Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Unidentified Analyst – Deutsche Bank Securities.
Unidentified Analyst – Deutsche Bank Securities
On your current guidance, I guess you guys have reiterated your guidance. I was wondering what level of ASP declines you guys are assuming in your numbers? And second, I guess, if you can talk about the tightening credit markets, you talked about how it’d have some impact on your volume, if you can kind of quantify that for us. That would be helpful.
Pat Lashinsky
We’re looking at average home prices for the year being down about 15% as we would go into our guidance. What was the second part of the question?
Unidentified Analyst – Deutsche Bank Securities
The second question was the tightening credit markets. I was wondering if you could talk about how that had impacted your volume of transactions in the second quarter.
Pat Lashinsky
The tightening credit market has been one of the real difficulties that our agents have to deal with every day when they work with clients. It’s a real factor that’s out there. Largely on our homes that are jumbo, those loans are very, very difficult to get right now.
If you’re outside the conforming and outside of a great credit client, it takes a significantly more time and we’re having more clients that believe that they’ve got approval, they go in, they work with that agent, they find a property, they get a contract written and then they find out that the loan that they had applied for is no longer there and they’re not able to get the credit anymore.
And so the volumes are still being restricted based on the tightness of the credit markets, the tightening of the conditions, and the inability for clients to find great lending sources right now.
Unidentified Analyst – Deutsche Bank Securities
Historically I guess, it was loans for the purchasing side probably closes closer to four to six weeks. Have you seen that maybe have extended to maybe about two months or so? Or is that kind of relatively in line?
Pat Lashinsky
It has extended and the hard thing is to differentiate how much is it extended because the banks are just busy with dealing with foreclosure and REO properties and what they have. But it is taking longer for deals to get done. And we think that part of it is because there’s just more caution out there and they’re dealing with more properties. But that time to close has lengthened.
- To read the full transcript on Seeking Alpha, click here »
