A Little Sense Of Seller FOMO, Where They’re Like, Oh No, We’ve Missed The Top

A report from Fox 13 on Utah. “‘Finally the madness has stopped,’ said Steve Perry, president of the Salt Lake Board of Realtors. ‘Finally the sellers are catching up with how the buyers need it to be. Buyers can now finally take a breath. They can look at more inventory, more houses. They don’t have to put above asking-price cash down.'”

“A good house in Utah that’s priced well could have sold in one or two days just a couple of months ago. Now, that home is more likely to sell in one to three months, said Perry. ‘I kind of think about it like stairs,’ said Martha Morris, realtor. ‘It’s like we’ve been on the staircase for so long where price is going up. And we’re now at the top stair, and the last like two months people have been reaching for stair that doesn’t exist.'”

The Herald Courier. “Homes for sale in Bristol aren’t getting as many multiple offers as they were last year, according to Realtor Tracy Lewis, who sees things cooling down a bit in Bristol, Virginia. ‘People are not so apt to jump on something that is severely overpriced, like they were last year,’ Lewis said.”

The Review Journal. “Las Vegas has again seen prices fall after a heated run. In Southern Nevada, home sales have been sliding, inventory has shot higher, and more sellers have been slashing prices in recent months as buyers face increased borrowing costs. Nearly 5,750 houses were on the market without offers at the end of June, up from around 1,740 as recently as February.”

“Those who lived here during the mid-2000s bubble and its devastating aftermath will have a hard time forgetting that period in particular. Las Vegas’ frenzy of rapidly rising property values and booming construction was followed by plunging prices, sweeping foreclosures and abandoned construction sites. And while there’s no guarantee a crash of that magnitude won’t happen again, the real estate run-up of the past few years was bound to end at some point.”

The Houston Chronicle in Texas. “Houston’s supercharged housing market reversed course in June as high mortgage interest rates, rising inflation and a low supply of homes for sale contributed to the biggest drop in single-family home sales in three years. Ron Jenkins, a real estate agent with Realm Real Estate Professionals in Katy who sells in the suburbs of southwest and west Houston, has seen a big shift in the market recently. ‘A lot of people are retreating, as expected,’ Jenkins said. ‘I’m a little concerned that they’re slowing down so drastically before the end of the summer buying season before school starts.'”

“In some markets, such as Katy and Missouri City, he’s seeing price reductions on upward of 20 percent of the listings compared to the previous rate of about 5 percent of listings. ‘I see a lot of arrows down,’ Jenkins said. ‘I see homes staying on the market now for at least two weeks as compared to five days or less before.'”

From KOB 4 in New Mexico. “Local realtors say prices are finally coming down and more houses are up for sale, but the housing market might not be cooling off just yet. Albuquerque realtor John Lopez says the increase in mortgage interest rates have caused a shift. He says the market created inflated home prices and now a correction is taking place with properties lowering prices by thousands. Lopez says the new price points are just where the homes should have been listed at to start with. ‘In the last six months, we were averaging about 300 price reductions per month for the whole MLS. As of last month, we saw 640 price reductions. That was actually an indication the market was getting a little bit more stable,’ he said. ‘In March, in the Albuquerque area, we literally got down in the 300s of single family residents. Now we’re up to about 800.'”

The Colorado Sun. “What happens in Denver impacts the Front Range, according to Patrick Muldoon, broker owner of Muldoon Associates in Colorado Springs. When Denver housing prices skyrocketed in the past few years, interest in Colorado Springs and Pueblo increased too. But now, a pullback in Denver, along with higher interest rates, inflation and economic nervousness (more on that below) are keeping local markets local with fewer out-of-the-area shoppers looking around.”

“‘When Denver was picking up, they had escalation clauses and we hadn’t heard of those. And boy, they had these weird things called appraisal gaps and we hadn’t heard of that. Then the Springs and then Pueblo followed suit. Much of that reverses when the market starts to cool in Denver,’ Muldoon said. ‘I feel like most of the buyers we’re working with locally now are actually local buyers because the Denver market is also slowing. We’re starting to see that into Pueblo. Those commuters at $5 a gallon can’t really justify a house price change.'”

“‘The analogy that really conveys to us what’s happening is just that we’ve hit the summit,’ said Matt Leprino, head of real estate brokerage Remingo in Denver. ‘We’ve climbed to the top of the mountain and we’re hanging out there. It’s not as though we’ve started a freefall back in the other direction. And just because you’ve reached the top of a mountain doesn’t mean you need to go back down. The historical perspective is that prices always go up, even when they decline in the way they did in ’09, ’10, ’11, ’12 and ’13. They very quickly rebounded back to the levels they would have been had the Great Recession never happened.'”

