Sales of existing homes plunged in July

[Amerigo Vespucci]

Source: MSNBC

WASHINGTON — Sales of previously occupied homes plunged in July to their lowest level in more than a decade, the National Association of Realtors said Tuesday.

Sales fell 27 percent in July from a month earlier to a seasonally adjusted annual rate of 3.83 million, the organization reported. Sales sank to their lowest level since 1995.

Sales have tumbled since a home buyer tax credit expired at the end of April, despite mortgage rates falling to record lows. Banks have also been selective in giving loans, which could be freezing out many potential buyers.

Home buyers also remain skittish about the value of homes and job concerns remain pervasive adding to the caution. The unemployment rate remains at 9.5 percent and weekly claims for unemployment benefits have consistently risen in recent weeks.

Read more: http://www.msnbc.msn.com/id/38828563/ns/business-real_estate/

[AngryAmish]

1. Unexpectedly?

Of course not. The sales that should be taking place now were accelerated due to government subsidy - which ended. It kept prices artificially high and kept prices from dropping to market clearing level.

[Kolesar]

2. The article does not contain the word: "Unexpectedly"...eom

[AngryAmish]

4. It was a joke

For the last three years every bit of bad news has been called unexpected. Just a jab at the financial media.

[Igel]

5. It was more than a joke.

I think a lot of people predicted or expected things to miraculously turn around instead of merely shifting demand from future months to the time covered by the rebates.

Some argued this was the most likely outcome. Some argued in response that the very idea of satisfying future demand made no sense whatsoever--this was created demand. They'll be in other threads about what may or could happen in the future, to continue avoiding their own little bit of hell.

[SarahB]

16. No, but it was unexpected by the "experts".

At least the magnitude of it. Analysts were expecting the number to fall, but not be nearly so much.

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[msongs]

3. in the same way government keeps war materials artificially high for welfare corporations nt

[JDPriestly]

15. Either way, lots of people are losing their homes.

What is shocking to me is the number of my friends who seemed quite wealthy to me but who are now losing their homes. The people losing their homes now were not poor, not since I have known them. This means that the economic downturn is creeping upward on the social ladder. Who will be next is the big question.

Meanwhile, Time-Warner is buying news media in Chile. Why don't we just stop using Time-Warner's products -- starting with Time-Warner cable. Let Time-Warner decide whether it is an American company or a foreign company. Let Time-Warner use its money to create jobs here in America or stop taking money from Americans.

[earthside]

6. Let's get real.

The 'recovery' that only existed for people at the top in the first place is over.

The 'Great Recession' that never ended for middle and working class Americans is getting worse.

And nobody, and I mean nobody, in Washington seems to have a clue that this crisis is structural, systemic and fundamental. No amount of "stimulus" money is going to fix the problem -- we need CHANGE! Real change!

Break-up the mega-banks. Break-up the mega-transnational corporations. Renegotiate trade agreements -- levy tariffs if necessary to bring home manufacturing jobs. Raise the capital gains tax rate; lower taxes on working Americans. Encourage local economies. Audit the Fed.

I'm sorry to say that President Obama and Secretary Geithner have only tinkered around the edges of this economic catastrophe ... and until they finally comprehend the deep and profound seriousness of this crisis, well, it is only going to get worse.

And the resulting anger and frustration and fear could very well mean a fascist reaction in this nation the likes we have never seen here before.

[cowman]

7. And I would add

bring the troops home and quit spending all that money on unnecessary wars and while we're at it, let's start closing some of the bases on foreign soil.

[Romulox]

8. Been looking at houses...my take is that sellers are being unreasonable.

:shrug:

[seattleblue]

9. I agree. I think home prices all over are very inflated.

Home prices have been rising much faster than wages for the better part of 30 years for a variety of reasons. Whenever this happens there will be a correction until they are at the same level again. I don't see any pressures that will cause wages to rise so home prices will continue to fall until they are at the level of wages.

[Change Happens]

10. Are you making offers? Low ball the hell out of them...Where do you live?

Here in South Florida, sellers are throwing in the towel, they held on for a couple of years, only to see their properties drop another 20%!!! And I am not talking about inventory held by banks, when these properties hit the market, you will pay 10 cents on the dollar for sure...

[Romulox]

12. I'm looking in rural Michigan...

I am a homeowner looking to move up, so I figure I have more to gain than to lose in a depreciating market for real estate. However, I haven't stumbled on any eye-popping deals yet for the type of property I am looking for (wooded acreage) that would tempt me to put forward an offer.

[hugo_from_TN]

14. I agree - lowball them.

The house we bought (a year ago)we got for almost 20% under asking price. After the closing got delayed, I asked for $10K from the seller to buy down our interest rate since the delay cost us to lose our lock. Got that too.

[bemildred]

11. I sold a house in July.

I just kept saying "yes" until escrow closed. I figured all the risk was on the downside. It's good to be right.

[SarahB]

17. Banks are still trying to keep property values artificially high by limiting foreclosures.

If housing was priced what it was worth today, nearly every bank in America would fail tomorrow.

[JDPriestly]

19. But at this point, aren't sellers just trying to avoid huge losses?

Many people selling houses are deeply in debt for the houses they are trying to sell. In many states, the sellers will have to pay back any deficiency (the difference between what a new buyer pays the seller) to the bank after the sale of the house. The banks own many of the houses, but even they don't want to take the losses. Taking a loss really hurts.

[Raschel]

13. Will the next wave be people walking away from their homes?

What will the incentive be for them to pay a high mortgage on a home that's worth way less than what they paid for it?

[OhioChick]

18. No job = No home n/t

[LandR]

20. Buyer's Market

As home sales are at the lowest level in several years and the mortgage rate is also low, the only people who benefit from this is new buyers, so long as they have good credit. Though how drastic the rate of sales has dropped is disturbing, but it seems the two-fold problem with the economy has not only been the unemployment rate, but also the decreased demand of American consumers and American goods. Unless a wave of new buyers enter the housing market, it doesn't appear this trend will turnaround quickly - similar to the unemployment rate which the CBO recently projected to not reach 5% until the end of 2014.

[Jamwill]

21. We needed a bigger stimulus

It may be too late now.