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The House Price Slip Has Become A Slump

It’s Friday desk clearing time for this blogger. “Seattle-area home prices dropped again in March. The median single-family home in King County sold for $840,000 in March, down about 10% from a year earlier, according to the Northwest Multiple Listing Service. Prices dropped sharply on the Eastside, where the median home price plunged 17% to $1.4 million. Nearby counties are reporting similar trends. The median Snohomish County home sold for $724,000 in March, down 9.5% year over year. The median Pierce County home sold for $526,000, down 6%. The median Kitsap County home sold for $517,500, down 4%.”

“Homes priced between $1.5 millionand $2 million are ‘flying off the shelves,’ said Seattle RE/MAX broker John Manning. But townhomes, typically a more affordable option for first-time homebuyers, are ‘sitting around unsold,’ Manning said. Tech layoffs in the Seattle area have shaken the confidence of younger tech workers who would be townhome buyers, Manning said. That’s especially true for tech employees on work visas, who can be forced to leave the U.S. if they don’t find another job. ‘They are sitting back and not getting in the market as much because they’re worried about where they will be employed,’ Manning said.”

“Not even the luxe real estate offerings of the Hamptons are immune from an ongoing slowdown. The median home sale price in the Hamptons fell to $1.66 million in the first quarter of 2023 – a 7.6% decline compared to the same period one year earlier, when the median home sale price was $1.8 million. The sharpest plunges in median home sale prices occurred in the Shelter Island market, where the figure plunged nearly 38% to $1.61 million. Sale prices in Amagansett and Bridgehampton each fell by more than 15%. All 12 Hamptons-area real estate markets tracked by the firm reported declines in total home sales. Overall, the number of home sales plunged by a whopping 44% for the first quarter year-over-year.”

“The number of homes on the market has exploded since last year — three times more, in fact. In March 2022, inventory was tight with only 2,000 homes on the market, but March 2023 was a different story with 6,000 homes available. Realtor Ethan Flynn’s data shows that inventory jumping even higher in April. At the same time inventory is up, Flynn said that contract volume is down as much as 20%. ‘When you look at the relative affordability of Nashville and the Nashville housing market, another 10% to 20% drop in prices is not unreasonable,’ said Flynn.”

“As prices have stabilized and mortgage interest rates have risen sharply, sales in general have slipped to nearly 30% of the volume from the year prior. ‘We’ve seen people who are deciding to wait, whether it’s because they’re not finding the home they want even though our inventories have come up,’ said Brian Tresidder, the 2023 president of the Realtor Association of Sarasota and Manatee. ‘Prices shot up, interest rates shot up, insurance has gone up, and so there’s not this rush for them to buy something that they may not necessarily like.'”

“Out of the 3,144 counties across the U.S., Los Angeles saw the largest drop in population between July 1, 2021 and July 1, 2022, according to the U.S. Census Bureau. More than 90,000 people left the area, though that’s fewer than the roughly 180,000 that moved the previous year. During the same 2021-2022 time period, California as a whole lost about 114,000 people, meaning L.A.’s exodus could’ve accounted for about 80 percent.”

“‘Anytime we see a coastal California County losing folks, that’s really a policy failure on our part,’ said Adam Fowler, founding partner at CVL Economics in Los Angeles, who also points to a lack of affordable housing supply as a major issue. He’s also watching office vacancy rates, which have been steadily climbing in many places. ‘That’s going to really have some red flags for our fiscal house of cards in jurisdictions over the next decade,’ he said. ‘We’re not sure how that’s going to play out if the valuation of those buildings follows the downward trajectory of what office vacancies might indicate. How we pay for things locally is going to hinge on a lot of those questions in the next few years.'”

