Earlier Tuesday, the National Association of Realtors (NAR) reported the annual rate of existing home sales decreased 2.2% in May, and industry reaction to the results and what the future may hold is decidedly mixed.
May is the first month in more than a year the homebuyer tax credit isn't an incentive to lure prospective homeowners into the market, but shoppers that signed a sales contract by April 30 have until June 30 to close the deal and still get the refundable credit — $8,000 for first-time buyers, $6,500 for existing homeowners.
The May decline follows upwardly revised monthly increases in April (8%) and March (7%) for closed transactions of existing houses, condos and co-ops. In addition, the NAR previously reported that pending home sales increased 6% month-over-month in April, the latest in a string of increases for that index, including rises in March (7.1%) and February (8.3%).
NAR's pending sales index is a forward-looking indicator of future closings based on signed contracts. Deals generally close one to two months after contracts are signed. That data suggested existing sales would jump from the revised estimate of 5.79m in April to 6.2m in May — an increase of 7% — Paul Dales, US economist for Toronto-based Capital Economics, wrote Tuesday.
The latest existing sales report "is hard to square" with the pending home sales index, Dales said, "so either signings are being canceled or it is taking longer than usual for a deal to be closed."
Existing home sales took an even deeper dive last December, the first month after the $8,000 first-time homebuyer tax credit was originally set to expire on November 30. That month — historically a slow month for home sales — existing sales dropped 16.7% month-over-month.
After a rush of first-time homebuyers caused existing home sales to shoot up from September through November, NAR called last year's cliff-diving sales volume an “expected” crash in sales volume. That double-digit decline came even though President Obama had already signed legislation into law that expanded eligibility and extended the credit to its most recent deadline.
"The market is going through a period of swings driven by the tax credit,” NAR chief economist Lawrence Yun said in December. “We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit.”
On the news of May's existing-home sales decline, the NAR blamed at least some of it on a slow down in the closing process. The association is among those in the industry supporting a Senate amendment that would extend the deadline to close to September 30, giving buyers an extra three months to get deals finalized.
“Approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales," Yun wrote in commentary Tuesday. “In addition, many potential sales are being delayed by an interruption in the National Flood Insurance Program. Florida and Louisiana, also impacted by the oil spill, have the highest percentage of homes that require flood insurance.”
But not all deals close, and many home shoppers with sales contracts in place may never close because of financing difficulties, according to Sylvia Alayon, vice president of operations at the Consumer Mortgage Audit Center (CMAC), a Fort Lauderdale, Fla.-based due diligence and consulting firm that specializes in mortgage forensic research and analysis.
"Lending standards are very, very tight," she said. "We're going to see a huge fallout from individuals that signed contracts, and a good majority of them are not going to be able to obtain financing."
Mark Rogers, a senior economist at Lafayette, Calif.-based Econoday projected earlier this month that many pending sales may not have closed by the tax credit deadline and will never close, adding home sales are "almost certain to slump in May."
Capital Economics' Dales wrote that if NAR's projections are correct, existing sales are likely to increase sharply in June. But thereafter, existing sales will fall back sharply, and his long-held projection of an impending double dip in housing would then begin.
"The tax credit-induced surge in demand is boosting prices," Dales wrote. "That is not too surprising given that the government effectively gave homebuyers an extra $8,000 to spend.
"Nonetheless, once home sales fall back to fairly depressed levels, house prices will start declining too," he added. "By the end of next year, we think they will be at least 5% lower."
Yun projected that pending home sales will decline in May and June, a cool down from the surge leading up to the tax credit's contract deadline. But, Yun added, job growth and a manageable level of foreclosures are keys to sales and price performance during the second half of the year.
Others, like John Burns, CEO of Irvine, Calif.-based John Burns Real Estate Consulting (JBREC) are less optimistic.
"This is very bad news," Burns said in reaction to May's numbers. "Sales are going to fall off a cliff in July."
CMAC's Alayon agrees, and said the tax credit pulled too much demand forward, and now sales have nowhere to go but down.
"Unfortunately, we're not going to see the sharp increase in home purchases and we have been accustomed to in the summer. That spike already happened as a result of the incentive the Administration offered," she said.
Alayon said the benefit of a third round of homebuyer tax credits would be minimal, and instead advocates greater incentives to lenders to reduce existing borrower payments through mortgage modifications.
The result, she said, would be a reduction in foreclosures that would stabilize housing prices and lure buyers back into the market.
"Once you can stabilize housing, then you can generate interest with first-time homebuyers and get individuals that can afford to buy second homes or investment properties because now it makes sense to invest in the market," she said.
Saturday, June 26, 2010
Friday, June 25, 2010
Tax credit NOT extended
Senate Dems fail to advance tax extenders bill for the third time
Senate Democrats just failed for a third time to advance legislation to extend unemployment benefits through November.
In a 57-41 vote, the Senate failed to end debate on the legislation.
The failure to move the tax extenders package, which also would have renewed scores of individual and business tax breaks, illustrates the extent to which fears about the deficit are now dominating the legislative process five months before a midterm election where Democratic control of Congress will be on the line.
