweden in May fell 1.6% from the previous month, the biggest monthly decline since the pandemic began. Asif Abbas Mehdi, a business owner in New Zealand’s Waikato dairy-farming region, said he has been trying to sell a three-bedroom, two bathroom townhouse for four months. Initially he sought NZ$730,000 (US$450,000), then NZ$680,000 (US$419,000). He is reluctant to go lower than that.”
“‘If nothing happens at 680,000, I might have to pull it off the market,’ Mr. Mehdi said.”
“Earlier this year, Nguyen Thi Chau, an investor in Hanoi, decided to use her savings and borrowed money to buy a 1,000 sqm land plot in Hoa Binh for VND4 billion. Some months later, a broker called her and asked if she wanted to sell the land plot at VND5 billion. Chau did not do so because she believed that land prices would increase further in the future. However, contrary to Chau’s prediction, there have been very few transactions. Chau is nervous as she cannot sell the land to pay debts. She told a broker that she would sell for VND4.3 billion, but she still cannot find buyers.”
“Like Chau, Nguyen Thi Huong in Ba Dinh district in Hanoi is also worried as she still cannot sell a row house in the suburbs which she bought at VND6.5 billion. If the house is not sold, Huong will see her capital ‘buried’ in the land for a long time. Nguyen Van Tien in Cau Giay district in Hanoi is offering to sell a 100 sq m land plot in Thach That. At first, he set the price of VND1.5 billion, but later, because there was no buyer, he lowered the price to VND1.2 billion, while he had to spend VND1.5 billion to buy the plot last year. Tien was worried that land fever is over and his money will get stuck.”
“Ads about the sale of land plots in the suburbs and city neighborhoods can be found everywhere, including newspapers and social networks. The owners of land plots say they are selling at a loss as they need money to pay debts. Analysts said the bubble is becoming larger and will burst one day when people have to sell land and houses at a loss. VARS chair Nguyen Van Dinh noted that it is now ‘easy to buy, difficult to sell.’ As buyers become more cautious and hesitate to buy real estate, it is difficult to sell products at this moment. Meanwhile, capital flow congestion will freeze real estate projects.”
“Here’s a scenario. You buy a pre-construction apartment and start paying the mortgage before it’s complete. The developer halts the project, has defaulted on its debt and it looks like the property may never get built. You hear of buyers elsewhere who have stopped making their loan payments. This encapsulates the dilemma for the Chinese government in coming to the aid of buyers in stalled housing projects.”
“Just as troubling is the emergence of such non-payment tactics in the first place, a strain of behavior hitherto unknown in China. The country has long been assumed to be immune from the type of self-feeding mortgage spiral that drove the US subprime crisis. When you’re a fruit picker loaned 50 times your salary to buy a US$750,000 (RM3.3mil) house with no money down, it’s little trouble to walk away if the market turns south.”
“Mr Zhao deposited his life savings into a bank in central China, but now can’t access any of it. The 44-year-old said his 1 million yuan ($217,000) had been frozen since April. ‘All of my life savings suddenly turned to zero. I am at a loss,’ he said. Mr Zhao — who only wanted to use his surname because of fear of retribution from local authorities for speaking to media — is among 400,000 people impacted by one of China’s biggest banking sagas.”
“Six banks in rural China have been hit hard by Beijing’s efforts to rein in a property bubble and spiralling debt, in a financial crackdown that has had ripple effects across the world’s second-largest economy. The slowdown forced four banks in Henan province, and two in Anhui province, to freeze all cash withdrawals since mid-April, leaving thousands of small savers without funds and sparking rare, sometimes violent, protests. When it comes to China’s economic woes, the banking issue is just the tip of the iceberg.”
“Gary Wang, 25, could not pay for all his purchases, but he kept buying anyway. The smartphones and clothes that appeared on the Chinese apps he used for watching short videos or ordering takeaways seemed too good to miss, and the platforms offered easy credit. ‘It is a lot easier to borrow from platforms than acquaintances,’ said Wang, a software tester living in the landlocked Hubei province, who earns a monthly income of 8,000 yuan (US$1,191). By the time he realised he could not afford his lifestyle, he had already taken out 150,000 yuan in loans, mostly to dine out and cover his then-girlfriend’s expenses.”
“China’s underdeveloped banking system has enabled the existence of a vast private lending grey market. And while the older generation may choose to borrow from family members, the digitally savvy Generation Z is used to seeking help online. ‘It was too easy to borrow [from internet platforms]’ said a debtor surnamed Xia, living in Hubei province. ‘It was like transferring money from your own account.’”
“A car salesman based in the coastal province of Jiangsu, who declined to be named, said he signed two contracts when he applied for credit through the Twitter-like blogging platform Weibo. One loan came with an 8 per cent interest rate, while the other entailed a 14 per cent service charge with Weibo acting as a guarantor. The total costs of the two loans, along with other extra charges, amounted to 22.4 per cent, in addition to the principal of 10,000 yuan.”
“On the first day that the debt became overdue, the man said collectors promptly sent him a text message at 8am, and his phone started ringing at 9am. ‘I was filled with anxiety and remorse, but I was the one who took the wrong path,’ he said. ‘There were endless threats and debt collection calls from strange numbers across China.’”