« Open Thread Brooklyn Spared In Great Post Office Purge of 2009 »

August 5, 2009

U.S. Homes Sales on the Rise

sold080509.jpgIs the national real estate comeback for real or just a head-fake? Bloomberg reports a 3.6 percent gain in the index of signed purchase agreements, marking five months, as of the end of June, of increasing contracts to buy previously owned homes. While this is good news, economists warn that we're still far from a sustained recovery: unemployment is still on the rise, estimated to reach 10 percent by 2010, and personal incomes are decreasing. Economist David Sloan told Bloomberg: “It’s a modest recovery, however these numbers are exceeding people’s expectations.”
Pending Sales of Existing Homes in U.S. Surge 3.6% [Bloomberg]
Photo by Joe Cawley




Posted by jscheff at 9:31 AM | Comments (24)
Categories: Sales

Trackback Pings

TrackBack URL for this entry:
http://www.brownstoner.com/mte/mt-tb.cgi/10876

Comments

Hmmmm. Awfully quiet around here. This is Brownstoner, right?

Posted by: slopefarm at August 5, 2009 9:54 AM

My guess is that what we're seeing is a final push for 1st time homebuyers to close in time to claim the tax credit. Let's see what happens as we get closer to December 1.

Posted by: CHMomma at August 5, 2009 9:55 AM

are you trying to pick a fight, SF?
I'm sure some loon will pick up the bait.

Posted by: antidope at August 5, 2009 10:04 AM

This uptick can be easily understood if you simply picture a tennis ball bouncing down the stairs.

Posted by: DitmasSnark at August 5, 2009 10:10 AM


Oh, this is awesome! I hope along with the sales comes a reinflation of the home prices!! Why should that market (read=buyers) even attempt to reset this mess... just go along and keep buying property at prices waaaaaay above what they should be.

(and yeah, *should* be is relative... but not subjective)

Way to go team!

Posted by: tybur6 at August 5, 2009 10:11 AM

People buying in this market will have a profit in 3-5 years, most definitely within 5.

Discuss.

Posted by: daveinbedstuy at August 5, 2009 10:24 AM

It is what it is. The economy sucks but home buying is up slightly nationally. The reason for this is because prices are so low in subprime areas -- including in Brooklyn. Many of the people buying are flippers. La plus ca change, la plus c'est la meme chose.

Posted by: mopar at August 5, 2009 10:27 AM

Flippers? How do you figure?
Flippers can make money in a rising price environment. That doesn't seem likely soon.
More likely, the tax credits, low interest rates and government supported mortgages are allowing first-time buyers into the market (who were previously priced out). These folks are not likely to be flippers.

Posted by: antidope at August 5, 2009 10:32 AM

the uptick is from foreclosures under 250,000. That market is real strong.

Posted by: brickoven at August 5, 2009 10:33 AM

DIBS, I agree with you and that's because I expect to pick up something pretty cheap relative to the current mkt

Posted by: more4less at August 5, 2009 10:47 AM

Flippers: A lot of the "uninhabitable" houses in Brooklyn are bought by professional companies with all cash, then rehabbed. I have met them and seen the work. I have read this is also the case nationally. These houses can only be purchased with all cash or a construction loan. No bank will give a regular mortgage for them.

Antidope, agree completely about the "rising price" environment factor. I don't quite understand it. Here in Brooklyn these companies seem to be trying to sell for pre-crash prices. A guy I spoke with who does it for a living was buying houses for around $300,000 and he claimed to have sold a three-family in March or April (we spoke in May) around Atlantic and Saratoga for about $500,000 or $550,000 or so (I forget the exact amount).

This is one of the factors that leads me to think prices are going back up in these subprime areas of Brooklyn. Closed sale prices are all over the map. You have "uninhabitable" houses selling for $200,000 to $300,000, other places just sitting on the market at $400,000 or so, and a smattering of properties closing for $600,000.

