Joe Moshé, Broker/Owner, Charles Rutenberg Realty, says that, despite the steady unemployment rate, fewer people jumped at the opportunity to buy existing home sales that were available on the market during the month of December. He also said that, with almost one-quarter of existing home sales that month being either foreclosures or short sales, many underwater homeowners wanted to make that sale out of fear of losing their tax deduction by year’s end.
The National Association of REALTORS reported today that existing home sales fell 1.0% to a seasonally adjusted rate of 4.94 million last month, down from a downwardly revised figure of 4.99 million in November 2012. The only good news was that December’s numbers were 12.8% higher than it was 12 months prior, when is was 4.38 million units.
The Bureau of Labor Statistics reported recently that the national unemployment rate — an indicator of how the housing market will perform — remained the same at 7.8%. “The jobless rate stayed at the same levels for the past few months, but some prospective homebuyers are concerned that the job situation isn’t improving and so they are standing on the sidelines until they see a decrease in the unemployment rate,” Mr. Moshé said.
Distressed home sales accounted for 24% of all existing home sales, which is up from 22% in November 2012, according to the NAR; of that, 12% were short sales and 12% were foreclosures. Short sales were sold at an average discounted rate of 16% below market value and foreclosures were sold an average of 17%.
“More homeowners who were underwater decided to enter into short sales because they believed they would no longer be eligible for tax deductions under the Mortgage Debt Forgiveness Act,” Mr. Moshé said. “For those who are looking to enter into a short sales transaction, we have launched a new ‘Done For You’ Short Sales Division, in which our Agents are trained to handle these untraditional sales. These types of transactions will be the norm in the Residential Real Estate market for the next couple of years.”
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