Dawn Rivera’s Fremont & East Bay Real Estate Blog

Happy thursday! here is some more info on the existing home sales. Some good some bad news.

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions

and a first-time buyer tax credit, according to the National Association of Realtors®. May’s increase

was the first back-to-back monthly gain since September 2005.

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.

Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very

affordable even with a recent uptick in rates. 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. Pending home sales

indicated much stronger activity, but some contracts are falling through from faulty valuations that

keep buyers from getting a loan.

Total housing inventory at the end of May fell 3.5% to 3.80 million existing homes available for sale,

which represents a 9.6-month supply2 at the current sales pace, down from a 10.1-month supply in

April.

The appraisal problem is serious. Lenders are using appraisers who may not be familiar with a

neighborhood, or who compare traditional homes with distressed and discounted sales. In the past

month, stories of appraisal problems have been snowballing from across the country with many contracts

falling through at the last moment. There is danger of a delayed housing market recovery and a further

rise in foreclosures if the appraisal problems are not quickly corrected.

A NAR practitioner survey in May showed first-time buyers accounted for 29% of transactions, and that

the number of buyers looking at homes is nearly 10 percentage points higher than a year ago.

The NATIONAL MEDIAN existing-home price for all housing types was $173,000 in May, down 16.8% from a

year earlier. Distressed properties, which declined to 33% of all sales in May from 45% in April,

continue to downwardly distort the median price because they generally sell at a discount relative to

traditional homes.

First-time buyers are concentrated in the lower price ranges, which include most of the distressed

sales.

Single-family home sales rose 1.9% to a seasonally adjusted annual rate of 4.25 million in May from a

pace of 4.17 million in April, but are 3.0% below the 4.38 million-unit level in May 2008. The median

existing single-family home price was $172,900 in May, down 16.1% from a year ago.

Existing condominium and co-op sales increased 6.1% to a seasonally adjusted annual rate of 520,000

units in May from 490,000 in April, but are 8.9% below the 571,000-unit level in May 2008. The median

existing condo price4 was $173,800 in May, down 21.9% from a year earlier.

Existing-home sales in the Midwest jumped 9.0% in May to a pace of 1.09 million but are 4.4% below May

2008. The median price in the Midwest was $145,800, which is 10.4% lower than a year ago.

In the South, existing-home sales were unchanged at an annual pace of 1.74 million in May but are 8.9%

below a year ago. The median price in the South was $157,400, down 9.9% from May 2008.

Existing-home sales in the West slipped 0.9% to an annual rate of 1.14 million in May, but are 11.8%

higher than May 2008. The median price in the West was $197,700, down 30.6% from a year ago.

Every day, more people are headed closer to foreclosure, and toward the day they may have to leave their home. What should you do if you are soon to join the people getting a foreclosure notice?

First and foremost, you should forego the natural human tendency to freeze and do nothing. Face the problem head on and prepare, for hours and hours, weeks and weeks of making phone calls and writing to people who may be able to help.  Don’t think it’s too late to do anything, As long as you are residing in the home, you probably have some opportunity to keep your home.

People facing foreclosure have more avenues to pursue than they might realize, for instance they have more options than (pay up or move out) that many homeowners think is their only choice.

- Negotiating a Loan Modification.
- Refinancing the loan.
- Have an agent List the home for a possible "short sale."
- Selling the home to an investor.
- Declare bankruptcy.

Short sales, are where the lender agrees to accept less than is owed on the home, to avoid the expense of a foreclosure-typically are handled by real estate agents, which at least takes some of the pressure off of a stressed homeowner. Many professional Realtors are completing more short sales these days and have many buyers looking for bargains, though the process can be slow and frustrating.

Short sales, they come at a good price but I have to wonder, are they are worth all the hassle and wait to get them? For the consumer who has the time and is willing to be very patience you can get a home which could be in very nice condition for a great price.

REO’s or Foreclosed porperties, Buying a bank owned property is much the same as buying a property from a home owner.  You will get a better price but will have to pretty much buy it as is.  The banks will not fix or repair things as a home owner will, but you can get the home at a price that will allow you to do the repairs yourself.