A report from Yahoo Money. "FOMO is a powerful thing — sometimes powerful enough to spur a life-changing decision like buying a house, selling a property or refinancing a mortgage. Krystle Harvey, who refinanced twice in 2020, says FOMO was a key player in her decision — especially the second time around. 'I wish I could say I made the decision based solely on math, but if I’m being honest, FOMO played a role,' says Harvey, a marketing coordinator for a wealth management firm based in Florida. 'I watched friends and colleagues buying new homes or refinancing, and I kept hearing about low interest rates in the news.'"

The San Francisco Chronicle in California. "The U.S. is in the middle of a record-setting boom in home values and a massive squeeze in supply. But the Bay Area has been somewhat cushioned from these effects, according to Zillow. The S.F. and San Jose metropolitan areas actually rank at the very bottom of all major metropolitan areas for home value appreciation, noted Jeff Tucker, a senior economist at Zillow. 'The big takeaway that I’m seeing here is, the most expensive parts of the Bay and the most urban parts of the Bay have had the slowest growth rates,' Tucker said."

"That’s for a number of reasons, but a big one is that people are leaving San Francisco for other parts of the Bay Area and California, lowering demand compared to previous years. In San Francisco proper, home values actually decreased by 2.8%. While the home inventory nationwide was down 30.3% this April compared to last year, both the San Francisco and San Jose metro areas saw their home inventories increase compared to the previous year — inventory was up by 32% in the S.F. metro area and by 37% in San Jose."

From Axios on Minnesota. "The years-long boom in Minneapolis apartment development has fallen off a cliff in the last five months. There was a glut of apartment construction in downtown Minneapolis before the pandemic. Landlords are still trying to lease up their new buildings, lessening the immediate demand for new units. Developer Kelly Doran recently finished construction on the Expo tower near St. Anthony Main and has two more multifamily sites next door. Otherwise, he's only developing the suburbs now. 'It's a combination of a lot of stuff. …. [T]here's people [saying,] 'I'm just not going to bother with Minneapolis, let's go someplace else.' And that's certainly what we're doing.'"

From Bloomberg. "It’s been obvious since the Covid-19 pandemic struck that commercial real estate would be hit hard. The demand for office, retail, and hotel space has been crimped more or less permanently by the pandemic, which taught people to do many things online instead of in person. A worker whose skills are no longer needed can switch careers, but a building will always be just a building—a brick-and-mortar sitting duck."

"In February my Bloomberg colleague Allison McNeely wrote, 'Troubled borrowers secured breaks of six to 18 months on their debt last spring as the pandemic shut large of parts of the economy and revenue dried up. But nearly a year later, some lenders are running out of patience and don’t have the ability to keep extending credit.' Manus Clancy, a senior managing director at Trepp, a real estate data firm, told her, 'We have tons of stuff that’s in purgatory'—not in hell, but not in the clear, either."

"The unsettled question is what share of distressed properties will recover, and of those that don’t recover, how the losses will be distributed. The Federal Reserve flagged commercial real estate as a trouble spot in February in its semi-annual Monetary Policy Report to Congress. It said prices 'appear susceptible to sharp declines' from historically high levels, which would be more likely to happen if the pace of distressed sales picks up or if the pandemic leads to longer-term declines in demand."

"'We are not finished with all aspects of distress, however. There is a looming supply of potentially distressed loans that still may have an impact,' Jim Costello, a senior vice president at Real Capital Analytics, wrote. Lots of loans are in forbearance, meaning that lenders are cutting borrowers some slack in hopes that conditions will improve and they will eventually get their money back. Full recovery won’t always happen, though, especially in sectors that have become outmoded by Covid-19-induced changes in behavior."

"'The challenge with so much of the potential distress is that all participants are taking a wait-and-see attitude,' Costello wrote. Bottom line: A lot of commercial real estate is still in purgatory."

The Globe and Mail in Canada. "Brian Cosburn knew that his daughter and her husband would not be able to afford to buy a house in Mississauga, close to where his family has lived for years. With prices in the city topping $1-million, there was no way that they and their young family could get into the market. 'They both have nice jobs, but it was the down payment,' said Mr. Cosburn, 74, a retired maintenance operator for a Bay Street tower."

"But Mr. Cosburn and his wife were in a position to help. Most of his money was in a registered retirement savings plan, and he didn’t want to touch it because of the taxes he’d pay on the withdrawal. But they had paid off their house 15 years ago and decided to tap that equity through a reverse mortgage, which has to be paid off when they sell."

"More and more Canadian parents are finding themselves in this situation, seeing their children priced out of the real estate market and anxious to help. The amount of money they are giving to their children to buy a house is rising sharply, speeding the transfer of wealth from one generation to the next and contributing to soaring home prices."

"Laura Martin, chief operating officer of mortgage brokerage Matrix Mortgage Global, estimates that 60 per cent of her millennial clients are getting some help from their parents, either with the down payment or as co-signors of a mortgage, which puts parents on the hook for the monthly payments if their child is unable to make them. 'They want their adult children to enter the market before it’s too late,' she said. 'Parental assistance with living-inheritance giving is the number one driving factor pushing up the prices in Canada’s largest urban markets.'"

"'For a lot of kids, how else are you going to get the amount necessary,' said Steven Ranson, chief executive of HomeEquity Bank, which specializes in reverse mortgages. 'People can’t believe how much they made on their houses.'"

"Al Marani, 37, is one of those who had to turn to his parents for help. In 2015, he bought a $434,000 preconstruction condo in downtown Toronto. He made a down payment of $86,800. His bank provided him with a preapproved mortgage for the remainder of the purchase price, which was due in 2019 when the condo had been slated to be built. However, construction delays pushed the completion until this year, putting Mr. Marani in a tough spot."

"The restaurant that he runs in Pickering, Ont., shouldered a 40-to-50-per-cent drop in revenues when the pandemic restrictions shuttered indoor dining. Even though his business had been profitable before the pandemic, his bank told him that his preapproved mortgage was no longer valid because there was no security in the restaurant industry."

"Mr. Marani considered alternative lenders but the interest rate was more than 7 per cent, nearly triple the rate offered by the big banks. He eventually asked his parents whether they would consider giving him a loan so he could close on the condo. They agreed and took out a reverse mortgage. 'Mum and Dad were willing to help out as much as they could. In doing so, they put their house on the line,' he said."

From Better Dwelling. "The Bank of Canada (BoC) recently created a model to detect exuberance in housing markets. It detects explosive movements in home price growth, compared to fundamentals. They then put it into a neat, color-coded chart. When home prices grow faster than fundamentals, buyers are said to be exuberant. If it becomes common for the whole market, the market is said to be exuberant. An exuberant market is better known as a bubble. The concept is similar to the US Fed’s groundbreaking work on exuberance detection."

"The BoC sharing data points that show there’s more than just 'froth' is a big change. Earlier this year, the central bank was blamed for boosting price growth expectations. Along with the Federal government, this boosted moral hazard. Now they are releasing a steady stream of messages to temper those expectations."

"Hawkish policy, tapering QE, and housing exuberance data are three big market messages. The BoC has yet to publicly state the sudden change in attitude towards housing. However, they are certainly leaving a breadcrumb trail for people to conclude that."