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Business Times
a day ago
- Business
- Business Times
US housing market posts worst spring selling season in 13 years
[BOSTON] The US housing market just logged its slowest spring season in more than a dozen years, leaving Glennda Baker, a veteran real estate agent in Atlanta, struggling to sell 21 listings. She's been slashing prices. But months of chatter about AI taking jobs and tariffs tanking the economy is feeding into buyer indecision. 'People say price solves everything,' Baker said. 'But price doesn't solve uncertainty.' Spring is traditionally the busiest season in real estate, not unlike Christmas for retailers. And while the most unaffordable housing market in decades has sidelined all but the most determined buyers, there were signs earlier this year that conditions were right for a rebound. By April, mortgage rates dipped, price growth flattened and the years-long inventory drought looked like it had finally broken. But that coincided with US President Donald Trump's 'Liberation Day' tariff bombshell, which sent shock waves through financial markets and pushed house hunters back into hiding. Fewer sales contracts were signed in the US from April to June than in any year since 2012, according to data from Redfin. That was back when the housing market was still finding its footing after the collapse that fuelled the financial crisis. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Before 2025, the previous two springs were also weak, pulled down by high rates and prices, but anxiety over the future of the economy has made things worse this time, said Chen Zhao, head of economics research at the brokerage. Prices, however, are unlikely to plunge because sellers are starting to pull listings off the market, limiting inventory, she said. 'We thought we hit rock bottom but we keep discovering there's more rock bottom to be had,' Zhao said. 'You have a lot of people being afraid of what's to come.' With consumer confidence ticking up and the stock market on a hot streak, the hope is that deals that normally might have happened in the spring will get pushed into summer. But there's likely to be only a small bump, according to Thomas Ryan, an economist at Capital Economics. The rental market is gaining strength because many would-be buyers still cannot afford to purchase, he said. And as borrowing costs remain higher for longer, people have stopped assuming they can buy now and be able to refinance at a later date, according to Ryan. 'The outlook for the housing market is dire,' he said. 'Affordability is at its worst since the 1980s. Nothing has changed on that front.' Location matters One silver lining is that buyers have gained some negotiating power as listings climbed across much of the country. But as always in real estate, what matters most is geography. Prices continue to rise fast in the Northeast and Midwest, where inventory shortages are severe. Yet in Sun Belt markets such as Florida and Texas, where homebuilders were most active in recent years, the market is sinking. In Las Vegas, active listings shot up more than 38 per cent from a year earlier while sales plunged 15 per cent, according to Redfin data for the four weeks to Jul 20. The fear of missing out has shifted from buyers to sellers, said Angela O'Hare, an agent with Real Broker in the Las Vegas area. It does not help that sellers have to compete with homebuilders offering to subsidise mortgage rates and help cover closing costs, she said. 'Sellers who need to sell will make it happen,' O'Hare said. 'I had a listing at US$950,000. I cut it down to US$799,000 and had three offers.' Even some of the country's hottest markets have lost some steam. In Narragansett, a picturesque beach town in Rhode Island south of Providence, homes that would have gotten a dozen offers a year ago now get three, if they are priced right, said Johnny Sheil, an agent with Mott & Chace Sotheby's International Realty. 'We are seeing a lot more price decreases throughout Rhode Island now,' Sheil said. 'Uncertainty scares some people.' BLOOMBERG
Yahoo
a day ago
- Business
- Yahoo
Here's Why Watsco (WSO) Sold Off in Q2
Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Smid Cap Composite underperformed the Russell 2500 Growth Index in the quarter and returned 5.00% net-of-fees vs 11.31% for the index. Sector allocation effects were positive, while sector allocation effects were negative. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025. In its second quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Watsco, Inc. (NYSE:WSO). Watsco, Inc. (NYSE:WSO) engages in the distribution of air conditioning, heating, and refrigeration equipment, and related parts and supplies. The one-month return of Watsco, Inc. (NYSE:WSO) was 10.95%, and its shares lost 2.72% of their value over the last 52 weeks. On July 25, 2025, Watsco, Inc. (NYSE:WSO) stock closed at $489.97 per share, with a market capitalization of $19.554 billion. Conestoga Capital Advisors stated the following regarding Watsco, Inc. (NYSE:WSO) in its second quarter 2025 investor letter: "Watsco, Inc. (NYSE:WSO) is the nation's largest distributor of heating, ventilation and air conditioning (HVAC) equipment, parts and supplies with 80% of revenue tied to the Sun Belt region. The stock sold off after missing estimates in its seasonally smallest quarter citing residential equipment weakness due to an industry-wide refrigerant transition. We believe this disruption will resolve itself during peak heating months." A commercial air conditioning unit mounted atop a residential roof in a suburban neighbourhood. Watsco, Inc. (NYSE:WSO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Watsco, Inc. (NYSE:WSO) at the end of the first quarter, which was 33 in the previous quarter. While we acknowledge the potential of Watsco, Inc. (NYSE:WSO) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
3 days ago
- Business
- Yahoo
The American housing market is in a deep freeze—Even lower prices aren't enough to convince stubborn buyers
The American new home market is cooling, with softer sales, higher inventory, and falling prices reflecting the current slowdown. The latest New Residential Sales report (June 2025) from the U.S. Census Bureau shows that the U.S. housing market is experiencing a slowdown in new single-family home sales, while inventory and supply have increased, and prices are declining. As buyers balk at high home prices and mortgage rates that continue to approach 7%, a recent Oxford Economics report predicts more pain ahead. Concerns about the economy and job security mean many would-be new purchasers are opting to make do with modest home improvements instead. Increased new home sales often indicate strong consumer confidence, greater employment, and accessible financing. Conversely, declines suggest waning buyer interest, affordability issues, or economic stress. 'There's no question that in many of pockets of the Sun Belt—the epicenter of U.S. single-family homebuilding—buyers have gained a considerable amount of leverage this year and the market has softened,' ResiClub editor-in-chief Lance Lambert told Fortune Intelligence. 'In order to keep sales volumes steady, big homebuilders have compressed margins further and done bigger incentives or outright price cuts. Lennar is spending the equivalent of 13.3% of final sales price on incentive, like mortgage rate buydowns,' Lambert noted, up from 1.5% at the height of the Pandemic Housing Boom in the second quarter of 2022. In normal times, Lambert pointed out, Lennar spends 5% to 6% on buyer sales incentives. (Lennar is ranked no. 129 on the Fortune 500.) Key points from the report: New home sales: Sales were at a seasonally adjusted annual rate of 627,000 in June 2025. This is only 0.6% higher than May 2025, but 6.6% lower than June 2024, indicating a notable year-over-year decline in buying activity. Inventory: At the end of June, there were 511,000 new houses for sale, a 1.2% increase from May 2025 and an 8.5% increase from June 2024. This rise in inventory suggests that homes are staying on the market longer. Months' supply: The supply of homes relative to the sales rate is now at 9.8 months, up from 9.7 months in May 2025 and 8.4 months in June 2024. A higher months' supply figure generally indicates a slower market with more supply than demand. Prices: The median sales price for new homes in June 2025 was $401,800, which is 4.9% lower than May 2025 and 2.9% lower than June 2024. The average sales price was $501,000, down from the previous month but slightly higher than a year ago. This points to downward pressure on prices, likely due to rising inventory and decreased demand. What it means: The combination of dropping sales, rising inventory, and declining prices indicates a market with weaker demand and increased supply. These conditions are often seen when buyers are constrained (e.g., by high mortgage rates or economic uncertainty), or homebuilders have ramped up production in anticipation of higher demand that didn't fully materialize. The elevated months' supply metric—at almost 10 months—suggests a buyer's market, where purchasers have more negotiating power and sellers may need to lower prices to attract buyers. A new home is defined by the U.S. Census Bureau as a single-family house that is being sold for the first time. Since new home sales are recorded early in the sales process, trends in new home sales can signal coming shifts in the broader housing market, forecasting changes before they appear in existing home sales data. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on
