Friday Facts June 3, 2011

FRIDAY FACTS
June 3, 2011
Here are some bullet points from Lawrence Yun, Chief Economist for NAR from the Midyear Meetings:

Annual home sales currently below the trend line. Underperforming. Last three years about the same – little under 5 million in 2008, little over in 2009 and a little under in 2010. Currently on track for 5.1 million in 2011.
Those with jobs responded to the tax credit.
Buyers want distressed properties at deep discounts.
International buyers are cashing in on the weak dollar.
Slow job recovery on average nationwide. Unemployment over the past three weeks has been disturbing. May be stuck at this level.
Residential real estate net worth has a long way to recover, but at least it’s not falling. It’s trending sideways, but maybe a slight dip in the last quarter.
Rents are rising. 1% higher than the previous year – could be 2 to 3% by year’s end.
New home values slightly lower than rent so it’s better to buy. There’s a growing pool of renters with the necessary income to buy.
Distressed sales were 20-40% of transactions. Will remain significant for the next 2 years.
Serious mortgage delinquencies are trending down, but are way above historical norm.
Dollar is very weak.
All cash sales at record 35% of all sales. Investors want quick deals. They can’t get mortgages. They don’t want to bother with appraisals. Hedge against future inflation. Empty nesters are downsizing and using leftover cash to buy homes for kids.
High inflation is a possibility
Housing starts are at historic lows. Prediction no rise this year or next.
Mortgage writing can’t get any tighter. Fannie FICO now 762, normal average 720. Freddie now 750, normal 720. FHA now 698.
Economic hurdles: inflation is hitting pocketbooks – gas, oil, food. Huge pool of underemployed – everything is unaffordable. Higher number of people claiming disability than ever.