June 2011 home sale figures were released today with the added specter of sales contract cancellations on the rise.
The cancellation rate rose from a normal 4% to a whopping 16% in just one month.
A 400% rise in contract cancellations is pristine evidence that the problems of the U.S. residential real estate sector are far from over. In fact, they are, if anything, getting worse.
The problem is not overly conservative appraisers. It is a market where sellers believe their properties are worth more than they really are and many buyers are tagging along on the unreasonable valuations because they fall in love with a house.
It has been said that the U.S. has a "buyer's market" for housing. REALLY? Sounds like many buyers are still overpaying for houses but the banks this time are catching many from making yet another unsound purchase.