Existing home sales fell 2.2 percent in May. As many buyers doubtlessly rushed to get under the April 30th homebuyer tax credit, many economists thought the downturn might be even sharper. The drop in new construction was deeper than expected and much more severe than the drop in existing homes. The seasonally adjusted drop in new construction is now 33 percent below projections.
David Crowe, the chief economist of the National Association of Home Builders, said the decline is really due to “larger factors” in the economy. Citing high unemployment and a general lack of consumer confidence, Crowe suggested that homebuilders were not entirely caught off-guard.
The homebuyer tax credit may have taken some buyers out of the May market but it had some advantages. May re-sales were 2 percent higher than last year.
Real estate prices were higher in 16 of 20 of the nation’s biggest marketplaces. In the Western region, housing prices were 7.4 percent higher than last year. Nationwide, home values gained 2.6 percent in the latest month.
In surveys conducted by Corelogic, prices were higher in 60 of the last 100 metropolitan markets. In year-over-year comparisons, all 100 markets were lower a year ago.
Many economists believe the real estate market may have peaked earlier this year. By the end of 2010, short sales will dominate the marketplace. With government programs like HAFA in full swing, the short sale opportunities will be at their highest level since the recession began.
Government guaranteed mortgage loans have flooded the country’s REO inventory. Distressed sellers who are using the HAFA program are providing an unparalleled opportunity for investors who have been hesitant to get involved in the complications of short sales.
HAFA sellers are pre-qualified, have agreed to price and occupancy terms and are motivated to sell. If you are a serious investor, learn more about HAFA. There is great potential for profit in this program.