Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit but remains comfortably above a year ago, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 16.0 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.

Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”

Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for the tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

Yun projects an additional 900,000 first-time buyers will qualify for the extended tax credit in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit.

“Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.

Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.

Watch the video interview with Lawrence Yun, NAR’s Chief Economist (Jan. 5, 2010)

Source: The National Association of Realtors® (NAR), “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.


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To put it mildly, the real estate market during the last decade was a rollercoaster. This year, though, seemed to be more of a low, and according to the most recent Realtors Confidence Index (RCI) by the National Association of Realtors (NAR), positive expectations are increasing.

According to a survey of more than 50,000 Realtors, sales expectations of real estate practitioners for residential properties for the next six months increased compared to a month ago for all types of housing.

Ratings include:

• Single-family homes: 41.1 (up from a rating of 38.7);
• Town-houses: 23.0 (up from 21.8);
• Condos: 18.2 (up from 16.7).

As for home prices, 60.1 percent of respondents expect home prices to increase 0 to 5.0 percent in the next year, but 30.4 percent believe home prices will fall over that same time period.

According to Lawrence Yun, NAR chief economist, home sales are expected to get a boost by roughly 15 percent next year. Existing-home sales are forecast to post 5.7 million units in 2010, up from 5 million units in 2009. In addition, Yun said new home sales will increase to 555,000, a jump from 400,000 in 2009.

By the middle of next year, Yun projects inventory will fall to a six to seven months’ supply, which means there are likely to be modest home price gains. Roughly speaking, a 2 to 5 percent price gain is likely in many parts of the country next year. Yun said home prices have been overcorrecting, leading to sizable destruction in middle-class housing-related wealth, but as home values increase, prices will be prevented from overcorrecting even further.

In his projection for 2010, Yun said the commercial real estate market will also benefit. However, the benefits in this market will, as usual, come after some lag time. As the economy becomes more fully entrenched in “recovery” mode, Yun projects employment will start to turn around. Rising employment and recovering consumer wealth will mean an eventual increase in demand for office, retail, and industrial space, Yun said.

“As always, there are some caveats,” Yun said. “Despite the very positive news on the housing stimulus, there remain significant risks to the forecast.”

According to Yun, mortgage rates will rise from their rock-bottom point as we move into 2010, and the Federal Reserve will slowly start the unwinding of its mortgage-backed securities purchases. In addition, Yun said consumer prices will be watched for any sign of accelerating inflation, and as a result, bond investors will be cautious about lending at such low rates. Up from the current rate of 5.0 percent, the 30-year fixed rate is likely to reach 5.7 percent by the end of 2010, Yun said.

Another worry of Yun’s is the labor market. He said the rising unemployment rate is a painful reminder that not all is well. The unemployment rate reached 10.2 percent in October, its highest level since 1983, and Yun said the climb is not over yet. He expects unemployment to hit 10.4 percent before reversing. While job cuts are continuing, Yun said there is a silver lining because the pace of job cuts is less sharp now than in the first half of 2009. Job creation is expected to turn positive by spring, and Yun said unemployment will likely be at 9.5 percent by November 2010.

“Despite the risks of rising mortgage rates and rising unemployment, the housing outlook has significantly improved,” Yun said. “As the fear of falling home values disappears, that one key negative factor that has held back home sales will no longer be in play. Happier days are ahead.”

Source: Brittany Dunn (DSNews)


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Andrea Cueny, REALTOR

Submitted by Andrea Cueny, REALTOR

Existing-home sales rose again in November as first-time buyers rushed to close sales before the original Nov. 30 deadline for the recently extended and expanded tax credit, according to the NATIONAL ASSOCIATION OF REALTORS(r).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.

Lawrence Yun, NAR chief economist, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

Inventories Fall
Total housing inventory at the end of November declined 1.3 percent to 3.52 million existing homes available for sale, which represents a 6.5-month supply at the current sales pace, down from an 7.0-month supply in October. Raw unsold inventory figures are 15.5 percent below a year ago. The last time there was a lower supply of homes on the market was April 2006, when it was at a 6.1-month supply.

“Nearly all markets experienced a solid sales gain from one year ago,” Yun said. “The only markets with measurably lower sales were in San Diego, Riverside, and Sacramento (Calif.), where inventory shortages for lower-priced homes are limiting sales.”

