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Housing Sales for October

Discussion in 'Uncategorized Threads' started by Earl4140, Nov 28, 2007.

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  1. Earl4140

    Earl4140 TS Member

    Aug 8, 2007
    O/T Housing Sales for October

    By Noelle Knox, USA TODAY
    In a painful reminder why real estate is traditionally a long-term investment, the National Association of Realtors said Wednesday that the median price for an existing home slid a record 5.1% last month to $207,800, bringing values back to March 2005 levels, because many buyers are having trouble getting financing.

    Sales of existing homes dipped 1.2% from September to October to a 4.97 million adjusted annual pace because condo sales tanked 9.1%. Compared to October last year, sales of single-family homes and condos were down almost 21%.

    "That light at the end of the housing meltdown tunnel appears to be an oncoming train," Joel Naroff, president of Naroff Economic Advisors, wrote in a research note.

    There is now almost 11 months of homes on the market, and Adam York, economic analyst at Wachovia, said he expects it will take up to three years to work through that glut.

    The problem is twofold: Buyers with poor credit and little money for a down payment have very few options to get a loan. At the same time, buyers who need to borrow more than $417,000, a so-called "jumbo" loan, are being squeezed out by higher interest rates.

    In Southern California, sales financed with mortgages above $417,000 have dropped 60% since the summer, according to DataQuick Information Systems.

    Steven D'Antoni, 32, was looking to buy a home this summer, and made a $680,000 offer on a four-unit property in the San Gabriel Valley of California in July.

    "By the time we got it to the lender, everything was in chaos," said D'Antoni, 32, a vice president of Origin Laboratories, which makes Purosol, an environmentally safe cleaner. "In order for me to qualify for the loan, I had to have put down a much larger down payment, which I didn't have."

    The lender, Countrywide, also raised the interest rate to about 7.5% from about 6%, and capped the maximum they would lend on the property at $399,000, and D'Antoni said, "That totally killed the deal."

    In New York on Wednesday, Federal Reserve Vice Chairman Donald Kohn, said, "The degree of deterioration that has happened over the last couple of weeks is not something that I personally anticipated," according to Bloomberg News. "We are going to have to take a look at" the stress in credit markets, he added, "when we meet in a couple of weeks."

    Of course, there are areas where home sales and prices are steady, if not rising, including Champaign, Ill., Albuquerque, and Green Bay, Wis.

    And even in areas where prices are falling, like California, Florida and Arizona, there are good deals and plenty of choices for buyers with good credit and money for at least a 10% down payment.

    Victor Koenig started looking to buy his first home in South Florida in April. His agent, Cathleen Flannigan at ZipRealty, showed him 53 homes, condos and townhomes before he found his "fantastic deal."

    "I wanted to take my time," said Koenig, 46, chief statistician for Playbook, a sports journalism company. "It was and continues to be a buyers' market. There was no hurry for me, and I wanted to look at as many places as I could."

    He found a three-bedroom home with a swimming pool in the city of Sunrise listed for $299,000 at the end of August. A couple weeks later, the seller dropped the price to $289,000. Koenig snapped up the home with a $265,000 bid, and moved in a few weeks ago.

    By region of the country, sales were unchanged in the Northeast and the South and down 1.7% in the Midwest and 4.4% in the West. Earl Hamman
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