Sales of previously owned homes fell back 0.8 percent in April, according to a new report from the National Association of Realtors (NAR).
The share of distressed homes – bank-owned properties and pre-foreclosure short sales — also dropped last month, accounting for 37 percent of total sales volume, down from 40 percent in March and an average of 39 percent over the first quarter. The trade group says an uneven recovery should be expected and notes that existing-home sales have risen in six of the last nine months.
Given the great affordability conditions, job creation, and pent-up demand, home sales should be stronger.
A parallel NAR practitioner survey shows 11 percent of Realtors report a contract was cancelled last month because the appraisal came in below the price negotiated between buyer and seller. Ten percent had a contract delayed and 14 percent said a contract was renegotiated to a lower sales price as a result of a low appraisal.
Home sales are being held back 15 to 20 percent due to the very restrictive loan underwriting standards
According to NAR’s latest report, all-cash transactions stood at 31 percent in April, down from a record level of 35 percent in March. They were 26 percent in March 2010. Investors account for the bulk of cash purchases.
If due to a low appraisal, 11% cancel, 10% delay, and 14% renegotiate, does that mean that 35% of appraisals come in low?