Sales Rise Across the Board
For the second month in a row, sales have risen in all price classes from a year earlier. Prior to October, the only consistent gains were in the lower price ranges. The national median existing-home price for all housing types was $172,600 in November, which is 4.3 percent below November 2008. Distressed properties, which accounted for 33 percent of sales in November, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-Family Homes
Single-family home sales jumped 8.5 percent to a seasonally adjusted annual rate of 5.77 million in November from a level of 5.32 million in October, and are 42.1 percent above the pace of 4.06 million in November 2008. The median existing single-family home price was $171,900 in November, down 4.4 percent from a year ago.

Condos
Existing condominium and co-op sales in November were unchanged from a seasonally adjusted annual rate of 770,000 in October, but are 60.1 percent above the 481,000-unit pace a year ago. The median existing condo price was $178,000 in November, which is 3.1 percent below November 2008.

By Region
Sales in the Northeast rose 6.6 percent to an annual level of 1.13 million in November, and are 52.7 percent higher than November 2008. The median price in the Northeast was $223,400, down 13.1 percent from a year ago.
Existing-home sales in the Midwest increased 8.4 percent in November to a pace of 1.55 million and are 53.5 percent above a year ago. The median price in the Midwest was $140,800, a decline of 0.4 percent from November 2008.
In the South, existing-home sales rose 4.8 percent to an annual level of 2.39 million in November and are 44.8 percent higher than a year ago. The median price in the South was $151,400, down 1.4 percent from November 2008.

Existing-home sales in the West increased 10.6 percent to an annual rate of 1.46 million in November and are 28.1 percent above November 2008. The median price in the West was $231,100, which is 4.1 percent below a year ago.

Please click here for the entire story from realtor.com on the gains in existing home sales.

I am very excited to pass along some uplifting news released this month by the National Association of Realtors® (NAR) showing an increase in pending home sales for nine months in a row!  In fact, this is the first time this has ever happened since the inauguration of the Pending Home Index in 2001.

For those that aren’t familiar with the Index, it is based on a national sampling of pending sales for existing homes.  Research has proven that signed contracts mirror actual closings within a 30 to 60 days time frame, so reporting on pending sales as opposed to closed sales has been accepted as the standard.  They do report both month-to-month and year-to-date percentages, but in my opinion the year over year figures are much more telling of the actual trends that are occurring.  And, as of October 2009 there was a 31.8% increase over October 2008 representing the largest annual increase ever!

Lawrence Yun, the chief economist for NAR, has stated that while we may see a small dip month over month in closed sales as the “pendulum” swings back between now and Spring time, we should reach “self-sustaining housing conditions and firming home prices in most areas around the middle of 2010.”^₁ Is this good news or what?  The prediction is that we will see at least a 20% increase in home sales by the middle of 2010, with an increase in median home values somewhere between 2-4%.  Of course, the extension on the deadline for the tax credit for first-time home buyers will be beneficial for this as it enables an additional 2.6 million households to qualify for the credit on top of the 1.8 million already qualified through the fourth quarter of this year. 

With the increase in the numbers above coupled with the fact that interest rates on mortgages are certain to rise, those of us in the residential real estate profession should be gearing up for an exciting year!  There is no doubt that we have definitely been tested over the last few years, but we are finally beginning to see some relief and we need to be ready for it.  Of course, it doesn’t hurt that we live in one of the most beautiful places in the country here in Southwest Florida!

Stay tuned for the release of the November home sales coming out in the next few weeks followed by the release of the Index numbers for November in early January.

^₁www.realtor.org

Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.

“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.


Original article:Walter Molony


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Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.

Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.”

By Region:

• Pending sales in the Northeast surged 19.9 percent to 100.2 in October and is 44.2 percent above a year ago.
• In the Midwest, the index rose 11.6 percent to 109.6 and is 36.6 percent higher than October 2008.
• Sales in the South increased 5.4 percent to an index of 115.4, which is 31.6 percent above a year ago.
• In the West, the index fell 11.2 percent to 127.7 but is 21.9 percent above October 2008.

Not Out of the Woods Yet
Yun cautioned that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge, but the weak job market remains a major concern and could slow the recovery process.

“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.

Source: NAR, December 1, 2009

Lisa Bennett, REALTOR®

Submitted by Lisa Bennett, REALTOR®, Atlanta Fine Homes Sotheby’s International Realty.

Video with Lawrence Yun, NAR Chief Economist

NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”

NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”

The Pending Home Sales Index in the Northeast slipped 2.0 percent to 83.6 in September but remains 16.9 percent above September 2008. In the Midwest the index rose 8.1 percent to 98.2 in September and is 17.8 percent higher than a year ago. In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008. In the West the index jumped 10.2 percent to 143.8 and is 23.7 percent above a year ago.

Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

A forecast for housing and the economy will be released November 13 at 11 a.m. PST at the 2009 REALTORS® Conference & Expo in San Diego. Existing-home sales for October will be reported November 23 and the next Pending Home Sales Index will be on December 1; release times are 10 a.m. EST.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Basic economics did not escape National Association of REALTORS chief economist Lawrence Yun who gave his US economy and real estate forecast during talks this past weekend at San Diego convention.

________________

Are home selling prices expected to improve? 

• We have experience downtrend in housing inventory for well over a year, and home selling prices appear to be in the early stages of stabilizing.

What is expected impact of expansion of homebuyer tax credit?

• With expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3% and 5% in 2010, but with wide geographic differences.

What’s your projection for Homebuyer Tax Credit impact?

• Projections are enhanced by tax credit expansion to more home buyers through the middle of 2010.

Was the prior homebuyer tax credit successful?

• Yes.  Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year.

Are you hopeful?

• Yes about the impact of expanded tax credit because it will stabilize home prices.

Why are you hopeful?

• Homebuyer tax credit is working better than first projected.  It now looks like we’ll have 2.3 to 2.4 million first time homebuyers this year.

What about those first time homebuyers?

• First-time buyers accounted for a record 47% share of home sales over the past year, which was up from 41% in the 2008 survey.  This share has risen steadily since a cyclical low of 36% in 2006.

What do you say about existing home sales?

• Existing US home sales are expected to total 5.01 million in 2009, a gain of 2% over last year, and then are forecasted to rise 13.6% to 5.69 million in 2010.

What about future of home values?

• Steady draw down of inventory will help home values to turn positive in 2010.  However, risks such as unemployment remain in the economy.

What about new home sales?

• New-home sales are projected at 397,000 this year, recovering to 549,000 in 2010. 

What do you expect on housing starts?

• Housing starts, including multifamily units, should total 564,000 units this year but grow to 752,000 in 2010.

What do you think will happen with mortgage rates?

• 30-year fixed-rate mortgage will probably average 5.3% in the fourth quarter, rising gradually to 5.8% by the end of next year.

 Will home affordability be better?

• NAR’s housing affordability index will set a record in 2009, averaging 30 percentage points higher than 2008.  Affordability will decline from record highs next year, but will remain at historically attractive levels for home buyers.

Prediction about gross domestic product?

• US gross domestic product to be at a pace of 2.5% in the current quarter, with GDP up 2.8% in 2010.

Your opinion about unemployment?

• Unemployment rate is close to peaking and is projected to ease to 9.5% by the end of next year. 

What will be impact of US budget deficit?

• Large size of US budget deficit is a concern going forward, and carries the risk of higher inflation.  At this point, that risk appears to be restrained.

What is Your thought about future US inflation?

• Inflation, as measured by the Consumer Price Index, is seen contracting 0.4% this year, then rising 1.6% in 2010.

__________________________

So this REALTOR.org economy forecast is on some basics and essentially positive.

Harrison K. Long, Explore Group, Coldwell Banker Previews, Irvine, CA.  Irvine Realtor.  CA DRE #01410855.  ExploreProperties@gmail.com.  

______________

Source:  National Association of REALTORS Forecast:  Housing Forecast Hopeful, November 16, 2009.

Pending home sales rose again, marking eight consecutive monthly gains – the longest streak since measurement began in 2001, according to the National Association of Realtors®. The Pending Home Sales Index rose 6.1 percent to 110.1 from a reading of 103.8 in August, and is 21.2 percent higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8. Lawrence Yun, NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”

Click here for the NAR Pending Home Sales (PHS) chart.

—From NAR member e-mail update, 11/13/09

Joe Sheahan, REALTOR

Submitted by Joe Sheahan, REALTOR®, Atlanta Fine Homes Sotheby’s International Realty. Article taken from 

Realtor.com

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.

Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.

Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”

Inventory Falls
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.

Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.

Here’s the region-by-region picture:

• Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
• Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
• South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
• West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.
  Source: NAR

Existing-home sales in the second quarter showed healthy gains from the first quarter in the vast majority of states, and price declines have increased affordability in most metro areas, according to the latest survey by the National Association of Realtors®.

NAR’ s Video – Economic Update (August 12, 2009)

Total state existing-home sales, including single-family and condo, rose 3.8 percent to a seasonally adjusted annual rate¹ of 4.76 million units in the second quarter from 4.58 million units in the first quarter, but remain 2.9 percent below the 4.90 million-unit pace in the second quarter of 2008.