The legislation cost about $100 billion and would have added about $33 billion to the deficit by extending unemployment benefits for six months. The cost of the added unemployment insurance was not offset with other tax hikes or spending cuts.
Republicans voted against the motion in unison, arguing it would add to the country’s ballooning deficit.
“We just can’t keep kicking the can down the street and say ‘Oh, we’ll take care it later on. It’ll be offset later,’” Sen. George Voinovich, a centrist Republican from Ohio, told The Hill.
“That’s all we’ve been doing these last couple of years, and I’m fed up with it.”
Voinovich, who is retiring at the end of this Congress, had voted for similar extensions in the past and hails from a state with one of the nation’s highest unemployment rates. That he could not stomach the cost to the budget of extending unemployment benefits again shows how budget concerns have overtaken worries about the economy.
Senate Majority Leader Harry Reid (D-Nev.) scaled back the package the Senate rejected on Thursday. The original tax extenders package cost $140 billion and added $80 billion to the deficit.
Democrats on both sides of Capitol Hill ripped Republicans for much of Thursday, accusing them of refusing to help needy families and criticizing them for budget hypocrisy.
Some Democratic senators expressed puzzlement that their conservative counterparts voted for $1.3 trillion in tax cuts during the Bush administration and escalated spending on wars in Iraq and Afghanistan. None of that spending was offset with out spending cuts, they noted.
“Now, they’re going to make their last stand on deficits by trying to take money away from the unemployed, in terms of extending benefits,” Sen. Bryon Dorgan (D-N.D.). “That’s sort of a bizarre priority as far as I’m concerned.”
Speaker Nancy Pelosi (D-Calif.) criticized Republicans for seeming to have “a tin ear when it comes to the appeals of the American people for job creation.”
But it’s not just Senate Republicans who are worried about increased spending in the face of the nation’s projected $1.5 trillion budget deficit.
Pelosi has been frustrated by opposition from House Democrats, who forced her to scale back a package of unemployment insurance extensions, aid to states and extended COBRA health insurance benefits. Vulnerable members of her caucus did not want to vote to add to the deficit without an assurance that the Senate would follow suit.
Senate Democrats on Thursday attempted to increase support for the bill by arguing unemployment has been extended for years without offsets. They also blasted Republicans for using the deficit to gain political points in the run up to November’s election.
“Somewhere along the line, throughout these charades, this job-creating, tax-cutting, loophole-closing bill has become a political football, and that is really too bad,” Reid said in comments on the Senate floor.
“The debate is focused on winning and losing and not on doing what's right, and that's really too bad.”
Senate Democratic leaders also tried to remind Republicans that when they were in charge they, too, extended unemployment benefits without offsets.
“This entire proposal is paid for except for unemployment insurance, which in a bipartisan way has always passed unpaid-for through the decades,” said Sen. Chuck Schumer (D-N.Y.). “But everything is paid for, so [their argument that the bill adds to the deficit] is no longer an excuse for them. And why are they doing this, it's beyond us.”
However, not every Senate Democrat supports the idea that leaders should continue the tradition by deeming continued extensions to unemployment benefits an emergency and not offsetting its cost.
“I don’t buy that distinction,” said Sen. Ben Nelson (D-Neb.). “At some point, it ceases to be an emergency, it’s ongoing … I think the bill should be paid for.”
Senate Democrats just failed for a third time to advance legislation to extend unemployment benefits through November.
In a 57-41 vote, the Senate failed to end debate on the legislation.
The failure to move the tax extenders package, which also would have renewed scores of individual and business tax breaks, illustrates the extent to which fears about the deficit are now dominating the legislative process five months before a midterm election where Democratic control of Congress will be on the line.
The legislation cost about $100 billion and would have added about $33 billion to the deficit by extending unemployment benefits for six months. The cost of the added unemployment insurance was not offset with other tax hikes or spending cuts.
Republicans voted against the motion in unison, arguing it would add to the country’s ballooning deficit.
“We just can’t keep kicking the can down the street and say ‘Oh, we’ll take care it later on. It’ll be offset later,’” Sen. George Voinovich, a centrist Republican from Ohio, told The Hill.
“That’s all we’ve been doing these last couple of years, and I’m fed up with it.”
Voinovich, who is retiring at the end of this Congress, had voted for similar extensions in the past and hails from a state with one of the nation’s highest unemployment rates. That he could not stomach the cost to the budget of extending unemployment benefits again shows how budget concerns have overtaken worries about the economy.
Senate Majority Leader Harry Reid (D-Nev.) scaled back the package the Senate rejected on Thursday. The original tax extenders package cost $140 billion and added $80 billion to the deficit.
Democrats on both sides of Capitol Hill ripped Republicans for much of Thursday, accusing them of refusing to help needy families and criticizing them for budget hypocrisy.
Some Democratic senators expressed puzzlement that their conservative counterparts voted for $1.3 trillion in tax cuts during the Bush administration and escalated spending on wars in Iraq and Afghanistan. None of that spending was offset with out spending cuts, they noted.
