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A Lot Of People Just Can’t Afford Their Payments Anymore

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.'”

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This Post Has 67 Comments

  1. Lots of tales of woe at the last link.

    ‘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’

    How many years of inventory is that?

  2. ‘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’

    Sound lending!

  3. ‘85% of homes on the island sold below asking price last month’

    Wa?

    ‘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’

    Annnd Miami joins the crater.

  4. ‘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’

    Insurers are bailing on CRE like scalded dogs. Hey lender, we’re going all in on self storage! We’re broke and stopped making payments, but look at me, Ima running, with scissors!

      1. Big glut coming in the self-storage space unless they can convert them to cheap living. They can set up a communal bathroom onsite.

    2. Hey lender, we’re going all in on self storage!

      The monthly self storage rates have absolutely skyrocketed the past few years.

      1. If we all become renters, storage makes sense.

        I’m an apartment renter, and I’d love a kayak or other large stuff I just cannot store in an apartment.

        1. If it flies, floats, or f**ks, rent it. I always thought it was pretty funny that the granola-head environuts seem to have the most outdoor gear in the form of tents, canoes, skis, camping equipment, and other outdoor stuff, much of it petroleum-based. Not to mention the Subaru Outback to haul it all around.

        2. “…other large stuff I just cannot store in an apartment.”

          I also like having tools and a place to service our cars.

          1. I store my fluids and other car stuff to keep my old Honda running in an apartment garage. No complaints so far, but it’s a small couple bottles. It’d be awesome if I could store stuff for brakes and do oil changes, but that’s a definite no-go.

      2. 2.5 years ago when I moved here (middle of nowhere) all the rental places were full. every one of them. No new ones have been built (smallish town/valley). Lots of vacancy signs on rental storage units. I think that’s another market that’s ready to go bust. Pretty easy thing to “just stop paying” and all that junk you never go look at just disappears.

  6. One of the ironies of California living is that after the housed pay a fortune on monthly payments and other costs of shelter, the state taxes them heavily to fund billions of dollars funneled to failing programs intended to help the unhoused.

    Small wonder financially viable middle class households are leaving the state in droves…

    1. The Wall Street Journal
      California Spent $17 Billion on Homelessness. It’s Not Working.
      The Wood Street encampment for years drew people with nowhere to live, until a fire made finding a solution an urgent—and frustrating—task
      LaTreasha McCoy was among the residents of the Wood Street encampment who faced eviction last summer.
      By Christine Mai-Duc and Jim Carlton
      | Photographs by Brian L. Frank for The Wall Street Journal
      June 2, 2023 12:01 am ET

      OAKLAND, Calif.—City firefighters arrived midmorning at a homeless camp on Wood Street to quell a fire spreading across a tinderbox landscape of discarded furniture, debris, abandoned cars and dwellings fashioned from tents, tarps and plywood.
      …

      1. California Spent $17 Billion on Homelessness. It’s Not Working.

        Politicians spend money like drunk “real housewives of (insert big city name here).”

        1. It’s not meant to work. If they solved the homeless issue, the funding and jobs dry up.

      2. “It was far from idyllic. Kellie Castillo, who moved to Wood Street in 2020, worked two jobs—arranging product displays at a big-box store and cleaning houses—which together didn’t pay enough to rent an apartment. “I’m getting older and I can’t take another winter,” the 60-year-old said last summer. In her trailer, cold nights were miserable no matter how many blankets she piled on. “You feel like your fingers are going to break off,” she said.”

        Come on Kellie, it doesn’t get that cold in Oakland, CA

      3. I used to swing by Oakland’s Wood street when I was doing vehicle repo(s). It’s where thieves would take a car to strip it of its easy saleable parts, and the scavengers would finish them off until it was an empty shell. I would record the VIN numbers from all of them. Back in the office, the ladies would run the numbers to see if any lenders with an insurance policy were looking for them.

    2. Yahoo
      Sacramento Bee
      Opinion
      Law enforcement leaders believe homelessness in California can be ended in a year | Opinion
      Jim Cooper and Jeff Reisig
      Wed, May 31, 2023 at 5:00 AM PDT·4 min read
      Renée C. Byer/rbyer@sacbee.com

      It is time for new thinking on our homeless epidemic. Every Californian has long witnessed the humanitarian crisis of our present course. But in recent weeks, the situation has hit a tipping point.

