It's Friday desk clearing time for this blogger. "Austin Board of Realtors latest data shows the median price of a home is about 466-thousand dollars, a significant drop from the price a year ago – 521-thousand dollars. 'Buyers have gotten scared, almost like the sky is falling and what the rates have done is eroded buying power,' real estate investor Jesse Breidor told CBS Austin. His partner in business is Zach Schaphorst, a real estate lender. 'I could characterize it as more of a correction to a relative mean,' he said of the current market, compared to that of the last two years."

"A lack of inventory remains the key driver behind a 32.5% statewide decline in existing home sales in April versus April 2022, according to the Wisconsin Realtors Association. Some counties at the core of the state's major metro areas did see median prices decline in April: Eau Claire (-6%), Outagamie (-1.1%), Ozaukee (-6.7%), and Wood (-18.9%) counties all saw median price declines. The median purchase price in the eight-county Central region — which includes Wausau, Stevens Point and Wisconsin Rapids — declined 3.2%, from $206,600 in April 2022 to $200,000 last month."

"High mortgage rates are discouraging homeowners from selling and fueling a growing lack of homes for sale in the Valley, according to the Cromford Report, which analyzes in the housing market in Maricopa and Pinal counties. Looking at total sales in April, the Cromford Report found they were down 28% from April 2022 and down 12.3% from March 2023. It said, 'The median sales price is down almost 9% compared to a year ago, but has recovered nearly 4% over the last three months.' 'To find a location that is still strongly favorable to buyers, we need to look at the secondary cities,' it said, pointing primarily to Casa Grande, which it called 'the weakest market in Central Arizona.'"

"During most of 2022, it said, 'we had plenty of sellers because those who saw their properties as investments were keen to avoid the risk of a major drop in value. Those were joined by the iBuyers who realized too late that they had purchased far too many homes for the market conditions since April. This caused a short-term stampede for the exits.'"

"Last year, rising mortgage interest rates chilled the previously hot Southern California housing market. Buyers backed off, sales plunged and, for the first time in a decade, home prices underwent a sustained slide. By one measure, prices in the six-county region fell 13% from the peak last spring. According to the California Realtors, though April's median in the combined six-county Southern California region was up $15,000 from March, it was $52,000, or 6.2%, below April 2022 levels. In Los Angeles County, the median was 8% less than a year earlier and 17% lower than when prices topped out in the county last September. In Orange County, April prices were 8% from that county's peak; in the Inland Empire, 5% below the peak; in Ventura County, 7% below the peak; and in San Diego County 5% below the peak."

"The number of homes sold statewide dropped 4.7% in April compared to the previous month and was 36% lower than a year ago. In the San Francisco Bay Area, the California Association of Realtors reported declines in all markets, with the overall regional sales volume 38.5% lower compared to April 2022. All major markets in California saw the median home price drop from a year ago, according to the report. The Bay Area experienced the largest price drop with the overall regional median value declining by 16.7%. Home prices in six out of nine Bay Area counties fell more than 10% year-over-year."

"In San Mateo County, the April median sales price of $1.97M was an 18% drop from the median price of $2.4M in April 2022. Santa Clara County's median sales price of $1.8M was 8.6% less than the median price of $1.97M in April 2022."

"Home sellers gave concessions to buyers in 42.9% of U.S. home sales during the three months ending April 30, up from 25.5% a year earlier, according to Redfin. That’s just shy of the 45.6% record-high hit in February. 'High mortgage rates and low supply have thrown the housing market out of whack, and each deal is different. Some buyers are asking sellers for the sun, the moon and the stars in addition to offering below the asking price, and some are requesting no extras because they’re so motivated to secure one of the few homes on the market,' said Boise, ID Redfin agent Shauna Pendleton. 'The one consistency in the market right now is homebuilders handing out freebies. Most builders are offering concessions equal to about 3% of the sale price, which gets credited to buyers at closing, to offload properties.'"

"The inventory of homes in Pensacola seems to be stabilizing to pre-COVID levels. Increasing insurance costs, interest rates, sales prices and maintenance expenses are putting a strain on landlords and renters, according to Nicole St. Aubin, a broker associate for the rental company Realty Masters of Florida. 'Many of the new landlords that we're getting are not able to rent the house out for their expenses,' St. Aubin said. 'So, people who bought recently are now needing to move, and they're trying to decide if they should sell or rent. They can't rent for what their final cost is, or at least the rent doesn't cover their final costs.' She gave the example of a landlord with a $2,100 mortgage who tried to charge that amount for a rental property. With no takers, they ended up lowering the rent to $1,800."

