NAR has published it’s June Pending Home Sales Index and it is encouraging.
The Pending Home Sales Index (PHSI) 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 June numbers don’t reflect activity resulting from the Housing & Economic Reform legislation recently signed. Projections are for a improvement in existing homes sales in the months ahead and stronger gains in the fourth quarter as homebuyers begin taking advantage of the First Time Homebuyer Tax Credit and FHA Modernization.
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According to Lawrence Yun, NAR chief economist:Â
” This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.”
According to the report the PHSI rose 9.3% in the South and sales have remained consistently strong in areas where prices have seemingly bottomed, like Sacramento CA, Las Vegas and Ft. Myers. Yun also noted that builders are still facing higher construction costs and new home sales may not benefit as quickly as existing homes until they are able to reduce inventory and costs.
With mortgage rates remaining favorable many buyers may be sensing the bottom and recognizing that owning a home is again affordable.
contact me at http://www.ges-realty.com , email me at rebuygeorge@yahoo.com or call me directly 561-306-6736
Here we go again with NAR Kool-Aid. I track this number for my market all the time. Pending sales in this market are very unreliable as many homes in the Bubble zones are short sales. Even NAR has posted that Short Sales have a very low closing ratio.
In my market in the begining of May we had 220 Single Family Detached Homes PENDING and only 89 closed for the month. The short sale market sure makes things look interesting, but the closings tell the reality.
Kind of …. is the glass half empty or half full ?
My buyer activity has increased. I’m busier, (not with short sales). Our mortgage provider has notified us that they’ve lengthened the time to fund from 15 – 20 days to 20 – 30 days due to increased activity.
All indicators I think that some may be sensing the bottom in some markets. A very positive sign I think.
Wow, I didnt even know Lawrence Yun was STILL employed!!
Well I did, but the point is that he shouldn’t be. Why does the NAR continue these tactics? And even worse, WHY DO PEOPLE CONTINUE TO ACTUALLY LISTEN!!?? I think Kevin Costner said it best in his role on JFK when he said something to the effect of, “Sure these scientists may be able to show you that all of this was caused by one bullet, but they will also be able to ‘PROVE’ to you that an elephant that is falling off a cliff will be able to save himself by hanging on to a vine at the very edge.”
Home prices are DROPPING and will continue to do so well into next year. But for those who are STILL gullable enough to still listen to Yun (is the Kool Aid THAT good?), go ask Freddie Mac and Fannie Mae if home prices are rising. I guess their quarterly BILLION DOLLAR losses can be attributed to all these new buyers popping up daily who are flocking to buy homes so fast that home prices can continue rising 9.3%.
“Our mortgage provider has notified us that they’ve lengthened the time to fund from 15 – 20 days to 20 – 30 days due to increased activity.”
Maybe……………………just maybe this might actually be because of ridiculously heightened underwriting requirements that should have been in place all along. Just a thought.
George,
I think the point is that many agents throw a Short Sale up on the MLS hoping that it will go through when in reality the banks have a pretty specific criteria for allowing a short sale. So in this area we have a bunch of shorts on the market that never had a chance of getting Lender agreement to the sale.
The only thing keeping us from getting to our bottowm is that the foreclosures are still showing up and show no sign of slowing.
Ted,
I posted a Blog on Active Rain and on http://www.blogspot.com/georgesinacori recently talking about agents and buyers in my area beginning to avoid short sale offerings.
The statistics that I like to follow and interpret should be stats that I believe are going to benefit me in some way. Either my business or my clients. I think it’s time for the Real Estate Professional to get good positive news out to thier clients and into the market and make a real push to get buyers out there looking. Realtors and the real estate community are the most forceful influences on housing we have and we need to get back into the market place and tell people that there are some really good things beginning to happen. Changes are happening and there’s a light at the end of the tunnel. It’s not going to fall in our laps we need to make things happen.
CORRECTION:
“buyers popping up daily who are flocking to buy homes so fast that home **SALES** can continue rising 9.3%.”
Ted,
I hope this reply doesn’t repeat because I submitted it once and it didn’t take but….
I’m seeing Realtors and buyers now avoiding short sale offerings here.
