Posted on 08/29/2012 7:39:26 AM PDT by blam
Pending Home Sales Surge Past Expectations, Rising 2.4%
Mamta Badkar
Aug. 29, 2012, 10:00 AM
Pending home sales beat expectations rising 2.4 percent in July. This is the highest level in over two years.
On a yearly basis they were up 12.4 percent.
Pending home sales in the south saw the biggest rebound rising 5.2 percent in July, and up 15.6 percent from a year ago.
"While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity," said Lawrence Yun, NAR's chief economist in a press release.
Pending home sales are considered to be a good leading indicator of existing home sales.
This chart from NAR shows the recovery in pending home sales:
NAR
Expectations: Economists polled by Bloomberg expect the National Association of Realtors' pending home sales index is expected to rise 1 percent month-over-month (MoM) in July.
But estimates range from as much a 1.5 percent MoM decline, to a 3.5 percent MoM gain in the index.
With home prices turning positive on a year-over-year basis, analysts will be watching this number to strengthen their argument that the housing market has turned the corner.
(Excerpt) Read more at businessinsider.com ...
“Pending” means they are still trying to get loan approval, and that’s been the problem since TARP went into effect. The federal government gave the banks tons of cash, but put in such strict rules on capital reserves that very, very few of these “pending sales” will get loans and result in actual home sales.
How is one supposed to take this statement? Are the prices for homes above what existing owners OWE on them? Are they market value? Are they actually increased value over low market values due to Obama's Economy? How can they say it is indicative of a recovery (i.e., turning the corner?). The prices of the homes, the amount if any former owners owe on them, and the price sold vs. market valuation are things I'd think someone with other than a motive of "pushing opinion" on a so-called recovery would want to know.
Realtors, banks, government et al have a VESTED interest in moving market opinion and mood. Taking their rosy outlooks should be accompanied by a grain of salt.
Real person-to-person sales or are the banks finally dumping foreclosed houses on the market and artificially boosting the number of houses sold?
How does dumping a foreclosed home on the market artificially boost sales?
There was a logjam in foreclosures for a while. If banks are finally foreclosing and then selling those houses it would increase the number of sales without being a sign of any increased confidence in the housing market. Thus my term "artificial". I don't have the numbers, but it would be interesting to see how many of the sales are person-to-person and how many are from the banks' inventory and how that compares to last year. Note that the entire article is about number of sales with passing mention of price.
Maybe people are starting to look past the regime and have hope that their future will be more secure, hence they are investing in homes. Maybe the American Dream can be revived.
Here in the northeast the upper end of the market is pretty good. Nice houses in the $600K to $2M range are selling briskly.
A friend of mine had to spend nearly a year living in an apartment before he found a suitable house in the town he wanted. He had $500K for the down payment, and was looking to spend just under a million. He was pre-approved for a mortgage, of course.
The Housing market can’t recover until good jobs are plentiful and good jobs are anything but plentiful.
The rest is just hype.
Well in my area of So. CA were seeing sold signs followed by people moving out, with others moving in behind them.
Are they all rich foreigners? Don’t know. But they are selling from what we see.
No doubt housing has “turned the corner” (it’s my job to keep an eye on the residential construction industry) but it has absolutely nothing to do with Obama’s policies. Even though housing has bottomed we are a hell of a long way away from a “normal” housing market which is ~1.5 million starts per year. We will get there it’s just a matter of when. The underlying demographics will drive the demand and we will have a housing shortage in the next few years if new construction doesn’t pick up.
I suspect you will start to see the ChiComs begin to snap up a lot of properties.
In 2007 I sold a home on Cape Cod. Since then the home has been “sold” twice. Both deals fell through and the home is back on the market. What is out there now are bottom feeders, people looking to steal a home, usually a repossession and the banks as much as they want to unload their inventory are still being very cautious with their lending.
If a buyer has a credit score of less than 775 and a debt to income ratio much over 25% they have little chance of securing a loan.
"Recently I wrote about the insolvency of the federal government and its upcoming default. Mathematically, it is impossible for government to meet its obligations. There simply is not enough income or wealth for it to confiscate. It cannot satisfy the spending path it is on and the promises made."
Some of my clients are still building homes...and using a ‘rent to own’ contract to get people in them. I wonder if this contract counts as ‘pending’.
Great news. Looks as though we are finally on track to recovery.
What happened to all the excess houses built a few years ago during the real-estate bubble, when people were buying as many houses as they could get their hands on “because real-estate never went down” and a house was a guaranteed ATM?
"Much as we hope for a rapid recovery, we must acknowledge that reports of a revival in residential housing are premature. Yes, a bottom of sorts is forming. But, key demographic trends — which ultimately drive demand for housing — give pause for caution, countering the view that a recovery is just around the corner."
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