A report from The Street. "Florida's Sarasota is the city with the biggest increase of home listings hitting the market. Between May 2022 and 2023, there's been an 128.1% increase in for-sale properties. The high inventory has to do with overall oversaturation of the real estate market. 'Too many sellers are pricing their homes as if the market were still as hot as it was a year or two ago,' Realtor.com writes, paraphrasing local agent Carissa Pelczynski. Other cities with high numbers of new homes hitting the market include Nashville, Tenn., and Austin, Texas. Home inventory is up a respective 124.7% and 112.5% in each city. But when mortgage rates rose in 2022, the Austin market was one that cooled the most, with list prices falling 15% from May 2022 to January of this year."

The Seattle Times in Washington. "Higher rates and lingering uncertainty in the economy mean 'the sense of urgency for buyers to get into a home has really changed,' said Seattle Redfin agent Bliss Ong. The median single-family home in King County sold for $910,000 in May, down 9% from a year ago, according to the Northwest Multiple Listing Service. The decline was especially dramatic in North King County and in Seattle, where median home prices dropped 17% and 12%, respectively. Condo prices were down 5% countywide."

"The median Snohomish County home sold for $780,000, down 4%. The median Pierce County home sold for $544,990, down 6%. The median Kitsap County home sold for $557,450, roughly flat from this time a year ago. (Even so, Kitsap hasn’t been immune to the market downturn. In April, the median price there was down 8% year over year.) King County home prices peaked at this time last year, when the median home cost a record high of nearly $1 million, and prices were up 15% from a year earlier. 'Certainly, we have seen a correction,' Windermere Chief Economist Matthew Gardner said, 'which makes sense because the market was artificially overheated' by ultralow mortgage rates from 2020 through early 2022."

The Livingston Enterprise on Montana. "Gallatin County’s housing market has continued to cool since the pandemic. The overall median sales price in Gallatin County dipped to $633,000, which is an 8% decrease from last year. The median sales price for a single-family home dropped to $777,000, a nearly 6% decrease from last year. The amount of closed sales dropped by over 20% from last April. The amount of properties on the market in Gallatin County at the end of April was over 83% higher than the previous year. 'With increased inventory it gives buyers more choices as opposed to rushing out to buying what’s there,' said Jim Gingery, board president of the Gallatin Association of Realtors."

From Newsweek. "Andrew Lieb, an attorney who offers real estate legal services around the New York metro area, told Newsweek via email that higher interest rates are 'generally devastating to the real estate world' not just because they depress demand by pricing out commercial buyers who count on leveraged offers. Instead, he said the real risk posed by higher interest rates is with respect to owners who have adjustable-rate mortgages that will automatically adjust to much higher interest payments, without notice or option, and as a result destroy owners' profit margins."

"Andrew Ragusa, a licensed real estate associate broker, told Newsweek via email that 'there is an eerie unsettling feeling going around' because many people are knowingly overpaying for properties because they have no other choice. 'A lot of people are going to see their house value come down after a big crash but they're all committed to monthly payments that are high and now have large loan balances,' Ragusa said. 'It does not look good right now.'"

The San Francisco Standard in California. "Park Hotels and Resorts, a Virginia-based real estate investment firm, said Monday that it had stopped paying back a $725 million loan on its main San Francisco properties and is likely to give two of the largest hotels in the city back to its lender. The decision to offload the city’s largest hotel—the 1,921-room Hilton San Francisco Union Square—as well as its fourth-largest hotel—the nearby 1,024-room Parc 55 San Francisco—represents a major disinvestment and negative sign for what was once one of the strongest hospitality markets in the country. Taken together, the two properties make up around 9% of the city’s total stock of hotel rooms."

