Florida’s red-hot real estate market cooling down: ‘Gone are the days of’ bidding wars, broker says
From one coast to another, the collapse of California-based Silicon Valley Bank (SVB) has now sent tidal waves to Florida’s real estate market, one broker claimed on “Varney & Co.” Thursday.
“It’s definitely cooled down a bit. Gone are the days when we would put properties on the market and we would expect a bidding war within a few days,” Sandals Realty Group broker Amanda Glass told FOX Business’ Ashley Webster. “It’s not happening anymore.”
According to the real estate expert, SVB’s insolvency causing bank-run contagion fears didn’t help the stability of the economy or mortgage rates. Even though mortgage rates currently remain up and homeowners may want to sell as soon as possible, there’s no guarantee they can secure an affordable mortgage elsewhere, causing some residents to stay put.
As of Thursday afternoon, mortgage rates plunged a quarter of a percentage point or more for all key repayment terms, with 30-year rates diving back below the 6% mark. Homebuyers who want a low-interest rate and smaller monthly payments may want to lock in a 30-year rate today, ahead of likely rate fluctuations, according to Credible.
“In addition to that, they’ll probably have higher property taxes, increased insurance. It all plays a factor into it,” Glass said.
The number of homes sold in Palm Beach County have also decreased, with data from FloridaRealtors.org showing single-family home sales are down 21% and condo sales 38% from one year ago.
“It’s definitely shifted more towards a buyer’s market. The sellers have to do what buyers are interested in at this point and adjust more accordingly,” Glass said.
The number of investors buying up property to then rent out in the Sunshine State has shifted with recent market changes as well, the broker noted.
“It’s adjusting because they’re not quite getting the rate of return that they used to before when they could invest in Florida real estate,” she explained. “It’s different now.”
Working in the industry for 19 years, Glass additionally pointed out a recent surge in the number of real estate agents leaving the “tough” and transitory market. A recent report from the National Association of Realtors indicated agent membership will dip this year after January numbers showed a significant decline from its October 2022 peak.
“I [worked] through the whole short sale and foreclosure crisis and everything, and back then I saw them leave, and now I’m seeing it happen again more and more,” she detailed.
Nearly 1,000 new residents are moving to the Sunshine State every day and will need homes to live and thrive in, Florida Chief Financial Officer Jimmy Patronis told Fox News Digital earlier this month.
“We think it’s about $24 billion in the last year of new recurring wealth that has come to the state of Florida, whether it be small businesses or just couples,” Patronis said. “In comparison, California has lost $18 billion in recurring wealth. So that is a compounding effect that really drives down the cost of living for, especially, young families in our state.”
Treasury Secretary Yellen warns of commercial real estate 'issues' that could strain banks – MarketWatch
Treasury Secretary Janet Yellen, in her first interview since the U.S. debt-ceiling was lifted last week by Congress, warned on Wednesday about the potential for banks to feel strain from their exposure to weakening commercial real estate valuations.
Yellen was asked by CNBC “Squawk Box” host Andrew Ross Sorkin about if she’s worried about the state of estimated $20.7 trillion commercial real-estate market, particularly the office, and if weakness in the sector could potentially spark more bank failures.
“Well, I do think that there will be issues with respect to commercial real estate,” Yellen said. “Certainly, the demand for office space since we’ve seen such a big change in attitudes and behavior toward remote work has changed and especially in an environment of higher interest rates.”
Major landlords from Blackstone Inc.
to Brookfield Corp.
have been bracing for a significant drop in office property values, as the Federal Reserve’s inflation fight puts an end to an era of abundant and cheap debt.
While the final word on wobbling property prices won’t be known for some time, PGIM Fixed Income, a key investor in commercial property debt, recently said they expect office values to fall 20%-50% from peak levels, while multifamily values could drop as much as 22.5%, in part because financing has become more expensive and scarce.
See: Commercial real estate’s debt machine is broken down
Office property woes and the ‘doom loop’
Researchers at the NYU Stern School of Business and Columbia Business School recently estimated there has been a $506.3 billion decline in office values from 2019 to 2022 nationally in the wake of the pandemic which could feed a “doom loop” in some big cities.
