Pending home sales in the US slowed in December, latest data shows

After reaching a 19 month high, pending home sales in the United States eased in December but stayed above year ago levels, according to the latest figures from the National Association of Realtors. Its Pending Homes Sales Index, a forward looking indicator based on contract signings, declined 3.5% to 96.6 in December from 100.1 in November but is 5.6% above December 2010 when it was 91.5. But Lawrence Yun, NAR chief economist, said that the trend line remains positive. ‘Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the homebuyer tax credit period,’ he explained. ‘Contract failures remain an issue, reported by one third of realtors over the past few months, but home buyers are not giving up,’ he added. Yun said some buyers successfully complete the sale after a contract delay, while others stay in the market after a contract failure and make another offer. ‘Housing affordability conditions are too good to pass up. Our hope is lending conditions will gradually improve with sustained increases in closed existing home sales,’ he concluded. The PHSI in the Northeast declined 3.1% to 74.7 in December and is 0.8% below a year ago. In the Midwest the index rose 4% to 95.3 and is 13.3% higher than December 2010. Pending home sales in the South slipped 2.6% to an index of 101.1 in December but are 4.9%  above a year ago. And in the West the index fell 11% in December to 107.9 but is 3.7% higher than December 2010. (propertywire.com)

18 Questions For Every Home Seller (Part 4) e-book

2.            Should I sell my house?

How motivated are you to sell?

You have to sell, or so you think. How urgently do you

need to sell? The answer may affect not only the eventual price you realize for your property, but the method by which you sell your house as well.

Some sellers feel the time is right to sell because of market considerations. For example, a shortage of properties on the market might mean an unusually good price. Opportunistic sellers are not highly motivated to sell. If you are such a seller, consider setting an above-market price for their property.

Other sellers feel compelled to sell but may or may not do so with real urgency. For example, a retiree heading for a warmer climate may not see any reason to sell until a high offer 2.is received. Or a family may move to another city but retain the precious house as a rental unit during a poor market. Such sellers will often ask an above-market price for their property.

Finally, consider owners under immediate pressure to sell their property. Such sellers may feel they have no time to realize the full market value of their property, and out of desperation may even try to sell their home during the low-activity period between Thanksgiving and New Year’s. If selling via traditional methods, they will set a relative low asking price.

Alternatives to selling

If you feel highly pressured to sell but think the market is low or have another reason to avoid selling, consider your alternatives. Simply postponing the placement of the property on the market may see prices drop rather than rise, so consider the auction-based selling methods discussed in a later section.

Renting the property instead of selling could help you postpone the sale until the market improves.

To determine whether the rental option makes sense, estimate the expected cash flow. In other words, what is the difference between rental income annually and the expected expenses. Income can be estimated by comparing comparable rental properties in the area, less about 10% due to necessary vacancy between renters. On the expense side, count your mortgage, property tax, utilities not paid by the tenant, anticipated repairs, maintenance, and conversion costs to make the property in the rental in the first place.

Remember, even if the overall cash flow is negative, renting a property is a much better net loss than letting a property languish on the market because your major costs (mortgage, property tax) will be present whether you rent or not.

Hong Kong to soon ease stiff property measures

Hong Kong’s property markets will soon get a reprieve from steep falling prices with the recent government pronouncement that the “cooling measures” would soon be eased.

No less than Hong Kong’s top finance officer Mr. John Tsang who acknowledged that the policies targeted to cool down the housing markets had effectively pulled down prices and eventually a “soft landing” could be achieved later in 2012.

 

In an interview in South Africa, Bloomberg News quoted Mr Tsang saying that the government will soon take “countercyclical measures to arrest the downward trend.”

 

In November, HK’s property prices dropped to a six-month low brought by the stiff taxes imposed by the government to discourage wealthy buyers from mainland China and other market speculators that triggered prices jumps early this year.

 

According to Global Property Guide Research, the HK Authority may consider lifting these mechanisms to move forward and arrest the downward spiral of property prices:

 

The Hong Kong government may remove the Special Stamp Duty  (SSD) and minimum down payments ranging from 10% and 50% especially imposed on foreign buyers acquiring a property priced not lower than HK$6 million and HK$10 million, respectively.

 

Mr. Tsang is yet to say when the right timing to pull back these measures will be undertaken, but he noted that this may happen sooner but not later than the second half of 2012.

 

Source: Bloomberg News, Xinhua News Agency