U.S. Homes Sales on the Rise
Is 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…
Is 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
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.
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.
Where are BHO and Miss Muffet to cry this cannot be?
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!
Careful everyone… Mopar got all ‘continental’ on our asses a few posts earlier! 🙂
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.
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?).
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.
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.