"Alan Reay, president of hotel consulting firm Atlas Hospitality Group, said some hotels are facing headwinds similar to San Francisco's office market, which is seeing record-high vacancies.  He pointed to other signs of trouble, such as the distressed sale of the Huntington Hotel in Nob Hill and financial troubles at the nearby Stanford Court Hotel, which is having trouble paying back its loan. In 2016, Hilton San Francisco Union Square and Parc 55 San Francisco were appraised at $1.6 billion, according to CMBS loan documents. Reay said the rubber could meet the road when a lender takes control of the properties and sells them off at a substantial discount."

"'If you have a 50% reduction in value since 2016, if you start to take that across the board on other hotel assets, that’s going to be a major problem,' Reay said, noting that the properties most at risk are larger hotels that cater to business travelers."

The Salt Lake City Tribune in Utah. "Downtown Salt Lake City may be forever changed by the coronavirus pandemic. As the pattern persists, effects of remote work and all those empty cubicles are now combining with higher interest rates, pockets of layoffs and rising economic uncertainty to produce a major slowdown in the city’s office sector, with office vacancies in some cases as high as 30% to 50% in parts of West Valley City and in southwestern portions of the valley. Technology and call centers, in particular, have shed space, and several large employers have put sizable portions of their offices up for sale or sublease since January."

"'Office is definitely going through pain,' said Kip Paul, vice chair of investment sales for brokerage firm Cushman & Wakefield. 'Nobody’s going to build an office building right now. Some of these buildings are transacting at literally 50% of what they would have been two years ago '"

Bisnow London in the UK. "The logic is impeccable: Distress ought to be hurtling toward commercial real estate like an angry summer storm. Squeezed between the suddenly escalating costs of refinancing, and their suddenly falling portfolio valuations, plenty of individual buildings and many landlords, must be heading for trouble. The advisers to lenders from the restructuring and insolvency worlds, those people who try to avoid financial cataclysm when loans become distressed, and take over when it can't be avoided, have a message. Lenders are beginning to deal with problems. The storm is about to hit."

"'Every lender you speak to say yes, we expect stress in the market, but our books are clean. The trouble is I remember this being said in 2008-2010 right up until the point when it was clear they weren't,' said Fraser Greenshields, EY partner and corporate finance leader. 'When interest doesn't get paid there's nowhere to hide,' Greenshields said. 'Buildings that looked good four years ago now look decidedly tricky when existing tenants lease expires. So there's argument for lenders to the get asset on the market now because the situation its only going to get worse; more will hit the market and at least if you act now potential buyers will look at the asset and you'll get a price, even if you don't like the price. In a short while, when six similar buildings are on the market, buyers may not even look at yours.'"

"RSM UK Restructuring Advisory partner Damian Webb said that the current period is the calm before the storm. 'It's coming,' he said, of a wave of distress. 'Remember, it's only 12 months since interest rates started going up, and nobody then envisaged them going this high, of demand softening in the way it has. Nobody, for instance, expected the negative land values we're now seeing thanks to high debt costs,' Webb said, adding that in these circumstances it has taken lenders (and borrowers) a while to grasp that this wasn't an inflationary blip.'"

The Delta Optimist in Canada. "According to the Real Estate Board of Greater Vancouver, the benchmark price for a single-detached house in Ladner in May 2023 was $1,399,600, up 3.5 per cent from this April. The price, though, was still down 9.3 per cent compared to May 2022, when the market had cooled. The benchmark price for a house in Tsawwassen last month was $1,553,300, almost unchanged from the pervious month, while down 10.7 per cent compared to May 2022. The benchmark for a single-detached house in North Delta last month was $1,383,500, almost two per cent up from April, while 12.9 per cent down from May 2022. Meanwhile, the Fraser Valley Real Estate Board says it saw an injection of supply in May as new listings surged by more than 40 per cent over April."

ABC News in Australia. "Maria Tupou was having dinner with her husband, Sio, in April when he delivered some bad news. Sio had just learned they could lose the $30,000 deposit they paid to construction firm Porter Davis to build their 'forever home' in Wollert, a suburb in Melbourne's outer north. They signed a contract with Porter Davis in November 2022. Then, in March this year, before construction had started, the firm collapsed. 'I just remember sitting there crying in the middle of a busy restaurant,' says Maria. 'I'm still emotional about it.'"

