‘False bottom’ for housing ahead?

Pent-up sellers could flood inventories, stall recovery

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Where's the housing bottom? While nobody seems confident in a prediction, Lawrence Yun, the National Association of Realtors' chief economist who last year predicted the turnaround would begin in late 2008, tried to throw his 1.2 million-member trade group a bone by showing that pending home sales slipped 4.6 percent nationwide in September from August but remained 1.6 percent higher than a year earlier. He also stated that some of the areas hardest hit by the slowdown, including Florida and California, showed "consistent, solid gains" and that NAR's housing affordability index is averaging 19 percentage points higher this year than in 2007. But today's sales are not like those of the past. Based on a recent NAR survey, 35 to 40 percent of all recent home sales across the country were "distress sales," such as bank-owned foreclosures or "short" sales in which the lender agrees to take less than the amount owed. In Florida, distress sales could...