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A Particularly Weak Time For Sellers Who Struggled To Sell At Their Desired Price

A report the Globe and Mail in Canada. “Some properties are drawing multiple offers and selling at a premium to the asking price. Others are sitting longer or selling below asking – even in sought-after neighbourhoods such as High Park and Riverdale. Jeffrey Wagman of Forest Hill Real Estate Inc. says there’s no rhyme or reason to those varied outcomes. He is hearing from some potential buyers who say they intend to wait for a while. They figure some homeowners may end up in financial distress and under pressure to sell.”

“Mr. Wagman is also advising less experienced agents to make sure that the sellers understand the asking price needs to be realistic and not inflated. ‘There’s no game in overpricing a house – especially right now. The buyers are there and they know what the price should be.'”

“Mr. Wagman says he has seen the downside of overpricing many times: many of those homeowners end up selling for even less than the lower end of their range because buyers start to question whether there’s something wrong with the property as ‘days on market’ tick up. When sellers eventually cut the asking price, buyers want a discount from that reduced price. ‘The damage was done already.'”

“Another outcome that National Bank of Canada, deputy chief economist Matthieu Arseneau is watching is the state of the tourism industry. Travellers may stay home for some time to come and that may leave a number of short-term rental properties vacant. The owners could decide to sell when rental revenue stops flowing, which would boost the inventory of properties on the market. If 25 per cent of short-term rental properties hit the market, listings in the Toronto market will swell by 34 per cent, he estimates.”

The Daily Mail on the UK. “House prices have suffered their biggest monthly decline in 11 years as coronavirus lockdown measures wiped £4,000 off the value of the average property. But some homes fell by huge amounts yesterday, with a five-bedroom mansion in St John’s Wood, London, down on Rightmove from £6.5million to £5.9million – a £600,000 drop. The pattern was reflected across the country as a six-bedroom house in Leicester fell from £1.75million to £1.25million – a £500,000 decrease.”

“Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors, described the price drop as a ‘car crash’. He said: ‘The extent of the car crash that hit the property market in May is laid bare in Nationwide’s report of the largest monthly fall in house prices for over 11 years. Uncertainty remains as to the direction of travel for values in some price ranges and locations until momentum begins to build again. The market feels a bit like returning after the Christmas/new year break, with buyers and sellers waiting to see who will blink first as prices establish their post-Covid level.'”

The Financial Express on India. “Your next penthouse or condo in a prime market like Mumbai or Gurgaon could cost much less, as the Covid-19 outbreak has dealt a harsh blow to the luxury housing segment, which has already been in the dumps with more than half of the units launched in the past three years remaining unsold. Knight Frank India chairman & MD Shishir Baijal said, ‘India’s key markets will also be facing uncertainty, mostly due to a significant erosion of confidence amongst buyers across spectrum.'”

The South China Morning Post. “Hong Kong homes prices dipped in April, with analysts predicting the market to come under renewed pressure from Beijing’s controversial plan to impose a security law tailor-made for the recession-hit city. Home prices are likely to retrace by 10 per cent this year, said Billy Mak, associate professor at the department of finance and decision sciences at Baptist University in Hong Kong.”

“‘After all, the economy is under pressure,’ Mak said. If home prices are positively correlated to the economy, they are likely to slowly adjust downwards. The adjustment does not mean the market is falling off a cliff, he added. Mak also noted some Hongkongers seeking to emigrate tended to cash in and sell properties more cheaply as political tensions throttle the economy. If the number of such sellers increases, home prices are likely to suffer, he added.”

The Australian Financial Review. “The number of homes on the market jumped by 11 per cent in Sydney and Melbourne in May, lifted by older listings as vendors struggled to find buyers that would meet price expectations, SQM Research said. In Sydney, properties that have been on the market for more than two months surged to 15,746, up by 41.4 per cent compared with a month ago.”

