Homebuyer credit extension heads to Obama

[ichy]

185k home thats 6 years old for 125k.

If the house sold for $125k then it isn't a $185k home.

 

[Thump553]

As the OP pointed out the credit period hasn't been extended, just the time period to close for contracts already signed. This makes sense as anyone in the real estate field can confirm it takes lenders much longer to close loans now than before the crash, they have gone overboard with the dot every i/require every possible piece of paper mentality.

 

[BlahBlahYouToo]

I read an article just this week that said they were up some 2.7% in MAY.

and i heard on the radio that analysts believe home prices will continue to fall.

you yourself posted an article saying that the housing market will collapse without govt incentives.
that means the tax credits are propping up the housing market. without it, the home prices will fall.

i don't see how anyone could be confused by this.

 

[piasabird]

This is just encouraging people to buy a House they can not Afford.

What if interest rates suddenly shoot up?

 

[dullard]

I read an article just this week that said they were up some 2.7% in MAY.

You are correct here spidey07. Note: I don't think you are comparing the right data though. The 2.7% increase was from May 2009 to May 2010. I think the monthly price change is more relevant.

Average existing (ie not new homes) home sale price in April 2010: $172,300.
May 2010: $179,600.

Those of course are unadjusted and before final revisions. But, that is a 4.2% monthly price increase after the credit ended. Although 4.2% is just about statistical noise at this point.

Other relevant data: From Jun 2008 ($215,000 average selling price) to Jan 2009 ($164,700 average selling price), the price fell every single month. That is a 30% fall in half a year (of course, that 30% isn't seasonally adjusted, so the swing isn't quite that bad). On Jan 1, 2009 the $8000 credit started and prices instantly stopped falling. They've swung around a lot, but they haven't ever dropped significantly below the Jan 2009 price.

 

[Slew Foot]

Is the mix of home selling the same? Because poor fuckwads buying cheap homes they cant afford and hoping for free Obama bucks were probably buying en masse in April which lowers the "average price of homes sold". When these losers are taken out of the market, the only people who are buying are wealthier people who are likely buying more expensive homes, causing the average price of a home sold to rise.

 

[dullard]

Is the mix of home selling the same?

I can give you some data but certainly not all that you ask. Key points:

"Distressed homes slipped to 31 percent of sales last month, compared with 33 percent in April; it was also 33 percent in May 2009.

A parallel NAR practitioner survey shows first-time buyers purchased 46 percent of homes in May, down from 49 percent in April.

Investors accounted for 14 percent of transactions in May compared with 15 percent in April; the remaining sales were to repeat buyers.

All-cash sales were at 25 percent in May, edging down from a 26 percent share in April.

Single-family home sales declined 1.6 percent

Existing condominium and co-op sales fell 6.8 percent"

Not a strong movement anywhere, but almost all movements pointed towards stronger buyers.

 

[Hacp]

You are correct here spidey07. Note: I don't think you are comparing the right data though. The 2.7% increase was from May 2009 to May 2010. I think the monthly price change is more relevant.

Average existing (ie not new homes) home sale price in April 2010: $172,300.
May 2010: $179,600.

Those of course are unadjusted and before final revisions. But, that is a 4.2% monthly price increase after the credit ended. Although 4.2% is just about statistical noise at this point.

Other relevant data: From Jun 2008 ($215,000 average selling price) to Jan 2009 ($164,700 average selling price), the price fell every single month. That is a 30% fall in half a year (of course, that 30% isn't seasonally adjusted, so the swing isn't quite that bad). On Jan 1, 2009 the $8000 credit started and prices instantly stopped falling. They've swung around a lot, but they haven't ever dropped significantly below the Jan 2009 price.

Most of the May "sales" should be houses that qualified for the credit but didn't close in April right? You can't really look at that if the tax credit is still factored in.

 

[spidey07]

Most of the May "sales" should be houses that qualified for the credit but didn't close in April right? You can't really look at that if the tax credit is still factored in.

No. The purchase agreement had to be signed by the end of April. They had until end of june to close and that's what got extended - the closing deadline.

The purchase agreement is really buying the house. The closing is just transferring everything (money, title, deed, property, etc).

 

[Hacp]

No. The purchase agreement had to be signed by the end of April. They had until end of june to close and that's what got extended - the closing deadline.

The purchase agreement is really buying the house. The closing is just transferring everything (money, title, deed, property, etc).

But the data should be rising because of the credit. The government doesn't count a house sold until it is closed.

 

[PingSpike]

Seems pretty stupid to have this thing just end all of a sudden, and then we have the moron economic news reports with the guys scratching their head that home sales fell off a cliff after it ended.