“More office space is being vacated than occupied in Dallas-Fort Worth. A quarter of DFW office space was vacant in Q1, while sublease availability remained elevated at 9.1M SF, per JLL. ‘Dallas has a record amount of sublease space on the market, over three times the amount of space we had pre-pandemic,’ said Robbie Baty, Cushman & Wakefield’s vice chairman. ‘While many building owners will be able to refinance and keep their buildings, there is a high likelihood that many buildings that are struggling will result in defaults and/or foreclosures.’ The construction pipeline remains robust, per Cushman & Wakefield, with 5M SF of new office space underway.”

“Seemingly gone — at least temporarily –are the days of the blockbuster deals. ‘No one’s willing to be the first one out of the box [in 2023] to put their properties out there to see how much the market has changed,’ NIC Chief Economist Beth Mace told Senior Housing News. ‘The market is still pretty stalled and it’s a very challenging environment.’ There are also still plenty of distressed properties that could hit the market in 2023. ‘I think the market’s been shocked and still trying to absorb what’s been happening,’ Mace said. Without pricing transparency, Mace said the industry could expect to see fewer deals and lower valuation adjustments. ‘There’s difficult decisions for portfolio managers probably right now on what to retain looking at their entire portfolio of properties,’ Mace said.”

“In high-rise towers and boutique buildings from mid-town south to Lake Ontario, listings are lower than normal, says Christopher Bibby, broker with Re/Max Hallmark Bibby Group Realty. One day last week, Mr. Bibby had 17 condo listings pop up in the city core – and some of those had been relisted after failing to sell earlier. He cautions that prospective sellers should not hold out for a return to the mania of late 2021 and early 2022. ‘To expect that is not realistic,’ he says of the frenzy. ‘We won’t go back to that type of market again.'”

“Sarah Coles, head of personal finance at consultancy Hargreaves Lansdown, says: ‘The house price slip has become a slump, with the biggest annual price drop in 14 years [according to the Nationwide]. The pace of descent accelerated, and we’re already almost five per cent below the peak in August. Unfortunately, the indications for the future aren’t looking terribly promising either. Buyers have been broken by rampant inflation, jacked-up mortgage rates, a stagnating economy, and the threat that there could be worse to come.'”

“Sweden has long had one of Europe’s hottest housing markets, but prices have tumbled and are not set to recover for a long time, according to Danske Bank. Prices are currently down by 12% from the peak recorded in February last year, according to the bank’s data. Danske previously projected a 20% drop, peak to trough, in Swedish house prices. It has since revised that figure to a 25% dip, meaning prices are currently ‘still only half-way to the bottom,’ according to Danske Bank’s Nordic Outlook report.”

“House prices have dropped 8.2% year on year, an increase in the rate of slowdown, according to the NVM estate agent association. Although the unprecedented 20% annual increase in prices during corona has not been corrected, the rate of slump has increased and sales dropped to a five year low. This year, almost twice as many houses were for sale between January and March than in 2022, with a total of 31,000 for sale boards with NVM estate agents. The median sale price dropped by 3.6% compared with the last quarter of last year, with a marked collapse in pricier new build houses and properties of over €1 million. ‘Everyone thought that price increases of 20% a year would not be sustainable,’ said head of the NVM housing group Lana Gerssen,. ‘This is a normal correction on the enormous price rises of the past years.'”

“Data from Statistics Finland reveal that building contractors began construction on a total of 1,734 flats in January, signalling a drop of 835 from January 2021. At the same time, the number of vacant newly built flats is high partly because of a high number of newly completed flats and partly because of a slowdown in sales. The number of newly built flats sold was 80 per cent lower in January 2023 than in January 2021 in Jyväskylä. Sale times in the city, meanwhile, have tripled in the past two years. The drops in sales have been even more dramatic in Helsinki, Espoo, Turku and Oulu.”

“Tuomas Viljamaa, the managing director of the Federation of Real Estate Agency indicated that the decline in the number of new construction projects is not necessarily a negative development. ‘You could say that we’ve built beyond our needs in recent years. The positive thing about that is that price increases haven’t got out of hand,’ he elaborated.”