“In Melbourne, older stock climbed by 34.4 per cent to 21,505, while Brisbane recorded a 15.2 per cent increase to 18,327. Nationally, listings over 60 days climbed by 12 per cent to 221,117 over the month. ‘The big rise in listings for Sydney is a carry-over of stock that hasn’t been selling since February effectively,’ said SQM Research managing director Louis Christopher. ‘It has been a particularly weak time for sellers who struggled to sell at their desired price.'”

“Worries about rising unemployment continued to weigh on buyers’ sentiment, which would further weaken sales turnover, said Mr Christopher. ‘I think buyers have a lot to deal with at the moment,’ he said. ‘The banks have increased lending criteria which make it harder to get a loan. Many buyers are worried about their jobs and whether or not they will hold [on to them] throughout the year.'”

From Domain News in Australia. “Sydneysider Ross Wheatley has always loved his holiday home on the Sunshine Coast for time off at the beach, and to earn income from short-term tourist rentals during the rest of the year. But now the closed border between NSW and Queensland has stymied any plans for trips north and his unit in Caloundra is lying empty, bereft of other holidaymakers, too.”

“‘I’m a self-funded retiree but we’re not getting any income from the property in this climate,’ said Mr Wheatley, 64, a semi-retired institutional investor advisor who lives with his wife in Beecroft. ‘The tourist market dried up completely since mid-March and all of our bookings were cancelled. It looks like we’ve lost everything until mid-September so it’s a bit of a stretch for us. There are literally hundreds of tourist accommodation units in Caloundra and they’re all sitting empty. They rely on visitors from NSW and Victoria coming up during the winter. I understand the health issues, but it’s very hard.'”

“‘Those areas that are the hardest hit will be those that rely on tourism and hospitality, like south-east Queensland,’ said Domain senior research analyst Dr Nicola Powell. ‘We’re now seeing many properties changing from holiday lets to the long-term residential market, but some landlords who don’t have a cash flow are now considering selling.’ As a result, the Gold Coast currently has 5.5 per cent of property listings classed as ‘distressed’ or urgent sales on Domain listings, the worst-hit region in Australia.”

“There could be a lot more on the market, with discounts, in October, believes Dr Powell. ‘At the moment, we’re on a bit of a pause because of the mortgage-payment freeze,’ she said. ‘But when that lifts at the end of September, many more of those property owners might end up trying to sell.'”

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This Post Has 63 Comments

  3. ‘I’m a self-funded retiree but we’re not getting any income from the property in this climate…The tourist market dried up completely since mid-March and all of our bookings were cancelled. It looks like we’ve lost everything until mid-September so it’s a bit of a stretch for us. There are literally hundreds of tourist accommodation units in Caloundra and they’re all sitting empty’

    As I said earlier, a lot of long-held assumptions about real estate are getting turned on their head.

    2. Wonder who is going to want an airbnb in an American city that disbands or drastically reduces their police force.

      1. Who would even want to open up a business in an area of looters where the cops just stand by and watch them rip you off then torch your shop?

        1. Next up: Businesses in areas popular with looters dry up due to the absence of police protection…

        2. The LAPD has far fewer officers than NYC, per 100,000 people.

          That’s just lipstick on a pig.

          Next up — defund the racist social workers, teachers etc.

          The reality is, they have no funds.

    2. So many fixed costs.

      Gold plated pensions.

      I guess all those union dues donated to the dem party didn’t buy as much as they thought.

      1. Why pay cops 6 figure salaries and fat pensions to be your goons when there are plenty of people who will do it for free?

  5. Why buy a house when you can rent one for half the monthly cost? Buy it later after prices crater for 70% less.

    Seattle, WA Housing Prices Crater 13% YOY As Demand Plummets On Skyrocketing Inventory

    https://www.zillow.com/seattle-wa-98102/home-values/

    *Select price from dropdown menu on first chart

    As a leading economist advises, “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.”

    1. Why buy a house when you can rent one for half the monthly cost? Buy it later after prices crater for 70% less.

      That’s my strategy. But it remains to be seen if it will work out. TPTB seem obsessed with keeping asset bubbles inflated at any cost.

