Due to increased risk in the market for houses, Redfin has become the latest real estate company to abandon its home-flipping business. Will Parker reports in The Wall Street Journal: Real-estate company Redfin Corp. laid off 13% of its staff on Wednesday and closed its home-flipping unit, saying the operation was both too expensive and too risky to continue. The Seattle-based company, which operates a real-estate brokerage and home-listings website, said the decisions were made because it is predicting that the real-estate market is going to be smaller next year and its home-flipping … [Read more...]
The End of Speculative Real Estate Development?
With interest rates rising fast, property developers may be taking a second look at their future plans for speculative development. Prologis, the world's largest logistics property developer, is slowing down its speculative investments. The Wall Street Journal's Liz Young and Sabela Ojea report: Prologis Inc. is pulling back on building new warehouses without tenants already signed on, as the world’s largest developer of logistics properties braces for a potential economic downturn. The shift away from what is known in the real-estate sector as speculative projects reflects “a more … [Read more...]
China Real Estate Debt Snowballing into Record Defaults
According to Bloomberg News, over the past year, the Chinese real estate market has snowballed into record defaults and is worsening. Bloomberg reports: A worsening crisis in China’s property market is dragging junk dollar bonds from the nation’s borrowers deeper into distress, as the implosion of what was once one of the world’s most-profitable bond trades sends ripples across trading floors. Anyone who had been expecting a market turnaround from the 20th Communist Party congress which started Sunday has been left grappling with a further grind lower in China’s offshore credit market this … [Read more...]
Contagion Hits China’s Property Markets
Chinese investors and home buyers are facing a contagion of bad news in China's property markets. The Financial Times reports: Contagion is spreading into the deep tissue of China’s political economy. What began as a property crisis — characterised by slumping apartment sales and a rash of debt defaults by developers — is now morphing into a financial crunch at the local government level. A new world of difficult choices looms before Chinese policymakers as a crucial congress of the ruling Communist party this month looks set to award another term in office to Xi Jinping, China’s … [Read more...]
China’s Property Markets Are in Turmoil
Investors are losing confidence in China's property markets. Smaller cities are being especially hard hit by a decline in home prices. Jacky Wong reports for The Wall Street Journal: September and October are usually the peak season for China’s property sales. But things are looking different this year—and not in a good way. Until Beijing works up the gumption to intervene more decisively to restore confidence, the slow drift downward of the market—and the broader economy—seems likely to continue. Chinese housing prices continued to fall last month. New-home prices declined 0.3% in August … [Read more...]
Do you remember the 70s? “Like it was Yesterday,” You Tell Me
“Like it was yesterday,” you said in my conversation with you. We were talking about your portfolio and markets and transitioned to Roxbury, Massachusetts of all places, and the Mission Hill neighborhood. I was explaining how, on Tuesday following Labor Day Weekend, Becky and I helped our daughter move to her new apartment where it seems everyone at Northeastern University lives. I said it’s outrageous what they’re getting for rent in these triple-deckers. “Funny, you should mention that,” you said. “I lived around the corner when I was at Northeastern a long time ago,” you … [Read more...]
Is China About to Suffer Its Own Financial Crisis?
China's real estate market is crumbling, and it's threatening to take the country's banking sector with it. Is China about to suffer its own 2008-style financial crisis? Cao Li reports for The Wall Street Journal: Shares in China’s privately run banks have fallen sharply this year, as the country’s property slowdown starts to bite. The Shanghai-listed shares of China Merchants Bank and Ping An Bank Co.—two of China’s biggest, most prominent privately run lenders—have fallen by 32% and 25%, respectively, since the start of 2022, wiping $68 billion off their combined stock market value. The … [Read more...]
DEJA VU? Mortgage Lenders Going Broke
Remembering the sad days of 2008 and 2009 when the market was in turmoil is not something most investors enjoy. But watching mortgage lenders going broke is giving some investors who were around back then a sense of deja vu. Bloomberg's Carmen Arroyo, Steven Church, and Maxwell Adler report: The US mortgage industry is seeing its first lenders go out of business after a sudden spike in lending rates, and the wave of failures that’s coming could be the worst since the housing bubble burst about 15 years ago. There’s no systemic meltdown coming this time around, because there hasn’t been the … [Read more...]
SHOCK: Home Prices FALL in San Francisco as Market Dries Up
San Francisco was the only major U.S. city in June to see its home prices fall. Crime, cost of living, and the crypto crash are all pulling down demand for housing in the city. Bloomberg's John Gittelsohn reports: A palatial five-bedroom home built in 1932 with stained-glass windows, hand-carved doors and jaw-dropping hillside views of downtown San Francisco hit the market in April for $9.5 million. In June, the owners dropped the price to $7 million. It went up for auction last week with an opening bid of $4.5 million. No offers emerged. That kind of pullback is a stark turn for a … [Read more...]
Is a Housing Market Crash Next?
With the Fed raising rates fast, homeowners are watching as demand for their homes begins to dry up. Pending home sales fell by 8.6% in June. That was much further than forecast, reports Aarthi Swaminathan at MarketWatch: U.S. pending-home sales fell in June by 8.6%, according to the monthly index released Wednesday by the National Association of Realtors. Analysts polled by the Wall Street Journal had forecast the pending home sales index to drop by 1%. The drop in pending home sales is the biggest since the depths of the pandemic in April and March 2020. It also follows gloomy data on … [Read more...]
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