If they didn't want this to be so wacky they should have had a fade out. $8000 for 6 months, $6000 for another 3 or something, then $4000 for 3 and so on. A guy at work had his loan fall through at the last minute and now he's done looking...there isn't really much of a get up and go now that the credit is gone. He knows things are picked over now (and probably still somewhat inflated as a side effect from the tax credit) so he might as well wait year or two at this point.

 

[alkemyst]

most people don't understand the statistics of home sales.

May-June are not really good times as most with kids have them just finishing school. There is a normal dip here. Being the credit was drying up it added to it.

 

[alkemyst]

Um the limits were arbitrary. They just picked a number and went with it. 8k is more than enough for housing prices to rise. Look at what happened the month after the subsidy ended. Housing prices plummeted because there were no buyers.

definitely not arbitrary. I work for a home builder. They also crippled the incentives we can offer, even more so if they don't want to deal with in-house financing.

In general, housing pricing and sales jumps dramatically depending on month.

Much like trying to get your air or heat replaced in the height of summer or winter.

 

[BlahBlahYouToo]

The credit DID NOT INFLUENCE housing prices. It just incented people to buy. Home prices did not magically fall after the credit nor were they artificially inflated, in fact they actually were up a slight tick last month.

People aren't buying homes and it's not because of price, it's because of the uncertainty of a terrible obama economy.

you were saying?

High unemployment, slow job growth, and tight credit have kept people from buying homes. The industry received a boost this spring when the government offered tax credits to homebuyers.

Since they expired in April, the number of people looking to buy homes has dropped, even with bargain prices and the lowest mortgage rates in decades available.

....

New home sales were down nationwide. They fell by more than 25 percent from a month earlier in the West, 14 percent in the Northeast, 9 percent in the South and 8 percent in the Midwest.

The median sales price in July was $204,000. That was down 4.8 percent from a year earlier and down 6 percent from June.

 

[spidey07]

you were saying?

High unemployment, slow job growth, and tight credit have kept people from buying homes. The industry received a boost this spring when the government offered tax credits to homebuyers.

That uncertainty is the direct affect of the Obama economy. The point still stands. The credits moved up demand. With rates this low people should be buying as much as they can, but they aren't because of the Obama economy.

 

[IndyColtsFan]

don't know if it's local or not but home purchasing decreased around here as soon as the tax credit expired.
there was a huge buying frenzy right up until the deadline.

Same thing happened here.

 

[BlahBlahYouToo]

That uncertainty is the direct affect of the Obama economy. The point still stands. The credits moved up demand. With rates this low people should be buying as much as they can, but they aren't because of the Obama economy.

i don't disagree with that part. the economy and job uncertainty definitely plays a role.

but you said that prices were not affected from the homebuyer credit.
this all but official confirms that it did. i don't know how you can be in such huge denial at something as obvious as this.
prices have tanked because demand is now lower. why is demand lower? because the credit expired.

please don't exclude this important piece.

The industry received a boost this spring when the government offered tax credits to homebuyers.

Since they expired in April, the number of people looking to buy homes has dropped, even with bargain prices and the lowest mortgage rates in decades available.

 

[EagleKeeper]

Demand is lower. Prices fall to account for demand.

Prices were not inflated $5K when the credit was there.

The credit created a demand for housing at the existing price point.

I do not think you can show where prices increased $5K because of the credit.

The other issue is trying to prove a negative.

We know that the credit pulled buyers into the market. Were those buyers willing to pay an extra $5K or more for the house, because of the credit?

Prices are dropping becuase there are no buyers at that asking price.
Potentialy, the buyers at that price point already come into the market last year because of the credit.

The real estate market borrowed from future sales, just as the auto market did witht he CLUNKER program.

Both pulled sales from the future and create very few "new" customers (those that would not have purchased within 1-2 years anyhow)

 

[SammyJr]

People aren't buying homes and it's not because of price, it's because of the uncertainty of a terrible obama economy.

No, its because the Bush/Greenspan housing bubble burst and the economy tanked. Kind of like in 2001/2002, the housing market sucked because the Clinton IT bubble burst. And it'll suck in 2022 when Obama's Green Jobs bubble bursts.

Do you think if McCain were in office, the housing market would be magically better?

 

[piasabird]

So real estate bankruptcy is a major problem. So the government solution is to pay their down payment so the people have no skin in the game and let people who cant afford to purchase a house do so. Then guess what will happen? We will have even more home foreclosures.

Why does this sound familiar?
Is this Barnie Frank's Idea to cause a foreclosure on the entire country or what?