We Can No Longer Blame Supply

A report from the Wall Street Journal. “Sales of existing homes rose slightly in May but held near historically low levels, the latest sign that buyers are staying away because of high home prices. This year’s spring has been a bust, putting the market on track for its third straight year of anemic sales. ‘With the interest rates, everyone’s looking for a deal,’ said Dana Hall-Bradley, a real-estate agent in Celebration, Fla. ‘The buyers are not making decisions as quickly as they were during the pandemic days.’ About one in four listings on Zillow got a price cut in May, the highest proportion for any May since at least 2018, Zillow said. Jane Coloccia and Victor Teixeira listed their Gearhart, Ore., home for sale in January and cut the price in February. They sold the house in May for about 7% below their initial listing price. ‘It’s definitely turning from a seller’s market into more of a buyer’s market,’ Coloccia said. ‘I think that a lot of people just couldn’t afford the mortgage.'”

From My 103.5. “For years, Montana’s housing market has been on a relentless upward climb. Now, as interest rates hold steady and buyer enthusiasm cools, many Montanans are asking: Are home prices finally starting to drop? According to the most recent housing data, Montana’s housing market is not in a free fall—but it is showing clear signs of cooling. The average listing in Montana now stays active for 109 days, up from 89 days a year ago. Price reductions are also becoming more common, with 17.4% of active listings seeing cuts in January. Homes are selling for about 97.2% of their asking price, suggesting buyers now have more negotiating power than in previous years. In Bozeman and the Gallatin Valley—one of Montana’s most expensive markets—the median home price was $745,000 in Q1 2025, a slight decrease from $749,500 in Q1 2024. Local agents note that nearly 38% of homes in Bozeman have undergone price reductions, and the average home is now taking 84 days to sell. For sellers, the days of above-asking-price bidding wars may be behind us, at least for now. Pricing strategically, making modest concessions, and being patient may be key to closing a deal.”

From Market Watch. “When Alyse and Chris Ginter found a home they wanted to buy in San Diego, it took two months of back-and-forth negotiations with the sellers before they came to an agreement. The problem was the price. The sellers refused to cut the amount they were asking for their home from $4.7 million to $4.5 million. They had already cut the price from $4.9 million, so they were reluctant to go even lower. But the Ginters needed the final price to come down again in order to afford the house. The couple had put in an initial offer of $4.3 million in March, but the sellers ‘weren’t budging,’ Chris Ginter, who works in the technology industry, told MarketWatch. ‘They were just extremely stubborn and didn’t want to move.’ They ended up meeting in the middle at $4.6 million.”

“Ginter didn’t want to deal with the same problem when it came to selling his own home in Seattle. When he enlisted an agent, he decided to be more flexible with potential buyers, and he cut his asking price twice to get the home sold relatively quickly. ‘We could have waited like [the sellers in San Diego], but I would rather just be out,’ he said. Realtors are casting mortgage rates as the key villain in this story. ‘The relatively subdued sales are largely due to persistently high mortgage rates. Lower interest rates will attract more buyers and sellers to the housing market,’ Lawrence Yun, chief economist at the National Association of Realtors, said in a statement. Sales are running at a ‘sluggish’ level, well below the typical pace before the pandemic, Yun said on a press call with reporters. ‘We can no longer blame supply. … It’s really about affordability conditions,’ he said.”

“In May, the share of homes that saw their asking price reduced was about 26% nationwide, according to a report by real-estate platform Zillow. That was the highest share for that month since Zillow began tracking the figure in 2018. But buyers remain unmotivated by the current environment. ‘The buyers who come through on tour these days have little urgency,’ Rob Wittman, a Washington D.C.-based real-estate agent with Redfin, said recently. ‘They’re often browsing instead of buying because they’re hoping mortgage rates will come down, even though that’s unlikely to happen soon.’ The total number of homes listed on the market in May rose 20.3% from last year, to 1.54 million units.”

Bisnow Los Angeles. “The ongoing disputes between the Trump administration and higher education institutions could have ripple effects on enrollment and student housing. The administration attempted to block Harvard University from enrolling international students and has revoked visas from immigrants attending other schools, likely leading many prospective international students to think twice about enrolling in a U.S. college or university. ‘You really have to be really mindful of these macro-scale politics,’ said Melissa Soto, California State University, Long Beach capital program development manager. Soto said CSULB had a dozen students whose visas were revoked over winter break. The students had flown to their various homes for the break and weren’t allowed to return. ‘I would not hang my hat on international students,’ Soto said.”

The Daily Hive. “Canada must dramatically increase the pace of home construction — nearly doubling current annual housing starts — to address the country’s deepening housing affordability crisis, according to a new report from the Canada Mortgage and Housing Corporation (CMHC). ‘Restoring affordability to levels last seen two decades ago isn’t realistic, especially after the post-pandemic price surge,’ the report states, emphasizing that post-pandemic market conditions have introduced new structural challenges, particularly in the high-cost regions of Metro Vancouver and Greater Toronto.”

From Insauga. “Real estate platform Wahi and Real Property Solutions recently released the May national RPS-Wahi House Price Index. ‘The beleaguered condo segment, especially in the Toronto and Vancouver markets, is one of the main drivers of the overall cooling at a national level,’ Wahi said in the report. Condo values plunged seven per cent annually in May, according to the report. This is tied for the largest year-over-year decline in condo values since the RPS-Wahi House Price Index was established in 2005. April and May of 2023, towards the tail end of the Bank of Canada’s last rate-hiking cycle, were the only other times that condo values fell at this rate.”

“In the Greater Toronto Area the condo market saw the average price drop down 6.4 per cent to $683,413, according to the the Toronto Regional Real Estate Board said in its May report. Condo sales also declined 25.1 per cent year-over-year. The average home selling price, at $1,120,879, was down by four per cent compared to May 2024, TRREB found. ‘The sluggish condo market is weighing on Canadian home price growth, but it is not the only headwind,’ said RPS-Wahi CEO Benjy Katchen. ‘Tariffs have challenged consumer confidence, and some local economies have been hit harder than others.'”

Radio New Zealand. “Another major bank has revised down its forecast for how far house prices will increase this year. ANZ revised its forecast down in May, and then again on Tuesday. BNZ said it, too, has lowered its expectations. BNZ chief economist Mike Jones said while 15 percent more houses were selling than the same time last year, about in line with the long-term average, there was still a large number of homes available for sale. That meant buyers had a lot of choice and did not have to bid up prices to secure a property. ‘Unsold inventory remains around 10-year highs. Buyers have both more time and more choice. Recent local council property (de)valuations in Wellington and now Auckland just reinforce this tilt in the balance of market power.'”

The Bangkok Post. “With the residential market expected to contract for at least three years, Thailand should restore foreign tourist confidence to drive economic growth and extend leasehold ownership to at least 60 years to attract international buyers, according to SET-listed developer SC Asset Corporation. Attracting foreign demand is critical, especially as Thailand faces a prolonged period of low population growth, projected to dip below zero within a decade, said Nuttaphong Kunakornwong, chief executive of SC. Still, the overall market is entering what Mr Nuttaphong calls an ‘ice age,’ with three major headwinds: a sluggish economy, high household debt and a looming oversupply in the low-rise housing sector. ‘Despite recent government efforts to support the sector, recovery remains uneven. We predict the slowdown will persist until at least 2027,’ he said. ‘Developers are now focused on offloading inventory, slowing new investments and preserving liquidity.'”