Posted by: mopar at August 5, 2009 10:53 AM

Antidope, yes, certainly, there are a lot of regular home buyers too looking for a cheap place. But it's not easy for them to compete against the flippers offering all cash and a sure close.

Posted by: mopar at August 5, 2009 10:56 AM

Other good news for NYC housing market:

http://www.myfoxny.com/dpp/your_money/090804_NYC_Foreclosures_Drop

Posted by: 11217 at August 5, 2009 11:07 AM

What do Brownstoners consider a "subprime" neighborhood in Brooklyn? I still think the housing prices seem super inflated in Clinton Hill for ex.

Posted by: bklyn11238 at August 5, 2009 11:50 AM

"People buying in this market will have a profit in 3-5 years, most definitely within 5.

Discuss.

Posted by: daveinbedstuy at August 5, 2009 10:24 AM"


Nominal or real?

Posted by: the chicken at August 5, 2009 11:53 AM

That's not a speculative flipper, imo.

Whether you like the rehab or price, it is a real business model with an investment thesis: buy crap cheap, invest in it and sell a rehabbed home for a decent profit.

A flipper would buy a finished or close to finished asset (condo/home) and plan to sell it within a short period of time, while investing nothing.

Definitions aside, to the extent these guys you describe are successful, they provide more ammunition to those who think the market is stabilizing. And I would describe successful as: we see more and more of them.

Posted by: antidope at August 5, 2009 11:56 AM

Antidope,

I don't imagine too many flippers are just buying, doing nothing and selling. Some are throwing up sheetock and doing minimally necessary renos and inexpensive cosmetics in the hope of adding more apparent value than they spent. To me, that's flipping. Some reno relatively honestly, others do not. That's why they are buying wrecks. But they are certainly less likely to do it if they anticipate continuing declines, eroding the equity they are supposedly adding. So if there is an uptick in bottom-feeding flipper activity (and I am not saying there is or isn't), that means an investor vote of confidence, as well as some light construction employment.

P.S. I was not spoiling for a fight, but I was surprised at the absence of one. 21 min. before first post on this topic is surprising.

Posted by: slopefarm at August 5, 2009 12:07 PM

ah? I get it. Create the illusion of value with minimal $$$.

I do think the FHA and other government sponsored loans are supporting this activity, for better or worse. Some of the stronger home sales (HOTD) seem to be in lower priced nabes and with generous mortgages. See 501 Bainbridge and 29 Maple, for example. Many of the other, bigger ticket homes are sold with significant equity (30%, 40, 50% and more), indicating folks are probably rolling equity from other real estate (trading up?).


Posted by: antidope at August 5, 2009 12:22 PM

Just as soon as those subprime loans start back up and they give all the unemployed people Jumbo loans with no docs to back them then all this outrageous 5x the real priced Brooklyn crap should be A-OK. I should go out and buy 20 because then I can be a billionaire in 3-5 years.

Posted by: williamsburgguy at August 5, 2009 1:00 PM


Careful everyone... Mopar got all 'continental' on our asses a few posts earlier! :-)

Posted by: tybur6 at August 5, 2009 1:21 PM

bklyn11238, subprime areas are literally where a lot of subprime loans were made. Two to three years later, they were all short sales. This includes Bushwick, East New York, and a lot of Queens.

C'est -- um, c'est dommage!

Posted by: mopar at August 5, 2009 5:40 PM

Where are BHO and Miss Muffet to cry this cannot be?

Posted by: mopar at August 5, 2009 5:41 PM

mopar - work's been too busy for me to participate during the day (I get my catch-up time at night). National trends vs. NYC are not the same - NYC was late to enter the downturn, will be late to get out.

Posted by: Miss Muffett at August 5, 2009 10:15 PM

Could be, Miss Muffett. But you know often the areas that are late to enter downturns -- the good neighborhoods -- are also the first to exit them.

Posted by: mopar at August 7, 2009 11:26 AM

Post a comment

Please be patient while your comment is published. It may take a moment.

Latest Restaurant Additions