The stats I like to follow should in some way benefit me or my clients. Positive news benefits me. As Real Estate professionals we are part of a most influential group of people and we need to get positive news out to prospective buyers and get buyers into the marketplace. Realtors and the real estate community can make a difference in how quickly we see a turn around but it’s not going to fall into our laps. Homebuyers and sellers are starving for some good news.
If you don’t trust the stats, don’t follow them but find something positive to bring to the market. As for me I’m busier with real buyers not looking for short sales. Our lender Loans Inc. here in South Florida has a bunch of new 1003′s to deal with. I’m looking forward to better months ahead.
Goerge,
I understand your position, however I think what you are missing is that there is no National Real Estate Market. Market conditions in your area are different, incomes, cost of living is different; your areas in not the barometer for the nation as a whole. Most of us in the business who are working have buyers and listings in our pipe lines that has always been the case in any market.
We had tiny old houses in my trade selling for over $575,000 whch would buy mansions in other parts of the country, so just becoming a bunch a spin doctors is not going to help the situation. Those houses are now in the low $400s – high $300s and still recieving pressure from other nicer homes and tracts that are now in the low $400s.
Buyers are not going to put up with $3,000 and higher monthly payments no matter how much you try to spin the true market conditions and that is a big factor driving the market here.
Second telling the truth about the market may not be popular, but we have a duty to explain what is truly going on. When you hide the truth to pump up the buyer market, you now mislead the sellers into thinking they are in a stronger postion than they may really be. If a seller holds on to a property because of spin and the market declines further and now they are upside down and either have to short, give it back or stay, then the spin did not help anyone.
The fact is were are in a great market to find good buys. Not every house is a good buy, but there are some really great properties. I just got back from showing property here in Simi Valley and in the homes I showed, 1 home is a hot property and and three of the properties were diamonds in the rough if negotiated successfully. This area has lots of great buy and hold properties; not many flips at this point, but I wll not go around telling my clients or the people in the tade area that I am sensing a bottom soon, the buyers can see the amount of Shorts, REOs and multitude of yard signs to not buy that story.
So we need to be positive, yes, but we also need to tell the truth and spin is not the truth.
George..Lawrence Yun????Doesn’t he sell used cars part-time?
Absolutely my area is not the baromoter nor is yours. So telling the truth about your market may be different than other markets although I’m certain there are Realtors in Southern CA who may have a different outlook than you. There are Realtors here who differ with me.
You make excellent points and of course you can use and interpret information anyway you feel comfortable or obligated to. Lord knows there’s been enough negative news coming from all directions at everybody. People deserve to here the good as well and I’m happy to tell them when something positive is happening.
The best baromoter for me is me. If my phone is ringing, I’m getting hits from my web sites, sign calls increase and more realtors are showing my listings I’m busy. If I’m busier than I was I tell my clients. If not I tell them I’m not and ask for refferals.
Ted you can call it spin or whatever you want to but in the end your either busy or your not.
Oh Barry, everyone knows Lawrence Yun even the DOJ has a biography on the guy. http://www.usdoj.gov/atr/public/workshops/rewbios/212130.htm
Keep it positive and keep it real help is on the way people!
Ted you make some excellent points and no my market isn’t the baromoter for the country nor is yours. If your not comfortable telling people about a published report or index than of course you won’t and you shouldn’t.
The best baromoter I know is me. If my phone is ringing, I’m getting hits from my websites, sign calls are increasing and realtors showing my listing are up I’m inherently busier and I’ll tell my clients that. If I’m not busy I’ll tell them that and I’ll ask for referrals.
Ted call it spin or anything else you’d like but in the end we’re either busy or we’re not .
Pessimism is contagious, so is optimism. Which would I rather pass on to my clients and prospects? Which would you rather pass on? Lord knows we have negative news flying at us faster than we can read.
Oh Barry, everyone knows Dr. Yun even the DOJ:
http://www.usdoj.gov/atr/public/workshops/rewbios/212130.htm
Great points Ted. There are great buys out there. I don’t know about anyone else but I’m not seeing anyone flipping these days. As for the bottom I don’t know but I know there are as you said great buy & hold properties for primary residence, first time buyers and investors. No spin there. High end properties are being bought here by foreign investors. Do they sense the bottom?
Oh Barry everyone knows Dr.Yun even the DOJ keeps a bio on the guy. Love him or hate him he is what he is, a repected economist by some and despised by others. What can I say, keep it real, keep it positive and every now and than we ‘ll get paid too.
