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WP: May pending home sales tumble without tax credits


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This should not surprise anyone. If you managed to sell before April 30th, good for you, because its a tough market again.

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/01/AR2010070101968.html?hpid=topnews

By J.W. ELPHINSTONE

The Associated Press

Thursday, July 1, 2010; 10:33 AM

NEW YORK -- The number of buyers who signed contracts to purchase homes tumbled in May, a sign the housing recovery can't survive without government incentives.

The National Association of Realtors said Thursday its seasonally adjusted index of sales agreements for previously occupied homes dropped 30 percent in May from April. The index fell to 77.6 from 110.9. May's reading was the lowest dating back to 2001.

The index also was down 15.9 percent from the same month a year earlier.

The reading provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.

The sharp declines were widespread. Pending sales dropped by 33.3 percent in the South, by 32.1 percent in the Midwest, by 31.6 percent in the Northeast, and by 20.9 percent in the West.

Federal tax credits helped to boost home sales this spring. First-time homebuyers could get a credit of 10 percent of the purchase price up to $8,000, while homeowners who bought and moved also could get 10 percent up to $6,500.

The deadline to get a signed sales contract was April 30.

It was widely expected that sales would flag once the tax credit expired. But such a large decline in sales is surprising.

"We are once again struck by the force of the drop," wrote Dan Greenhaus, chief economic strategist at Miller Tabak + Co. "There is simply no other way to spin the recent housing data as anything other than significantly worse than virtually anyone, including the housing bears - a group in which we find ourselves - envisioned."

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Of course they will. I purchased my first home because of the 8k obama tax credit. Thay money helped pay off my destination wedding. I convinced two of my buddies to buy houses because of this credit as well. There was a huge influx of first time home buyers because of the tax credit. Without it, the upward trend in home sales shouldnt even be expected. Also, Its still a good time to buy a home. Prices are still low, just not as low as last year maybe. Get in while you can would be my advise. A lot of people may have missed the boat with the tax credit (and extension) but that doesnt mean it isnt still a buyers market. Just my opinion anyways.

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With news like that I would hold off 6-12 months before any purchase. No reason to buy now when your investment might take an hit right out of the gate. If your going to use an agent make sure he/she understands that you will only offer 70% of anyones asking price. Folks that are looking to unload are out there.

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With news like that I would hold off 6-12 months before any purchase. No reason to buy now when your investment might take an hit right out of the gate. If your going to use an agent make sure he/she understands that you will only offer 70% of anyones asking price. Folks that are looking to unload are out there.

good call. In Northern VA, a lot of people are in bidding wars over houses. The realdeals right now are on the outskirts and suburbs of Northern VA. I have no idea about Maryland.

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With news like that I would hold off 6-12 months before any purchase. No reason to buy now when your investment might take an hit right out of the gate. If your going to use an agent make sure he/she understands that you will only offer 70% of anyones asking price. Folks that are looking to unload are out there.

Are you an agent or in the real estate profession?

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The real question is: when are the banks going to stop sitting on their thumbs? That is the problem with all of this. The banks are not lending expodentaily. It's making the recovery skidish. My question is when will Obama be allowed to attack the banking industry without people complaining he is trying to expand government at the expense of corporate interest? Where is the Tea Party on that issue?

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The real question is: when are the banks going to stop sitting on their thumbs? That is the problem with all of this. The banks are not lending expodentaily. It's making the recovery skidish. My question is when will Obama be allowed to attack the banking industry without people complaining he is trying to expand government at the expense of corporate interest? Where is the Tea Party on that issue?

huh? The banks lending to much to anyone with a pulse is what started this.

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huh? The banks lending to much to anyone with a pulse is what started this.

I know that. But that was because we had people in power that let banks call balls and strikes. We need reform, but we also need banks to start lending, and stop taking our money to bail out themselves out. What about the general public?

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there is so much inventory on the books, home prices will continue to depreciate, instead of appreciate. I wonder how many homes were a "short sale"? OMG a double dip recession!!!!

Probably not many of the houses in the statistics were short sales, because of the sheer amount of time a short sale takes to go through, and that is the fault of the bank. I was involved in a short sale and used my option to back out after five months because the bank hadnt even picked up the file yet. So combine the amount of time short sales take to close, with the sime sensative nature of a lot of those first time home buyers, and Id say that there probably were not many short sales in the statistics.

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Probably not many of the houses in the statistics were short sales, because of the sheer amount of time a short sale takes to go through, and that is the fault of the bank. I was involved in a short sale and used my option to back out after five months because the bank hadnt even picked up the file yet. So combine the amount of time short sales take to close, with the sime sensative nature of a lot of those first time home buyers, and Id say that there probably were not many short sales in the statistics.

I bet the reason that a lot of homes are still on the books is banks are slow with "short sales". They don;t want to compremise their investment, even though having more demand in the market would turn a lot of this around.

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I bet the reason that a lot of homes are still on the books is banks are slow with "short sales". They don;t want to compremise their investment, even though having more demand in the market would turn a lot of this around.

How do you increase the demand in the market?

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How do you increase the demand in the market?

Banks should take the short sales. But they are dragging their feet because they don't want to take a lost on their initial investment. If you sell the homes, and supply decreases, and demand increases, maybe people can recoup some of the equity they've lost since this collaspe began. These are leverage products. The market will set the price. If the market feels they can get more for the product then they will. So the home owner gets to sit back, and not watch their investment dpereciate. But that is asking the banks to look out for the public's general interest , take a momentary lost, and recoup their money by issuing sound mortgages to deserving people. But the banks don't want to take a lost. They sit on the money, pass their bs stress test, and act like everything is all good.

