September: Home sales down 19%
Home sales fell 19 percent in the Baltimore metro area in September, compared with a year earlier -- the third month in a row of declines.
Sept. 30 was the official end of the homebuyer tax credit, the last day to close on a deal. But the real rush happened by June 30, the deadline that Congress extended at the last minute -- which is why sales have dropped since.
Contract-signing is continuing to drop, too -- an early warning signal of what's to come with sales, since it takes a month or two to close on most deals. Buyers signed 25 percent fewer contracts in September than their counterparts a year earlier in the metro area, according to Metropolitan Regional Information Systems.
The price stats require real scrutiny. The average is up about 2 percent in the metro area, and much more strongly in some counties. But are sellers actually getting 2 percent more for their homes than people with similar homes got a year ago?
We're seeing the "changing mix" problem that we've chatted about before. If fewer first-time buyers are closing on starter homes now than they were a year ago, when the $8,000 tax credit was around, then the average sale price will probably rise even if everyone's getting less for their particular homes. (Or, in the city, the average will probably fall farther, because investors buying cheaper rentals become a more important part of the market as traditional-homeowner-type buying decreases.)
Metro-wide, the number of homes sold for less than $250,000 in September dropped 23 percent vs. a year ago. The number of homes changing hands for $500,000 or more? Up. Just a bit, but that sure helps explain why the average rose. (Median, too.)
In other housing-related drama, Bank of America announced Friday that its temporary freeze on foreclosure sales is now nationwide. That's either great news for the housing market or terrible news, depending on whom you ask.
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Comments
Halting foreclosures is horrible news for people hoping for an increase in home sales. Aren't foreclosures account for 80% of sales?
Great news for people who are on the cusp of foreclosure. They get a few more months to live in their house free and hopefully find work to pay for their house later.
I can only assume sales will drop even further and prices soon to follow.
Now what's all this nonsense about FHA almost doubling their annual insurance premium???
Posted by: ironhide196 | October 9, 2010 12:32 AM
I don't care if sales were up 20% or down 20%...I don't care if people have jobs or they don't have jobs...I don't care if "closing costs"(costs to keep a dying industry alive costs) are doubling or tripling..I don't care if I can afford the monthly payments or not.......I don't care if there are or may not be foreclosures happening in neighborhood I am interested in.......I don't care if stats say prices are going up or down...
DEMAND IS THERE AND IT IS ALWAYS A GOOD TIME TO BUY!!! IT IS ALWAYS A GOOD TIME TO BUY.
IT IS ALWAYS A GOOD TIME TO GO IN MAJOR DEBT AND PAY RICH PEOPLE WHO WORK AND OWN BANKS JUST SO I CAN SAY I 'OWN" A HOUSE!!!
I HAVE BEEN BRAINWASHED TO TAKE MY HARD EARNED MONEY AND BUY A DECLINING ASSET AND PAY INTEREST (OR IS IT A TAX) TO BANKERS!!!!!!
Posted by: Peter Itiswhatitis | October 9, 2010 8:36 AM
BofA is only the first to announce halting all current foreclosures. Soon, ALL banks will halt ALL foreclosures nationwide. After that, some analysts are even predicting that banks will be forced to retry ALL foreclosures from 2-3 years ago. Back to square one we go. All REO's, short sales, foreclosure sales, etc. are all in jeopardy. This mess is just getting starting, the tip of the iceberg. What's going to happen to the title insurance companies that insured a clean title and now those sales may be forced to go back to the original owner? If this is all true, and it probably is (not announced yet but in the works), housing will take another huge hit.
Posted by: Frank Rizzo | October 9, 2010 11:47 AM
Looks like Citi and Wells are next in line to halt foreclosures. Expect the announcement by Monday. "Foreclosure-Gate" is going to get real ugly real fast. Just do a Google search on "Foreclosure Gate" and you will see all this for yourself.
http://www.businessinsider.com/category/foreclosure-gate
Posted by: Frank Rizzo | October 9, 2010 12:48 PM
Where were you when I needed an honest word of advice about finances Peter Itiswhatitis~!
LOL! Everyone was telling me to buy, buy, buy! Buy into the dream now or you will be priced out forever!
You can best believe I will carry your advice close to my heart in the future!
Posted by: Wallace | October 9, 2010 10:34 PM
Uh oh. Looks like this investigation is moving along quicker than I thought...
http://finance.yahoo.com/news/Up-to-40-states-plan-inquiry-apf-1630813912.html?x=0&sec=topStories&pos=main&asset=&ccode=
Posted by: Frank Rizzo | October 10, 2010 12:04 AM
@Iron - FHA's upfront premium went down from 2.25% (which was just bumped up from 1.75% about a year ago) to 1% of the purchase price, and changed the monthly premium from .55% to .90%. Very strange. So you pay less up front at closing, but if you hold the FHA mortgage for a long period of time, you'll pay more $$$ due to the higher monthly premium.
No one knows how this will shake out. I have a number of buyers looking at foreclosures and no one's saying they aren't available anymore yet! :)
Posted by: John K. | October 10, 2010 12:21 AM
Get a load of this one. The bank is ASKING $495k. Which means can be had at most for $450K. House sold in July of 2005 for $713k. The neighbor in the pic paid $699k for the same house.
"Junior, dat is ebidence. Put it in da caaah.
-Jackie Gleason,
Smokey and the Bandit
Posted by: elweedz | October 10, 2010 9:51 AM
OOPS forgot the link.
http://www.trulia.com/property/3021192451-9110-Panorama-Dr-Perry-Hall-MD-21128
Posted by: elweedz | October 10, 2010 10:30 AM
Such a bland house...
Posted by: ironhide196 | October 10, 2010 2:35 PM
RE: the foreclosure moratoriums.
It reduces new supply and all else equal should be an upward force on prices. The trade off is 2 fold: 1. prices must fall to reach equilibrium given incomes and 2. this may spook buyers out of the market as the impact of when/if these foreclosures finally do hit the market is a predictable downward force on prices.
Everything going on right now from the Fed's QEII to this is about protecting Wall St. under the pretext of helping Main St. The banks will be supported by as much newly Xeroxed money as it takes to keep them "solvent." The moratoriums are just the latest chapter in their play book of "Amend, Extend, and Pretend." The winners and losers that are chosen from these government decrees are getting so obvious and acute that were economic liberties not considered a second class right subject to the ambiguity of the rational basis test, this would likely be pushing the limits of the 14th Amendment.
Posted by: Josh Dowlut | October 10, 2010 4:49 PM
Josh Dowlet Posts> Elweedz Posts
Posted by: elweedz | October 10, 2010 6:29 PM
Probably the best article I have found on the next crisis that is about to hit...I sure hope all you homeowners/buyers have your title insurance policy.
http://mandelman.ml-implode.com/2010/10/the-signing-or-pardon-me-mr-banker-but-your-remic-is-showing/
Posted by: Frank Rizzo | October 11, 2010 2:39 AM
Another hilarious buzz word is born, Robo-Signer.
All I can imagine is a room filled with Robert Patrick clones frantically scribbling "T1000".
Posted by: ironhide196 | October 11, 2010 3:03 PM