Lmao..George..of course I know who Yun is…my comment was tongue in cheek as to how anyone could find hime to be a reliable source. He’s a puppet!
So sorry for the repeated posts. For some reason I was having trouble submitting the comments.
Barry comment to you about everyone knowing Yun was tongue in cheek also. Like the guy or not he is what he is, NAR’s chief economist. I wonder what the other NAR Indians think of him?
But the Blog isn’t about Yun the messenger as the June PHSI is the message.
Im going to start using President Bush as my reference piece on how the war in Iraq is going so well and how our economy is just booming right now. Like the guy or not he is what he is, THE UNITED STATES PRESIDENT. His administration has plenty of “facts” that support those statements above so i guess they HAVE to be true.
George,
I am not trying to be pessimistic, but rather realistic. The facts remain that now there are no more Liar’s Loans, prices have declined and at least in my trade area the action is on the low end of the market, my listing clients can plan and prepare in an educated manner. If I neglect to tell them these facts then I am not doing my job.
My beef with NAR is that Pending sales reporting really does not amount to much. Financing is tricky these days, properties have their own issues and escrows don’t close at the ratios of 2004. I sold a house 3 times last year before it finally closed escrow. I have one listing that has fallen out already and it’s shaky again. This market is not going to recover because NAR issues a pending sales report. Niether is it going to recover if I am Polyanna. It’s going to recover when financing – pricing match what the average buyer can afford.
Ted
I don’t mean to pry but I’m curious. Are your contracts falling because they are short sales? http://www.blogspot.com/georgesinacori
I’m not sure that we have a report that tells us locally how many contracts fail to close and if there is I’d appreciate that info but the number of short sale contracts in that stat would be significant.
We are closing 90% of our contracts and thankfully taking lots of them FHA these days with most at a 10% DP
Geographically we may be covering more territory than you in 4 counties and yeah some areas seem less troublesome than others.
Polyanna? I think she was involved in some of the 10% that didn’t close. She definetly doesn’t work with us.
George,
In my MLS it is not too hard to figure out the closing ratios of Shorts.
Since Januray 1st all of the closed Short Sales in Simi Valley California Total 92 YTD. That is SFD and SFA.
Simi Valley has 344 Listing contracts that have been cancelled that were short.
191 current active listings that are short
90 pending escrows that are short.
We are averaging 115 closed escrow per month since April, the closing were half that for Jan-Mar. If we average out 92 over 7.5 months that is 12 shorts closing per month eve n if I adjust for the activity of the last four months I am no where near a 90% closing percent rate for my area.
Florida and California are two different animals, our population densities here are higher, cost of living is higher and average home price higher. Social attitudes toward money probably much different.
I am completely stoked to hear that the banks are cooperating in your trade area. This is what they should be doing in other areas of the country. Sometimes the banks are not the problem……..one I was dealing with had a judgement and the Attorney would not budge on his judgement amount come hell or high water.
My point is that there is no national market and we need to be very careful on how all this information is disseminated. Positive yes, but realistic is more important especially for sellers.
http://www.newsweek.com/id/153146
Polyanna
Listen Ted, I didn’t say that lenders are co-operating in Southeast Florida. In fact I indicated the contrary. Buyers and Realtors are beginning to avoid shorts because of the difficulties involved. Our (GES Real Estate, LLC) 90% closing ratio does not involve short sales.
Are the stats that your getting regarding short sale closings and failed contracts strictly from your MLS? If so I wouldn’t rely too heavily on them simply because not all agents indicate a short sale in the MLS. MLS stats may be misleading because of the Realtor inputting the info. You probably have a lot more short sale listing than indicated.
I’ve had a number of calls & email inquiries since HR3221 was passed and the problem I’m seeing is that too few people including Realtors and mortgage professionals understand it and are either giving or getting the wrong information.
Sellers need to be realistic as always and get ahead of this market. Aggressive pricing and good marketing will help them sell.
Geroge,
Our MLS makes it too easy to fine the pants off agents that do not post their listing properly. Ther is a little button on each listing that says “report a violation” and that button gets used. Fines are a nice profit center for the MLSs.
http://homebuysblog.com/2008/08/15/simi-valley-real-estate-video-blog-report-on-short-sales/