Tag Archives: Home Sales

Been waiting for the spring homebuying season to hit? According to a new industry report released Wednesday, it may be settling in. The National Association of Realtors (NAR) says contracts in place for sales of existing homes rose 8.2 percent in May compared to the trade group's upwardly revised reading for April and are 13.4 percent higher than in May 2010. NAR's latest reading marks the first time since April 2010 that contract activity has come in above year-ago levels.

Backlogged foreclosures, severe oversupply, and negative equity are pulling home prices down further, according to Radar Logic. The company tracks 25 major metropolitan areas across the country. Its latest index recorded a decline in the composite reading of 5.1 percent in April when compared to April 2010. The monthly sales rate remained more than 9 percent below April 2010. While sales of non-foreclosed homes increased more quickly than sales of foreclosed homes, RadarLogic says foreclosures are selling at an average discount of 39 percent.

Twenty-eight percent of homebuyers in California who signed their name on the dotted line last month are buying REO properties. At the same time, short sale deals made up some 19 percent of the state's pending home sales in May. These are the latest figures released by the California Association of Realtors. While the state's 48 percent distressed market share is significant by all accounts, some areas of California are nearly fully saturated in distressed sales. In Madera County, REOs and short sales claimed 90 percent of all pending sales last month.

Freddie Mac said Thursday that mortgage interest rates, while mixed this week, held steady at low levels for the second straight week. The 30-year fixed rate matched last week's 4.50 percent average, while the 15-year rate edged up to 3.69 percent.

Distressed properties accounted for just 31 percent of existing-home sales in May, the National Association of Realtors (NAR) reported Tuesday. The ratio of distressed homes - typically bank-owned or pre-foreclosure short sales - was down from 37 percent in April and 40 percent in March. A pick-up in non-distressed sales volume is typical for the spring and summer seasons, but last month, overall sales of previously owned homes dropped along with the distressed percentage to hit a six-month low.

Markets across the country are in full-fledged correction mode. That combined with the prevalence of foreclosures has analysts at the research firm Capital Economics convinced that the double dip in home prices will continue throughout this year. In fact, they say the structural factors that are constraining demand, such as higher down payment requirements, probably mean that prices won't rise consistently until 2014. Capital Economics expects up to three million foreclosed homes to make their way to the market over the next few years.

John Burns Real Estate Consulting released a housing report card Thursday that confirms most key market indicators trending southerly, signaling more distress may be in store. The research firm notes that annual resale activity within the existing-home market has slipped to just over 5 million residences, and home prices by some measurements have dropped to 2002 levels. With these numbers, the firm says, affordability has never been better for entry-level buyers, or worse for move-up and move-down buyers.

Experts blame the massive inventory of existing homes on the market for hindering the housing sector's recovery. The overhang has been inflated by large volumes of foreclosures, and it's expected to grow with millions more coming down the pipeline. One economist says it will take 6.5 million new household formations to absorb the excess inventory. He expects it will take five years to achieve that goal and emerge from the self-defeating cycle of oversupply pushing prices down, the negative equity triggering defaults, and in turn, further increasing the oversupply.

According to Freddie Mac's latest market outlook, over the first four months of 2011, sales of existing homes are up 5 percent from the pace of 2010 - in line with the GSE's earlier projections of a 5 percent annual increase in existing-home sales this year. Regardless, Freddie's economists say going forward, their forecast for sales growth remains dampened by declining consumer confidence and economic uncertainty. They point out that news of still-falling home prices has potential homebuyers waiting for a clear signal that home values have firmed.

Foreclosures are claiming a smaller share of the Phoenix sales market. The ratio has dropped for three straight months, according to a new report from Arizona State University's business school. In May, foreclosures represented about 35 percent of existing-home transactions in the Phoenix area, down from 43 percent earlier in the year. Still, the university's real estate professor says he's doubtful foreclosures will cease to be the dominant force in the market. More than 3,500 foreclosures occurred in the Phoenix metro last month.