Posted by: Clayton-Paul Cormier, Jr. | October 7, 2009

2009 Q3

konishiki

Oct. 1 (Bloomberg) — The number of contracts to buy previously owned homes in the U.S. increased more than forecast in August, reinforcing signs of a rebound in housing, industry figures showed today.

The index of signed purchase agreements, or pending home sales, rose 6.4 percent after a 3.2 percent gain in July, the National Association of Realtors announced in Washington. The gain was the seventh in a row. Compared with a year earlier, pending sales rose 12.4 percent.

Home Sales Contracts in 7 Month Rally. One problem in extrapolating future closings from contract signings, however, is that there are continuing problems obtaining mortgages that may scuttle many deals, according to Yun. “The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said.

Home Sales Up; Home Prices Down. It is becoming increasingly clear that a two-headed housing recovery is underway. Unfortunately, unlike Siamese twins, the heads will not be arriving at the same time. Recent reports on housing activity strongly indicate that a home sales recovery is now underway, while a home price recovery continues to be far off; perhaps not until the middle of 2010.

Q3 real estate market activity was clearly affected by the race to capitalize on the First Time Home Buyer’s Tax Credit as first time home buyers intensified their house hunts.

Bloomberg: existing U.S. home sales jump to highest level in 2 years.

Crain’s: Suburban landlords see third quarter uptick in vacant office space.

National 30-year Fixed Mortgage Rate Falls Below 5 Percent.

15 year mortgage rates fell to lowest point in 15 years.

investors run

DOW, Up 15%, Has Best Quarter since ’98: The big gains followed a brutal bear market that hit hardest those companies with the shakiest balance sheets, heavy debt loads and high fixed costs. The Fed responded by cutting interest rates essentially to zero and flooded the credit markets with additional money, buying up Treasuries, government-backed mortgage securities and agency debt.

Gold Prices Hit Record High.

Apartment Glut Expands.

The Two Headed Housing Recovery. In the past, housing contractions and recoveries were measured by a drop or rise in home sales and housing construction activity. It was uncommon for home values to drop in a housing contraction, at least on a national scale. But today’s housing recession is an exception-both home sales/construction and home prices have fallen precipitously during the past 3 years. Thus, for us to proclaim a complete recovery in the today’s housing sector, both home sales/construction and home prices must stabilize and begin their ascent.

Residential & Commercial Real Estate Headed in Different Directions. The good news is that after a prolonged contraction, residential construction is finally going in the right direction and is expected to meaningfully contribute to GDP growth in the third quarter of this year. The bad news is that commercial construction is moving in the opposite direction.

Bear market rally or recovery? Bearish Paul Tudor Jones vs bullish Goldman Sachs.”We are much closer to a housing bottom than many believe.” Joseph Lavorgna, chief US economist at Deutsche Bank Securities Inc. in New York.  Combined sales of new and existing homes were up 15 percent in August from January, when they reached the lowest level since comparable records began in 1999, according to figures from the Commerce Department and the National Association of Realtors.

For more information go to www.maplesweet.com www.lightamber.wordpress.com e-mail us at info@maplesweet.com or call 1-800-525-7965. Thank you very much for your interest. To a great Halloween, Thanksgiving, Christmas, Hanukkah & New Year’s Eve.

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