Home Buyers Back Out Of Deals in Record Numbers

[Brutus]

Now is not the time to close the deal, many buyers are deciding

By June Fletcher and Ruth Simon

A little over a year ago, buyers couldn't wait to sign contracts to purchase homes. Now, many can't wait to get out of them.

With real-estate prices falling around the country and even pro-industry trade groups predicting further declines over the next year, buyers are backing away from deals in droves. At a semiannual housing forecast conference in Washington, D.C. recently, economists reported that contract-cancellation rates for big builders were running around 40 percent — about twice as high as last year's levels. Anecdotally, real-estate professionals say they are seeing a similar dynamic in existing-home sales.

Some of the cancellations are by people who signed new-home contracts at one price months ago, haven't yet closed, and are now stunned to see the builder drastically cutting prices on identical properties. Some are by speculators caught short by other investments they can't unload. And some are by people trapped in a chain reaction: They can't sell their old home — or the buyer has canceled the contract — so they are being forced to cancel the deal on a new house they are buying somewhere else.


http://www.move.com/New%20Homes/Real...11462&poe=move

[zengrifter]

The crash has begun! zg