All over the media, you can find breathless stories about housing sales being up. It’s true, and the sales prices aren’t even shockingly low. But there’s a Cash For Clunkers Effect here.
Namely, the $8,000 first time homebuyer’s tax credit that expires at the end of November is driving sales. It’s pushing people who wouldn’t be rushing to move into their own home into moving on one of the many foreclosures on the market.
Nationwide sales are up nearly 24 percent from their bottom in January, but are still down 23 percent from four years ago.
Prices, however, continued to be dragged down by foreclosures and short sales, where the mortgage exceeds the sales price. The median price last month was $174,900, down almost 9 percent from $191,200 a year earlier, and slightly lower than August’s median of $177,300. (AP)
And then you’ll get the breathless quotes about the housing market being back, with somebody saying we’re in a mini-boom. Look I’m all for optimism, but let’s keep it rational people. The market still has some very strong underlying weakness, especially here in California. Like cvash for clunkers brought forward demand for new cars, so is this program for moderately priced homes. It’s even creating a little bit of bidding up on some of the prices in stable markets.
There is a ways to go before this market is anywhere near healthy, but it’s good to see some improvement. Hopefully this time around we get a little more common sense in the market.
I’d love to buy a house(I’m not able to take advantage of the $8000 tax credit as I get Supplemental Security Income(SSI) as the SSA won’t give out a form to allow Me to apply for It, But so far one potential buyer called about My Home(It’s set at $20,000(look for 37130 Calico), the assessor says $27,000 of course) and then wouldn’t call back or respond to a message left by My agent, So I’m on hold(I even have all the paperwork collected too), As the local county HAP program is a problem as they require the house to be in escrow or sold before they’ll help and then there’s the stumbling block of credit scores, The lender who is HAP approved will do what is called manual underwriting(It was done before the FICO score was created and people became a bunch of lazy ass zombies). Yeah the mobile home I own(No mortgage) is up for sale, More better pics are supposed to be put up soon and a better description too. space rent is $215 a month and is set at a 1yr lease and after that becomes a month to month lease. The price of a house for Me would have to be around $50,000.00 to $70,000.00 at most or I don’t see how I could afford It on $845.00 a month, Thanks Arnold, Tanks a lot.
NAR “adjusted” for seasonality. Actually sales fell 5.2%.
See Existing Home Sales FALL in September 2009
What happened was that sales did not fall off as much as they did a year ago between August and September, so NAR “adjusts” and calls it a big increase.
But this year the “buying season” extended because of the big tax credit from the government.
Don’t bet your life savings on a down payment right now.