      1. Prices fell 13% and cratering fast.

        It is what it is my good friend…. It is what it is.

  6. lbuyers start to question whether there’s something wrong with the property as ‘days on market’ tick up. ”

    Just take it off the market for a week and re list, like we do in the states. Easy Peary.

  7. Did you dump your long-term Treasurys before it was too late?

    Unfortunately for stock HODLers, a rising risk-free rate against the backdrop of deflationary pressure is likely to diminish the value of stock HODLings. Who wants to HODL overvalued risk assets when you can get a positive real return on a risk-free asset that will generate significant capital gains if predicted negative yields materialize.

    1. The Financial Times
      Coronavirus business update 30 days complimentary
      US Treasury bonds
      US Treasury sell-off becomes crowded trade
      Increase in 10-year and 30-year yields accelerates
      The difference in yields between 5- and 30-year Treasuries rose to the highest level since December 2016
      © REUTERS
      Eric Platt in New York
      7 hours ago

      Yields on long-dated US Treasuries climbed to the highest levels since March on Thursday as hedge funds and other investors crowded into a trade that will pay off if the yield curve continues to steepen.

      Investors were buying shorter-term Treasuries on the expectation that the Federal Reserve would continue to pin interest rates near current low levels, while shorting 10- or 30-year bonds, traders and strategists said.

      The intensification of the three-day sell-off in the longer-dated bonds pushed one part of the yield curve to its steepest level since late 2016, ahead of an update from policymakers at the Fed next week and more sales of new government debt to fund the federal stimulus.

      The difference in yields between 5-year and 30-year Treasuries rose to 122 basis points, the most since December 2016.

      “At this point I have a hard time thinking about who isn’t doing it,” Jon Hill, US rates strategist at BMO Capital Markets, said about the investor strategy. “It is becoming a very crowded trade. A lot of people see this as intuitive given [Treasury] supply, the pull back in demand and the flows.”

      The yield on the 10-year note went beyond 0.8 per cent for the first time since March on Thursday, rising 7 basis points to 0.82 per cent. The yield on the 30-year climbed 9 basis points to 1.62 per cent. Two-year Treasury debt, by contrast, was unchanged on the day, yielding 0.19 per cent.
      …

    2. Dumb question of the evening:

      Wall Street has seen unlimited upside volatility for around ten straight weeks since central banks around the planet announced and implemented unprecedented market support measures.

      Could a similar protracted period of downside volatility take hold at some point after investors eventually realize this moonshot has run out of thrust?

        1. I’d need to see some humanity (and common sense) return before I’m prepared to be optimistic about the future.

      2. Could a similar protracted period of downside volatility take hold at some point after investors eventually realize this moonshot has run out of thrust?

        The only question is when. This month? This year? This decade?

  8. Antimalarial drug touted by President Trump is linked to increased risk of death in coronavirus patients, study says

    By Ariana Eunjung Cha and Laurie McGinley
    May 22, 2020 at 4:41 p.m. EDT

    A study of 96,000 hospitalized coronavirus patients on six continents found that those who received an antimalarial drug promoted by President Trump as a “game changer” in the fight against the virus had a significantly higher risk of death compared with those who did not.

    The Lancet analysis — by Mandeep Mehra, a Harvard Medical School professor and physician at Brigham and Women’s Hospital, and colleagues at other institutions — included patients with a positive laboratory test for covid-19 who were hospitalized between Dec. 20, 2019, and April 14, 2020, at 671 medical centers worldwide

    https://www.washingtonpost.com/health/2020/05/22/hydroxychloroquine-coronavirus-study/

    Study on safety of malaria drugs for coronavirus retracted

    Marilynn Marchione, Ap Chief Medical Writer Updated 7:58 pm EDT, Thursday, June 4, 2020

    “Not only is there no benefit, but we saw a very consistent signal of harm,” study leader Dr. Mandeep Mehra of Brigham and Women’s Hospital in Boston told The Associated Press when the work was published.

