The mysterious plunge of existing-home sales
What happened to existing-home sales? In three words: tax credit expiration.
But nothing’s quite that simple. Here’s how Lawrence Yun, the chief economist for the National Association of Realtors, explained it: “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower, and a pause period for home sales is likely to last through September.”
Existing-home sales declined 27.2% from June, and 25.5% from a year ago. Still, the NAR expects 5 million total for the year, ahead of the 20-year average.
An even longer answer came from Bernstein Research, publisher of a research note called “Waking up to the morning after,” a perspective on the post-tax-credit home improvement market. In it, analysts pointed to the pull-forward of demand from the expiring tax credits, the result of which “could cause turnover to remain negative over the next six to 12 months.”
It’s not only sales, of course. July’s actual, non-adjusted estimate for starts was the lowest figure for that month since 1959. Hence the Bernstein phrase: “shallow slope of recovery.” At least it’s a recovery.
Pending home sales rise modestly in July
The Pending Home Sales Index, a forward-looking indicator, rose 5.2% to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, according to the National Association of Realtors (NAR).
The index, released Thursday, is 19.1% below June 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months, according to the NAR.
Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”
Suspects stalled by flat tires
Two men suspected of stealing power tools from a Southern California Home Depot were arrested on Aug. 20 after their getaway vehicle developed two flat tires.
Deputies from the Victorville Police Station, summoned by store personnel, arrived at the Home Depot on Bear Valley Road shortly before noon to find a black SUV leaving the scene. One suspect attempted to drive the car, which had two flat tires, along an adjoining road but soon fled the vehicle on foot. He was arrested by sheriff deputies.
Asecond suspect was detained in the parking lot of the store.
Inside the SUV, law enforcement officers found electric drills valued at more than $2,000 that had been allegedly stolen earlier that day at another Home Depot store in Victorville.
Arrested for commercial burglary were Jose Munoz, 34, and Rolando Martinez, 39, both from Los Angeles. The suspects are known gang members, according to authorities.
Karen Hunt, a spokeswoman for the Victorville Sheriff’s Department, told Home Channel News that the commercial burglary charges stem from the suspects’ “intent to steal,” as opposed to “spur of the moment” shoplifting. As for the flat tires, “They tried to drive over an embankment in order to get away the deputies and loss prevention [personnel],” Hunt said.