Pending Home Sales and Affordability Rise

According to the NAR, pending home sales and affordability of homes has increased. If you are a first time home buyer, do you feel that "affordability" has finally become a reality for you or are you still waiting to buy?
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May 06 2009 - Athens
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Hank, does the NAR know what percentage of those pending sales are short sales waiting on bank approval - that may take too long for the buyer who will walk or that the bank will ultimately deny?

The short sale property that I have an offer in on now is in pending status while we wait for the bank to decide.  I have seen many, many short sales in my area go "off market" only to come back on in 3,6,9 months.
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May 06 2009
"does the NAR know what percentage of those pending sales are short sales waiting on bank approval -" Not sure if that has been disclosed or is something they can pin down.  You might assume that since roughly half of all sales were from distressed sales, that the same ratio might be carried over to pending home sales as well.
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May 06 2009
Hank--I do not trust any pending home sales number....it's a spin...three of our every four short sales do not close the first time....I'd rather keep my eye on the closed sales.
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May 06 2009
Thanks for the comments Amanda. I appreciate your point of view. We could debate the validity of these figures all day. 
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May 06 2009
Right on, Amanda.  Way to straight-talk.
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May 06 2009
"Right on, Amanda.  Way to straight-talk."

Again, we could debate the validity of numbers.  I am not sure that Amanda nor anyone other than Lawrence Yun himself knows exactly how the pending home sales numbers are computed nor what percentage of these are short or some other distressed sale. I am not saying you are wrong, just that no one knows who is right.
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May 06 2009
"Right on, Amanda.  Way to straight-talk."

I think any time a non-realtor hears one of us beating up or disputing NAR figures we are deemed "Enlightened" or something for going against the establishment.  There are figures I will and do believe in when it comes to the NAR, and some I don't, but I don't subscribe to the popular theory bantered by some that anything or "everything" the NAR does is for political reasons.
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May 06 2009
Profile picture for dacolan
Affordability has definitely improved, but those of us in bubbly areas still have awhile before we see stabilization in our markets.

Home sales can be taken as another one of the few positive indicators, but are relatively meaningless considering the seasonality of the residential RE market.
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May 06 2009
"Home sales can be taken as another one of the few positive indicators, but are relatively meaningless considering the seasonality of the residential RE market."

Dacolan, Would you agree however that seasonally adjusted sales figures which can be found with different market reports, possibly even Zillow's, are a little more useful?  Even the NAR's figures, to the best of my knowledge, are comparing sales year over year and I do remember their chief economist taking into account in his conversations information based on the same time frame (seasonally adjusted) in previous years.  
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May 06 2009
Hank, it turns out that I don't need Yun to break it down for me (not that he would, since the concept that increased "pending" sales might be artificially pumped up by short sales does not help his industry).  I can use my own eyes and see what is happening within my market.  I view Amanda as a "straight-talker" because she is seeing similar things in her market and not only admits it, but recognizes that the "pending" number is subject to spin because of it.
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May 06 2009
Profile picture for Bette Defarm
I think any time a non-realtor hears one of us beating up or disputing NAR figures we are deemed "Enlightened" or something for going against the establishment.

Unfortunely, the NAR, starting with LeReah, has been so badly discredited that one does feel anyone adhering to the party line is, in fact, unenlightened. The NAR has behaved disgracefully through Yun's tenor as well and I'm afraid the "brand" is so tarnished that those associated with it will be paying for it with the public's distaste for years to come.
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May 06 2009
As I said, it is easier to hear a realtor say they disagree with the establishment and they are viewed "enlightened" as opposed to anyone  that supports the NAR.  No idea if you have discussed anything with Amanda before this, but from a few comments from her I find it entertaining that she is a "straight talker" because she has an opinion that agrees with yours. I am not saying that I do believe 100% of what the NAR touts, but as I say, I don't fall into that category of everything Yun and the NAR say is driven by political reasons. Your comments above basically indicate that you do subscribe to this theory.

You are right, FL, CA, NV, etc... are in the toilet much worse than the rest of the country.  Real estate is local however as we know.  My area is different than your's, Amanda's and and so on.

What I did say however, is that I am not sure that Amanda nor anyone other than Lawrence Yun himself knows exactly how the pending home sales numbers are computed nor what percentage of these are short or some other distressed sale.

