Ok, so I doubt they’re sinking the housing market but retailers are likely having some influence in the housing market today:

• When the annual holiday season rolls around, home buyer activity falls sharply and home seller activity wanes too. 
• In addition, retailers are also throwing out their holiday deals sooner as well – what once was left for the day after Thanksgiving is now becoming a month-long saleabration.  When consumers spend money on “deals” they are less likely to be saving for a home.
• This year we have retailers putting out their holiday displays sooner than ever before.  When you start the holiday season early (retailers) then you shorten the “home selling season.”

So if the housing market slows to a crawl this Winter, just blame the retailers.  I know I will.

This Winter is likely to remain far more active than last year’s but this activity is still going to be down substantially from its peaks this Summer and Fall.  This is normal.  This is ok.  This is what happens every. single. year.

The housing market takes a relative breather due to the myriad holidays, school schedules, and of course the change in the weather.  Not only are there fewer buyers out in the Winter months, there are fewer sellers too; many sellers simply do not want to keep their house “show ready” during all of the festivities between Thanksgiving and the New Year.

If you are selling your home during this time of year, things can get lonely.  When you listed your house a few months ago it wasn’t unusual to have 3-4 showings per week – now you may be struggling to get even 1!  One of the old “tricks of the trade” is to cancel your current listing and then immediately relist it with a change of photos that depict the current season, some new descriptions, and often a slightly revised (lower) price.

The mere act of relisting your home is likely to bring a quick “pop” of new attention to your house and often leads to several new showings in the first week and often spills into the 2nd or 3rd week as well.  The reason this works is that many buyers avoid “old” listings like they would expired milk in a store.  The difference is that while milk will go bad if it isn’t bought quickly, a house does not “spoil” just because it has been on the market for a few months.  Often the house is now listed for less (sometimes substantially less) than what it was when it was first listed… something that many buyers miss.  When you remove the stigma of the “old listing” you will find more buyers will stop to take a look.

This “trick” is not meant to deceive anyone – the full listing history of a property is available to all REALTORS and when asked, I always tell anyone the true length of time it has been listed for sale.  The truth is this trick works.  In fact, I recently did this with a listing and saw 3 new showings in the first 4 days it was relisted – two of those showings went very well, with buyers having placed the house on their “short list.”

Now if you are terribly overpriced, show horribly, or in a market with no activity this trick won’t do you any good but if you have addressed everything else you can and still haven’t seen results, this is just one more thing to try.

A short sale means that the seller has negotiated – or intends to negotiate – with their lender to pay off their existing mortgage for less than what they owe on the home. This is different from a foreclosed home, where the homebuyer has defaulted on the loan and the lender already owns the property. With a short sale, you are negotiating with not just the seller but also the lender; even if the seller accepts your offer, the lender may not.

Keep in mind that it’s important to work with a real estate professional that is experienced in short sales.  They can help expedite the process and protect your interests as a buyer. In addition, remember to:

1. Do Your Homework. Before you put in a bid, find out how much the home was purchased for, what the tax assessed value is, and how much comparable homes in the area sold for. You could also learn whether a foreclosure notice has been filed, how much is owed to the lender and whether there’s a second mortgage on the home. All of this is important because it will help you determine how much to offer on the home.Keep in mind that if the property is priced below market value, it’s likely there will be multiple offers. In addition to putting in your best and highest offer, make your overall bid as attractive as possible. Include a pre-approval letter from your own lender, don’t ask for the seller to pay closing costs and it should go unsaid that the offer cannot be contingent upon the sale of your home.
2. Be Prepared for a Long Wait. Once the seller has accepted your offer, you then need to wait for the ‘real’ approval from the lender. It could take a while – anywhere from two weeks to six months or even longer to get a response from the lender.You could make your offer contingent on the lender’s response by a certain date after which you rescind the offer. But keep in mind that the lender will accept the best offer, so even after you submit your bid, another buyer could outbid you while you’re waiting for a response.
3. Remember the Inspection! Remember that with a short sale, you’re buying a home “as-is,” so it’s very important to make the sale contingent upon a home inspection. But even if the inspection points out things that are wrong with the house, lenders typically won’t pay for suggested repairs, deferred maintenance or home protection plans.Patience is the name of the game when buying a short sale, but good homes will come to those who can wait.

Source: edinarealty.com

So the latest idea still includes an $8000 tax credit to 1st time buyers and a $6500 tax credit to repeat buyers that have owned their previous home 5+ years.  While it doesn’t say it in the CNBC article, I have heard from other sources that the proposed extension would expire at the end of April but allow purchase agreements signed before that date to close up to the end of June.