Thirty-nine states experienced sales increases from the first quarter, and nine states were higher than a year ago; the District of Columbia showed both quarterly and annual rises.

Lawrence Yun, NAR chief economist, said the sales gain appears to be sustainable.  “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said.  “There have been sustained sales gains in Arizona, Nevada and Florida, as well as diverse areas such as Maryland, the District of Columbia and Nebraska.  More recently, we’ve seen strong double-digit gains in Idaho, Utah, New Mexico, Washington, Hawaii, New York, New Jersey, Maine, Vermont, Wisconsin, Indiana, South Dakota and Montana.”

Distressed sales – foreclosures and short sales – accounted for 36 percent of transactions in the second quarter, which continued to weigh down median home prices because they typically are sold at a 15 to 20 percent discount; first-time buyers accounted for one-third of transactions.  The national median existing single-family price was $174,100, which is 15.6 percent below the second quarter of 2008.  The median is where half sold for more and half sold for less.

Read more…

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Excellent but lengthy video of the “Your Real Estate Portfolio:  Troubled Properties” Presentation from the 2009 “Leadership & Legislative Summit”:  here.

Featured Speakers:

Lawrence Yun, Ph.D.
National Association of REALTORS®
Washington, DC

James A. Evans, CPM
Bruce G. Pollock & Associates
Grand Blanc, MI

Robert B. Toothaker, CPM
CB Richard Ellis/Bradley
South Bend, IN

David Boehmig, President/Founder

Submitted by David Boehmig, President/Founder

WASHINGTON (MarketWatch) — Pending sales of existing homes rose for the third month in a row in April, boosted by record-low mortgage rates and special incentives for first-time buyers, a real estate trade group reported Tuesday. 

The pending home sales index for April rose 6.7% after a 3.2% increase in March, the National Association of Realtors said. The index, based on sales contracts on existing homes, was 3.2% above April 2008. “This is yet another positive indication that the bottoming process is forming” in home sales, wrote Jennifer Lee, an economist for BMO Capital Markets. “Now if only prices would stabilize.”

The NAR reports on sales of existing homes in a separate report once a transaction closes, usually six to eight weeks later. In April, existing-home sales rose 2.9% to a seasonally adjusted annual rate of 4.68 million, 3.5% below year-earlier sales rates.

With mortgage rates hovering near all-time lows, housing affordability has improved, said Lawrence Yun, chief economist for the NAR. Yun expects existing-home sales to rise about 17% by the end of the year to a seasonally adjusted annual rate of 5.48 million. Sales of new homes, by contrast, are expected to fall another 12% to a 308,000 annual rate.

“Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers,” Yun said.

The federal government is offering an $8,000 tax credit for first-time home buyers, which can be used for the down payment. Other incentives are being offered by state or local governments.

Recently, first-time buyers have accounted for about half of sales, a much larger percentage than in normal markets. With a large number of owners underwater in their mortgage, many are not able to sell their home in order to buy a different house. About half the sales have been foreclosures or short sales.

Pending home sales rose about 33% in the Northeast, and about 10% in the Midwest. Pending home sales were flat in the South and rose 2% in the West.

“Given that most of the gains in sales were in the more stable Northeast and Midwest markets, it appears that foreclosed properties were less of a factor given that most of the foreclosures have been occurring in the West and the South,” wrote Millan Mulrainem, an economist for TD Securities.

Yun noted that it’s taking longer to close a sale. Mortgage processing time has increased due to complexities in negotiating short sales and foreclosures. Some short sales are falling through at the last moment, he said.

Rex Nutting is Washington bureau chief of MarketWatch.

For the entire article, please click here.

I’m often asked, “How long does it take to flip a short sale?”, or “How many months will it take before I can get my first deal done?” My answer is always the same – “It depends.” It depends on the banks. Some are slow. Some take FOREVER. Some are surprisingly quick. Nathan Jurewicz, aka – theShort Sale Kid, told me the other day that Countrywide was getting easier to work with. It looks like their new bosses over at Bank of America sent them a stern message. “Get those short sales done!” It depends on your team, your negotiator, your Realtor, your BPO agent. It depends on you. 

So, how is it that you hear short sales are easy from some investors and then the next day you hear a real estate agent say, “Short sales stink!” Here’s the secret. Shh! Don’t tell anyone. It’s the system! Nathan and his partner Chris McLaughlin put together, arguably, the most comprehensive guide to doing short sales on the planet. I personally use the Short Sales Riches system and also coach our Inner Circle students on how to use the system. 

