A weekend topic starting with Bisnow South Florida. "Short term rentals have proliferated across Miami as developers race to meet demand that surged during the pandemic. At least 4,312 short-term rental units across 12 projects have been proposed or started construction in Miami just since November, based on an analysis by Bisnow. 'Buyers like it because it's flexible,' said Harvey Hernandez, CEO of Newgard Development Group, which has two short-term rental properties under development in Miami. 'The times of the consumer buying an asset that they cannot monetize are over.'"

WKRN in Tennessee. "Helping buyers is inventory. Nashville has the biggest year-over-year increase in the U.S. at 102.5%. Meanwhile, prices are down 6.3% from last year, with the median price now at $440,000. 'When Nashville has the highest rate of inventory increase, or among the highest, in the nation, that is really indicative of just how low our inventory was at the peak of this whole housing thing,' said Jeff Checko, relocation director with The Ashton Real Estate Group of RE/ Advantage."

Community Impact in Texas. "In May, the median home price in the city of Austin dropped 16.7% year over year to $550,000. The median home price in the Central Austin region also dipped about 8% year over year from $810,000 in May 2022 to $710,000 last month. Housing inventory in the Central Austin region reached 4.9 months last month, a roughly 300% increase since last year."

From Go Banking Rates. "In May of this year, ATTOM recorded a sharp uptick in foreclosure rates around the United States. Adding up notices of default, repossession by banks and auctions on the calendar, the report found 35,196 American properties with foreclosure filings. 'The lifting of all COVID-19 related moratoriums that have finally unclogged the pipeline of distressed properties,' said Kristen D. Conti, the co-chairwoman of Default Industry Leaders. 'Those people who chose to take advantage of programs where they could not pay their mortgages and put the payments on the back end of the loan are now faced with homes whose prices are leveling out and they find themselves underwater. The escalation of prices put many marginal buyers at the very top of their qualifying range. Any change affecting household income can be catastrophic right now as prices become more prevalent and prices decrease.'"

"Conti explained that new construction is being delivered to the market on a consistent basis, pumping up the inventory while demand has taken a deep decline because of high interest rates. 'I believe foreclosure rates will continue to increase,' Conti said. 'I know the clients I work with are gearing up their loss mitigation departments in preparation for what is next in our market. We certainly don’t expect another downturn like 2008 but some stabilization and balance are a welcome change from the Post COVID craziness of multiple offers, waiving of inspections and appraisals and other risky decisions.'"

The New York Post. "Inflation in the new era of remote work is creating a global commercial real estate 'apocalypse' where zombie properties sit vacant and owners with loans coming due hand their keys back to lenders, according to experts. Commercial real estate owners in hubs like New York, San Francisco, London and Hong Kong are handing keys back to lenders for properties worth less than the debt secured against them. Harold Bordwin, a managing director at Keen-Summit Capital Partners, said lenders will choose between 'pushing mark to market' or 'extending and pretending,' tactics that were used to crawl out of the ’80s and ’08 financial crisis. 'Things were sold at pennies on the dollar, and regulators made their way through that inventory,' he said."

"Another option would be the 'extend and pretend' tactic that was used during the financial crisis of 2008, where borrowers 'take loans, allowing banks not to think about what collateral is really worth,' Bordwin explained. However, 'there is just a massive amount of obsolete space,' the real estate expert said. 'Nobody has a great answer to how that could be dealt with,' he added, noting that 'a portion of these buildings could end up getting knocked down eventually' if they’re deemed unable to be converted into residential or lab space."

Bisnow San Francisco in California. "Real estate professionals have doubts about the effectiveness of office-to-residential conversions as the answer to the city’s problems. '[Office conversion] is not going to be the solution,' Grosvenor Senior Vice President of Investment Angela Biggs said. 'Even if these impact fees get passed, you are still a full 200 grand-per-unit to get to a number that you know pencils, and this is when everybody is scrambling for capital.'"

The Globe and Mail. "Central bankers worldwide are spooked – like a herd of zebra catching wind of a lion pride. The predators they fear are inflation and inflation expectations. And those are more significant threats than they thought just weeks ago, particularly the latter. Businesses have become experts at convincing us that 10-per-cent-plus annual price increases are justified, whether they are or not. It’s a tough cycle to break but the Bank of Canada and its global peers have no choice but to kill these mindsets. And the only way to do it is with aggressive interest rate increases, hikes that leave no doubt the central bank means business."

"In the last few months, policy-makers around the world have raised rates in surprise fashion. We’re talking Britain, Australia, Norway and New Zealand to name a few countries –and, of course, Canada. All are finding core inflation more difficult to tame than anticipated. That’s an anxiety-maker for variable-rate mortgage borrowers. Families are now watching in dread of higher payments, which is exactly what we’ll get if bond market investors are right."