“‘If you compare it to five years ago, yeah, we’re better,’ said Muldoon. ‘But I think we’re in a shift, for sure. … Our days on market are increasing in the Colorado Springs area. Inventory is increasing weekly in the Colorado Springs and Front Range area. You’re not getting the amount of offers you were. You’re not seeing the highest and best. … It is like buyer FOMO has left the building and now you almost have a little sense of seller FOMO … where they’re like, ‘Oh no, we’ve missed the top. How are we going to make our house sell?'”

From Market Place. “The housing market has been so frenzied for the last couple of years, that it became common for prospective buyers to waive things like homeinspections. But Moira Holley, a broker in Seattle said now mortgage rates are up and fewer people are looking so, ‘inspections are back. And in some cases … financing contingencies’ – which let a buyer pull out of a sale if they can’t get a loan.”

The Northern Kentucky Tribune. “Sixty-nine percent of Kentucky REALTORS® expect sellers to drop their asking price, while eighty-five percent expect houses to stay on the market for longer, according to the June 2022 edition of the HousingIQ Survey of Kentucky REALTORS®. ‘The typical home mortgage payment is approximately 35% higher. 66% of the survey respondents said some of their buyers had dropped out of the market because of higher rates,’ said Vidur Dhanda, survey author. ‘Sellers will have to reset their expectations. The days of immediate sales and contingency-free offers are likely over. 55% of the survey respondents expect more houses to sell below the asking price.'”

From WMDT. “‘The sure sign of the change was seeing price reductions instead of price increases and seeing opening houses,’ Remax Advantage Realty Associate Broker Pam Price said. What was once considered a hot sellers market on Delmarva is now leveling out and experts say a big factor is changing interest rates. ‘Those rate changes make real differences to buyers and what they can participate in,’ The Payne Team Lead for Coldwell Banker Realty Rob Payne said.”

“‘Now if you were approved at $300,000 four months ago then you’re not going to be approved for that same amount today,’ Price said. If priced incorrectly, he says you can expect that for sale sign to sit in your yard even longer. ‘If you try to overprice something, it’ll sit there. Buyers know what’s going on,’ Payne said.”

The Real Deal. “Contract signings were down 30 percent year over year last month for Manhattan co-ops and 29 percent for Manhattan condos last month, according to data reported by appraisal firm Miller Samuel for Douglas Elliman. In Brooklyn, contract signings for condos, co-ops and single-family homes were all down. ‘The whole market has been so spoiled for so many years,’ said BOND New York’s David Kazemi, who recently signed a $15,000 rental — rather than selling the unit — in Brooklyn. ‘It’s just a tough pill to swallow.'”

The Orlando Business Journal in Florida. “When Realtor Christine Elias and her clients put a Longwood home on the market in June, they had a buyer put in an offer and then back out. They next took one of the other three offers they received, only for that buyer to cancel, too. That situation is a lot more common in Central Florida than in most other parts of the country. Last month, two Central Florida markets were among the top 10 in the U.S. for the highest proportions of pending home sales falling through, according to Redfin. The Palm Bay metro was No. 7 at 24.9%, while metro Orlando was No. 8 with 24.5%.”

“Meanwhile, contract cancellations are increasingly common across the U.S., a sign of a shift in the balance of power between buyers and sellers as the housing market winds down from where it was a year ago.Roughly 600,000 home-purchase agreements fell through in June, roughly 15% of all homes that went under contract, per Redfin. That was up from 11.2% a year ago. When would-be buyers cancel on Elias, it’s not because they’re pulling out of the housing market. They typically find another home and go buy it, she said. ‘They think they have more negotiating power with other properties.'”

“In addition, the frenzied pace of the housing market forces some buyers to rush into a contract, Diamond Real Estate Group broker Tiphany Weeks previously told OBJ. Later, buyer’s remorse sets in, she said. ‘Pre-pandemic, when someone wanted to purchase a home, they’d look at it, go home, sleep on it, think about it and visit it again…  We’re seeing a lot of transactions getting canceled.'”

From ABC 10. “The city of Sacramento’s housing market is cooling at the second fastest rate in the nation, according Redfin. Five of the ten housing markets that have cooled down the fastest so far this year are located in Northern California. San Jose is leading the nation in a housing market cooldown, according to the report, with the supply of homes up 10% year-to-year in May. ‘There is good news for some buyers. People who can afford to buy right now could get something for $100,000 or $200,000 less than a few months ago, largely because homes are often no longer selling above asking price,’ said San Francisco Redfin agent Joanna Rose. ‘They’ll have a higher monthly payment for now due to the rise in mortgage rates but can refinance later if rates come down.'”

