What would happen to home values in the event that popular real estate deductions for mortgage interest and local property taxes were cut significantly? It’s an issue you’re likely to hear more about as Congress and the Obama administration wade deeper into “fiscal cliff” and comprehensive tax reform negotiations heading into 2013.

Some of the forecasts are scary: Any significant reductions in these long-established tax benefits would inevitably trigger declines in home values. Under some circumstances, they could be well into the double digits — 15 percent, according to Lawrence Yun, chief economist of the National Association of Realtors. “That’s how much we can expect values to fall as buyers discount the value of the deduction in their purchase offers,” Yun said. [more]

Sales and closing prices of existing U.S. homes grew in April and listed inventory fell, indicating a strengthening recovery, according to data released today by the National Association of Realtors.

Completed sales on existing homes increased 3.4 percent from March to a seasonally adjusted annual rate of 4.62 million in April 2012. Sales are up 10 percent from the 4.2 million rate recorded in April 2011. [more]

Experts disagree over the chances of a new housing boom and bust, although little can be done to stop it, according to Ardavan Mobasheri, chief economist of AIG, the Palm Beach Post reported. “So long as individuals have the liberty and freedom to be greedy, the speculative bubbles will be inevitable, and we’ll have to deal with the outcome of the bursting of that bubble. There is no measure we can take to prevent investors who want in a short period of time to become rich.” [more]

Lawrence Yun

Existing home prices in Florida could increase by as much as 10 percent by the end of this year, according to Lawrence Yun, the chief economist for the National Association of Realtors, the Palm Beach Post reported. “Compared to other parts of the country, the Florida market, particularly South Florida, is [recovering] very rapidly from oversupply to a shortage of inventory,” Yun said at a conference in Palm Beach. “That clearly implies we will begin to see some modest turnaround.” [Palm Beach Post]

Existing home sales increased 4 percent in November, according to a report released today by the National Association of Realtors, which also revised four years worth of data the organization previously announced was errant.

NAR downwardly revised existing home sales statistics dating back to 2007 by more than 14 percent. The association said the bad data stemmed from a previously unnoticed increase in the number of people that use brokers, and therefore an unaccounted for change in the market share that the multiple listing services throughout the country capture. – Adam Fusfeld

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Pending home sales rose strongly nationwide in October, increasing by 9.2 percent year-over-year, according to the October pending home sales report from the National Association of Realtors, released today.

The Pending Home Sales Index, which measures signed real estate contracts for existing single-family homes, condominium and co-op units, rose to 93.3 in October from 84.5 in September. In October 2010, the index was 85.5.

The Pending Home Sales Index in the South surged 8.6 percent to 99.5 in October and was 9.7 percent above October 2010′s index. An index of 100 equals contract activity from 2001. – Guelda Voien [more]

Pending home sales slipped in August throughout the country, but were higher than a year ago, according to the National Association of Realtors data released today.

Nationally, the Pending Home Sales Index declined 1.2 percent to 88.6 in August from 89.7 in July but is 7.7 percent above August 2010 when it stood at 82.3. The data reflects contracts, but not closings.

Lawrence Yun, NAR’s chief economist, said the nationwide drop reflects an uneven market.

“The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,” he said. “But broadly speaking, contract signing activity has been holding in a narrow range for many months.” -- Miranda Neubauer [more]

Are homebuyers walking away in droves from the contracts they’ve signed? Or are they essentially
fouling out of the game, unable to close deals because of financing and credit issues?

Whatever the answer, this much appears to be certain: exceptionally large numbers of signed real estate
contracts fell apart last month, failing to reach settlement. According to the National Association of
Realtors, one of every six real estate agents polled in June reported having signed contracts canceled
before closing — up from just one in 25 the month before. The typical monthly cancellations rate over
the course of the past 16 months has ranged in a narrow band between 8 percent and 10 percent.

What’s going on here? Lawrence Yun, the chief economist of NAR, said the sudden spike is surprising
and worrisome, and that there are no hard statistics available on the causes. [more]

Higher oil prices led to a 3.8 percent drop last month in existing home sales nationally, according to the National Association of Realtors. There was a seasonally-adjusted number of 4.81 million sales, down 190,000 from April. “Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward,” said Lawrence Yun, chief economist at the NAR. “The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.” [SFBJ]
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One in 10 residential sales in the U.S. last year went to vacationers who intended to use the property as a second home, according to a new report from the National Association of Realtors. Despite the tight credit market for second homes, that market share was unchanged from its level in 2009. And despite depressed home price levels, the market share for investment sales also held steady, accounting for 17 percent of all residential sales nationwide, just as it did in 2009. Both vacation home buyers and investors purchased a disproportionate number of distressed properties, compared to buyers of primary residences, the NAR data shows. While just 5 percent of primary home purchases were sold as foreclosures or in trustee sales, that share was 17 percent for investment purchases and 11 percent for vacation home purchases. “The fall in home prices has opened opportunities for more families to enter the second-home market,” said Lawrence Yun, chief economist at NAR. “The median income of investment buyers today is lower than it’s been in recent years.” TRD