If only the National Association of Realtors would identify the solution instead of the problem. We know there is a problem. The NAR "pending home sales" showed a slight decline for Feburary 2013. As is always the case, the Association points out that the February home sales volume is higher than February 2012, as if that would somehow impact the near future.
The NAR Chief Economist, Lawrence Yun, was quoted as saying "Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50% from current levels".
Am I the only person who finds this quote alarming? Shouldn't the members be exploring why the "current" housing isn't selling?
It is so simple, really. The homes that are selling are mostly foreclosures and short sales, which are sold at prices designed to satisfy an outstanding loan, and NOT to reflect the actual value of properties.
If only the NAR and its underling associations would know to eliminate any sales via foreclosures and short sales from their monthly statistics and enter them into a separate category. When average housing prices and sales are reported by "legitimate" sales, the property values will go up to where they should be. Once that happens, some home owners will have a reason and incentive to list their homes, knowing they could get full price.
I'm reminded of the story a few years ago about the divorced ex-wife whose "busy" ex-husband asked her to "Sell the Porsche and send me the money" as part of their settlement. She then reportedly sold it to some guy off the street for $500 and sent him the check.
This may be amazing to the NAR, but anyone bringing that information to a Porsche dealer to show that the value of a (whatever year) Porsche model (whatever) had dropped to as low as $500 was not able to purchase a similar car for under $1,000. Somehow, Porsche dealers around the country managed to convince the public that their cars continued to be worth thousands and thousands of dollars more.
Yet, even though a number of houses and condos are selling for half to two-thirds of their value in order to satisfy delinquent loans, thousands of realty agents are allowing their "Porsches" (in the form of houses) to count toward their value in the market.
I'll ask my question again. Am I the only person who finds this quote alarming?
Places in Time III
1 day ago