Well the good news in this report from our perspective is it validates that the low end of the market is very active. Big surprise with 8K first time buyer incentive at risk of expiring.
This report also means we are close to the mysterious bottom from an average price perspective. But as we have stated before we believe this is more of a statistical issue because we are foreclosing on and selling more homes in the traditional move up market with the upscale markets soon to see a wave of Alt-A foreclosures coming.
Also we have to remember that more pending homes do not mean more actual sales as the buyer must still get a loan. Also we suspect a fair amount of the rise in pending sales are actually short sales that are just as likely not to close because they take so long to process and approve.
So in the end we still have a market that is unhealthy due to various external issues.
Anyone think more foreclosure moratoriums are coming around the holidays that could be another negative wrench?
We also suspect more families that are currently paying their mortgage are going to decide it is better to withhold payment. If we can’t turn the value around this negative feedback loop could get even worse.
Commercial real estate is a hammer that is going to fall in 2010 and add pressure
But remember our motto “More Problems = More Opportunity”
Good Investing
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