“Now, they’re going to make their last stand on deficits by trying to take money away from the unemployed, in terms of extending benefits,” Sen. Bryon Dorgan (D-N.D.). “That’s sort of a bizarre priority as far as I’m concerned.”
Speaker Nancy Pelosi (D-Calif.) criticized Republicans for seeming to have “a tin ear when it comes to the appeals of the American people for job creation.”
But it’s not just Senate Republicans who are worried about increased spending in the face of the nation’s projected $1.5 trillion budget deficit.
Pelosi has been frustrated by opposition from House Democrats, who forced her to scale back a package of unemployment insurance extensions, aid to states and extended COBRA health insurance benefits. Vulnerable members of her caucus did not want to vote to add to the deficit without an assurance that the Senate would follow suit.
Senate Democrats on Thursday attempted to increase support for the bill by arguing unemployment has been extended for years without offsets. They also blasted Republicans for using the deficit to gain political points in the run up to November’s election.
“Somewhere along the line, throughout these charades, this job-creating, tax-cutting, loophole-closing bill has become a political football, and that is really too bad,” Reid said in comments on the Senate floor.
“The debate is focused on winning and losing and not on doing what's right, and that's really too bad.”
Senate Democratic leaders also tried to remind Republicans that when they were in charge they, too, extended unemployment benefits without offsets.
“This entire proposal is paid for except for unemployment insurance, which in a bipartisan way has always passed unpaid-for through the decades,” said Sen. Chuck Schumer (D-N.Y.). “But everything is paid for, so [their argument that the bill adds to the deficit] is no longer an excuse for them. And why are they doing this, it's beyond us.”
However, not every Senate Democrat supports the idea that leaders should continue the tradition by deeming continued extensions to unemployment benefits an emergency and not offsetting its cost.
“I don’t buy that distinction,” said Sen. Ben Nelson (D-Neb.). “At some point, it ceases to be an emergency, it’s ongoing … I think the bill should be paid for.”
Thursday, June 24, 2010
Quote of the Week
"The starting point for all achievement is desire. Keep this constantly in mind"
-Napoleon Hill
-Napoleon Hill
Transformers 3 Set to Film in Milwaukee & Hold Casting Call this Weekend
The Milwaukee Art Museum and the Tower Site will be the backdrops for the next installment of Transformers, announced Visit Milwaukee.
The majority of the shots will be filmed at the Milwaukee Art Museum. Filming will begin the week of July 12 at the art museum. A cast and crew of 150 personnel will be helping create the shots.
A casting call will also be held on Saturday, June 26 from 10 a.m. - 3:30 p.m. at the Milwaukee City Center (509 W. Wisconsin Ave).
Both men and women are asked to dress up in a “trendy-executive” style of clothing. The casted extras will work on July 12 and July 13.
It is estimated that Milwaukee will receive more than $1 million in local spending on salaries, hotels, food, fuel and more.
“Public Enemies” was the most recently shot major Hollywood film in Milwaukee in 2008.
The majority of the shots will be filmed at the Milwaukee Art Museum. Filming will begin the week of July 12 at the art museum. A cast and crew of 150 personnel will be helping create the shots.
A casting call will also be held on Saturday, June 26 from 10 a.m. - 3:30 p.m. at the Milwaukee City Center (509 W. Wisconsin Ave).
Both men and women are asked to dress up in a “trendy-executive” style of clothing. The casted extras will work on July 12 and July 13.
It is estimated that Milwaukee will receive more than $1 million in local spending on salaries, hotels, food, fuel and more.
“Public Enemies” was the most recently shot major Hollywood film in Milwaukee in 2008.
Wednesday, June 23, 2010
New Rates are in!
The new rates for today have been announced and they are showing and amazing 4.5% interest rate on a 30 year fixed! With these rates being lower than they've been in the past few months they sure won't stay here for long! So don't delay and take advantage of this amazing opportunity to own a home and save a TON OF MONEY!! Contact me today to find out how easy it is to get you into a home and stop wasting money on rent! Or even move up to a bigger, and better home with the low prices of homes!
Ty Jakoblich
Shorewest Realtors
Brokers Associate
Cell:262-716-5149
Home Office: 262-431-4023
Ty Jakoblich
Shorewest Realtors
Brokers Associate
Cell:262-716-5149
Home Office: 262-431-4023
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About Me
- Ty Jakoblich- Realtor
- Waukesha, Southeastern WI, United States
- I am a life long resident of the Waukesha and Milwaukee county area. I have a goal set out to help as many families reach their real estate goals and dreams. Seasoned in all aspects of real estate including residential, commercial, multi-family, business opportunites and vacant lots. I am an Accredited Buyers Representative (ABR) A Accredited Staging Proffessional (ASP) A Shorewest Certified Relocation Specialist (SCRS) As well as a Short Sale and Foreclosure Representative (SFR) And as a Broker's Associate I have a higher knowledge and experience than your typical sales associate. Buying and Selling a home can be a very exciting time in many people's lives. I am here to make sure you reach your goals, and make sure the process is simple, quick and smooth, and most importantly FUN!