A report from Mansion Global on Washington. "'The upper end of the ultra high-end market is softer than we’ve seen in many years,' said Moira Holley, co-founder of Realogics Sotheby’s International Realty in Seattle. 'In 2021, when there was brisk movement, we saw sales in the $30 million range. We haven’t had a sale at that price point since then. The market in general is off about 20% from recent highs.' Holley has the listing for Seattle’s most expensive property, a $22.5 million Madison Park waterfront home whose price has dropped more than 30% over the course of a year."

"'I’d say we’re down 10%-12% over last spring, and this is a moment of opportunity for the luxury buyer,' said Jen Cameron, managing partner of the Agency Real Estate in Seattle. 'And when you’re talking about homes worth millions of dollars, the spread is even greater when home prices are down.'"

The New York Post. "After numerous record-breaking, pandemic-fueled, $100-million-plus mega-mansion sales, the hyped up Hamptons may have finally hit a wall. The number of East End home sales fell to their lowest level in 14 years in the first quarter of the year, according to Douglas Elliman. Meanwhile, the median home price saw a 7.6% decline, down to its lowest point since 2019, according to Town & Country Real Estate. Spectacular summer homes from Quogue to Montauk are chopping prices to entice wallflowers to the dance floor. At 335 Town Lane in Amagansett’s estate section, Alec Baldwin is asking $22.5 million for his sweet-as-can-be stunner on 10 acres. The two-story, 10,000-square-foot, cedar-shingle modern farmhouse listed back in November 2022 for $29 million, before being reduced in January and again in March to its current price."

"Back on the beach, 33 Lily Pond Lane — a 7,000-square-foot, six-bedroom, eight-bathroom, oceanfront oasis in East Hampton — hit the market in the heady days of August 2021 asking $64 million. That’s been whittled down to its current ask of $44.5 million. In Water Mill, a massive 13-bedroom mansion at 71 Cobb Lane, set on 9 sprawling acres overlooking Mecox Bay, is asking $59.95 million — a big slash from its $72 million ask last year."

From Islander News. "What's in store for the South Florida real estate market during the second half of 2023? 'The demand for Florida real estate has been exceedingly strong over the past few years, but now in late May of 2023, the Florida market is undergoing a healthy re-balancing with the higher interest rates and increased cost of borrowing,' said McCaughan Tompkins, who has been in the real estate business for 20 years on Key Biscayne."

"On Key Biscayne, 20 houses were sold in April, down 13% from the previous month, another report indicated. Sales over the past 12 months have translated to a median price of $1,450,000, actually 2.9% less (or $43,750 less) than a year ago. That report indicated that 85% of homes on the island sold below asking price last month."

Bisnow South Florida. "The flood of investment sales spurred by the pandemic in Miami has turned into a trickle. Commercial real estate sales in Miami fell to $194M in the first quarter, down 80% from the same period last year, according to a report from Dwntwn Realty Advisors. The decline, which was felt across all asset classes. Office was the hardest hit asset class, with only $6M in sales in the first quarter across Miami-Dade County, a 97% decline from the $226M in office sales during the same period last year. Multifamily assets saw the second-largest drop in sales volume, falling 83% to $40.6M in the first quarter compared to the $235M in sales seen during the same period last year."

Noozhawk in California. "Office inventory is in over-supply, as remote work has 'left a glut of large office spaces on the market,' while limiting demand to absorb' vacancies, according to the first quarter report by Hayes Commercial Group. The combined South Coast office vacancy rate of 11.4% is a new high mark, and for the first time on record Goleta, Santa Barbara and Carpinteria cities are carrying double-digit office vacancy. Remote work has been the single-largest factor behind the expansion of available inventory during the past two years, according to Hayes. Orange County office vacancy is 17%, and Bay Area vacancy is pushing 30%, according to Hayes."

"There are 34 spaces larger than 10,000 square foot available on the South Coast. Aside from renewals, according to Hayes, only 16 office leases larger than 10,000 square feet have transacted during the past three years, and none of those was signed in the past 12 months."

The Real Deal on Texas. "Silver Star Properties is making significant changes to its investment strategy, repositioning its portfolio of office, retail and industrial holdings into self-storage, according to a May 26 SEC filing. Silver Star is repositioning its entire 6.8 million-square-foot portfolio to self-storage, a plan its board of directors’ executive committee outlined on April 6. The Houston-based REIT completed a $3 million acquisition of Southern Star Self-Storage Investment Company in early May to operate alongside its existing operations."

"The company saw a $24 million loss in the recoverable value of eight properties by the end of 2022. It had suspended the payment of distributions in July 2022 to preserve capital and ensure its financial stability. The company also divested from certain properties that faced a decline in value and diminished demand in light of uncertainties in the commercial real estate market. Perhaps most worrying is a looming maturity date on a $259 million SASB Loan. The loan, backing 39 properties, is set to mature Oct. 9, after the company exhausted three one-year extensions. The loan servicer declared an event of default due to noncompliance with insurance requirements in November, restricting the company’s ability to meet operating obligations. The company’s ability to continue as it currently exists is 'dependent upon ability to refinance the SASB Loan prior to the maturity date,' it said."