“Melbourne resident Eric Poon, 33, said he is among Porter Davis customers left without insurance, and argued the suggestion some people fell through the gap is an attempt to rationalise the home builder’s actions. He and wife Abby Zhong paid the deposit for their Porter Davis home at Lilydale in Melbourne’s outer north-east in December 2020, but the land was only titled last week because of delays by a land developer handing over the property. ‘This has put a considerable financial strain on us,’ Mr Poon told AAP. ‘We were hoping to complete the construction of our new home as soon as possible so that we could rent out our current apartment and generate some cash flow.'”

“Shareholders at Credit Suisse’s last-ever annual meeting vented their frustration, anger, and disappointment in remarks directed to the bank’s board. After sharing that he did not bring his gun to the final annual meeting, shareholder Guido Roethlisberger said that security checks at the door into the conference ‘were enough to annoy me,’ according to a translation of his remarks. Another angry shareholder appeared to be implying that Credit Suisse’s board would’ve been crucified during medieval times. Earlier in his remarks, the shareholder said one share of Credit Suisse was worth over 80 Swiss francs 25 years ago, but today a share is not enough to afford a Swiss pastry.”

“‘The value has decreased by about 99%,’ he said. ‘And for this achievement, the best top managers of the world would have been paid not only millions but billions in bonuses. And now, they probably want a golden parachute to bid farewell to us as well. Have you ever asked yourself, how much is enough? How much is enough for a golden parachute that is on his crashing plane that is the Credit Suisse?'”

“One shareholder held up a handful of walnut shells and said ‘a bag of these costs around one share’. He said he had a ‘gift’ for Credit Suisse, and held up walnut shells, saying a bag full of them would cost as much as one share of the troubled bank. He added that he ‘opened the shells, ate the nut inside of it and then glued them back together. So they’re hollow nuts.'”

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This Post Has 49 Comments

  1. More than 90,000 people left the area, though that’s fewer than the roughly 180,000 that moved the previous year. During the same 2021-2022 time period, California as a whole lost about 114,000 people, meaning L.A.’s exodus could’ve accounted for about 80 percent….‘Anytime we see a coastal California County losing folks, that’s really a policy failure on our part’

    So LA sux even more than bay aryans? Adam, you gotta play up the positives. Do yer lamp posts hold up to bum urine longer than 6 months? Just throwing that out there.

  2. ‘The market is still pretty stalled and it’s a very challenging environment.’ There are also still plenty of distressed properties that could hit the market in 2023. ‘I think the market’s been shocked and still trying to absorb what’s been happening,’ Mace said. Without pricing transparency, Mace said the industry could expect to see fewer deals and lower valuation adjustments. ‘There’s difficult decisions for portfolio managers probably right now on what to retain looking at their entire portfolio of properties’

    Now just wait a minute Beth. Yer hinting at giving it away! Don’t do it.

  6. A reader sent these in:

    Another ZIRPER fraud bites the dust

    https://twitter.com/INArteCarloDoss/status/1643908630197022720

    Jamie nails it

    https://twitter.com/INArteCarloDoss/status/1643952301353193474

    As I have been emphasizing, Dale, shadow banks now bigger than all banks together: my estimate shadow lending 60% of global lending, banks just 40%. What can go wrong?

    https://twitter.com/Halsrethink/status/1643963689752469507

    Global Central Bank Update: -New Zealand hiked rates for the 11th time, 50 bps increase to 5.25%.

    https://twitter.com/charliebilello/status/1643985292930748419

    Silicon Valley Bank: $1.8 billion loss on sale of Treasury/MBS holdings -> run on the bank -> shut down. The Fed: over $1 trillion unrealized loss on Treasury/MBS holdings -> still going strong -> chastises SVB for failing to hedge interest rate risk. It’s good to be the King.

    https://twitter.com/charliebilello/status/1643800075808768001

    I would be careful buying a house in a tech-oriented city right now. The combined layoffs in Tech and Finance are jumping.

