Just speaking anecdotally, I think that this year will see a very large number of homes for sale. You’ve got existing home sellers who were not able to sell their home last year and gave up, waiting to try again; you’ve got homeowners no longer able to hang on as the bad economy outlasted their savings; and you’ve got millions of foreclosed houses must have to come to market soon.
Obama’s “Summer of Recovery” 2010 was supposed to have created new home buyers as job creation picked up. But the recovery didn’t happen. Sure, there’s been a recovery for those in the stock market, but that’s not Main Street these days. There simply are not enough people with money who are willing to spend it.
And then there is home lending. Or more accurately, the lack thereof. Banks are NOT lending. I laugh when I watch the isolated CNBC hosts and guests saying that the banks are lending, and sadly there are no borrowers. Bullshit. I’m watching three community banks in my area go under. Why? Because the FDIC is making it impossible for community banks to lend money (favoring the big banks), or even simply survive. Even on the high end, I know people that have millions, even tens of millions, in assets, but the banks will not give them a home loan because they have “no income” (they are retired from active work, and took losses to zero out their recent years cap gains).
Everyone has pinned their hope on 2011 as the turn around year in real estate. But it just ain’t gonna be. Take a look at the sales downturn and sale price decline in February, as reported by Yahoo:
Fewer Americans bought previously occupied homes in February and those who did purchased them at steep discounts. The weak sales and rise in foreclosures pushed home prices down to their lowest level in nearly 9 years.
The National Association of Realtors said Monday that sales of previously occupied homes fell last month to a seasonally adjusted annual rate of 4.88 million. That’s down 9.6 percent from 5.4 million in January. The pace is far below the 6 million homes a year that economists say represents a healthy market.
Nearly 40 percent of the sales last month were either foreclosures or short sales, when the seller accepts less than they owe on the mortgage.
One-third of all sales were purchased in cash — twice the rate from a year ago. In troubled housing markets such as Las Vegas and Miami, cash deals represent about half of sales.
The median sales price fell 5.2 percent to $156,100, the lowest level since April 2002.
Oopsie. Low interest rates and wasteful stimulus cannot overcome unemployment and underemployment. If you have to sell your home this year, you better get moving on it before the summer, and you had better get real about the price.