A report from Go Banking Rates. "What goes up must come down. The market’s downward shift is most apparent in the properties on the high side of the median. According to Redfin, luxury home sales fell by a record 45% year over year, to the second-lowest level ever. That outpaces even the steep 37% decline in sales of non-luxury homes. Naturally, prices are falling along with demand. For example, the median home value in San Francisco fell from $1.41 million to $1.28 million during the luxury crash. But the median buyer would pay $8,372 per month at today’s rates compared to $7,100 one year ago despite a nearly 10% drop in price. Overall, the pandemic housing boom was historic, but for the million-dollar market, it was unsustainable."

The Marina Times in California. "Sales are down, and prices are down. And it’s not just San Francisco. Compared to the first quarter of 2022 when prices and buyer demand were at their peak, median home sales prices in the city were down 18 percent year-over-year — the second most of any Bay Area county in that time period, and just behind Alameda County’s 18.5 percent decline."

Danville San Ramon in California. "For people in the Bay Area tech sector, there’s almost daily news of big employers shedding lots of workers to prepare for more challenging economic times. And housing prices have stabilized and dropped—driven largely by the hike in interest rates that changed the affordability picture significantly. For instance, we’re now paying nearly as much monthly on our home equity line of credit that floats with the fed rate as we are on our fixed rate mortgage that borrowed twice as much money."

The New York Post on California. "Tommy Lee’s 'spectacular hillside' Calabasas home finally sold for $3.6 million on Friday after the Motley Crue drummer’s best efforts at offloading the property for years. But the closing price didn’t even turn a profit for Lee, who purchased the home in 2007 for $5.85 million."

From Reuters. "Howard Marks, the co-founder of Oaktree Capital Management, warned in an April 17 memo of a slew of mortgage defaults that could increase stress on the US banking sector. The US' largest city, New York, faces the most trouble over CRE, according to an analysis by a website that covers the CRE industry. 'Due to its enviable location and substantial demand for office space, the Big Apple has long been a commercial real estate powerhouse. The pandemic, however, has left the city's office market in shambles.'"

"In San Francisco, the office vacancy rate 'is about 30 percent, or about 35 million square feet that is not currently being used,' Colin Yasukochi with commercial real estate firm CBRE told NBC News Bay Area. 'And that's the highest that we've ever seen in San Francisco.' A former San Francisco WeWork building has seen its property value slashed by about 66 percent, according to Trepp, which tracks CRE data. The building at 25 Taylor Street was once almost entirely leased to WeWork, the formerly highflying co-work startup. The building was valued at $28.1 million in 2014, but was recently appraised at $9.5 million, according to Trepp."

The Dallas Morning News in Texas. "A steep decline in commercial property sales contributed to a drop in Dallas-based CBRE Group’s quarterly profits. The commercial real estate services firm saw a 70% decline in net income during the first three months of the year. 'Looking at the office market, we estimate it will take this asset class twice as long to recover the lost value as it did in the aftermath of the global financial crisis' in 2008 and 2009, CBRE CEO Bob Sulentic said. 'This reflects the formidable challenges facing office assets, driven by both the slow progress employees return to office and the shedding of jobs in tech and other sectors.'"

From Market Watch. "Toby Cobb has been in the catbird seat of the commercial real-estate market for decades. Cobb was Deutsche Bank’s co-head of U.S. commercial real estate in the run up to the global financial crisis of 2008. He now thinks office woes could put other areas of commercial-real estate at risk of contagion, and that the U.S. could be headed for a meaningful economic downturn, as banks pull back from lending because they end up reeling from their office exposure. 'Every single crisis in my lifetime has been headlined by real estate,' said Cobb. 'In each case, it has been about a fundamental mismatch in supply and demand. We had way too much square feet and not enough people to put in it. Overbuilding has historically been the culprit.'"

"The bulk of the U.S. office inventory also skews heavily toward older buildings constructed in the 1980s and before, which are 'at the end of their useful life and very expensive to tenant,' Cobb said. 'There are just a bunch of buildings now that nobody is going to want.'"

Business Insider. "While banks hold about half of all US commercial-real-estate debt, there are other big holders that are starting to feel the pain, especially over holdings of office properties suffering from the rise of remote or hybrid work schedules. Among them are the large pension funds, REITs, and insurance companies, together accounting for more than $1.2 trillion — or 22% — of the $5.62 trillion in total commercial-real-estate debt outstanding, according to BofA Global Research. 'This is just an indication of what's to come,' said Manus Clancy, a senior managing director at Trepp, about the pension woes. 'This is the beginning of what will be a lot of this from the funds, from the private equity guys, from the insurance companies. There will be a lot of reductions in equity values over the next couple of years, or sooner. It will be heavily tilted toward office.'"

"Already, some big landlords have chosen to default, including Brookfield on $161 million in debt tied to office properties around Washington, DC. 'I don't know if you've been in Washington, DC, anytime since COVID, but nobody goes to the office down there,' said Orest Mandzy, managing editor of Trepp's news outlet."

The Globe and Mail in Canada. "More lenders of Ontario builder StateView Homes are demanding it repay close to $200-million in loans, casting doubt on its ability to cover its debts, according to new court documents. Filings from KingSett Mortgage Corp. – part of KingSett Capital’s $17-billion portfolio – challenge StateViews’s recent claims that it will finish a half-dozen townhouse projects that include hundreds of future homes, making insolvency and liquidation more likely."