    https://twitter.com/JeffWeniger/status/1644088107002744835

    SBA basically admits they sh*t the bed on PPP loans, unreal.

    https://twitter.com/GRomePow/status/1644175777410461698

    Uh Oh …… 🚨 Is everything still fine? 🔥🔥🔥

    https://twitter.com/WallStreetSilv/status/1644116145090207744

    It’s pending. The final list price ($396,000) is 19.8% below what Opendoor paid ($494,000) for the North Las Vegas in April 2022. It’ll be interesting to see where the final sales price lands.

    https://twitter.com/NewsLambert/status/1644128308479549440

    Airbnb falls amid short report from The Bear Cave

    https://twitter.com/MarketCurrents/status/1644009322748469249

    it’s never been more affordable to rent than to buy

    https://twitter.com/zerohedge/status/1643991564568633347

    Cost of debt is currently higher than CRE cap rates 🫡🤡🥃

    https://twitter.com/DonMiami3/status/1643962480035790849

    You can own this 2023 Escalade ESV V-Series for a COOL $199k 💀

    https://twitter.com/GuyDealership/status/1644157643659919363

    SAMSUNG JUST REPORTED ITS Q1 EARNINGS OPERATING PROFIT IS DOWN OVER 95% YEAR OVER YEAR AND IT MISSED EARNINGS ESTIMATES BY OVER 50% PER @GURGAVIN
    THIS IS SAMSUNGS WORST EARNINGS SINCE THE 2008 / 2009 FINANCIAL CRISES

    https://twitter.com/gurgavin/status/1644124679001481223

    Here is a chart visualizing this data. The massive spike in 2020 was due to $4 trillion in stimulus which was printed and handed out. This money quickly disappeared as inflation soared. Again, there’s no such thing as “free” money.

    https://twitter.com/KobeissiLetter/status/1643697394922541056

    Ramit’s Rule #42: Never, ever take financial advice from a realtor

    https://twitter.com/ramit/status/1642541041093070848

    That building quality is an absolute joke, but not altogether surprising for Australia in 2023.

    https://twitter.com/AvidCommentator/status/1644159181707186176

    This morning BankWest announced that their variable rate is going up 10bps as of TODAY!!! This is an out of cycle rise. They have also raised their assessment rate by 10bps today which will affect any new borrowers immediately.

    https://twitter.com/KirilRuvinsky/status/1643840323418980352

    Bankruptcies surging in France. 👀

    https://twitter.com/SagarSinghSetia/status/1643923922008825860

    1. ou can own this 2023 Escalade ESV V-Series for a COOL $199k 💀

      You could once get a Bentley for less than that.

  7. ‘While many building owners will be able to refinance and keep their buildings, there is a high likelihood that many buildings that are struggling will result in defaults and/or foreclosures’

    Ahem…

    ‘The construction pipeline remains robust, per Cushman & Wakefield, with 5M SF of new office space underway’

  8. The Deep State is going to kill him:

    “Prior to his anti-vaccine activism, Kennedy had a reputation mostly as an environmental lawyer. But since the early 2000s, Kennedy has been an integral piece of the anti-vaccine ecosystem in the United States, trading on his family name and high-profile connections to give a sheen of legitimacy to bunk science — which critics say has led to needless deaths and a wave of anti-science, anti-government paranoia that is now a defining feature of American politics.

    The COVID-19 pandemic gave Kennedy a new platform for his false medical views. Kennedy’s anti-vaccine group, Children’s Health Defense, more than doubled its annual fundraising to $6.8 million in 2020 and notched millions of website visits monthly, The Associated Press reported.

    The following year, an analysis from the anti-misinformation group Center for Countering Digital Hate found that Kennedy was the source of the most anti-vaccine content shared or posted on Facebook or Twitter, behind only Joseph Mercola, who has influenced millions with “natural” cures.

