Although the overall volume of sales transactions on existing homes was up last month in many areas of the country [1a], short sales and REO sales made up a lower percentage of overall home sales in April. According to the National Association of Realtors (NAR), 37 percent of all home sales were bank-owned properties or pre-foreclosure short sales – 3 percent fewer than in March of this year[1]. NAR chief economist Lawrence Yun says that while the housing recovery is expected to be uneven, he still feels that the market is underperforming, considering “the great affordability conditions, job creation and pent-up demand.” He blames tight credit for restraining home sales as much as 15 to 20 percent, while “a steady level of low appraisals” are causing many contracts to be delayed or canceled[2].
In April, 11 percent of realtors reported that at least one contract was canceled due to an appraisal coming in below a negotiated price, while an additional 10 percent experienced contract delays and 14 percent had to renegotiate to a lower price. NAR president Ron Phipps called lenders “stingy” in response to reports that credit issues are impacting would-be buyers’ ability to purchase homes, and said that “banks needn’t be so stingy as to only lend to those with the highest credit scores.” He added that if cash purchases and/or high credit scores became requisite to investing in a home, that far fewer people would “have access to the American dream of home ownership.”
Do you think that there is any reason for NAR to be as confused as its representatives appear to be about the housing market and housing recovery? Should homes be easier to buy or should banks keep lending standards strict?
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[1a]http://www.zacks.com/stock/news/53655/Existing+Home+Sales+Up+in+April+
[1] http://www.dsnews.com/articles/reos-and-short-sales-slip-to-37-of-aprils-existing-home-volume-2011-05-19
[2] http://www.seattlepi.com/realestate/article/Realtors-disappointed-by-slow-April-home-sales-1386838.php
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