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Posted on 07/20/2011 8:01:43 AM PDT by Free Vulcan
Compared with June 2010, sales fell 8.8%.
Economists polled by MarketWatch had anticipated a 4.9 million sales rate. The data caught economists by surprise in part because pending homes sales were up 8.2% in May.
Lawrence Yun, the chief economist of the NAR, said that “a very weak economy [led] to weak sales.”
Cancellations spiked to 16% — the highest rate since the trade group started measuring them in May 2010 — way up from 4% in May but also above the typical 10%.
Yun speculated that appraisal difficulties, financing problems and typical buyer’s remorse may have been behind the cancellation increase.
(Excerpt) Read more at marketwatch.com ...
1) People are choosing renting over buying.
2) People are trying to buy but are force to cancel before the deal is done, my guess is due to lack of financing from unwilling banks, either because they have tightened or people's financial situation has worsened.
3) There seems to be some price firming in some parts of the country while the rest is still falling. Hard to say if this is a real trend or due to local and regional factors. Speculators are more active than last year, that may be part of it.
4) Distressed homes are coming in at the same clip, and all in all the supply increased, so while there's been some building and some firmer prices in places, the housing market as a whole seems to be languishing near the bottom.
2) should read:
‘People that are trying to buy are forced to cancel before the deal is done, my guess is due to lack of financing from unwilling banks, either because they have tightened or people’s financial situation has worsened.’
Keep in mind that many people are not convinced prices have hit bottom and are willing to wait it out.
Headline doesn’t match the story.
I agree, why buy when you can rent for far less money in many cases and keep flexibility to move easily if there is a better job opportunity.
Housing prices doubled in 10 years from 1995 to 2005 and have only corrected 10%-20%. They are still historically high.
It’s the way I excerpted. Sales year-to-year fell 8.8%, month-to-month fell .8%.
I apologize for making it unclear, I didn’t copy and paste very well.
In many areas, home prices are getting closer to 100-120x monthly rents or 2.5 to 3x the buyer's income.
I would refer to that as "returning to historical norms" rather than "languishing near the bottom".
I have to believe the highly restrictive guidelines and procedures placed upon lenders reflects a complete lack of confidence in the future of housing.
As goes housing, so goes the economy. In the meantime, I envision the Government to continue to pacify the public with it's standard line of “we're turning the corner” as the economy continues to sink.
Languishing near the bottom of the current downtrend. In otherwards, we are not rebounding as they say, and things are not improving.
That doesn’t preclude us from going even lower, which I expect we will.
Another unexpected measure of the results of the socialist trend we are experiencing..
But if we view "a house" as a lottery ticket which must be guaranteed to be a winner, we cut the rest of our economy off at the knees.
Housing prices should/will continue to drop as long as wages are stagnant, people are losing their jobs and there is inflation above pay increases. This reduces expendable capital for housing while making credit scarce.
= Price go down.
We’re waiting it out. Almost jumped in twice so far and have pulled back at the last minute due to fears the prices are still falling. We were right. Looks like we’ll be waiting even longer. This is not a bad thing. We are saving an additional 30K each year we hold off. Another few years and we’ll be able to pay cash!
[We’re waiting it out. Almost jumped in twice so far and have pulled back at the last minute due to fears the prices are still falling. ]
I do real estate in Las Vegas and I am seeing that pattern a lot. Sucks to be me right now, good thing I still have my pole dancing career to fall back on.
If the “Gang of Six” deal becomes law, and the mortgage deduction is stricken from the tax code, then home prices will continue to fall. Unless one really, really needs to buy a house, the next 3-5 years are not a good time for that decision.
;^)
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