Pending home sales jump 6.3% in April

[Amerigo Vespucci]

Source: CNN

NEW YORK (CNNMoney.com) -- The number of homes under contract to be sold rose unexpectedly in April as buyers go bargain hunting, according to a report released Monday.

Pending Home Sales Index from the National Association of Realtors (NAR) rose to 88.2 in April, up 6.3% from March's reading of 83 and the highest level since October. The increase defied the consensus estimate of economists polled by Briefing.com, who had expected pending sales to fall by 1%.

"Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it's unclear if they are investors or owner-occupants," said Lawrence Yun, chief economist for the NAR in a statement.

The Pending Home Sales Index was strongest in the Midwest, where it jumped 13%, and weakest in the Northeast, where it declined 1.9%

Read more: http://money.cnn.com/2008/06/09/news/economy/pending_home_sales/index.htm?cnn=yes

[pattmarty]

1. My guess is that this is bargain hunting by investors and NOT....

...."owner-occupants". The nation is in a heated speculative frenzy with anyone with OR access to capital. This country is turning into a "Las Vegas" for the world to gamble at mainly because of our lax banking laws and regulations.

[magellan]

2. Yep, mostly vultures

...who'll rue the day a year from now when that property they snatched up for peanuts is still on the market and still losing value....

[Amerigo Vespucci]

7. "Flip That House," round 2

I'm not an expert, but I've got to believe that there's a strong possibility of this "feeding frenzy" being driven by the house flippers and bottom feeders that inflated the bubble in the first place.

[pattmarty]

8. Yep, that's kinda what I'm thinking. Just because a person........

....."has money" doesn't necessarily mean that he/she is smart. People tend to forget that an un-occupied home still needs maintenance (some cases more) just like an owner occupied home. the longer it stands vacant, the more money you have to put into it to keep it in a salable condition.

[magellan]

10. Look at this

This is near where I live. The orange flags are pre-foreclosures (people are behind in payments), the green are bank-owned, the yellow are on auction. Don't mind the numbers at the bottom given for each category as they only apply to the specific zip code I pulled up...although they are still informative. This map covers a couple of zip codes.



No doubt someone could pick up a good bargain here, as people are desperate to unload their homes. But logic says this is a bad time to buy if you're hoping to make a return on the purchase. There are so MANY heading to foreclosure that it's dragging down home values generally, and that won't stop any time soon. More ARMs are due to reset this year, and next. There will be a glut of homes on the market for some years to come in areas like this, and I live right next door to Orlando.

Even if someone is looking to buy a house to live in -- if they can get the loan (another reason I agree with you that these are likely investors/bottom-feeders) -- now isn't the time. Prices haven't bottomed yet. Some talking head said last week that we're only halfway through this...I think that's optimistic.

[pattmarty]

12. Totally agree with everything you said.

[YOY]

14. Depends on where you are.

They stopped in Arlington, VA last month. They're still dropping in Cleveland (where my folks live.) People want to move closer to the city. I can't blame them.

My comute is 1/2 hour and all public transportation. I live near a grocery, 2 pharmacies, a movie theater, and several really good (not expensive too) restaurants.

I fill up my tank once a month usually. Medium sized sedan.

I can see why someone would want to buy in my burg.

[magellan]

17. I know it's different from place to place

...but where the bottom's still falling out, like here (which was all I was talking about), people will be tempted to think they can get a good deal. They'll likely be sorry if they move on that unless they can afford to sit on the place while its value drops below what they paid for it. Values WILL come up again in areas like mine, but not any time soon.

[slackmaster]

15. Do you have anything to substantiate your speculation?

It doesn't sound right to me. There are millions of people who have been waiting in the wings for prices to come down so they can buy homes to live in.

[pattmarty]

16. What the fuck did I say?? MY GUESS. I ain't a fucking.......

....economist, but just look at who has money (capital), it ain't the "folks" as O'Reilly likes to call US. The lower & middle class is losing buying power so what makes you think my "guess" is fucking wrong?

[slackmaster]

18. Jeez, take a 'lude or something

It's only 1s and 0s.

[pattmarty]

19. Well, just use your intuitive skills. Stop and think about it.......

I assume since you are a DU member that you read and dig deeper into the news like most here. Economy going into the shiter, people that barely could afford homes now losing them. I really don't think it takes a brain surgeon to kinda figure that hey, me and my neighbor don't have shit, we both lost our jobs (or are working at much shittier jobs), who the fuck is left with any funds and/or borrowing ability? BINGO; the speculators with capital. And, just as an aside, I am a "new" liberal that doesn't back down or take ANY shit from conservatives. So, you my man, take a "lude" and relax until after the election and maybe, just maybe things will turn into utopia.

[slackmaster]

20. My powerful intiutive skills give me a different answer than yours do

Maybe some actual facts would be helpful in this discussion.

;-)

[pattmarty]

21. Okay, then get some. I was responding with my opinion and MY GUESS.

[Javaman]

3. Why do I suddenly fear the coming of yet another bubble?

the "bargin buyers" loading up on cheap houses, only to inflate their prices to make a profit.

know where did I hear that before?

[flvegan]

4. I'd like to know what percentage REOs are of this.

If this is an uptick in owners selling to new owners, then great. If this is banks blowing out REOs to clear their books, even at a loss to raise capital, then it's kind of a false hope number. Good for the buyers of those REOs, though.

[YOY]

5. I bought in April

Got a good rate too. Same neighborhood I rent in. Bought it from an "investor" who was renting it out and not taking any care of it. She financed stupidly too.

I couldn't buy a forclosure. It wouldn't have felt right.

[fed-up]

6. home sales usually rise in the spring nt

[spinbaby]

9. Exactly

Sales are up only when compared to March. They're down 13.1% from April a year ago.

[Xithras]

11. Here in the SJV, it's mostly owners, not investors.

The northern San Joaquin Valley has seen the worst crashes in the nation, with some homes losing over 60% of their value (and in a few extreme cases, up to 75%). So far this year our home sales have EXPLODED, but prices haven't gone up one bit. The reason? Real estate prices climbed out of reach of locals about 7 years ago, so people who worked in the area were left with a simple choice...rent, or take some funky, risky mortgage. Most of the meteoric climb in values since then has been driven by investors and SF Bay Area commuters. The investors are taking it in the shorts nowadays, and the high gas prices are turning people off to the traditional NorCal 80 mile morning commute. The only activity at the moment is from those local workers.

Prices here have fallen to the point where local workers can once again afford homes, so many are jumping in while prices are down. My sister recently lost her $525,000 home to a funky mortgage and unemployment brought on by the lousy economy (she's a home decorator...not much call for her services when the economy is down). Her ex-home just resold last week...for $207,000. It dropped $318,000 in just under three years!

Normally this would cause prices to start rising again, but that's not the case this time around. The local price range is geing set by the local wages, and when homeowners or banks try to sell above that range, they don't move. A home priced above $250,000 will sit on the market forever. A home at $200,000 will have a dozen offers in a week. The banks have responded to this by pricing all of their REO's and short sales in the sub-250k range, which have caused sales to explode.

[Vinca]

13. That gives me an iota of hope.

My husband is a real estate appraiser and has just gone through 3 weeks of zero jobs coming in.