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My house hot the market 4-24-10 and sold 24 days later. From what I have seen things are moving especially with traditional sales. The house we bought was on the market a week and had 3 contracts on it after they accepted ours.

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The real question is: when are the banks going to stop sitting on their thumbs? That is the problem with all of this. The banks are not lending expodentaily. It's making the recovery skidish.

What are you talking about?

huh? The banks lending to much to anyone with a pulse is what started this.

QFT

Banks should take the short sales. But they are dragging their feet because they don't want to take a lost on their initial investment. If you sell the homes, and supply decreases, and demand increases, maybe people can recoup some of the equity they've lost since this collaspe began. These are leverage products. The market will set the price. If the market feels they can get more for the product then they will. So the home owner gets to sit back, and not watch their investment dpereciate. But that is asking the banks to look out for the public's general interest , take a momentary lost, and recoup their money by issuing sound mortgages to deserving people. But the banks don't want to take a lost. They sit on the money, pass their bs stress test, and act like everything is all good.

The average nagotiator has somthing like 900 files on their desk. You want to try and deal with 900 files x 10 calls a day on each one? OK, maybe not 900 files, but you get the point. Should the banks be better at getting them done? YES! Should they have been more prepared for this? YES! But that doesn't mean they are doing it on purpose.

because they don't want to take a lost on their initial investment.
What is wrong with that? Not wanting to take a loss on something is why a good % are trying to do a short sale and therefore the need for the "BS" stress tests.

Sales are down in May because probably over half of the "normal" May sales went into April. Compare 2010 April, May and June to 2009 and you will get a better picture.

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So you'd offer say 350k on a house listed at 500k? Good luck with that! ;)

Well at that point what's the worst that happens? They say no, and you move on. At the moment there are more homes for sale than people who want to buy them, and you never know when you'll meet a desperate person.

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The real question is: when are the banks going to stop sitting on their thumbs? That is the problem with all of this. The banks are not lending expodentaily. It's making the recovery skidish. My question is when will Obama be allowed to attack the banking industry without people complaining he is trying to expand government at the expense of corporate interest? Where is the Tea Party on that issue?

Ladies and gentlemen, I proudly present a new law of economics, determined right here at our very own ES. When you flood the market for housing with thousands upon thousands upon thousands of houses, you're reducing the supply of... houses.

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What are you talking about?

QFT

The average nagotiator has somthing like 900 files on their desk. You want to try and deal with 900 files x 10 calls a day on each one? OK, maybe not 900 files, but you get the point. Should the banks be better at getting them done? YES! Should they have been more prepared for this? YES! But that doesn't mean they are doing it on purpose.

What is wrong with that? Not wanting to take a loss on something is why a good % are trying to do a short sale and therefore the need for the "BS" stress tests.

Sales are down in May because probably over half of the "normal" May sales went into April. Compare 2010 April, May and June to 2009 and you will get a better picture.

Look if homes sales continue to sag then it's not a trend, its a problem. If you feel that figures in May are an aberition, then so be it. What ever makes you sleep well at night.

I do not get the point about the 900 files. These are professionals. Stop with the excuses. All you have to do is run their credit, and you know if they qualify. You may have to be creative with some, but for the most part you know who can qualify for a mortgage. From their it's on to the negotiations, etc. The bar has been set high by most banks. So think about it. You have 900 people come to you. You know that they need a ceratin score to get a loan, that narrows the field. Then you look at their earnings. We are at 9.7 unemployment, so that narrows the feild even more. Then you have to look at the fact they have be able to afford the home they live in, so their LTV has to be correct. That narrows the field even more. If you have 20% of 900 able to qualify you got it made. Commissions are high on home loans for a reason. If you have that much business I am sure you can hire some people to help you get loans done. Time favors the banks. Just keep that in mind. The financial industry has to figure out a way to make banks have sound lending practice, and give people a chance to buy a home if they qualify. 700+ credit is not good, especially with unemployment so high. Its a self serving system.

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Ladies and gentlemen, I proudly present a new law of economics, determined right here at our very own ES. When you flood the market for housing with thousands upon thousands upon thousands of houses, you're reducing the supply of... houses.

The less amount of homes on the books, the more you can ask for homes when the demand is there. You can sell at a premium, instead of a discount. That would help everyone. But some one has to take the first step.

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Look if homes sales continue to sag then it's not a trend, its a problem. If you feel that figures in May are an aberition, then so be it. What ever makes you sleep well at night.

I do not get the point about the 900 files. These are professionals. Stop with the excuses. All you have to do is run their credit, and you know if they qualify. You may have to be creative with some, but for the most part you know who can qualify for a mortgage. From their it's on to the negotiations, etc. The bar has been set high by most banks. So think about it. You have 900 people come to you. You know that they need a ceratin score to get a loan, that narrows the field. Then you look at their earnings. We are at 9.7 unemployment, so that narrows the feild even more. Then you have to look at the fact they have be able to afford the home they live in, so their LTV has to be correct. That narrows the field even more. If you have 20% of 900 able to qualify you got it made. Commissions are high on home loans for a reason. If you have that much business I am sure you can hire some people to help you get loans done. Time favors the banks. Just keep that in mind. The financial industry has to figure out a way to make banks have sound lending practice, and give people a chance to buy a home if they qualify. 700+ credit is not good, especially with unemployment so high. Its a self serving system.

Uh.... you do know that the negotiator he was talking about was a response to your question/'point' about short sales. The negotiator doesnt have anything to do with the credit of the buyer, they are not extending a loan to that person.

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