"In terms of the growing availability of homes, St. Aubin said the last few years, landlords who had Airbnb units have stepped back from the market to return to long-term rentals, since they did not get the returns they wanted financially. New developments have popped up across the area. 'All this new construction is filling in the needs that we, have but they're coming to the market at higher than the average house, if you look at these statistics,' St. Aubin said. 'So, I do think we're past the availability shortage with this influx. And every month, there are so many new construction units coming to the market, from this mix of new construction houses and apartments, but again, not at the price point that most people need.'"

"The gloomy warnings have been coming thick and fast. On Wednesday, the latest arrivals to the misery party were the Canadian commercial banks. BMO and Scotiabank were the first in what is likely to be a trend by all the Canadian banks to set aside extra hundreds of millions of dollars — more than a billion for BMO — to cover loans that borrowers cannot afford to pay back in full. The central bank warned last week that half of all mortgage holders will find their mortgage payments have risen by the end of 2023; others will feel the effect as they renew in the coming years. The bank also warned that rates may have to stay higher for longer until inflation is defeated."

"Walter Bolduc, the economic forecaster who compiled the Conference Board report, foresees a potential 'snowball effect' as people spend a little less, creating a wider slowdown in economic activity. 'We might have some households which are completely unable to cope with these higher costs and maybe have to default on their mortgages,' he said."

"The Government has commissioned an investigation into developments stalled due to land speculation after it was revealed that 43,000 housing units with planning permission in Dublin had yet to begin construction at the end of 2022. A separate report on the operation of Home Building Finance Ireland, has found that lenders may not have the risk appetite to fund build-to-sell apartments because the demand for people to buy such homes is 'unproven.' It said 'funding gaps remain' in terms of meeting the expected housing demand at this time, as lenders 'may not yet have the capacity or risk appetite to provide the overall levels of funding required.'"

"Germany’s efforts to increase housing supply are faltering as higher materials costs triggered a decline in residential construction orders by more than one third in the first quarter, according to the country’s main builders lobby. Builders are now facing the prospect of having to put workers on state-subsidized furlough or 'in the worst case' cutting jobs, said Felix Pakleppa the trade group’s managing director. 'People willing to build are losing heart and canceling orders.'"

"Some of Germany’s European Union partners also have troubled housing markets. In the neighboring Netherlands, new construction remains well below government targets amid an acute shortage of affordable homes. Sweden’s residential property market saw construction levels falling by more than half in the first quarter as one of the world’s worst real estate routs continues to gather steam."

"Richard Portes, a London Business School economist and an expert on financial stability, said in an interview that the same economic headwinds that helped catalyze the failure of Silicon Valley Bank and First Republic Bank remain. 'Funding costs for regional banks took a big jump a couple of months ago and they haven’t come down,' Portes said, noting that the spread between the interest rate regional banks must pay to borrow money in the debt markets and the rate large, diversified banks pay has widened significantly of late. 'Regional banks own all these long-dated assets, whether they are mortgages or longtail securities that are not paying anywhere near those funding costs,' he added. 'That’s a really big deal.'"

"Economists estimate that the market assets of the U.S. banking system are worth more than $2 trillion less than the book value of those assets."

"There’s nothing new about the causes of the recent mega-bank failures. Case in point: the implosion of San Francisco’s First Republic Bank, which is the second largest bank failure in the nation’s history, just behind Washington Mutual during the Great Meltdown of 2008. One of the root causes of First Republic’s takeover by the regulators was borrowing short and lending long, meaning that they made home loans to billionaires at below market rates, and fixed the rate for as long as 10 years with an eye to getting the borrower’s deposit and other banking business. It worked, as it always does, for a while, until short-term rates, and the bank’s cost of borrowing goes up. Then the yield on the low-interest loan is lower than the lender is paying to fund the loan, and the lender is losing money."

"In every endeavor or business there are core guiding principles that are essential to the success of the activity or business model. For example: Investing: Buy low; sell high. Landscaping: Green side up. Skydiving: Do not exit aircraft after takeoff without parachute. And, in banking: Do not borrow short and lend long."

"So why do lenders do the same thing over and over and expect different results? Well, yes, they’re probably insane, but it’s a valid question and the answer is elusive. Leading up to the Financial Crisis in 2008, very bright people decided it was a good idea to make mortgage loans to borrowers who demonstrably could not afford the debt service. Why?"

"Possibly it’s 'hubris,' from the Greek 'hybris,' meaning 'wanton … arrogance resulting from excessive pride.' (Webster’s Collegiate Dictionary). For example, if you’re really, really smart, you come to think you’re smarter than everybody else, and soon you figure maybe natural laws might not apply to you. In any event a lot of MBAs crossed the border into La La Land at the turn of this century motivated by, possibly, a dash of hubris and a lot of greed."