By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer 1 hr 13 mins ago
WASHINGTON – The U.S. housing market is rebounding faster than expected. The question is, can it last? Home resales in July posted the largest monthly increase in at least 10 years as first-time buyers rushed to take advantage of a tax credit that expires Nov. 30. Sales jumped 7.2 percent and beat expectations, the National Association of Realtors said Friday.
"We've got tens of thousands of homes perfect for the first-time homebuyer and we've taken advantage of that," said George Hackett, president of Coldwell Banker Real Estate in Pittsburgh.
Sales hit a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the fourth-straight monthly increase and the strongest month since August 2007. Sales had been expected to rise to an annual pace of 5 million, according to economists surveyed by Thomson Reuters.
The risks to that healthy pace, however, are job cuts, mortgage rates and the looming end to the homebuyer tax credit. And the last one could be a doozy because first-time buyers are snapping up one out of every three homes.
First-time buyers get a credit of 10 percent of the purchase price of a home, up to $8,000. The credit phases out for singles earning more than $75,000 and couples earning more than $150,000. The real estate industry is lobbying to have the credit extended but its unclear if Congress will be swayed.
"I would not be at all surprised to see a dip at the end of the year once the tax credit expires," said Robert Dye, senior economist with PNC Financial Services Group.
The home sales report was another sign that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression.
Economic activity in both the U.S. and around the world appears to be leveling out and "the prospects for a return to growth in the near term appear good," Federal Reserve Chairman Ben Bernanke said Friday.
But fallout from the recession will linger for some time. Unemployment rose in July in 26 states and fell in 17, the Labor Department said Friday. That is driving up foreclosures, which are not expected to level off until sometime next year.
Sales of foreclosures and other distressed properties made up about a third of all transactions last month, down from nearly half earlier this year. In places like San Diego and Orlando, buyers are snapping up foreclosed properties at deep discounts, and inventories are low.
Those sales helped drag down the national median sales price by 15 percent to $178,400.
Stephen Stoyko hunted off-and-on for two years before he bought a four-bedroom, two-story foreclosure this week for $320,000. The home in Roswell, Ga., north of Atlanta, was initially priced at $335,000.
Stoyko expects to spend about $7,000 to replace missing kitchen appliances and light fixtures — a cost will be at least partially offset by the first-time homebuyer tax credit. "It's bigger than I needed, but the price was right," he said.
The inventory of unsold homes on the market rose to 4.1 million, from 3.8 million a month earlier as buyers who had held their homes off the market in the past decided to list them for sale. That's a 9.4-month supply at the current sales pace, unchanged from June.
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AP Real Estate Writers Adrian Sainz in Miami and J.W. Elphinstone in New York contributed to this report. AP Economics Writer Jeannine Aversa contributed reporting from Jackson Hole, Wyo.
I think that the “first time buyer” credit and the “cash for clunkers” program violate the Equal Protection provisions of the Fifth and Fourteenth Amendments of the US Constitution.
Much of this is simply people trying to hedge against inflation. Spending is the smart thing to do (although I disagree with buying a home). Interest rates have to go up and the value of the dollar has to go down… so borrow and buy now. If you have cash or the ability to borrow, invest in raw land, gold bullion, and your business… today.
The advantage of investing in your inspection business now (and for most inspectors, “investing” means “marketing”) is that your bed-wetting competitors are all curled up in the fetal position. Take their markets away from them!
Most of my business interests are related directly or indirectly to the housing market, and when it went to hell, I punched the gas pedal down and haven’t let up yet. Same with InterNACHI: www.nachi.org/whats_new.htm
“No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
So in plain Language ( you can type slow for us dummies) how would cash for clunkers and the first time tax credit do this Violation. Not being a smart *** i am just curious. and if it is why has no one approached it that way.
Any government spending is paid by us, the taxpayers. More spending by Obama and his cronies, the more in taxes we will have to pay, sooner or later.
There is no way that 5.2 million homes sold for July. There is only an inventory of 4.1 million homes? Math is not correct. Perhaps that is a “adjusted” rate. Sounds like Obamanomics.
I don’t see it as a violation of equal protection under the law, but it is a conflict of interest. Obama buys a bankrupt company with our money, then takes more of our money and uses it to bring in customers to his company. The clunkers and the consumers where just a way of making it not appear so bad and camouflaging the stupidity of his purchase of a portion of a bankrupt company for more than its historic market cap high (dumbest business move in all of human history).
“Our phones have been ringing off the hook,” said a giddy Pete Richards, general manager of Ed Voyles Honda in Marietta, Georgia. “… It’s been great. Phenomenal.”
The program has generated so much traffic and new-car buzz that even non-qualifying and used car sales have jumped, Richards said.
**"Cash for your clunker- $4000.00
Cash for first time home buyer- $8000
BUILDING CONSUMER CONFIDENCE- PRICELESS"**
And your great, great, great, great grandchildren will be paying for it. First time in human history that a country has deliberately and knowingly bankrupted itself. It would be fascinating to watch if it wasn’t so terrifying.
Here is the real problem. You all probably know by now that I believe that subliminal marketing works. It can work for you or against you. Ever wonder why InterNACHI chapter Presidents who invite all the agents to the InterNACHI meetings are so busy? Even though the agents never come, the invitation is a great subliminal marketing piece that reminds all the local agents that the head of the chapter is their local inspection association President.
Now, the mistake Obama made with health care and the reason so many senior citizens revolted was directly the result of Cash for Clunkers which subliminally insinuates that something old, even if operating, should be destroyed.
It is working great here, get the crap off the road, no more choking behind that smoke screen car. Of cousre it did keep the Mosquitoes down . Only problem all the fly by night crap car dealers are running low on cars. This will mean the lots will be closed leaving half the road clutter gone. What to do what to do. Maybe we have to plant trees or something . Oh this could mean a work project or two.