Home Sales Rise, But is Pain Easing?
Aired August 21, 2009
National Public Radio
By: Bill Radke
Jeremy Brandt, CEO of real estate company 1-800-CashOffer, talks with Bill Radke about the big increase in home re-sales, and whether it was helped by a one-time home buyer credit the government is giving out.
Bill Radke: Home re-sales have posted the largest monthly increase in at least ten years. That’s the report out this morning from the National Association of Realtors. Re-sales rose just over 7 percent from June to the highest level since the crash hit in the summer of ’07. But is there less here than meets the eye? That’s what we want to know, and joining us live is Jeremy Brandt, founder and CEO of the real estate company 1-800-CashOffer. Good morning, Jeremy.
Jeremy Brandt: Hi Bill. How are you?
Radke: I’m good, thanks. Biggest increase in ten years sounds good. What does it mean?
Brandt: Well it is good in some ways, so certainly the increase is great. But this a month-over-month increase, so they’re comparing it to the previous month. And when you have a long period of downtime, it’s expected that you’ll have a couple of months of big spikes, but what matters is what’s going to happen over the long term.
Radke: And what do you think that is?
Brandt: I think we’re going to continue to have highs and lows, just like in the stock market when it’s volatile, things bounce up and things bounce down. I think we’re in a bit of a trough in the housing market, and we’ll continue to be there for at least the next year to two years, but we’ll continue to see a slow increase in home prices and an increase in sales.
Radke: The government’s giving out this one-time home buyer credit that expires in November. How much of last month’s jump do you think was a temporary blip because of that one-time credit?
Brandt: I think a lot of it. I think there’s two main factors that are affecting this jump. One is pent-up home sales on the market. So a lot of people have been sitting on the sidelines figuring out what they should do, but they still need to buy a house. That credit pushes them over the edge, and sends them to guy buy a house. But I also think we’ve got a long way to go.
Radke: Yeah, and that $8,000 credit — that mostly comes into effect in a lower-priced home. It’s a bigger deal there, huh?
Brandt: Right. On the low-end, it might be 8 or 10 percent of the property value. On these higher-end homes, it’s not a significant incentive.
Radke: Right. OK. Jeremy Brandt, founder and CEO of the real estate company 1-800-CashOffer. Thanks a lot.
Brandt: Thank you Bill.