Monday, August 24, 2009

Housing Sales - Recovery Postponed.

We keep hearing all the good news about the housing recovery. Here's the real news you don't get on CNBC. Let's put this in perspective.

The first time home buyers credit coupled with bargain basement prices have really driven home sales. Sales of homes below $100,000 surged 39%!, bump up to $200,000 and we are up 9%. When you cross $250,000, it all goes south and the higher the price, the more sales drop off. Over a million and sales are down 23%. Over 2 million, down 32%. Sales are sluggish on the high end real estate agents say if the home buyers tax credit isn't extended, we can see the surge in sales turn the other direction.
If you are going to have a real estate market that is good, it is measured by 'step up sales'. Not the first time home buyer buying $100,000 houses. We are looking for people stepping up to their 2nd or 3rd house. The press should have said

Since the surge in new home purchases is localized to the $250,000 under market, the recovery will be postponed.
If you are underwater with your house, you can't afford to sell your house to buy a larger house because you'll have to come to the closing table of both transactions with a lot of money.

No comments:

Post a Comment