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calculatedriskblog.com - 6/28/2009

Norris on New and Existing Home Sales

— calculatedriskblog.com — From Floyd Norris at the NY Times: How Bad Is the Recession? Check New Home Sales ... For more than three decades, the sales volume of existing single-family homes and newly built houses tended to rise and fall by about the same percentage, as can be ... (more) Norris on New and Existing Home Sales

Recession

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Existing Home Sales in May
Calculated Risk — The NAR reports: May Existing-Home Sales Continue Rising Trend Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008. ... Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.1-month ...

Misleading House Price Data
Calculated Risk — From FHFA Director James B. Lockhart, June 23, 2009: “Although monthly data are volatile, we may be starting to see signs of stabilization in prices for houses funded by conventional conforming loans, as the HPI is only down 0.3 percent for the first four months of the year.”From the National Association of Realtors, June 23, 2009: The national median existing-home price for all housing types was $173,000 in May, down 16.8 percent from a year earlier. Distressed properties, which declined to 33 percent of all sales in May from ...

Distressing Gap: Ratio of Existing to New Home Sales
Calculated Risk — ... Yesterday, the National Association of Realtors (NAR) reported that distressed properties accounted for one-third of all sales in May. Distressed sales include REO sales (foreclosure resales) and short sales, and based on the 4.77 million existing home sales (SAAR) that puts distressed sales at about a 1.6 million annual rate in April. ...

Appraisals
Calculated Risk — Much is being written about the complaints of the NAR (Realtors) and the NAHB (Builders) concerning the Home Valuation Code of Conduct. And the response from the Appraisal Institute. From Lawrence Yun, NAR chief economist: "[T]he increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.” emphasis added ...

The Tyranny of Mark-to-Market Rules for Houses
Hit & Run — ... "Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates," says Lawrence Yun, chief economist for the National Association of Realtors. "First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisals are stalling transactions. ...

National Data: Distressed Sales and Types of Buyers
Calculated Risk — ... permission). Source: Summary Report--Real Estate Agents Report on Home Purchases and Mortgages, Campbell Communications, June 2009 Click on graph for larger image in new window. The Campbell survey broke REOs down into damaged and move-in ready. According to this national survey of real estate agents, over 63% of sales were distressed sales in Q2. This is higher than the numbers reported by NAR. From NAR: Distressed properties ... accounted for 31 percent of sales in June ... ...