In October, Lennar Corp. took the road previously not taken. The Miami-based homebuilder decided to invest its hard-earned dollars not in new housing developments, but in distressed real estate, buying $740 million in busted assets from three financial institutions. At this point in the housing cycle it was probably a better use of its capital.
From April 2010 when the federal homebuyer tax credits expired, sales of existing homes slid lower and lower and lower. The National Association of Realtors’ figures for August showed a 19.2 percent decline over August 2009. And the Wall Street Journal reported home sales were lowest for any month since 1997 except for July.
It seems the only thing keeping the housing market afloat from 2009 to early 2010 were the tax credits. Otherwise, even with record-low mortgage rates, the American public can’t be pulled, dragged or cajoled into buying a new home.
Real estate folks suggest the market has reached an impasse: Buyers won’t buy unless prices are deflated even more, but sellers feel they have dropped prices more than enough to make a sale.