      The departure of Nordstrom, Whole Foods and other retailers from San Francisco may not be the most critical data point on this issue, but we believe these events demonstrate that no one, regardless of socioeconomic status, is immune from the quality of life deterioration that our communities are experiencing due to homelessness.

      Our once-great cities are being hollowed out. This requires us to move beyond the tired blame game of politics and the same approaches to the problem that have proven to be abject failures.

      We can do better, and we can learn from what other states could teach us if we are willing to listen.

      Opinion

      Several large Democratic states have low homelessness rates, such as New Jersey, Maryland, Michigan and Illinois.

      We believe there is a reason for this: All these states have much stronger hard drug laws than California.

      In our opinion, fentanyl, heroin and other hard drug addictions — and the associated mental health crises that these drugs sometimes entail — are the root cause of California’s homeless crisis. Until we address addiction and mental health, homelessness in our state will only continue to grow. California’s hard drug laws are out of step with progressive states that have lower rates of homelessness.
      …
      https://news.yahoo.com/law-enforcement-leaders-believe-homelessness-120000279.html

      1. “Several large Democratic states have low homelessness rates, such as New Jersey, Maryland, Michigan and Illinois.”

        Having spent a couple of winters in Chicago and knowing about the climates in the other states, I can attest that California weather is much more pleasant to be outdoors year around.

        2. Maryland may not have a lot of homeless, but it sure has a lot of median-walkers. I guess the median walkers aren’t counted among the homeless if they are couch-surfing with friends and family.

          The liberal counties tell us to not give anything to median-walkers. Those counties provide enough food and shelter for anyone who is willing to look for it.

          2. t sure has a lot of median-walkers

            Are you talking about those people who try to start washing your windshield to force you to give them money? I’ve only seen them back east, but the second somebody tries that my window is down screaming “don’t touch my f***ing car ever again.”

          3. Luckily the median walkers don’t touch the car. They just walk up and down the median with a sign that almost always says “I hAvE ThrEE kidz LoST my JoB gOD bLEsS”

  7. ‘They’re not sounding the alarm, they’re ringing the bell when the horses are all out of the barn,’

    modus operandi

  8. ‘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.”

    Yep, those are the only two options. House prices crashing 50% is out of the question!! Now sign on the dotted line and be house poor for ever…

  9. Tents make it easy to spot the homeless in warm climates. Those empty houses and offices are great shelters that no one talks about. When municipalities tear them down they have a heck of a job making sure there is no one in them before demolition. I got a short education on this recently from someone in the demolition business.

  10. Ireland Gov’t Plans to Slaughter 200,000 Farting Cows to Combat ‘Global Warming’

    by Jamie White
    June 3rd 2023, 10:58 am

    One proposal to achieve this is by reducing the national dairy herd by 10%, the equivalent of removing 65,000 cows a year for three years, according to the Irish Independent.

    Minister for agriculture Charlie McConalogue told Irish radio station RTE Morning Ireland that a dairy vision group with farmer representatives has been looking into a range of options to reduce emissions on farm.

    Meanwhile, Joe Biden’s climate envoy John Kerry warned last week that farmers need to stop growing so much food in order to reduce greenhouse gas emissions.

    https://www.infowars.com/posts/ireland-govt-plans-to-slaughter-200000-farting-cows-to-combat-global-warming/

    1. People are having a hard enough time to buy food as it is, and they want to reduce supply. Tell me this isn’t about depopulation. Poor and miserable people are less likely to have children.

      1. Remember this: if food prices rise in the first world due to lack of supply, they will also rise in the third world, where people already can’t afford to eat. They are planning on starving millions, if not billions, of poor third worlders to death.

        1. I don’t mean anything other than a simple note. In all honestly, I’m sure most people would live much healthier lives if they ate only half of what they eat now. Life quality, health and life expectancy would rise significantly too. I was shocked on my first restaurant experience in US. It was more than twice the size I was used to.

          1. I’m sure most people would live much healthier lives if they ate only half of what they eat now.

            Most Americans, sure. Third worlders, not so much.

      2. I guess vaccine was too safe and too effective for them.

        And we need MORE food now than ever, while we still have fertilizer, and while Ukraine’s wheat and sunflower crops are bombed into oblivion.