Didn't say you needed Yun to break it down for you.  That was an opinion she threw out.  In your apparent bias against the NAR as a political organization apparently she said what you wanted to hear.

As I also said,  I am not saying you are wrong, just that no one knows who is right when it comes to pending home sales and whether or not distressed sales made up a large enough figure in this arena to make the difference Amanda surmised they would make.  No one knows this until they close.  Any assumption as to these pending numbers "not closing" and skewing the numbers is just an opinion. 
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May 06 2009
"Unfortunely, the NAR, starting with LeReah, has been so badly discredited that one does feel anyone adhering to the party line is, in fact, unenlightened. The NAR has behaved disgracefully through Yun's tenor as well and I'm afraid the "brand" is so tarnished that those associated with it will be paying for it by public distaste for years to come."

That is 1000% right.  I am sorry that the brand got tarnished.  The sad thing is that in the Realtor (don't laugh all you naysayers) code of ethics is supposed to hold we who hold the brand to a higher standard.  I personally, as a broker, take my license very seriously.  I am careful to do all I can, for my clients.  That is a sad testament to the business.Please don't however paint all alike.  There are some good people in the business who care about their clients.  A lot of good people.
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May 06 2009
Profile picture for dacolan
Would you agree however that seasonally adjusted sales figures which can be found with different market reports, possibly even Zillow's, are a little more useful?

Absolutely agree. Unfortunately, I'm not sure how meaningful using 2008 as a benchmark is. Less anemic is still not good. How do recent sales compare historically (seasonally adjusted, of course)?

Recent sales may represent an improvement over all-time lows, but improving on what may be the single worst sales record in decades (2008) doesn't inspire much confidence.
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May 06 2009
One last comment,  it all depends on your market.  Real estate is local. 
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May 06 2009
"Yun's tenor"

Bette,

One more thing to note per your comments, Yun would never make American Idol with that singing voice.  <g>
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May 06 2009
Profile picture for space_acer
Pending Home Sales and Affordability

In the San Francisco Bay Area the sales are driven by foreclosures which are seeing major discounts.  The rest are still falling in prices.
 
As for Affordability:
The California Association of Realtors, the data feeder provider to NAR,
has changed its formula for affordabilty in 2005.

For decades before 2005, affordablity was based on  mediam prices  mediam incomes, with 30 year fixed rate, 20% down payment.

Since 2005,  "Entry Level home" with 10% down ARM loan. 
It is still unclear what "entry level home" means. Today they publish affordabilty is higher due to "window dressing"
 
The major reason for the change was they could no longer put out press releases what showed cities in the San Francisco Bay Area had  under 10% affordibilty, while maintaining there was no "housing bubbles" since late '90s.

And look what happened in the aftermath...

So my question would be ... what do you mean by affordability ?



 
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May 06 2009
"So my question would be ... what do you mean by affordability ?"
Affordability is the families with income more than $20,000 could buy the condo for $70,000.
the families with income more than $30,000 could buy the starter house for $120,000.
the families with income more than $46,000 (average family income at this time) could buy the house for $180,000.(average housing's price)
The calculation is take 1/4 of family income to pay for mortgage. and without of down payment for easier calculation.
If there is down payment, then he can buy the house more value.
I don't want to put many number here to prove but it is correct.
If you make less than $20,000 then you can't affort the single house's price at $80,000, and don't dream about it.
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May 06 2009
Profile picture for space_acer
If you make less than $20,000 then you can't affort the single house's price at $80,000, and don't dream about it.

Strawberry Picker's $14K salary nets him $720K House (2007)

http://hollisterfreelance.com/news/contentview.asp?c=213141

" Despite making only $14,000 a year, strawberry picker Alberto Ramirez managed to buy his own slice of the American Dream. But his Hollister home came with a hefty price tag - $720,000."

Truth is it was never a $720K home anyway, but more like $200K. But im sure the sale fueled comps on all future sales in the area, even for those who could afford it at their salaries.  


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May 06 2009
Need to read and thinking :
"Affordability is the families with income more than $20,000 could buy the condo for $70,000."
Any where i said " the families with income $14,000 could buy the house for $720,000." ??????????
The debate is actual time, not few years ago, even with few years ago nobody said  "the families with income $14,000 buy the house for $720,000. is good move"
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May 06 2009
and don't talk about Yahoo's stock no more. :-)
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May 06 2009
 
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