"'The debtors have effectively no liquidity … the state of the debtor’s books and records is poor and, and in certain circumstances, non-existent,' says a statement of claim filed April 27 on behalf of KingSett and lender Dorr Capital Corporation. The lenders are demanding repayment of $167.8-million and $4-million that was advanced to StateView for a variety of residential and commercial properties. They are also asking the court to appoint a third-party receiver to manage a sales process on StateView’s remaining assets."

The Irish Mirror. "House prices may have peaked but are still at 'unaffordable prices' that prospective buyers could struggle to meet, a housing expert has said. At the weekly Fine Gael parliamentary party meeting on Wednesday night, TDs and Senators were briefed by party leader and Taoiseach Leo Varadkar on measures announced by the Government. He claimed that the country 'is now experiencing the highest draw down on first time mortgages since 2005.' He suggested that was due to increased supply, the Help to Buy scheme and the First Home Scheme. The meeting heard that house prices in Ireland have 'almost certainly peaked and the average house price is expected to fall this year.'"

"Dr Rory Hearne, an Assistant Professor at Maynooth University, pointed out that they are still at very high levels. He said: 'Very clearly, we’re seeing prices reduce in the rate of increase. In Dublin, there has been a fall in house prices over the last two or three months. We’re seeing a more significant fall in house prices in second-hand or existing dwellings. There definitely is a fall in [these] house prices.'"

Domain News in Australia. "Six-figure sums have been slashed from house prices in popular sea-change destinations as the property market downturn ripples across regional NSW. House prices in the previously booming Byron Shire Council area fell 17.8 per cent, or $321,000, to a median of about $1.48 million over the year to March, Domain’s latest House Price Report shows. Prices in the Kiama council area took a $240,000 hit, dropping 15 per cent to a $1.36 million median, while flood-affected Lismore recorded a drop of 12.2 per cent and values fell more than 9 per cent in the Wollongong, Shoalhaven and Bellingen areas."

"McGrath Byron Bay principal Will Phillips said rapidly rising interest rates had affected the region more than others. 'When we see a tightening of monetary policy, the first thing people either sell or don’t buy is the boat, the holiday home or the caravan,' he said. 'We’ve seen an oversupply of properties and an undersupply of buyers … which meant those needing to sell had to drop their prices further, whereas in Sydney it’s the reverse [with too little supply] so the market has levelled out.'"

"KPMG demographics expert Terry Rawnsley said demand for sea and tree change had slowed from the heights reached earlier in the pandemic. '[Prices] come back to the local market fundamentals … the days of cashed up big-city buyers coming in and pushing up prices is over … it’s coming back to the average [local] wage and borrowing capacity,' he said."

The Telegraph. "Waves of money printing have turned banks into 'drug addicts' reliant on cheap cash to stay afloat, one of the world's top central bankers has warned. Raghuram Rajan, who was once a contender to lead the Bank of England, said repeated rounds of quantitative easing (QE) had encouraged lenders to take bigger risks in search of returns that are disappearing in the world of higher interest rates. The former head of India's central bank said 'excessively aggressive monetary policy' was ultimately to blame for the collapse of Silicon Valley Bank in the US, which had billions of dollars tied up in long-term bonds."

"More than a decade of low rates and money printing have made commercial banks reliant on the 'drug of stimulus' that will lead to more failures as central banks continue to tighten policy, Mr Rajan warned. 'High QE has made the banking system more dependent on central bank liquidity,' he told the Telegraph in an interview. 'And when you try to withdraw it very quickly, you find it's like a drug addict. It's gotten used to the drug. And you can't provide the old levels of the drug because they've gotten used to new high levels. And so it seizes up when you do that. I think we have to go back to asking, ‘why did these systemic risks emerge?’ And almost always the root cause of these systemic risks is monetary policy.'"

"The former chief economist of the International Monetary Fund (IMF) warned the banking crisis was far from over, predicting that lenders holding long-term debt and those who before the pandemic invested in commercial property and office buildings will suffer the most. 'We will see more bankruptcies,' he said. Mr Rajan blamed the current turmoil facing the First Republic, which is fighting for survival, on its holdings of 'jumbo mortgages' issued when interest rates were at rock bottom."

"Worried customers pulled $100bn (£80bn) in deposits from the bank in March amid fears that the bank was sitting on big losses. The Federal Deposit Insurance Corporation, which is responsible for overseeing depositor protection in the US of up to $250,000 for savers, has warned that US banks are sitting on more than $620bn of paper losses due to the rise in interest rates. Academics at NYU Stern School of Business believe the figure could be as high as $1.7 trillion, which is 'comparable to the total equity in the entire banking system.'"

"Mr Rajan said the FDIC's estimate did not take into account losses from all long-term debt, as he warned of a potential reckoning. 'So there are losses from long term loans, but there's also the commercial real estate losses to buildings to office buildings, which nobody wants to come into nowadays,' he added. 'So rents are going to fall. Valuations are gonna fall for those buildings. So I'm not saying there's a huge crisis on the way, but I'm saying there's enough to be concerned about.'"