Sales Down 17% in December
We just got the report from the NAR that existing home sales were down in December from November by 17 percent. Rather than react to the way the media and the NAR want to present it, blaming the end of the Homebuyer tax credit, this decline is the result of the following factors:
1) Buyer uncertainty – December sales were probably entered into contract in October or November. During this time, unemployment was rising and there did not seem to be any end to it, just as today. People look at their finances and hold back during times of uncertainty. This especiallt applies to large purchases, including homes. Until such time as there is a little confidence built into the news, this will be aconstant issues.
2) Seasonal influences. Sale ALWAYS GO DOWN during the holidays. Last year was no different. While this decline was nearly a record decline, see reason #1.
3) Availability of credit - although interest rates are low, financial institutions have raised qualifications, added tone of new rules and paperwork and denied loans that have been approved in the past. This began at the start of the 4th quarter last year and finally evidenced itself in December. Lending institutions are trying to deal with ever changing rules laid down by the regulators as well. Until this confusion ends, it will be more difficult to obtain credit.
The media and the Treasury know all of this to be true, but will not print it. You need a source you can trust to give you the facts.
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