While this is quite different than the proposal that was floating around just a few days ago, by expiring the program at the end of July and the lower amount offered to repeat buyers, it is still a more modest proposal than what several special interest groups were lobbying for until just recently.  That proposal was so ludicrous and expensive that I was actually quite upset that NAR supported it with the MBA and NAHB.

If this bill is passed, I believe many of the following things will happen:

Some Closings will be Delayed
It may sound odd but if the tax credit extension takes effect December 1, many closings scheduled for November may be pushed out a few weeks to December so that the repeat buyer can take advantage of the tax credit too – $6500 can be a strong motivator.

House Prices will Continue to be Artificially Supported
We saw strong support levels for house prices in the 2nd half of this year – which is more likely due to the tax credit than the fundamentals of the market.  We’ll continue to see the house prices artificially supported through the end of the tax credit extension.  This does not mean that prices will instantly drop $8000 after the credit expiration, only that there will be some downward pressure on prices due to the normalization on demand and the lack of artificial incentives.

Tax Credit will Support Housing Through the Slow Winter Months
Historically the housing market is slower & sees price declines in the winter months as demand drops enough that prices drop to meet it.  With the expanded credit in place, we are likely to see less seasonality in our sales prices and units sold over the winter months.

The 1st Time Buyers will be out in Lower Numbers than 2009
Many 1st time buyers that were planning to buy in 2010 bought early due to the tax credit, so some of that demand has been borrowed from the future and our borrowing from the future does have limits (pun intended).

More Houses in the Move-Up Buyer Category will Sell
Many buyers looking to make a move to a more expensive home will find the tax credit gives them a little more help to make that move or will give them the incentive to take the “loss” on their current home to make a “gain” on their new home.  The fact that repeat buyers will excluded from the 2009 tax credit likely helped feed move-up buyers’ negative sentiments about the housing market.

Lower Inventory in the Under $150,000 Price Point will Limit Sales
Since the inventory of 1st time buyer homes has shrunk, some buyers who could not find homes to buy this year will have the same struggle next year.  While more foreclosures are coming in 2010, the demand this year was so strong that inventory next year is still likely to be far more limited than it was last year at this time.

Inventory of Houses for Sale will Continue to Decline
Without increases in employment, wages and home prices, many Americans that might want to move still will not have the financial ability to do so and thus will still not list their house for sale – for many the $6,500 tax credit is simply not enough.  As big as the foreclosure and short sale issue is, it still represents a very small percentage of all homes in the country.

Traditional Sellers will be able to Better Compete with Banks
Suddenly sellers that are planning to make a purchase of a new home after they sell their current one will find that they can give up a little more $ on the sell side due to the credit.

The $500,000+ Market will Still be Slow
With Jumbo mortgages still much harder, more restrictive, and more expensive to get than Conventional loans, these homes will see little help from the housing stimulus though the first timer’s move-up’s move-up may spend $500,000+ but they are just as likely to go more lateral than up by buying a home that is a better fit for their lifestyle versus bigger and more expensive.

That concludes today’s crystal ball forecast.  If you have any thoughts on all of this, please comment below!

NCLC Report on Mortgage Servicers –

This has largely lead to the precipitous decline of available inventory on the under $190k and brought Months supply of homes in the 1st time buyer category down as much as 60%!

This has been seen expecially strong in the Lender Mediated category, and particularly in the Bank Owned segment:

While it is quite possible that the tax credit is extended, the question becomes whether there will be houses out there for these buyers to purchase.  In the Under $120k segment there is less than 3 months of supply.  When considering that close to 1/2 of these properties listed for sale are likely already pending, the real supply at this price point is very tight – I have several clients hunting desperately for homes and are quite disappointed.  Some of these buyers may not be able to find a home even if the credit is extended.

Even in the $120k – $150k and $150k – $190k price points we’ve seen substantial reductions in available inventory and months supply and this has decreased the options for many buyers.  While there is still many homes to choose from, even this inventory is “picked over” by buyers, meaning it is either a bad floor plan, bad condition, bad location, badly overpriced, or a combination of all the above.  There are still many more foreclosures and short sales coming in the next year (as well as Traditional Sellers too) but the demand for these price points has been substantially stronger than new supply coming on for many months now and so I question whether the available inventory will climb much in 2010.

I have several clients that want to use the tax credit but have said they won’t settle just to get the money.  Good for them – that is definitely the right way to look at it!

If and when Congress passes an extension of the 1st time home buyer credit, buyers may still find themselves with nothing to buy.  I wonder how much Washington has thought about that?

While I’m not always on board with what Diana Olick has to say and I have no way to know if this plan is serious or not, the structure of the plan appears to be a reasonable compromise and I think would score political points for everyone who supports it.  It’s a soft-landing type of compromise and incentivizes consumers to buy sooner than later.

