A weekend topic starting with Market Watch. "Home prices are falling, but the housing market is still too expensive for most Americans. The median price of a home in the U.S. was about $400,000 — about 5.6 times the real median household income. There may be hope on the horizon: Home prices fell 3% in March, the largest year-over-year drop since 2012, according to Redfin. That follows February’s 1.2% dip. The drop in March was the largest in a decade, which is as far as the company’s records go on home prices."

From Market Place. "Price increases over the past couple of years have made many so-called affordable cities not so affordable anymore. Take Houston. Manda Rogers teaches sixth grade in the Alief neighborhood of southwest Houston. She used to live in the neighborhood in a small apartment with her two children, but recently, she purchased a townhome on Houston’s southeast side. At the moment, Rogers’ townhome is still bare of even a stick of furniture. She is actually saving money on housing by buying compared to what she paid in rent for her old apartment. But that doesn’t mean her new home came cheap."

"'I was working with some counselors on trying to get into a house that was 30% of my income,' Rogers said. 'Right now, I think I’m sitting at like 40, 45% with the taxes and stuff included.' That makes Rogers 'cost burdened,' which the U.S. Department of Housing and Urban Development defines as anyone who spends 30% or more of their income on housing. On top of that, Rogers now has a longer and more expensive commute. She estimates the combined cost of housing and transportation at 60% of her income."

KVEO Brownsville in Texas. "Senior Property Tax Consultant Tim Wilkins stated he has been getting a very high call volume regarding complaints of some notices that have been received. 'All around the state appraisals are going up. Hidalgo issued a little more than 190,000 notices of increase for this year. I think that the housing bubble along with the supply chain constraints that drove up material prices have caused them to increase valuations across the board,' the CADTax Property Tax Consulting CEO said. 'Your tax bill goes up so does your escrow component from your mortgage payment and everybody’s getting hit in the wallet pretty hard.'"

"A McAllen homeowner said he was floored by the amount his property appraisal shot up. 'I feel devastated. $248,000 to $309,000. So that’s a big difference,' McAllen home and small business owner, Tamark Yepez, said."

The Morning Call in Pennsylvania. "Jack Gross, CEO of Better Homes and Gardens Real Estate Cassidon Realty, said it’s a rough market for those looking to purchase their first home. The market has cooled a bit since the pandemic buying frenzy, but it’s still hard for those buyers who need to finance the purchase. Part of the problem is that building affordable housing isn’t profitable for builders, Gross said. Instead of building modest, single-family homes, builders are focused on larger homes, which offer the most profit. Often called 'McMansions,' these types of mass-produced homes are overscale — and high priced. 'For the first-time homebuyer, you’re seeing McMansions because they have to build those in order to make a profit at the end of the day, because of the cost and expenditures that they’re making,' Gross said."

"It’s a similar issue with new apartments in Allentown and Bethlehem. They’re gorgeous with plenty of amenities, Gross said. But residents can’t afford them. 'I’ve seen them. They’re beautiful. They’ve got gyms, maybe pools, private storage areas, got community rooms, plus lobbies. They’re beautiful, but they’re also getting $2,500 rent for them,' he said. 'And, you know, that’s not affordable to a lot of people. But again, why is that happening? Because they can’t make any profit any other way. They can’t make by building affordable.'"

"Apartment building construction is surging, with about 3,600 units on the drawing board in 2022, mostly in Northampton County."

Bisnow Washington DC. "Throughout most parts of the District, rents for Class-A apartments are hovering below pre-pandemic levels, according to Delta Associates’ Q1 multifamily report. Meanwhile, supply is soaring. Class-A deliveries in the District are up by 47% year-over-year, accounting for more than half of the new developments in the region. 'There’s just a lot of product that’s hitting the market all at the same time, and so therefore you see a pretty concessionary market, just as all that product is trying to get absorbed and get stabilized, and that’s holding down the rent increases,' said MRP Realty principal Matt Robinson, whose firm has apartment projects in Capitol Riverfront, NoMa and Edgewood."

Fox Business. "Significant cracks in the $12 trillion private equity business are emerging. The firms will buy public companies, take them private and sell them at a profit years later. They also invest in real estate and trade various securities to earn returns that often beat the markets. Large investors who were interviewed by Fox Business point to the floundering Blackstone Real Estate Income Trust, which some sophisticated investors say is understating losses. The fund has a net asset value of $65 billion; it’s a so-called REIT or real estate investment trust fund with holdings in commercial real estate bought at the top of the market when interest rates were at historic lows, these investors say."

"These same investors also point to issues at Apollo Global Management, which is known for its shrewd deal making and contrarian investment approach. But executives at Apollo are said to be 'begging' uninterested investors to put money into its latest fund, the PE firm’s 10th fund, according to people with knowledge of the matter. Like Blackstone, many of these investments were made during the Fed’s money printing days. Higher interest rates have now collapsed not just commercial real estate prices, but the valuations of other portfolio companies."

"'These PE funds overpaid for stuff and now we’re saying ‘you’re not generating good returns, so go pound sand,’ said one official at a major public pension fund who spoke on the condition of anonymity. 'They have taken their eyes off the collective ball and they’re now collectively panicking that they’re badly missing their numbers.' 'I bet right now (Blackstone CEO Steve) Schwarzman is calling everyone he knows in DC to get the Fed to back off,' said one large investor about the PE’s firms’ politically connected billionaire CEO and founder. 'The Fed won’t, of course, because no one is going to bailout a bunch of fat cats.'"