They estimate banks own 61% of U.S. commercial property debt. They also see potential for the value of New York City’s office stock to drop 44% from 2019 to 2029 due to stress in the sector from flexible work arrangements.
“I think banks are broadly preparing for some restructuring and difficulties going ahead,” Yellen said, adding that the overall level of liquidity at banks looks strong and that stress tests of the largest banks show they have adequate capital to withstand fallout from the commercial property market.
She also said banking supervisors will continue to closely monitor “a range of banks to make sure that they are adequately prepared to deal with it.”
Yellen also said that, “while there will be some pain associated with this, that banks should be able to handle the strain.”
Related: Blackstone wrote down its stake in this Chicago office building to $0. Now it’s talking with lenders on the debt coming due.
South Okanagan residential real estate market sales picking up speed – Penticton News – Castanet.net
Buyer activity and real estate listing activity are gaining momentum again in the South Okanagan, as residents have adjusted to the current late spring market.
“The market is doing really well,” Association of Interior Realtors Past President Lyndi Cruickshank said.
“I think a lot of people felt really shell shocked when the interest rates started to rise, understandably so, as we often feel that resistance when there’s a dramatic change in our lives. And is often the case, people settle into what our new reality is, and our interest rates are certainly significantly higher than they were. But people are finding ways to manage.”
There has been a bit of a decline in the average home price, which is helping buyers. And as more homes come on the market, it ultimately helps the consumers looking to purchase.
“I talked to so many people last year that really wanted to be able to sell their home, but there was such a fear as to where they were going to go. So now that we have seen the inventory start to open up quite a bit. It’s allowing them more choice.”
Home inventory has increased by 38 per cent in active listings.
In the South Okanagan, the benchmark price for a single-family dwelling dipped 6.6 per cent, to $772,200. Townhouses ($558,100) and condominiums ($427,700) also dropped in May compared to this same time period last year.
“We’re certainly more into a buyer’s market than we have been over the last year. Previously, we were very predominantly held by a sellers market. And we’re seeing a lot more strength on the buying side now,” Cruickshank said.
She added that this is typically the time of year that people start to look for homes and that people really traditionally look to put their homes on the market.
“That plays a big role, obviously, in that increase in activity that we’re experiencing right now.”
The more balanced market will give buyers more of an opportunity to do their due diligence before purchasing.
“We’ve got a long way to go. We came from such an extreme market this time last year. And then we had that real hit with interest rates and things really slowed down very dramatically. So it’s really nice to see things starting to just move forward in a more normalized way again.
Still, finding homes in the South Okanagan remains to be a challenge as vacancy rates remain low, even as developments continue to grow.
“It’s going to take years, years before we’re ever at a place where our inventory is going to meet demand unless we see something really dramatic. And that’s right across the country when we look at what the demand is, and the current supply. So I don’t see that changing.”
Advice for first-time home buyers remains the same: finding a realtor and figuring out what time to buy is best for you.
Real Estate Builder Backed by Ackman Says Lenders Rejecting New Apartment Deals – Bloomberg
[unable to retrieve full-text content]
Real Estate Builder Backed by Ackman Says Lenders Rejecting New Apartment Deals Bloomberg
NASA's Parker Solar Probe Plunges Into Fast Solar Wind and Discovers Its Mysterious Source – SciTechDaily
Can China Keep Rising Without the West? – The Atlantic
Françoise Gilot, Whose Art Transcended Her Relationship With Picasso, Dies at 101 – Smithsonian Magazine
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Business21 hours ago
As a Job Seeker, Handle What You Control First
News20 hours ago
Poilievre accuses Liberals of leading the country into ‘financial crisis,’ vows to filibuster budget
News12 hours ago
Canada attends first-of-its-kind UFO briefing at the Pentagon
Health23 hours ago
A researcher had trouble getting mosquitoes to bite him after eating lots of garlic. Here are the factors that keep these insects away.
Media12 hours ago
‘Wednesday’ Actor Percy Hynes White Issues Response To Social Media Posts Accusing Him Of Sex Assaults
Real eState20 hours ago
PGIM CEO Sees 60% of Office Real Estate Market in 'Purgatory' – Bloomberg
Science23 hours ago
Scientists discover first ‘virgin birth’ in a crocodile
Media20 hours ago
12 Ways Web3 Media Could Embrace AI – CoinDesk