Daily Mail
3 days ago
- Business
- Daily Mail
House price drop imminent across America
Buyers are walking away from home purchases in record numbers, causing complete chaos in the US housing market . In June, over 57,000 home sales across the country were abruptly canceled , equaling a staggering 14.9 percent of homes that went under contract, according to a report from Redfin. That number is an uptick from 13.9 percent of sales which collapsed this time last year. It's also the highest June figure ever recorded since Redfin began tracking cancellations in 2017, and the Sun Belt has become ground zero for cancelled deals. It's all down to the buyers, who currently hold the power in the real estate market. With a surplus of sellers flooding the market and far fewer buyers, Americans looking to buy now have the upper hand, and it seems they're taking full advantage of it. The soaring cost of homes, home repair and near-record mortgage payments are also giving Americans cold feet. Some buyers simply balk when they see the reality of their future monthly bills. 'I've also heard of some buyers backing out because they're hoping home prices or mortgage rates are going to plummet soon, even though that's unlikely,' Zschirnt said. There are also budding homebuyers rattled by bigger picture issues like economic uncertainty, tariffs, stubborn inflation and fears of a looming recession. Meanwhile, sellers are scrambling to keep deals alive. 'Sellers are willing to make deals because in today's buyer's market, they don't want to lose out on a sale once they have a buyer under contract,' said Van Welborn, a Redfin Premier agent in Phoenix. 'A few years ago, when the market was more competitive, sellers were able to tell buyers to move on rather than pay for repairs found during the inspection period. 'Now, sellers are doing whatever they can to close the deal. I have one buyer who discovered a septic issue on an ultra-luxury home and was able to talk the seller into reducing the price by $1 million.' The majority of cancelled deals are found in the Sun Belt. Redfin links the spike to heavy new construction in those regions - meaning even more choices for buyers - as well as skyrocketing insurance costs driven by natural disasters. At the other end of the spectrum, Nassau County, New York, saw just 5.4 percent of deals fall through, making it the lowest in the country. That was followed by Montgomery County, Pennsylvania, with 6.8 percent of cancellations and Milwaukee with 8.2 percent. Despite those areas remaining strong, cancellations are rising nearly everywhere else across the US. Only seven metro areas saw a drop compared to last year, but the changes were minimal. Fort Lauderdale had the biggest decline, with 16.5 percent of deals canceled down from 17.7 percent, followed by Denver with 16.2 percent down from 17.2 percent.
Time of India
4 days ago
- Business
- Time of India
Canada's City Office REIT to be taken private in near $1.1 billion deal
BENGALURU: City Office REIT said on Thursday it has agreed to be taken private by MCME Carell , an affiliate of hedge fund Elliott Investment , in an all-cash deal valued at nearly $1.1 billion, including the assumption of debt. MCME Carell will acquire all the outstanding shares of the real estate company it does not already own for $7.00 per share, representing a 26% premium to the stock's last close. Shares of City Office rose more than 24% to $6.92 in morning trading, their highest since March 2023. They have risen 25% since the start of the year. "In light of a challenging environment for the office sector, this transaction delivers immediate and significant value to our shareholders," CEO James Farrar said. Morning Calm Management, another affiliate of MCME Carell, said the deal underscored its continued belief in the recovery of the office sector and its interest in acquiring high-quality office assets in strong growth markets. The deal "provides a shorter timetable (for shareholders) to realizing $7/share of value, but obviously takes additional upside off the table," said Robert Stevenson, analyst at financial advisory firm Janney Montgomery Scott. Vancouver, Canada-based City Office owns and operates office properties mainly in Sun Belt markets. It owns about 54 office buildings in Dallas, Denver, Orlando and Phoenix among others. A post-pandemic switch to hybrid and remote work models by companies knocked down demand for office spaces significantly below pre-pandemic levels and vacancy rates to historic lows. At the same time, higher borrowing costs make it more expensive for builders to finance or re-finance their properties. The deal, expected to close in the fourth quarter, is subject to certain agreements including among other things, the sale of the company's Phoenix portfolio.