This Is Money. "Insanity is doing the same thing over and over again and expecting different results. That apocryphal quote may not really have come from Albert Einstein but Britain does need to wean itself off the insanity of the two-year fixed rate mortgage. Once again, our love of fixing the interest rate on a lifetime debt over a period that flashes by all too quickly, is massively exacerbating problems in the mortgage market. Two-year fixed rates aren’t responsible for the current mortgage mayhem – we have years of Bank of England and government economic blundering to thank for that – but they are certainly compounding the misery."

"Ultimately, the Bank of England, the government, banks, building societies and mortgage brokers know that two-year fixed rates are a fundamentally risky product. Yet, they are still flogged with merry abandon to unwitting homeowners without sufficient warning of what might go wrong if rates suddenly rocket, or the mortgage market seizes up. Figures from the IFS show how this is hammering a generation of homeowners in their 30s and 40s. The Bank of England owes them and others an apology, as it spent years reassuring borrowers that when rate rises came, they would be ‘limited and gradual’ - whereas instead they have been brutal and rapid."

The Irish Times. "German residential property prices have experienced their steepest fall in 23 years, ending a decade-long boom that saw many ordinary earners increasingly priced out of their home cities. The largest price declines compared with the same quarter of the previous year were logged in cities that have noticed the sharpest rises in the last decade: Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf. Here prices for semidetached houses fell by 10.4 per cent, while apartment prices are 6.4 per cent down on average."

"Overall average Berlin apartment prices have jumped 180 per cent in the last decade, with prices in certain areas often far exceeding that average. Berlin property agents said they sensed a residential price slump as long ago as this time last year, expedited as the year went on by the European Central Bank interest rate increases. Since August 2022 the total value of home loans granted has dropped from €25.8 billion to €13.8 billion – though agents notice a new stabilisation in the last weeks. 'The gold-digger mentality is gone, with people buying silly things for silly money,' said one western Berlin agent."

The Sydney Morning Herald. "Residents of several outer fringe suburbs who can no longer afford their mortgages face the prospect of selling into a weakening local property market. In the mortgage-belt neighbourhoods that have high numbers of indebted households, many have falling property prices, rising listings or both, CoreLogic head of Australian research Eliza Owen said. Owen said a rise in listings in an area where prices were falling was a 'red flag' and indicated homeowners weren’t choosing to sell but were unable to hold off until favourable market conditions arrived."

"'When you look at some of the areas like the Melton-Bacchus Marsh area and the Blacktown north market for Sydney, this is where we see a slightly worrying trend of listing volumes rising,' she said, although property prices have edged up in Blacktown. 'Why are new listings rising across Melton and Blacktown? Usually, this time of year it’s winter and listings should be going down, not up. New listings continue to rise, which is pretty curious. Maybe there are some people who feel they need to sell their property.'"

"Other highly mortgaged areas that had a drop in prices but a rise in listings included the southern part of Melbourne’s Casey Council and the Knox Council area. In NSW, it included Gosford and Wyong on the Central Coast."

From City AM. "Earlier this month, I spoke at the European Parliament on the unfolding economic situation around the world. The fragility in the banking system over the last few weeks has caught many policy-makers by surprise, yet much of what is happening is entirely predictable. In 2018 and 2019 I gave a series of speeches in the European Parliament detailing the consequences of zero percent interest rates—the unparalleled growth in debt and build up of risk in the global financial system that was developing."

"For the last forty years, through much of the developed world, each recession has been responded to by central banks setting lower and lower interest rates, thereby creating larger and larger debt bubbles. This is a phenomenon that has taken place across almost all of the developed world. For instance in America—which as the holder (at least for the time being) of the world’s reserve currency has special importance—when the bubbles in property and other asset classes burst in the late 1980s, the response from Alan Greenspan was to set interest rates at 3 per cent, the lowest for a generation, and then follow up with several iterations of the so-called 'Greenspan Put,' thereby creating the Dot Com Bubble."

"When the Dot Com Bubble burst in 2000, the response from the Federal Reserve was even lower interest rates, of 1 per cent, which then created an even larger bubble—the Housing Bubble. When this burst in 2008, the response was the lowest interest rates in history, 0 per cent, with some central banks even setting negative interest rates, for more than a decade. The main consequence of this, far from bringing back prosperity, has been to generate an even larger global debt bubble."

"In fact, with each phase of the growth of the global debt bubble from the 1980s onwards bond quality has fallen as issuing more debt became the solution to every problem—thereby making the economy more reliant on artificially low interest rates. Unlike previous business cycles from the last hundred years, we now have to unwind an entire generation of ever-larger distortions. Now that this iteration of the generational debt bubble is beginning to burst, it is an opportunity to re-examine the role of interest rates in the economy and view them as an important and systemic pricing mechanism rather than a 'policy tool' for central bankers."