    The drugs have been controversial because President Donald Trump repeatedly promoted their use and took hydroxychloroquine himself to try to prevent infection after some White House staffers tested positive for the virus. The drugs are known to have potential side effects, especially heart rhythm problems.

    The Lancet study relied on a database from a Chicago company, Surgisphere. Its founder, Dr. Sapan Desai, is one of the authors.

    Dozens of scientists questioned irregularities and improbable findings in the numbers, and the other authors besides Desai said earlier this week that an independent audit would be done. In the retraction notice, those authors say Surgisphere would not give the reviewers the full data, citing confidentiality and client agreements.

    “Based on this development, we can no longer vouch for the veracity of the primary data sources” and must retract the report, they wrote.

    “I no longer have confidence in the origination and veracity of the data, nor the findings they have led to,” Mehra said in a separate statement Thursday.

    https://www.greenwichtime.com/news/article/Study-on-safety-of-malaria-drugs-for-coronavirus-15317848.php

  9. Unintended Consequences:

    My FAVORITE Asian American restaurant is located opposite some University run housing at Rutgers College. Now it is unlikely to survive! You see all the foreign students found it to be tasty, cheap and casual enough that on old-timer on a fixed income would fit it comfortably in my rotation. No Football I can take, but NO Dumplings is too much to ask.

    1. So what is an “Asian-American” restaurant? I don’t ever remember friends or family stating that they wanted to go out for “Asian-American” food. Do you mean Chinese food? If you mean Chinese food then say Chinese food. It’s not racist and the only people who will be upset by that term are people whose opinions you shouldn’t worry about anyway. I abhor political correctness and the idiocy that it breeds.

      1. Asian-American = Chinese, Japanese, Korean, Vietnamese, Indian, or one of any number of other ethnic cuisines from the Asian continent that appeal to American or expatriate tastes.

        But “dumplings” suggests perhaps he meant Chinese. Is that racis’?

        1. I guess it’s important to pay attention to what variety of “Asian-American” cuisine you fancy.

        2. This is a very common thing. I remember back in the late 80’s, early 90’s eating at a Chinese restaurant near the University. I got a “House Chow Mein” with a tender, somewhat slimy meat that I could not decipher, and did not care for. In hindsight, I know it was cat. That place is long gone.

          This has been going on since forever and a day. There is a large Hmong community in Fresno, CA, who were notorious for eating the neighborhood animals back in the day.

        1. I will have the Dean of Asian-American studies contact you. If you are in the Ivy Castle you can do no wrong.

  11. Speaking of liars:

    Remember that Lancet study that said HCQ was bad? The study was a FRAUD. In fact it was so fraudulent that the authors themselves retracted it, not the Lancet.

    https://www.washingtonpost.com/health/2020/06/04/researchers-retract-study-that-found-big-risks-using-hydroxychloroquine-treat-covid-19/?hpid=hp_hp-top-table-main_hydroxy-650pm%3Ahomepage%2Fstory-ans&itid=hp_rhp__hp-top-table-main_hydroxy-650pm%3Ahomepage%2Fstory-ans

    https://www.thelancet.com/lancet/article/s0140673620313246

    2. “Remember that Lancet study”

      You mean that study 5 posts above this that the Washington Compost had a May 22 headline that read…

      “Antimalarial drug touted by President Trump is linked to increased risk of death in coronavirus patients, study says”

      1. Yeah, I got a giggle out of seeing that “old news” while scrolling down.

    3. It becomes very challenging to obtain objective scientific information when money and politics get involved. Take climate change, for example.

      1. …Take climate change, for example.

        Now remember, your betters have announced that climate change is real and scientifically proven!

        Never mind that it’s actually all just predictions based on computer modeling.