    “What makes him particularly difficult is his name. His family is one that stood up for the underdog, that represented the underdog, that spoke truth to power, so when he stands up and says, ‘These vaccines are doing an enormous amount of harm,’ that has a special influence,” said Paul Offit, director of the Vaccine Education Center at Children’s Hospital of Philadelphia and a longtime Kennedy critic who believes him to be the country’s most influential anti-vaccine voice.

    Kennedy, Offit added, “lies and lies and lies about vaccine safety.”

    https://www.huffpost.com/entry/robert-f-kennedy-jr-anti-vaccine-activist-presidential-campaign_n_642f46dce4b001e12d71633b

    Covid “vaccines” are not vaccines, they are deadly poison designed and intended to kill you.

    It’s a medical genocide.

    1. “Kennedy was the source of the most anti-vaccine content shared or posted on Facebook or Twitter”

      They can smear his name but they can’t counter any of the facts in “The Real Anthony Fauci”.

      “Center for Countering Digital Hate” ….LOL. We live in truly Orwellian days.

    1. It’s best to watch the entire 1:38 that way you get an appreciation for his driving skills which contain a blatant disregard for the lives of others and either his class graduation photo as a valedictorian or his mug shot I’m not sure which.

  11. Domestic terrorists:

    “Former NCAA swimmer Riley Gaines was barricaded in a room at San Francisco State University Thursday night after she was physically assaulted following a speech to students about saving women’s sports at a Turning Point USA and Leadership Institute event on the campus.

    Louis Barker, Riley’s husband, said he had brief conversations with her while she was barricaded in the room for nearly three hours.

    “She told me she was hit multiple times by a guy in a dress. I was shaking. It made me that mad. It makes me sick to feel so helpless about it,” Barker said. “She was under police protection and was still hit by a man wearing a dress.”

    On Twitter, Gaines shared footage she took showing her being rushed out of the venue by police officers amid an onslaught of verbal attacks from the detractors who surrounded her.

    “The prisoners are running the asylum at SFSU…I was ambushed and physically hit twice by a man,” Gaines wrote in the tweet. “This is proof that women need sex-protected spaces. Still only further assures me I’m doing something right. When they want you silent, speak louder.”

    https://nypost.com/2023/04/07/riley-gaines-ambushed-and-hit-after-womens-sports-speech-at-sfsu/

    Marxists gonna Marx.

    1. “Gaines, a 12-time All-American swimmer, became a national figure when she objected to trans swimmer Lia Thomas participating in women’s sports.”

      That’s what you get when you object to the 462nd ranked male swimmer winning Women’s Championships By 7 Full Seconds.

      Trans Swimmer Lia Thomas (Formerly 462th Ranked William Thomas) Takes The Gold In Ivy League Women’s Championships By 7 Full Seconds

      BY GINA FLORIO·Feb 18th 2022· 3 min read

      https://www.eviemagazine.com/post/trans-swimmer-lia-thomas-formerly-462th-ranked-william-thomas-takes-the-gold

          5. Don’t you vote for this kind of thing?

            No matter how bad it gets, some people will always pull the D lever.

            Also, there is a sob story on 9News about an abortionist who is moving from Tennessee to Dumver because The Volunteer state now restricts some abortions.

            “I pulled my children out of school. I told them we were moving because I couldn’t do my job. I had to say goodbye to people that I really care about including patients,” she said.

            Kids: Mommy, what is your job?
            Mom: I kill babies.

            https://www.9news.com/article/news/local/local-politics/doctor-leaves-tennessee-colorado-abortion-ban/73-54feb57b-c84f-4835-a539-e00551553622

            I am really hating the Centennial State. Wyoming is looking better every day.

          6. an abortionist who is moving from Tennessee to Dumver because The Volunteer state now restricts some abortions.

          7. an abortionist who is moving from Tennessee to Dumver because The Volunteer state now restricts some abortions.