From KTUV on California. “There are new challenges confronting both buyers and sellers in just the last four months. Just since last March, 30-year fixed market rates went from 3.2 percent to today’s high of 6.8 percent — more than double. ‘It scares them. Sometimes it prices them out of the market,’ said Rob O’Malley, a five-star rated mortgage originator throughout California.”

“For sellers, they must recognize today’s reality. ‘We are seeing more price reductions than we did 120 days ago. A lot of the price reductions is when a seller started too high,’ said veteran East Bay real estate agent Sam Benson. ‘It’s been a real hard time for real estate agents to manage the expectations of sellers.'”

From KSWB TV in California. “The median price was $987,225 in June, up slightly from May, the agency said using data from the San Diego Multiple Listing Service. Prices fell nearly 5% month-over-month for condos and townhomes to $638,000. While the data only reflects sales with area realtors, it offers a monthly snapshot into a market that appears to be cooling into the summer months. ‘The good news for prospective buyers is that we’re beginning to see signs of a more balanced market with homes remaining on the market a little longer,’ SDAR President Chris Anderson.”

The Telegraph on California. “It was meant to be the sale of the year. In March, The One, the vast hilltop mansion in Bel-Air billed as the most expensive property in America, was up for auction after being placed in receivership by the Los Angeles County superior court last year. The sale was expected to raise nearly $300 million dollars. Instead, the home went for a mere $141 million. For critics, The One embodies a delirious highpoint of Los Angeles largesse a moment before this year’s tech crash.”

“‘It’s one of the ugliest homes I’ve ever seen,’ said one broker who toured the property before the auction. ‘Only someone with terrible taste who wants to scream to the world that they’re rich [would buy it], and even then, I’m not so sure.’ Potential buyers may have also been put off by some of Niami’s ‘out of the box thinking’ – such as cameras placed in the nightclub’s gents’ loo broadcasting into the ladies’, since ‘in LA, a lot of dudes are scumbags.'”

From Blog TO in Canada. “The only places in the GTA where average prices declined from May to June were:Rosedale/Moore Park — prices dropped a staggering 34 per cent month-over-month and 27 per cent year-over-year in this bougie area, to hit an average of $1.99 million. Brock, Durham Region — prices fell 31 per cent month-over-month and 11 per cent year-over-year to an average of $729,059. St. Andrews/Bridle Path/York Mills — one of the most expensive pockets of the city saw average prices decrease 30 per cent month-over-month and 28 per cent year-over-year to $2.2 million.”

West Midtown — prices plunged 27 per cent month-over-month and five per cent year-over-year to an average of $1.62 million. Scarborough Lakeshore East — prices tumbled an average of 18 per cent month-over-month and six per cent year-over-year to $992,300. Etobicoke Centre — prices dropped 17 per cent month-over-month and one per cent year-over-year to $949,423. Scarborough Southwest — prices went down 15 per cent month-over-month and eight per cent year-over-year to $888,801, on average.”

The Toronto Sun. “One of the problems with doing what I do and spending time with the people I spend time with is that pretty much all I ever seem to talk about is real estate. Prices. Market slowdowns and rebalancing. Bank of Canada rate hikes. Doom and gloom, optimism and exuberance. Even by real estate-obsessed Toronto standards, it’s a bit much. The Toronto Regional Real Estate Board’s June market data revealed our first year-over-year decline since the pandemic began. Canada-wide prices have fallen 18.4% and we are looking at our largest month-over-month decline in the national benchmark index price since the index began in 2005. This is significant.”

“Of course, this sudden shift in buyer sentiment and activity is almost entirely attributable to the current state of our economy with inflation back to ‘80s levels, a recession looming on the horizon, and interest rates with nowhere to go but up. But even with the broad consensus that rates would rise, this week’s announcement by the Bank of Canada that they would raise their benchmark interest rate by a full percentage point came as a surprise. After months upon months — years even — of dragging their feet as markets exploded and inflation settled in, few expected that they would suddenly move forcefully towards the biggest rate hike by the central bank since 1998. For the first time, a variable rate mortgage is now higher than it was pre-Covid. And lest one think that this is one and done, a similarly aggressive hike is all but guaranteed for September.”

“Ten years from now university economics classes will study the confluence of government ineptitude that, in fact, hurtled us towards this moment. One can only hope that this week’s move by the Bank of Canada signals a recognition that it’s time to get serious.”

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