Question regarding the February "Pending Home Sales" number...

[MercutioATC]

Up 2.1%, but an estimated 45% of those sales are foreclosed or otherwise distressed homes...and this is supposedly a positive sign.

Isn't that a little like claiming that auto sales are recovering because more people bought repossessed cars in February?

[county worker]

1. The foreclosed homes are a start. You have to cut into the glut on the market to get past where we

are. Selling foreclosed homes is part of recovery. Now if we can stop the foreclosures we really have something to crow about.

[marketcrazy1]

3. how many of these "pending" sales will fall apart

and foreclosures are money losers for banks.......... not to mention the hundreds of thousands of homes held by banks in "shadow inventory" wich have been taken but not put up for sale..

[county worker]

5. I have a home for sale. It has been on the market for over 2 years.

The value has dropped from 350K to 230K. A couple of reasons the value dropped is that there are a glut of houses for sale including foreclosed ones and they are being sold at below market values bring down the market value of all homes. Nothing will change until the foreclosed homes are sold and the glut of houses for sale is reduced.

I have lost all equity I ever had. Now to some here I know they will be bringing out the violins but this is not a good trend for anyone. I can not sell my house for market value and pay off the debt and a sales commission. So I rent it out until someday I have equity again.

You have to be in the shit to understand it I think.

[MercutioATC]

4. Understood, but don't these numbers show...at best...a mixed picture?

A 2.1% gain is respectable...but the fact that 45% of those sales were distressed homes reaffirms an equal or greater negative, doesn't it?

[county worker]

6. I see it as a number of home sales and not the type of home.

We are some place where we have not been before I think. We have so many foreclosed homes on the market because of the lousy way these homes were sold to people who could not afford them and because of the resulting economy which is increasing the number of people who cannot make their payments.

So if I were wanting to decrease the glut of homes on the market the foreclosed ones will have to be sold first since they are going for less than market value. Their sales bring down the market value of all other homes because the value is based on the sales price of comparable homes sold in the neighborhood in the last 6 months.

Until the economy turns around and people get jobs and all the possible foreclosures happen and those homes are resold and lenders begin to lend again, the housing market will not turn around meaning homeowners begin to build equity again.

So to me any increase in sales is a good thing. It will take many years for this to be a seller's market again. Until I can sell my house at a break even price I can't afford to sell it. Many people are like I am. We made our payments because we could and we expected the values of our homes to continue to go up. Now all bets are off.

[marketcrazy1]

7. it`s both good and bad

good that these homes are being cleared from inventory. bad because it will increase price declines in the hardest areas as these sell below market. it is also not so good for home builders who can`t compete with these prices ( home builder stocks are up today?? ) also for those who want or need to sell as noted by the poster above....

[Skwmom]

2. Well, in my area a lot of homes get listed as "under contract"

and then go right back on the market. Plus, foreclosures are included as sales. But what the heck, when you're trying to convince people that everything is okay, you gotta do what you gotta do.

[yella_dawg]

8. Forclosure has gotten so expensive

since the banks have to take over property taxes and so forth, that they are packaging blocks of homes and selling them for pennies on the dollar to investors, many of them foreigners (Sovereign Wealth funds?) Rising home sales are not good news at all. Future slum lords are just building inventory.