            Welp, I failed the first time. Let me try again:

            <grumpy_cat_good.jpg%gt;

          9. Don’t you vote for this kind of thing?

            If you vote D, you do! We all know PB suffers from TDS.

  12. “During the same 2021-2022 time period, California as a whole lost about 114,000 people, meaning L.A.’s exodus could’ve accounted for about 80 percent.”

    That doesn’t align with the 500,000 pandemic population decline in California often cited in the MSM.

    1. CalMatters
      Your guide to California policy and politics
      BY Ben Christopher • February 17, 2023
      Presented by Randle Communications and Lights on California
      California’s persistently shrinking population — and the reasons why
      A boy takes in the view of the Los Angeles skyline from the Griffith Park Observatory Trails Peak in Los Angeles on Nov. 14, 2022.
      Photo by Jae C. Hong, AP Photo

      In 2021, it was big news — the “California exodus.” Now, it just looks like the new trend: California’s population is still shrinking.

      According to the latest population estimates from the U.S. Census Bureau, California’s total population declined by more than 500,000 between April 2020 and July 2022.

      Put another way, 1 out of 100 people living in California at the beginning of the COVID-19 pandemic had, two years later, left the state — either by U-Haul or by hearse.

      Where’d they all go?
      …
      https://calmatters.org/newsletters/whatmatters/2023/02/california-population-exodus-housing/

  13. “Another angry shareholder appeared to be implying that Credit Suisse’s board would’ve been crucified during medieval times.”

    Medieval times? Crucifixion was a Roman punishment. By the 12th century they had moved on to iron maidens and other torture devices.

  14. I was thinking the other day on the regression of American prosperity for the masses. I think first it started with Colleges in 90’s. Soon after that it was Medical. Then housing became somewhat unattainable, now cars and soon travels/leisure. As high the Food is now, it could get a lot worse imo.

    1. “…regression of American prosperity for the masses.”

      Don’t forget to imclude the guys living under bridges in your assessment.

      1. And don’t forget the Millenials receiving support from their Boomer parents.
        —————
        “Savings.com surveyed 1,000 parents and found 45% with at least one grown child provided them with an average of $1,400 per month.

        That includes money for things like groceries, cell phones, rent, and student loan debt. But 43% of parents also paid for their children’s vacations, and about 4 in 10 paid for their car…

        A Pew analysis found about 6 in 10 people aged 18 to 24 resided with one or both of their parents in February 2020. That same age group accounted for 65% of those still relying on mom and dad for money.

        Surprisingly, nearly 20% of adults receiving financial support from their parents were over 30 years old.”

        https://www.aol.com/news/45-parents-financially-support-adult-190400025.html
        —————

        The numbers are pretty skewed because so many kids 18-24 are still in college, but… paying for vacations, really?

        1. paying for vacations

          Only after one sends a check for “grocery money for the grandkids” and a vacation is discovered to have happened, does one realize that they paid for a vacation.

  15. “Homes priced between $1.5 million and $2 million are ‘flying off the shelves,’ said Seattle RE/MAX broker John Manning.”

    How can you tell when a Relitter® is lying?

  16. Charges have been filed against a man who identifies as a woman after he allegedly planned to carry out mass shooting attacks on multiple schools in Colorado Springs, the 18th Judicial District Attorney’s Office announced.

    William Whitworth, 19, was charged on April 6 following an investigation into threats involving the schools in Colorado Springs Academy District 20, officials said.

    Whitworth, who told police he identifies as “Lilly,” has been charged with two counts of criminal attempt to commit murder in the first degree, one count of criminal mischief, one count of menacing, and one count of interference with staff, faculty, or students of educational institutions.

    https://www.theepochtimes.com/man-who-identifies-as-woman-arrested-for-allegedly-plotting-school-shootings-in-colorado_5178459.html

  17. ‘You could say that we’ve built beyond our needs in recent years. The positive thing about that is that price increases haven’t got out of hand’

    Tuomas, can you face the sun? Good, thanks.

    Click!

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