The unexpected drop in signed contracts to buy existing homes in Aprilshould have come as no surprise. It is all about price point, supply, and where the action is/has been.
Depending on which survey you follow, sales of distressed properties (foreclosures and short sales), make up anywhere from a quarter to 40 percent of all home sales nationwide.
The bulk of these sales are out west in cities like Phoenix, Las Vegas and much of Southern California. Real estate agents out west will tell you that supplies of these distressed properties are dropping fast, thanks to huge investor demand. That, in turn, led to a huge drop in sales of lower priced properties, as we reported last week, down 26% in the $0-100,000 price range, according to the National Association of Realtors.