patrick.net

If you think about it, why would any reasonable buyer want to sign a purchase agreement in May, it would be April or later.

Having said that, the weakness is apparent and home prices are heading lower month to month this summer. Fall activity is the true barometer on whether the housing market can stand on it's own without the credit.

CA had a $10k giveaway that started in May and had a very short lifespan. The West was still down 20%.

In CA, sign a contract by April (for fed) and close by May (for fed and state). If you're gonna buy, you sign a contract in April not May.

"The Realtors said its Pending Home Sales Index, based on contracts signed in May, fell to a record low 77.6 from 110.9 in April. Economists polled by Reuters had expected a smaller decline of 12.5 percent in May."

If you pulled 20% of the sales from May to April (which is rational given the mechanics of the credit), that would make 97.6 in May and 90.9 in April. The economist must be nuts to expect 12.5%.

Now if June is less than May, that would be doom and gloom.

I'm tired of people setting prices based on what they need to net; not what the house is worth. It'd be funny if there is a buyer's united where we all conspire to not look at/buy homes.

Seriously.. 9/10 homes I look at... when I check the property records, they all cashed out during the bubble and expects someone to foot the bill. Short sales are overpriced as well because the listing agent is inconfident that the bank will take a 400k loss, despite the current value.

I don't look at foreclosures much anymore since there's too much competition, and I had discovered that one of the homes I had bid on but lost before to a cash offer actually had concrete lodged inside it's pipes. So glad I didn't get it. I swear the banks knew about it. That's why they priced it significantly lower than everyone else, and they get away with not disclosing.

SF ace says

In CA, sign a contract by April (for fed) and close by May (for fed and state). If you’re gonna buy, you sign a contract in April not May.

Yes, in theory that would be great, but if you didn't find a house until May, you couldn't have signed in April. Inventory was still pretty low in April. The CA credit wasn't signed into law until mid April (I think), so people couldn't exactly plan ahead of time. Not to mention the fact that Fed was capped at $800k and had income limitations, so many houses in the BA didn't qualify anyway. With that in mind, people didn't have much of an opportunity/need to rush to sign by the end of April in CA.

Extend and pretend baby... that 10K cali tax credit is all they can do to bounce the volleyball up in the air for another few weeks...

Record low rates, tax credit, great weather....what else does a home buyer need!?!?!?!?

Vain, I'm curious: concrete in pipes? Didn't an inspection root this out before you made the offer? Or was this offer made where you still had an opportunity to inspect before close and walkaway?

Question for the group: Is there a service available where people can share/trade/sell inspection data they aquire from a failed bid on a house for future buyers? A buyer would still want to get their own inspection but at least they could save some time and research before setting foot in the door.

PolishKnight, great idea on that HouseFax thingy. That would really make things better. Maybe even let people comment after they see the house. Of course, you'll have many an agent and others niggling over the comments due to anti-discrimination laws. E.g. the person cannot say, "It was a nice, multi-cultural area" from what I've been told. Probably cannot even say "Several nice ethnic restaurants in the area". But Craigslist and others seem to have addressed this problem by letting readers flag discriminatory content.

Sorry to go OT. This is really bad news for anyone in housing. Where's the next bubble? maybe bubble time is over. ???

PolishKnight says

Vain, I’m curious: concrete in pipes? Didn’t an inspection root this out before you made the offer? Or was this offer made where you still had an opportunity to inspect before close and walkaway?

My father is a contractor. We never do buyer inspections because we feel he's probably more qualified than hiring someone not really knowing their background. I remember that the water was shut off so there was nothing to really test it with. I'm almost certain that had we hired an inspector, they would not have caught it either.

Had we had found it, it wouldn't necessarily be a deal killer. He can fix it. It's just that finding out about it later while never having suspected it is a bummer.

RobertShiller asked,

RobertShiller says

Record low rates, tax credit, great weather….what else does a home buyer need!?!?!?!?

- Downpayment money, ability to borrow, confidence to be able to repay, or;
- Enough cash to buy outright and comfort with owning a home instead of the cash.

Vain says

I’m tired of people setting prices based on what they need to net; not what the house is worth. It’d be funny if there is a buyer’s united where we all conspire to not look at/buy homes.

Back in the 90s when I was thinking about real estate seriously (for the first time) I was wondering how the underwater buyers in Boston ever got out of their situation (which was pretty bad in the aftermath of the '89 crash). When the thought occurred to me that THE BANKS have to eventually unload the property at its market value, I had achieved some level of enlightenment.

Compares the twin housing crashes in Boston, showing both the 90s crash and the current crash are pretty much the same in depth and duration.