        1. I guess vaccine was too safe and too effective for them.

          A lot of 3rd worlders were never jabbed. Got to get them somehow.

          2. My Mennonite neighbors, and they are many, did not take the jab or wear the mouth diaper. I didn’t hear any stories of the black death from them.

          3. I didn’t hear any stories of the black death from them.

            I told plenty of people that Covid was not the black death. They still stampeded to jab centers.

  12. I haven’t mowed a lawn in almost two decades before today. Hedge trimmers, weed whacker, gonna have to hire a kid to mow when I’m not here.

    Knocking down the chimney is going to be interesting…

    1. Did you buy one of those trendy electric mowers? I was at the Home Despot the other day (I needed one of those drip pan insert thingies for my grill) and just for kicks I looked at mowers From what I saw, 90% are electric and are VERY pricey.

      1. I can tell that most of my neighbors now have electric mowers, as I rarely hear non electrical ones running any more.

      2. Yeah FYI, Honda (who makes the best gas mowers since Toro and others have gone to china crap land) is stopping ALL small engine making after this year. Snow blowers are already out of stock. If you want a good mower that will last 20/25 years (Honda) you have to buy one RIGHT NOW. Next year will be too late and some models are already gone from local dealers.

        1. “stopping ALL small engine making after this year”

          Does that include generators?

          1. Although old I found this.

            Honda To Stop Manufacturing All Gas Powered Lawn Mowers

            Karuna EberlKaruna Eberl
            Updated: Dec. 02, 2022

            Is This Going to Affect Any Other Honda Products?

            It doesn’t appear so. Honda has stated it “will continue to sell the remainder of its lawn and garden product line and industrial-type power products such as GX engines, generators, and water pumps, and continue to support its service and parts operations in the U.S. market.”

            https://www.familyhandyman.com/article/honda-to-stop-manufacturing-all-gas-powered-lawn-mowers/

        2. Yeah FYI, Honda (who makes the best gas mowers since Toro and others have gone to china crap land) is stopping ALL small engine making after this year.

          That is 100% false.

    2. “Knocking down the chimney is going to be interesting…”

      Is the structure staying after you take down the chimney?

      1. I’ll post some pictures on tomorrow’s thread. There’s not alot that’s going to be staying.

        QED has an even better promo deal on the Milwaukee hammer drill kit than Home Depot, buying it this week.

  13. ‘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’

    An interesting development.

    ‘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’

    Wa happened to my pivot?

  14. Watching the video really drives home what a pathetic wet noodle society this is turning into and drives home the point that people like the guy who stopped those kids from singing the National Anthem needs to be put in a dunk booth for a long weekend with free baseballs to drop his Woke @ss into the tank.

    Children’s Choir Forced to Quit Performing National Anthem at U.S. Capitol Invited Back By Speaker McCarthy

    Infowars.com
    June 3rd 2023, 2:01 pm

    A children’s choir who were forced to stop performing the National Anthem at the U.S. Capitol this week have been invited back by House Speaker Kevin McCarthy to finish their performance.

    The Rushingbrook Children’s Choir were told by Capitol Police to stop performing the National Anthem last Friday because the song could “offend someone,” resulting in widespread online backlash by conservatives.

    The Overton Report
    @overton_the

    The moment a children’s choir singing at the #uscapitol was told to stop singing the U.S. National Anthem during the second verse. They had been given permission to sing prior to a higher up deciding our nation’s anthem in our nation’s capitol was offensive.
    No, seriously, when… Show more

    https://twitter.com/overton_the/status/1662176369428639746?s=20

    1. Perhaps they should have sung the old Soviet anthem. I’m sure every Dem within earshot would have applauded.

    2. National Anthem is offensive to whom? Offensive to enemy of US, offensive to One World Order, offensive to illegals, offensive to who.?
      This is just insane World?

      1. It’s “white supremacism”, didn’t you know? /sarc

        I hope those snowflakes who are offended don’t get the vapors at a ballpark.

    3. drives home what a pathetic wet noodle society this is turning into

      I watched What is a Woman? this morning. The Frankfurt School’s disciples would be overjoyed at the current state of our society.

