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Hello All,
It looks like we are still on the roller coaster for the time being. What do our readers foresee for the next 12 months?
Let us know how you feel about this challenging real estate market.
The article, May home sales unexpectedly fall 2.2 percent, from MSNBC.com, reports that last month’s existing home sales fell 2.2 percent from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal incentives is gone entirely, starting next month. Sales of previously occupied homes are dipping even though buyers can still benefit from government tax credits. And nearly a third of sales in May were from foreclosures or other distressed properties. That means home prices could be heading downward after stabilizing over the past year. The tax credits were expected to lift sales in May and June. Lawrence Yun, the Realtors chief economist, said delays in the mortgage-lending process put about 180,000 potential buyers in limbo. They are unlikely to qualify by the June 30 deadline. The trade group is pushing Congress to extend the deadline for closing a sale until Sept. 30. Another troubling sign is the number of foreclosures and short sales — which happens when the lender agrees to accept less than the total mortgage. They made up 31 percent of sales in May. And those numbers could rise in the coming months as government efforts to help at-risk homeowners have been unsuccessful. First-time buyers made up 46 percent of sales. The report "suggests that even government stimulus in the form of a tax credit isn't enough," to support the U.S. housing market, wrote Guy LeBas, an analyst with Janney Montgomery Scott. Here is the link to the article, http://www.msnbc.msn.com/id/37844518/ns/business-real_estate/ The article, Sales of new homes in May hit record low, from MSNBC.com, reports that sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits. The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation's housing market. "We fear that the appetite to buy a home has disappeared alongside the tax credit," Paul Dales, U.S. economist with Capital Economics," wrote in a note. "After all, unemployment remains high, job security is low and credit conditions are tight." New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating back to 1963. And it's the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005. "We all knew there would be a housing hangover from the expiration of the tax credit," wrote Mike Larson, real estate and interest rate analyst at Weiss Research. "But this decline takes your breath away." The median sales price in May was $200,900. That was down 9.6 percent from a year earlier and down 1 percent from April. New-homes sales made up about 7 percent of the housing market last year. That's down from about 15 percent before the bust. Here is a link to the article, http://www.msnbc.msn.com/id/37867779/ns/business-real_estate/
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