From Market Watch. "WeWork Inc. bonds have been sinking deeper into distressed territory after two top executives left the company on the heels of a complex debt restructuring. WeWork’s roughly $163 million of 7.875% bonds due May 2025 were trading hands at about 45 cents on the dollar on Thursday, down from about 55 cents in mid-May, according to BondCliQ data. Corporate bonds trading below 70 cents are broadly considered distressed. At its peak, WeWork was valued at $47 billion. CreditSights pegged its current value at about $1 billion, meaning its equity lost about 99%."

Business Insider. "Corion Enterprises CEO Fred Cordova said in an interview published Thursday that warnings issued by investment banks including Goldman Sachs and Morgan Stanley have come too late, with office prices already in freefall. 'They're not sounding the alarm, they're ringing the bell when the horses are all out of the barn,' he told Fortune. 'What's happening in the office sector is apocalyptical. We're creating this huge class of zombie buildings, buildings that no one wants to put any money into because the capital structure is broke,' Cordova added."

"Office prices are already tanking, according to Cordova, who said that a building bought for $230 million would probably now sell for $100 million. 'Have you seen the Denzel Washington movie 'Flight'? Well, the wings of the plane are on fire, the plane is coming down,' Cordova told Fortune. 'It's just a matter of how hard it's going to hit.'"

From Bloomberg. "Roiled by rising borrowing costs and falling valuations that wiped out $148 billion of shareholder value, European landlords are bracing for a new wave of pain. Property companies have about $165 billion of bonds maturing through 2026, while banks are reducing their exposure to the industry and credit costs are at their highest since the financial crisis. That’s left some of the firms at risk of being downgraded to junk status, making it even more expensive for them to borrow."

"The headwinds include a crash in office values from the City of London to Berlin, leaving property as the least popular industry among fund managers for the third straight month, according to a Bank of America Corp. survey. Bloated with debt, many landlords will have to turn to asset sales, dividend cuts and rights issues in an attempt to rightsize the firms for a more turbulent future. 'The maturity wall could be a catalyst for transactions to happen because if borrowers are not able to refinance, they will have to exit,' said Jackie Bowie, head of EMEA at Chatham Financial. 'You’ll have more assets sold in the market, I suspect, at distressed levels.'"

The Toronto Star in Canada. "There’s been a 'notable' increase in homeowners selling within one year of buying a property, particularly condos, since interest rate hikes started last year, according to a new report from land and commercial registry company Teranet. A third of Ontario condos sold were owned for less than a year in 2022, up from less than a quarter. In the GTA, properties sold within a year went from 20 per cent in the first quarter of 2022, to about 29 per cent in the fourth quarter of that year, before dropping slightly to about 24 per cent in the first quarter of 2023."

"The report found that properties held for less than a year increased to 22 per cent of all transactions in the province at the end of last year and the first quarter of 2023, which 'may suggest home ownership stress for those who purchased at the peak of the housing market.' Historically, this figure sits around 15 per cent. Ira Jelinek, a sales rep with Harvey Kalles Real Estate, said the numbers 'make sense,' although he doesn’t personally have any clients in that situation. 'It’s a lot of people that just can’t afford their payments anymore,” he said."

Stuff New Zealand. "House prices are still a long way from being at a sustainable level, and households have to earn well above the average income to avoid mortgage stress, according to an analysis by Canstar. Canstar found Auckland households needed to earn $219,000 a year to be able to afford an average-priced house and keep up with repayments at current interest rates without going into mortgage stress. 'That is nearly $80,000 more than the average Auckland household income, meaning homeowners will either face mortgage stress or need to find a far bigger deposit,' Canstar noted."

"Things were not much better at the national level, with the average household needing to earn $171,417 to avoid mortgage stress, which was more than $50,000 higher than average. Infometrics chief forecaster Gareth Kiernan came to a similar conclusion, finding the current mix of interest rates and house prices meant borrowers needed an income more than 40% higher than they did in March 2020 to meet servicing requirements. That was despite house prices having retreated 17% from their 2021 peak, and was based on the assumption a bank would not lend to you if repayments took up more than half of your take-home pay. 'No matter which way you look at it, housing still looks really expensive. It’s not as expensive as it was back in 2021, but that was partly fuelled by very low mortgage rates which were, as it turned out, unsustainably low,' he said."

From ABC News. "A new home requires much more than a roof, windows and brickwork. Just ask first homebuyer David Niblitt who despairs as he stands on a patchy lawn in front of his half-built house. Two years after signing a $430,000 fixed price contract, the boilermaker can no longer afford to finish the home that he and his wife had hoped they'd be living in by now. The foundations are up and the roof is on but inside, it's nothing but plywood and concrete slabs. Like thousands of Australians, the Niblitts have been caught in a perfect storm."

"Their builder, Porter Davis, collapsed in March and they've been told they'll need to find an extra $120,000 to finish their home, near Geelong, with another company because of soaring construction costs. 'We're trying to do what all Aussies do, build your first home,' Mr Niblitt said. 'But it's just been an absolute nightmare.'"