Nationwide Wide Pending Home Sales Rose 8.2%

by Admin on July 7, 2011

Is the worst over with yet? I get this question a lot from various clients throughout my sphere of influence. It’s tricky to answer because real estate markets are very, very specific to a region. The worst in San Diego has been over with since March 2009. I’ve been telling my clients this for sometime now. But with national media outlets referring to a potential double dip in pricing in other markets, I think they might be a little premature in their evaluations. Some positive news came out from the National Association of Realtors. Pending home sales in May rose 8.2% compared to the month of April. Pending home sales are defined as contracts signed to purchase a previously owned home. Pending home sales are up 13.4% on a year to year average from May 2010 to May 2011. What does this mean? It’s a sign that the economy is improving. However, don’t be overly excited. Traditionally, the summer months see more sales volume. I don’t have the seasonally adjusted numbers, but it would be interesting to see if this is a normal uptick in contracts being signed. The 13.4% year to year average can be misleading because of the Federal Home Buyer Tax Break in 2010. Last year in order to qualify for the $8000.00 tax credit; a purchaser had to be under contract by April 30, 2010. Naturally, May 2010 numbers would be down because buyers pushed up the buying to April 2010 instead of the summer time. The federal tax break didn’t seem to bring many new buyers to the market, all it did was put more transactions in April 2010 instead of spreading the buyers evenly amongst the rest of the months of the year. I didn’t mean to pooh-pooh the enthusiasm of the numbers but I do feel the worst is over with in San Diego. The best it yet to come, especially from a long term point of view. The numbers in other parts of the country surprisingly showed great improvements. Particularly in previous soft markets like Indianapolis and Minneapolis. To read the full article, I’m referencing, please click here. -Rob

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