      1. From the article:
        —————-
        “Hours later, a highly anticipated University of Minnesota study published in the New England Journal of Medicine found the drug failed to prevent COVID-19 infections. “While we are disappointed that this did not prevent COVID-19, we are pleased that we were able to provide a conclusive answer,” Dr. David Boulware, ”
        —————

        The Minnesota study was BULLSH!T. Here’s why:

        1. They didn’t even TEST for COVID! They asked the patients to self-report symptoms ban based the data on that. If a patient reported so much as a cough, they assumed a positive COVID. P-bear, didn’t you yourself swear that you probably had had COVID, only to find that you (and most of Cali) didn’t? What if you have been in this study? Based on your symptoms, you would have been marked as a positive when you weren’t. The data are useless.

        2. The patients took the HCQ 4 days after exposure, so by definition they were not studying “prevention.” 4 days is long enough for symptoms.

        3. No good tracking of Vitamin C or Zinc.

        4. No good follow-up. That is, did the patients recover? Maybe if HCQ didn’t prevent, did it reduce symptoms?

        5. Overdosing of HCQ. 600 mg when 400 or even 250 would have sufficed. There’s a theory that the doctors were intentionally trying to induce side effects to make HCQ look bad. Yeah, at this point we have to assume that doctors are liars now.

        6. Sampling is suspect. The control group and the HCQ group were very closely matched. Average weight 160 pounds for both control and HCQ group? Same % of smokers? etc? That’s not normal for a small number (~800) of patients.

        7. A study from India did a true preventative study and found better results.

        8. And just on an observational note, when Boulware says “we provided a conclusive answer” when he knows bloody well that he didn’t even test for actual COVID, that alone is pretty suspect. He seems more interested in bragging than in science. Doctors are liars now.

        1. Doctors are liars now. 10,000 years ago when I was in training & practice I used to wonder about that, particularly about those in positions of authority & undue influence over other practitioners.

    2. So what is an “Asian-American” restaurant? I

      I’m guessing that the bulk of the unemployed were never going to buy a shack anyway.

  13. all is well no more worries…the sky is a deep deep blue as far as you can see.

    Mini Dow Jones Indus.-$5 Jun 20 (YM=F)
    26,840.00+587.00 (+2.24%)

    1. Seems like the same question was raised about NOLA over a decade ago, after Hurricane Katrina hit in 2005.

      As of February 2020, it seemed to be thriving again. But then COVID-19…

      1. Yes, people have moved in/back, though the population apparently is still lower than just before Katrina.

        Guess they didn’t get the memo, that it will soon be submerged by rising sea levels! #AnyDayNow

        1. Yes Spanish people moved in they had ads in NYC for all types of workers starting at $12hr in 2005 fast foods FREE fema housing …there was no jobs march in N.O. No sharpton, waters jackson nothing because they knew the locals from the 9th ward would not work.

  15. Are you missing out on the massive one-way-up rally in risk assets? Buy what the Fed buys.

    The Financial Times
    Coronavirus business update 30 days complimentary
    High yield bonds
    Investors pump record $22.5bn into US bond funds
    Cash infusion over past week is the highest since 2007, when EPFR started tracking
    The demand for credit funds reveals a hunger for yield among investors with short-term interest rates falling to almost zero
    © EPA-EFE
    Richard Henderson in Melbourne and Eric Platt in New York yesterday

    Investors pumped a record $22.5bn into US bond funds in the week to Wednesday as they shifted out of haven money market accounts to riskier but higher paying investments.

    The cash infusion into US bond mutual and exchange traded funds was the most since 2007, when the data provider EPFR began tracking the figures.

    Investment grade corporate bond funds counted $5.5bn of inflows in the week, while funds that buy investment grade corporate bonds and government debt received $7.5bn in inflows.

    Junk bond funds attracted $8.5bn, falling just short of the weekly record set in April.

    “We’re seeing a major reversal of the extreme risk-off behaviour we saw a few months ago,” said Max Gokhman, head of asset allocation for Pacific Life Fund Advisors. The activity has been helped by the big rally in US stocks since March, he said. “Usually bonds lead equities but in this case I think equities are leading bonds.”
    …

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