      2. Last month, Kroger sent out an email telling people they could opt out of receiving emails from Kroger mentioning Mother’s Day, as some people have a problem with it. I don’t recall them offering an opt out from Pride emails.

  15. Fortune
    FINANCE HOUSING
    This city dodged the 2008 housing market crash—now it’s the epicenter of the pandemic correction
    Austin is arguably the epicenter of both the Pandemic Housing Boom and the Pandemic Housing Correction.
    BY LANCE LAMBERT
    June 03, 2023 1:27 PM EDT

    Among the 400 largest housing markets, Austin has seen home prices fall the most during the correction. Getty Images

    As home prices started to boom in the early 2000s, housing speculators doubled down on fast-growing Sun Belt markets like Phoenix, Las Vegas, and Miami. Those speculators, who were often house flippers, assumed high-population Sun Belt markets would provide the best return at the lowest risk. Of course, they were famously wrong, as those booms turned out to be some of the biggest housing bubbles, which ultimately burst and helped spur the financial crisis.

    The ’00s Sunbelt housing crash had one, relatively speaking, exception: The Lone Star State. Peak-to-trough, home prices in markets like Austin and Dallas only fell 8.5% and 10.5%, respectively, while house prices tracked by the Zillow Home Value Index (ZHVI) fell 63.9% in Las Vegas, 56.4% in Phoenix, and 52.2% in Miami between their peaks around 2007 and bottoms around 2012.

    While zealous lenders across the nation in the mid ’00s were allowing borrowers to take on mortgages without putting much down, Texas stuck with its conservative lending practices. Those tighter lending laws helped the state escape the ’00s housing crash and, according to Texas A&M researchers, limited “the number of foreclosures.”

    Fast-forward to 2023, and this time around one pocket of Texas is arguably the epicenter of both the Pandemic Housing Boom and the Pandemic Housing Correction: Austin.

    Indeed, between July 2022 and April 2023, Austin home prices as measured by the Zillow Home Value Index have fallen 10.02%—that’s 10 times greater than the national decline (1%) registered by ZHVI during the same time period. That’s the biggest decline, so far, among the nation’s 400 largest housing markets, just beating out San Francisco (-10%), Bend, Ore. (-9.5%), and Boise (-9.3%).
    …
    https://fortune.com/2023/06/03/austin-missed-2008-housing-market-home-price-crash-but-not-this-time/

    1. 10% price decline isn’t bad…unless you bought recently and put less than 10% doown, in which case you are underwater and lost over 100% of your investment.

  17. Trends
    Mortgage Rates Just Shot Up Again—but the News Gets Worse From There By Margaret Heidenry
    Jun 2, 2023

    Mortgage rates soared even higher this week, averaging 6.79% for a 30-year fixed-rate home loan as of Thursday, according to Freddie Mac. That’s a significant jump from last week’s rate of 6.57%.

    As if that weren’t enough to make homebuyers’ hearts skip a few beats, many are finding very few fresh listings on the market—and the few that are for sale are mobbed with desperate buyers, despite high rates.

    “Limited inventory levels [have resulted] in intense competition for fresh listings, adding to the budgetary pressures faced by prospective homeowners,” according to Realtor.com® Chief Economist Danielle Hale in her recent analysis of housing data for the week ending May 27. Sound familiar?

    Here’s a breakdown of what the latest real estate statistics mean for buyers and sellers in our column “How’s the Housing Market This Week?”

    The fight for fresh listings

    It’s been 47 weeks and counting that newly listed homes have been on a downward trend compared with the previous year.

    For the week ending May 27, the number of new listings was down 20% versus the same time last year, creating what Hale calls a “drag on home sales.”

    And anyone eyeballing the mortgage rates of late will understand why sellers are staying put.

    “Existing homeowners, benefiting from mortgage rates considerably lower than current rates, are reluctant to list their properties, leading to a lag in new listings,” explains Hale.

    Although new listing levels have plummeted, overall housing inventory (which also includes stale listings lingering on the market) is up by 18% over last year for the week ending May 27.

    Homebuyers who are desperate enough to give these old listings a second look could stand to land a deal, although it may not be the ideal dream home they’d been hoping for.
    …
    https://www.realtor.com/news/trends/mortgage-rates-just-shot-up-again-but-the-news-gets-worse-from-there/

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