Jim Guido's Blog

Although pending home sales edged up in June, a new report found that cancellations skyrocketed, with four times as many agents reporting that would-be buyers were unable to close.

Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month as reported by  Lawrence Yun, a chief analyst for National Association of Realtors.

Reasons behind the spike in cancellations are unclear, but may include tight credit and low appraisals. It was also reported that 16 percent of NAR members reported a sales contract was cancelled in June, up from 4 percent in May.

The National Association of realtors also reported that overall the gains in the South and the West helped boost pending home sales by 2.4 percent in June. The uptick comes a year after the Pending Home Sales Index, a housing measurement tool, fell to low point following the expiration of the federal home buyer tax credit intended to stimulate the economy and shore up the housing market.

Still, the NAR’s June PHSI of 90.9 for sales agreements for previously occupied homes is more than 9 points below a reading of 100, which would be considered healthy by economists.

The Realtors group says a growing number of buyers have cancelled contracts ahead of closings after appraisals showed the homes were worth less than they bid. The reason for this may be that the banks may be growing even more cautious of the lending process.

Another factor behind contract cancellations could be home buyers pushing back the closing date.

“Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations,” Yun said.

Since the start of the year, existing home sales appear to be underperforming.

At the current level  housing activity is below sustainable levels based on population and employment levels. While the market is trying to recover on its own, the main constriction is the credit issue, followed by slow job growth.  It was also reported that home sales would be 15 to 20 percent higher if banks simply returned to the sound underwriting standards that were in place before the loose credit standards which led to the housing boom.

The National Association of Realtors, which views existing home sales of 5.5 million homes as sustainable, says the U.S. is likely to tally 5 million this year, a slight increase from 2010.

San Jose, 95123 Summary

The median sales price for homes in ZIP code 95123 in San Jose from Mar 11 to May 11 was $340,000 based on 243 sales. Compared to the same period one year ago, the median sales price decreased 9%, or $33,500, and the number of sales decreased 23.8%. Average price per square foot for homes in 95123 was $251, a decrease of 6.7% compared to the same period last year. There are currently 148 resale and new homes in ZIP code 95123 on Trulia, including 5 open houses, as well as 366 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in 95123 was $335,201 for the week ending Jun 22, which was unchanged compared to the prior week. Popular ZIP codes in San Jose include 95125 and 95123, with average listing prices of $721,410 and $335,201.

95123, San Jose Recently Sold Homes

95123, San Jose Homes For Sale

Sales of existing-home sales rose in March 2011, continuing an uneven recovery that began after sales bottomed last July, according to the National Association of REALTORS®. Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7% to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3% below the 5.44 million pace in March 2010. Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit. Lawrence Yun, NAR chief economist, expects the improving sales pattern to continue.

NAR’s housing affordability index shows the typical monthly mortgage principal and interest payment for the purchase of a median-priced existing home is only 13% of gross household income, the lowest since records began in 1970.

A parallel NAR practitioner survey shows first-time buyers purchased 33% of homes in March, compared with 34% of homes in February; they were 44% in March 2010.

All-cash sales were at a record market share of 35% in March, up from 33% in February; they were 27% in March 2010. Investors accounted for 22% of sales activity in March, up from 19% in February; they were 19% in March 2010. The balance of sales were to repeat buyers.

The national median existing-home price for all housing types was $159,600 in March, down 5.9% from March 2010. Distressed homes—typically sold at discounts in the vicinity of 20%—accounted for a 40% marketshare in March, up from 39% in February and 35% in March 2010.

Total housing inventory at the end of March rose 1.5% to 3.55 million existing homes available for sale, which represents an 8.4-month supply at the current sales pace, compared with a 8.5-month supply in February.

Single-family home sales rose 4.0% to a seasonally adjusted annual rate of 4.45 million in March from 4.28 million in February, but are 6.5% below the 4.76 million level in March 2010. The median existing single-family home price was $160,500 in March, down 5.3% from a year ago.

Existing condominium and co-op sales increased 1.6% to a seasonally adjusted annual rate of 650,000 in March from 640,000 in February, but are 4.1% below the 678,000-unit pace one year ago. The median existing condo price was $153,100 in March, which is 10.1% below March 2010.

Regionally, existing-home sales in the Northeast rose 3.9% to an annual level of 800,000 in March, but are 12.1% below March 2010. The median price in the Northeast was $232,900, down 3.0% from a year ago.

Existing-home sales in the Midwest increased 1.0% in March to a pace of 1.06 million, but are 13.1% lower than a year ago. The median price in the Midwest was $126,100, which is 7.1% below March 2010.

In the South, existing-home sales rose 8.2% to an annual level of 1.99 million in March, but are 1.0% below March 2010. The median price in the South was $138,200, down 6.6% from a year ago.

Existing-home sales in the West slipped 0.8% to an annual pace of 1.25 million in March and are 3.1% below a year ago. The median price in the West was $192,100, which is 11.2% lower than March 2010.

San Jose, 95120 Summary

The median sales price for homes in ZIP code 95120 in San Jose from Jan 11 to Mar 11 was $818,000 based on 59 sales. Compared to the same period one year ago, the median sales price decreased 5.4%, or $47,000, and the number of sales decreased 27.2%. Average price per square foot for homes in 95120 was $369, a decrease of 7.3% compared to the same period last year. There are currently 117 resale and new homes in ZIP code 95120 on Trulia, including 5 open houses, as well as 77 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in 95120 was $1,028,838 for the week ending Apr 06, which represents a decrease of 1.2%, or $12,182, compared to the prior week. Popular ZIP codes in San Jose include 95125 and 95123, with average listing prices of $722,901 and $340,038.

95120, San Jose Homes For Sale