Back to my question about Flippin’ Short Sales, “Is it that easy?”  Well…. it depends! Nathan will be the first to tell you and I will concur. This business is hard work, at least in the beginning. No surprise here. Now, I know you’ve heard that any business worth doing is going to be hard work. But the Short Sales Riches system is all about leverage, putting together a hard working team of people who do specific jobs toward a wonderful profitable result – Cha-Ching!

Many of your team members will probably do their specific tasks far better that you could do any one of them. What makes a great short sale investor great, is leadership. You must be able to communicate what you want, when you want it, who’s going to do it, and as importantly, communicate the rewards everyone will receive once the job is done. Everyone wants to know, “What’s In It For Me?”

So by now you’re saying, “Okay, Okay, I get it, but Patrick you didn’t answer my question, is it that easy?” My answer is “It depends!” You will see that once you have put “your hand to the plow” toward building yourself a highly productive team consisting of hungry, like-able people who work together with you, it is that easy.

Now, go out there and start building your team!

Watch for my next blog. I’ll share with you my recent discussion with Chris McLaughin on the Top 6 Reasons why Realtors should use the Option method.

Patrick Thurmond

Short Sales Riches Coach

www.proshortsaler.com

I attended Seattle King County Realtors’ Broker Summit in Bellevue today, with several hundred other real estate brokers and managers, where the keynote speaker was Lawrence Yun, chief economist for the National Association of Realtors. Yun said there will likely be some recovery in the housing market in late 2009 and that there will be not big drop in Seattle’s home prices like those seen in other areas such as Orange County, California. He believes this is because our prices didn’t rise as in other markets largely due to the impact of our dot.com crash in 2001.

Yun also said that the recently passed $787 billion stimulus package, including an $8,000 credit to first-time home buyers, is likely to boost the housing market by creating an additional 900,000 new home sales across the country this year. These sales will not only come from the first time buyers themselves, but also as a result of the compounding effect caused when those sellers become buyers themselves. The accompanying increase in conforming loan limits, now $567,500 in King County, will also contribute to the boost in home sales in 2009.

Yun’s underlying message was that with economic indicators pointing in conflicting directions, this year will be all about consumer confidence. He made the argument that by all accounting-based principles, the real estate sector should be showing greater strength than it currently is. Our current low interest rates have made monthly payments comparatively more affordable than ever before at a time when there are incredible bargains to be found. It is consumer confidence, or the lack thereof, that continues to keep buyers on the sidelines. He stated that ultimately it will take consumers return to confidence—through economic stimulus, compelling interest rates or the desire not to be left behind as activity increases to propel us through this.

Job stability and real concerns about the economy have permeated our thoughts. The economy is in tough shape to be sure. But consumer confidence is the key to the beginning of recovery. Yun says economists estimate that if a 10% of the workforce became unemployed (much higher than the current 7.6% national unemployment) another 20% would have concerns about job stability, leaving 70% feeling reasonably secure about their job stability in the future. Yun also made the argument that further decreases in real estate prices would cause significant collateral damage and lead to even greater weakness in our financial sectors and the economy as a whole. What happens in our economy this year will be dependent upon whether or not consumers feel safe in re-entering the real estate market.

He said that by all indicators, the Seattle area and Washington State overall, with its strong interstate immigration, highly educated work force with compelling employment opportunities and low foreclosure rates will be one of the best real estate markets to own property in over the next decade. One has to believe that there will soon come a time when we look back and say, “I wish I would have bought back when rates were low and prices were unbelievable”.

Yun said that sales activity is beginning to pick up across the nation already as a result of the stimulus package. He predicts that, allowing time for buyers to begin their home search and ultimately close on a property, monthly reports over the next few months will begin to show steady and larger increases in home sales. Assuming all this to be true, prices will stabilize as more and more buyers snatch up available inventory.  Again,  it does seem to boil down to being all about consumer confidence.

Pending home sales increased as more buyers took advantage of improved affordability conditions, according to the National Association of Realtors®. Big gains in the South and Midwest offset modest declines in other regions. The Pending Home Sales Index rose 6.3 percent to 87.7 from an upwardly revised reading of 82.5 in November, and is 2.1 percent higher than December 2007 when it was 85.9. Lawrence Yun, NAR chief economist, said the index shows a modest rebound. “The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month,” he said. “The biggest gains were in areas with the biggest improvements in affordability.”