"Maria and Sio are far from alone. Porter Davis is just one of dozens of building companies to collapse in the last 12 months. Phil Dwyer, president of the Builders Collective of Australia and builder of 40 years' experience, says the insolvency crisis in the construction industry is a 'nationwide problem.' Dwyer says, currently, 'there's a great escalation in insolvencies.' Dwyer says introducing the HomeBuilder scheme into an already 'heated industry' created a volume of work that has proved unmanageable for the nation's builders. '[The government] should never have done it,' he says."

"With the price of raw materials such as steel and timber increasing between 40 and 50 per cent during the pandemic, many operators have simply run out of money to finish projects. 'It's devastating for the building industry [and it's] devastating for consumers … We're in a lot of trouble,' Dwyer says. Michael, a residential builder based in Melbourne, has recently finished work on a project he took over in 2021, after the owner discovered the previous builder was trading insolvent. 'This is the third job I've completed where the previous builder has gone broke or gone missing,' he says."

"The completed work was substandard and underinsured, creating problems for the owners, including a $400,000 budget blowout. '[The owners have] got two young children; they're living with their parents. They're struggling financially, too,' Michael says. These days, it's a situation he's seeing more often. 'A lot of builders who are going broke … are office-based. They pay people to manage the jobs — they have an accounts team; they have a marketing team,' which amounts to 'a lot of fixed costs,' he explains."

"These large firms, who might do up to 90 jobs at a time, now face a perfect storm of raw material price hikes and expensive delays, due to labour shortages, lockdowns and bad weather. 'This is where they're getting bitten,' Michael says. 'If you're a large or volume builder, you're really caught out in this inflation bubble.'"

From Yicai Global. "Amid sluggish demand in China’s property market, developers in some cities are offering ‘zero down payment’ and ‘negative down payment,’ sales practices that exploit legal loopholes, to attract buyers, Yicai Global has learned. The cities include Shenzhen, Foshan, and Huizhou in China’s southern Guangdong province, Changchun in the northeast of the country, and Chongqing in the southwest. Compared with the previous zero down payment practice, which was more of a marketing gimmick, this time some developers are taking a risk to artificially lower the initial payment made on properties, Yicai Global found from interviews."

"'If you buy a certain apartment in our project, we can offer you an actual zero or even negative downpayment,' a sales agent in southern China told a reporter from Yicai Global posing as a homebuyer. This is done by exploiting the difference between the price filed with the local authorities and the price the customer actually pays, the agent said. With the buyer’s cooperation, the developer notifies the authorities that an apartment sold at the government-set guide price of CNY18,000 (USD2,530) per square meter, but in reality it sold at discount for about CNY14,400 per sqm."

"The buyer then uses the fabricated data to apply for a mortgage, borrows more than actually needed, and uses the difference to reduce the actual downpayment. The practice means buyers only need to pay 30 percent or less of the official minimum downpayment to seal the deal, a sales agent in Huizhou told Yicai Global."

"When the property sector boomed in the past, there was no room for such market manipulation, as builders were unwilling to offer any discount against the price filed with the authorities, according to a source at another developer in southern China. The practice’s emergence reflects sluggish market demand, the person added. The various gray-area practices to lower downpayments reflect weak housing market demand, with some developers desperate for buyers, an analyst at Centaline Property in southern China told Yicai Global."

"These developers splurged on land at the peak of the speculative bubble several years ago, but after the market cooled their destocking efforts barely work, and in some smaller townships, sales are so poor that only a handful of properties change hands each month. Fighting to survive, these developers have no other choice but to offer subsidies and cut prices, the source added. Regional regulators have picked up on the new practice and are stepping in. For example, Huizhou put out a notice late last month to forbid such illegal practices among developers and real estate agencies."