Only time will tell but it sounds like we might have an answer on this in the next week or so.  I think that this is the plan that will end up passing.

As anyone who works with data knows, the statistics you create are only as good as the data underlying it – also known as: “garbage in, garbage out.”

The RMLS has several different statuses for MLS listings like: Active, Pending, and Sold.  As anyone in the housing market today knows, many homes listed as “Active” are really “Pending” because they have an offer accepted subject to inspection or in the case of REO (bank owned) & short sale homes, they often have multiple offers on them already.  Because our MLS does not have a status for “Active with Offer,” Realtors and consumers have a hard time finding out what properties are truly available until the agent sets up a showing – a very frustrating and time consuming process.

Luckily, some Realtors have been adding to their MLS remarks fields information about listings being “sold subject inspection” or “short sale offer accepted- backup offers only.”

On Monday I looked at these remarks fields and searched for terms used to describe accepted offers subject to inspection, multiple offers, and offers subject to bank approval.  What I found was that there are 884 listings that are currently marked Active but look to be “Pending.”  Of these 884 listings, 675 were short sale and an additional 50 were bank owned, making a total of 82% of these shadow pendings ”lender mediated.”

In my experience, more listings are never updated with these kind of remarks than are, so it is quite possible that more than 2000 listings that we see as available inventory are really not.

While the data that MAAR is currently publishing is entirely accurate based on the data they are provided, this clearly shows that there’s more activity happening than is currently reported - which to any buyer or agent in the field right now matches perfectly with our experiences.

If we could do more successful loan modifications and short sales we would dramatically reduce the foreclosure problem in the future… more needs to be done at all levels to make this a reality.

• New Lender Mediated listing activity has remained steady over the last 5 quarters
• Lender Mediated sales continue their 3-year trend – going up and up each quarter
• Lender Mediated inventory for sale has been dropping due to the capped new inventory and skyrocketing sales
• Lender Mediated median sales prices are showing a potential bottoming.

One thing that has helped stem the tide of new lender mediated listings is the substantial {decrease of Sheriff Sales over the same time last year}, which has lead to fewer new bank owned homes coming on the market.  Due to the 6 month redemption period after Sheriff Sale that most foreclosures include, there is likely to be far fewer new bank owned listings coming on the market until the end of 2009 and early 2010- though it appears likely that a new wave of foreclosures is likely to hit in 2010.

The other component of lender mediated listings, short sales, are a significant part of the listings we have for sale today (approximately 15%) but make up a miniscule number of the closed sales (5%) according to the analysis of June’s sales activity… the first month in which we could break out bank owned homes and short sales separately.  Reasons for this include the following:

• Short sales are listed at a price that is not guaranteed to be sufficient to buy the property; the Seller needs to negotiate with their lender or lenders
• This negotiation process can take 3 weeks to 3-4 months and often ends with a counter-offer of rejection from the Seller’s lender(s)
• In my experiences with short sales, approximately 1 in 3 offers leads to a successful closing

Getting back to the title of this article, why do Traditional Sellers have a window of opportunity?

• With new bank owned listings at reduced levels and less than a 2 months’ supply of inventory, many buyers will not find what they are looking for with such a relatively low number of these listings.
• The first time home buyer $8000 tax credit expires on November 30, 2009 and most transactions take 3-5 weeks to close after an offer is made.
• Buyers will have to have chosen and negotiated on a house by the end of October to have a reasonable assurance of closing prior to the expiration of the credit.
• Banks do not have great concern over deadlines when dealing with REOs, so they are not likely to consider November 30th a “make or break” date even though the buyer will.
• Buyers making offers on short sales risk missing the tax credit if the answer from the seller’s lender takes to long or isn’t acceptable.
• In the coming weeks Buyers will find that the only option they have available to them has been the one who has been ready and waiting for this moment: the Traditional Seller.

If you are a Traditional Seller and your house is currently listed, keep it listed through Halloween if you can.  In past years the market quickly quiets after school starts but this year appears to be very different.  If you’ve been considering taking an additional price reduction, take it as soon as you can so you are priced correctly when the buyers’ interest swings your way… this will likely be you last-best-hope for selling till March 2010.

 Click on the picture for a larger version.

http://www.cnbc.com/id/32569620

It is nice to see a little renewed interest in new construction lately… I have seen several developments with 10+ houses under construction at once… something that isn’t very notable compared to 2002-2006 but quite interesting compared last year.  This surge in activity is very spotty though and is found mostly where builders or developers lowered their prices to get the completed home down to a competitive level.