Expected: home sales will fall after the end of April Homebuyer Tax Credit program. What no one expected and that the industry is staggering, is the depth of the deposit. Pending home sales-meaning home sales, which are under contract but not yet closed down 30% in May from his brand of April. This fall, put it in perspective, is the largest single drop of a month in its history, and to make it even more significant, it was 15,9% decrease from the same month a year earlier.
Some would call this drop falling from a cliff. Free fall of painful proportions. And although it was not entirely unexpected, it still stings.
What does this mean
Does this mean the level of delivery for long-term health and growth of housing construction? Talk can now be opened up. Many factors have happened in April, including the federal government will no longer buy up distressed assets, credit buyers coming to an end, and interest rates begin to rise from their historically low levels.
Another factor that contributes to putting a slow economic recovery in that country. Millions of people are unemployed and millions of people were laid off in recent months. It was the perfect compilation of factors that would each, individually, resulted in a decrease in the number of contracts to sell the house in May, regardless of other factors. But taken together as a whole, all the combined factors combine to offer a struggling real estate market of the worst single drop in a month in its history. All this is in accordance with the National Association of Realtors (NAR).
How to handle the news
This may seem grim for many Realtors country, one thing that can be removed from this terrible record in that, perhaps, the worst is behind us. News surfaced that Obama is considering extending credit home buyers tax through September, the government points out that growth sustainable, which means employers will soon be hiring again, and Wall Street reform bill that must pass and be signed into law can open credit in many leading financial institutions in the country.
As realtors or mortgage brokers or lenders, the numbers in May are certainly instructive, even sad, but it is up to each of us to look beyond the number of factors that led to this ward, and to see signs of recovery, that surround us every day.
This is the worst really over?
This, of course, the problem remains positive and optimistic, as weeks roll into months and months dragged on for years, but it obliges us to continue to think positive, to dismiss bad, stunning news, and look for silver linings wherever they were hiding. Alternatively, you can continue to be sullen and downtrodden of the economic climate around us, and when that happens, it becomes extremely difficult to get other people, the most important potential homebuyers to feel positive about the future.
Nobody knows what really is around the corner from this recession. Depending on whom you ask, you get a different answer. And it always seems to be politically motivated. Do not look to Washington for answers, look to your own community. Accentuate the positive, which occurred over the past year, or last month or last week.
The only way to turn tragically bad news, such as in May pending home sales report, the positive indication of the local community level and in every community, there are beacons of light shining around the world, you just have to look harder.
