Sales of Existing U.S. Homes Fall for a Third Month

[Purveyor]

Source: Bloomberg

By Lorraine Woellert Apr 22, 2014 1:26 PM ET

Sales of previously owned homes fell in March for a third consecutive month as rising prices and a lack of inventory discouraged would-be buyers.

Closings, which usually take place a month or two after a contract is signed, fell 0.2 percent to a 4.59 million annual rate, the lowest level since July 2012, the National Association of Realtors reported today in Washington. Purchases were down 8.5 percent compared with the same month last year before adjusting for seasonal patterns.

Property values have climbed faster than wages, putting ownership out of reach for some Americans. Harsh winter weather in January and February also probably kept some properties off the market, contributing to a lack of supply that has further stoked price increases.

“The housing recovery is on pause,” said Guy Berger, U.S. economist at RBS Securities Inc. in Stamford, Connecticut, which is among the top home-sales forecasters over the past two years, according to data compiled by Bloomberg. “There may be some weather impact, but it doesn’t seem like that’s what’s really holding things back. What does seem to be holding things back is this shortage of inventory.”

Read more: http://www.bloomberg.com/news/2014-04-22/sales-of-existing-u-s-homes-fall-for-third-straight-month-1-.html

[Historic NY]

1. I've noticed homes sitting unsold the longest...

seem to be getting second or third looks at reduced rates near me. One on the market for over 2yrs just sold across the street. Were down to 4 in the neighborhood left from estates or foreclosures. People buying them are renovating. Then again we have the mega mansions on the west end many still listed.

[Erich Bloodaxe BSN]

2. The one next door to us

got its first bid in about a year after reducing the offer yet again. It's the same layout as mine, and looks like it will go for something like 18-20k less than I paid for mine a decade and a half ago. Our housing prices have never 'recovered'.

[Sunlei]

3. All the cheap foreclosed were snapped up for cash by the hundreds by big investors. The banks didn't

even list those dirt-cheap, foreclosed homes in any easy to search informative public way.

You pay cash for a home, no inspections, no costly points to pay, no survey map, no real estate agents to deal with. Fix them up and those will be rented to the middle class or resold in the retail market.

It's hard to get a pre-approved or approved, bank mortgage these days, probably impossible for most of our working 'middle class.' middle class hold on to your homes!!

[dipsydoodle]

4. Great house here in Dayton OH

$23,300 - needs total rehab.

[bob27]

7. That's a mansion.

But it probably requires a mansion-sized budget to repair.

[KansDem]

5. I'm worried about this...

I'm no economist but I'm worried that there'll be more houses on the market than buyers.

Why? Boomers were born from 1946-64. That means the first year of Boomers are retiring, starting in 2011 for 65-year-olds. There'll be large numbers of Boomers retiring over the next two decades. The problem I'm worried about is there'll be more houses than home buyers. Especially when you take in consideration the "buying power" of younger workers' depressed wages of the disappearing "Middle Class."

So what happens when there are more houses for sale than buyers? Prices decline and that one "nest egg" that so many retirees use to depend on--the selling of the family home (usually paid-off), to move to a smaller residence, like an apartment--won't be there.

Anyone else worried about this?

[Historic NY]

6. We're having a surge in crackerbox condos again...

they say for seniors but most of the seniors in my town are either dead, in nursing homes or moved to Florida or North Carolina. I'm still trying to figure out who they are for, its like the work force housing scam. Even pieces of crap real estate is being turned into condo land.

[ArizonaLib]

9. Agree

I agree - it's amazing how no one seems to know with certainty where the market is going, but the crackerbox/multi family housing builders know when to build like crazy! Even when the housing market was at its lowest these builders were building up. Part of the new housing problem is that with the reductions in salaries/wages, few can afford to buy up, so those medium priced houses are going down, and while many can only buy down, the starter home prices are rising steadily. Everywhere else around the Phoenix area, any crappy piece of land is being developed for apartments.

[Yo_Mama]

12. Yup.

It's a very real problem. Housing values are out of whack with what first-time purchasers can realistically afford in many areas, which means, in those areas, that housing values will trend down over the long run.

If you look at the numbers of younger people, there shouldn't be a problem. But if you look at the household incomes of younger households, it's clear that there is a major problem. If you then add in the impressive student loan debt load that many of the better-earning younger cohort is carrying, it becomes a major blockage to home ownership.

This is the first generation in which the college-educated are less likely to buy a home in their twenties than the non-college-educated.

You'll probably have to answer a few survey questions to read this article, but it is well worth it:
http://www.latimes.com/business/realestate/la-fi-0420-student-debt-house-2-20140420,0,7975649.story#axzz2zoTiPz9Y

The consumer expenditures survey shows the breakdown by age, and it isn't pretty for home prices:
http://www.bls.gov/cex/2012/combined/age.pdf

And if you contrast the income stats of the 25-34 crowd to the homeowners with mortgage crowd, you see why only 40% have a home, and only 35% with a mortgage:
http://www.bls.gov/cex/2012/combined/tenure.pdf

[quadrature]

8. this story is rubbish

there are two markets, in the US

coastal California, and WashingtonDC,
are the good market.

everywhere else is the bad market

[NickB79]

10. They're building like crazy here in the south Twin Cities area

Lakeville, MN is BOOMING with housing developments going up. There are at least 5 separate development sites I know of adding houses as we speak, with a 450-acre/1000-house development just announced a few weeks ago. That one will come complete with a new road to more easily connect the new residents of the area with I-35 for a faster commute into the Minneapolis/St. Paul area 20 miles further north.

The kicker is that virtually all of these developments have a starting price of $300,000! Two of the biggest developments are in the 400K and up range, so they're all McMansion's going up on postage-stamp sized yards But since they keep building and building and building, I'm assuming SOMEONE keeps buying them.

The only affordable development I know of in the area is a plan to convert an old Catholic school/church into a senior living facility (which should be pretty cool once done; the old brick building has some beautiful architecture).

[PasadenaTrudy]

11. Lol, sounds cheap to me!

Homes like this one go pending within days or weeks in my town....

http://www.trulia.com/property/3150204196-1800-Marengo-Ave-South-Pasadena-CA-91030