Here we are one month after the first-time homebuyers credit expired. [Recall that in order for a first-time homebuyer to claim the $8,000 tax credit, they were required to be in contract on a property by April 30, 2010, and subsequently close on the sale by June 30, 2010.]
In the weeks leading up to the April 30 deadline a flurry of offers were made as potential first-time home buyers presented offers on prospective properties…sometimes on multiple properties in the hope that at least one would close by June 30th.
On May 1st I took a snapshot of pending sales so that we could track how many of these offers would ultimately result in a closed sale. On May 1st I recorded 2,220 pending transactions. Today we revisit those 2,220 pendings….
Solds
The good news is 465 of those pendings, or nearly 21 percent have sold. If you are a first-time homebuyer and one of those solds is your property, congratulations, you made the June 30th closing deadline.
Withdrawn
119 properties, or 5.4 percent were taken off the market. These properties could have been short sales that were foreclosed upon despite having an offer on the table. If so, perhaps we’ll see these properties return to the market listed as bank-owned. Unfortunately, for the prospective first-time home buyer, if one of these withdrawn properties was one on which you were counting on purchasing prior to the tax credit deadline, you are out of luck. …unless you had a contingency plan, such as an offer on another property.
Pendings
1,487 of the May 1st Pendings are still pending today. That’s 67 percent. First-time homebuyers have 29 days left to close on one of these remaining pendings. Hopefully, the ratio of closed transactions will increase in June, otherwise only about a third of these pendings will result in a sale.
Back on Market
149 properties, or 6.7 percent, came back on the market. These properties most likely represent potential buyers who backed out for one reason or another. Perhaps the buyer could not get financing; or perhaps they tired of waiting for bank approval of their short sale offer; or perhaps they closed on another property and no longer needed this property as a prospective purchase.
Whatever the case, it will be interesting to track this number next month. For the first-time homebuyer who finds herself still in contract after June 30 when the tax credit deadline passes, what will be her decision regarding remaining in contract?
Check back on July 1st when we take a look at 60 days later.
| June 1st – 30 days later | July 1st – 60 days later | |
| Sold | 20.9% | |
| Withdrawn | 5.4% | |
| still Pending | 67.0% | |
| Back on Market | 6.7% |
PriceItRight
I predict that the median sold price for May will plunge to a new low because of these “flurry” in closings. A huge majority of buyers in race to avail the first-time homebuyer credit have to be in the lower end of market. It makes more sense to compete for a $150k house (and even pay couple of percent more than asking, but save $8k), than compete for a $450k house. A drop in median sold price for this month therefore may not necessarily mean a decline in property value. It would be interesting if Guy can provide ratio of solds in zip 89511 vs. solds in zip 89506. An abrupt drop in this ratio for May would validate my assumption.
Me
We made an offer on a short sale April 3rd, which was faxed to Wells Fargo April 23rd (Agent waited till After the sellers did their taxes I guess). Wells Fargo approved it May 28th, exactly 25 business days later, true to their timeline given in a previous post.
So it’s “possible” that some of these short sales may close in time for the June 30th cutoff if the offers were submitted early to Mid April.
However with the speed of most banks, I think the majority of short sale buyers are going to be SOL.
billddrummer
I believe that Wells is one of the faster banks to respond to a short sale offer.
Anybody else, SOL awaits.
BTW, my bank was closed on Friday and taken over by another institution. I’ll be posting a ‘boots on the ground’ missive about the aftermath of the experience through Mike M. I have to do it from home, for obvious reasons.
More to come!!!
sleezy
“I predict that the median sold price for May will plunge to a new low because of these “flurry” in closings”
while it wouldn’t be strange for the median to retrace somewhat given the increase we have seen this year. however it it is HIGHLY unlikely they median for may will PLUNGE to a new low..
sorry not happening
Guy Johnson
PriceItRight,
That would be an interesting exercise. Unfortunately, the interface of our MLS does not lend itself readily to performing such an analysis easily. I can probably do it, but it will take some time.
If I get a free moment, I’ll take a look.
smarten
Just out of curiosity Guy, 2,220 pendings out of how many active for sale listings?
Could it be a 2+ month “pending” absorption rate and do you have any historical pending figures [maybe on the first day of each month]?
To me, active listings and pending sales would be two pieces of valuable data to consider along with your other monthly data [I say can DOM and % of listing price – these two numbers, the way they’re currently calculated, are worthless].
billddrummer
FWIW, I won’t be posting from my office computer.
I’ll check in from home instead.
billddrummer
Further on the bank’s closure:
Can’t say anything. All inquiries are to be directed to the FDIC website and their media contact.
No comments from anyone else.
DownButNotOut
I hope it all works out for you. Keep us up to date.
smarten
BillD, was it Sun West Bank [of Las Vegas ( http://www.fdic.gov/news/news/press/2010/pr10127.html )]? Regardless, I too share DBNO’s hope all works out for you. I thought that when a banking institution is taken over by another, the employees of the former are generally retained by the latter. Was that the case with you?
KingBud
BillD, hope things work out for you.
Smarten, keeping all the employees of the acquisition target after an FDIC takeover would be the best-case scenario, but it is short-term because at some point the FDIC will look to sell it to a private bank. When that happens, all bets are off in terms of everyone keeping their jobs. . .
skeptical
BillD,
How is it that the FDIC can put the muzzle on bank employees of banks that it has taken over? Did they threaten you with firing, or just advise you not to speak?
I’m seeing more and more of this lately. BP has put the muzzle on all the clean up workers it will allegedly pay (I say allegedly because many news reports indicate the fisherman and citizens that are helping have not received their checks, yet.)
So, how is it that a government agency can legally muzzle employees of a takeover?
I don’t agree with some of the contributors to this blog, but I sure am glad they are free to say whatever they wish. The 1st amendment seems to be taking a beating, lately….
doofus
Bill’s issue isn’t with the FDIC, it is with the successor bank who is now his employer, City National Bank. If I had a new employer who I knew nothing about, I sure wouldn’t be testing free speech issues on a blog.
Good luck to you, billdd. This could actually be a great (if accidental) career move for you.
MikeZ
Private employment contracts that require employee silence on certain issues do not violate the First Amendment!
billddrummer
To all,
Thanks for the kind words.
I’d like to respond directly to two questions above.
To skeptical,
I can’t answer either question. All specific inquiries are being routed to the FDIC media contact.
To doofus,
Right. And I’m excited to be a part of the new organization.
To MikeZ,
Also right.
Sully
skeptical, in additional to the above, this deal isn’t completed. Until both sides are satisfied all the details have been uncovered (similar to escrow) and the FDIC representative is ready to leave the main office, then anything can still happen. This can take 3 weeks to six months, depending on the size of the operation. I don’t think it’s a free speech issue as much as it’s an unknown issue. Any post take over comments, except from the FDIC, would be speculative in nature and just add additional confusion to a very intense situation.
Passin Through
Only on a blog focused on Reno can the various contributors espouse curtailment of free speech and first amendment rights (without even a whiff of irony).
Maybe the Tea Party can hold their next convention in Reno!
I used to think Reno was a bit backward with some of the hicks up there, now I have no doubt. You can have your blog. Passed by to check it out, don’t need to come back.
DownButNotOut
Passin’ Through – Ah, the old Louis L’Amour classic. Interesting your reasoning for not coming back – because we talk about other things than Real Estate, and espouse our views. Do you live in a vacuum, or is RE an entity unto itself that isn’t worthy of discussing outside influences on it. Keep passin brother. You’ll find a group that fits your needs. That’s what is great about our country.
billddrummer
To Sully,
Also right.