A press release. "Roughly one of every seven (13.5%) U.S. homes sold by an investor in March sold for less than the investor bought it for, according to Redfin. That’s comparable with February’s 14.5% rate—the highest since 2016. It’s also nearly triple the share of a year earlier. 'Home flippers aren’t reaping the gains they used to,' said Phoenix Redfin agent Van Welborn. 'I recently showed one of my buyers a three-bedroom single-family home in Glendale that was listed by an investor. My client ultimately found another house they liked better, and the investor ended up losing about $20,000. The investor bought the home for $450,000 and sold it for $480,000, but put $50,000 of work into it. The house also sold below the $550,000 list price after sitting on the market for almost four months.'"

"In Phoenix, 30.7% of homes sold by investors in March sold at a loss—the highest share of the 40 metros Redfin analyzed and more than double the national rate. Next came Las Vegas (28%), Jacksonville, FL (20.9%), Sacramento, CA (20.2%) and Charlotte, NC (17.4%). Investors who rent out their properties are also seeing their returns shrink in some areas. The median U.S. asking rent fell 0.4% year over year in March—the first annual drop in three years—and 13 major metros saw larger declines. Owners of short-term rentals are getting hit as well. The Airbnb market is oversaturated with supply, and authorities are imposing tougher restrictions on hosts, driving some to sell, Redfin agents said. Redfin recently reported that investor purchases declined a record 46% year over year in the fourth quarter."

From USA Today. "Last year, Rishi Khanna, CEO of a Dallas-based software company, had to open his wallet to hire new employees. He shelled out as much as $225,000 for a sales leader and more than $100,000 for a software developer as he vied for candidates who were juggling multiple offers from other companies. Now, salaries for those same positions have dropped to about $150,000 and $85,000, respectively, and Khanna's company is flooded with applications from far more qualified candidates. As a result, he no longer needs to lure prospective workers with ever-higher pay packages. 'That competition is gone,' Khanna says."

"The tech industry hired too many workers during COVID-19’s online boom and is now paring staff. Khanna says he’s drawing many applications from workers who were laid off last year by tech giants such as Amazon, Google, Twitter and Microsoft. 'They don’t want to be out of a job for too long,' he says."

The Washington Post. "Major companies unleashed more layoffs on Friday, as Lyft and Deloitte announced plans to shed a reported 1,200 jobs each. The news came just days after more layoffs were reported at Facebook’s parent company Meta and at Whole Foods. Companies have blamed an uncertain economy with rising interest rates for a string of layoffs, stretching back months and piling into the tens of thousands in the United States. So far, job losses have been relatively contained within tech, financial services and housing — industries that all saw ballooning growth during the pandemic and are now struggling to readjust. Zoomed out, the labor market is still extremely tight."

From CNBC. "In June 2021, Google won approval to build an 80-acre campus, spanning 7.3 million square feet of office space, in San Jose, California. The timing couldn’t have been worse. A decadelong bull market in technology had just about run its course, and the following year would mark the worst for tech stocks since the 2008 financial crisis. Rising interest rates and recessionary concerns led advertisers to reel in spending, shrinking Google’s growth and, for the first time in the company’s history, forcing management to implement dramatic cost cuts."

"The city of San Jose may now be paying the price. What was poised to be a mega-campus called 'Downtown West,' with thousands of new housing units and 15 acres of public parks, is largely a demolition zone at risk of becoming a long-term eyesore and economic zero. CNBC has learned that, as part of Google’s downsizing that went into effect early this year, the company has gutted its development team for the San Jose campus."

"About a year ago, Google announced that it would invest nearly $10 billion in at least 20 key real estate projects in 2022. By then, the company had already completed much of its multiyear land grab of downtown San Jose for the future campus. Things changed in a hurry. On Alphabet’s fourth-quarter earnings call, in February, finance chief Ruth Porat said the company expected to incur costs of about $500 million in the first quarter to reduce global office space, and she warned that other real estate charges were possible in the future."

"'We all originally knew that it’s going to be a long-term plan,' San Jose councilmember Omar Torres, who represents the downtown area, told San Jose Spotlight in February. 'But yes, it’s definitely concerning that a lot of the money is coming when the cranes are in the air.'"

The Tribune. "San Luis Obispo County home sales dipped in March as overall housing costs and supply grew slightly. Statewide, Californians felt the effects of a slowing housing market, according to the California Association of Realtors’ March 2023 Sales and Price Report. Several locations across SLO County saw home costs fall compared to the previous year. Only Arroyo Grande, Nipomo and Atascadero’s housing markets saw median price increases."

"Templeton homes saw a precipitous 43.9% decline in median price from March 2022, landing at $846,000 in March. Homes there only spent a median of five days on the market, but only three of the 16 active listings were sold. Those three sales represented a 62.5% decline from the previous year. Despite falling 30.6% from March 2023, Pismo Beach’s median home price of $1.1 million still was one of the highest in SLO County in March. The South County city had 16 active listings in March — 77.8% more than the previous year — and only six sales were reported, a 14.3% drop from March 2022."

"Morro Bay’s housing market similarly cooled, as homes in the coastal city spent a median of 90 days on the market despite a 19.4% median price drop to $800,000. Fourteen homes were available to buyers, a 16.7% increase from the previous year. However, only five homes sold, a 50% decline from March 2022. Meanwhile, Cambria’s median home price dropped 9.9% to $1.16 million in March. Homes there spent a median of 19 days on the market before selling."

"With a median home price of $721,000, Paso Robles had the cheapest real estate listings in the county, thanks to a 3.8% price drop from the previous year. There were 52 active listings in the North County city in March, representing a 33.3% uptick in available homes over March 2022. However, sales dropped by 49.1% to 27 in March."