One can feel the good news coming into the real estate market. The Pending Housing Sales Index rose again in June as buyers of mid and low priced homes are buying. This is very important as it is where the base starts.
If you are in a starter house with 2 kids and desperate to get out because you feel crunched, you first need to find someone to buy your home. And once you sell your home you can upgrade to a bigger home. It is a pretty simple concept.
Not many home sellers will be moving into an apartment, they will be moving into another home that is likely larger. So as time goes along and we see the bottom of the market strengthen we will start to see the mid and high priced homes start to move.
And that is great news.
The National Association of Realtors said its Pending Home Sales Index rose 3.6% during the month. That was 6.7% higher than June 2008. It was the fifth straight month of increases, the first time that has happened since July 2003..
The report followed several other recent pieces of good news for the housing industry, including a substantial rise in new home sales, a jump in existing home sales and the first home price increase in nearly three years.
The jump was also much higher than expected. A consensus of industry experts put together by Briefing.com had forecast an increase of just 0.7%. via CNN.
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Closings are having some trouble here too. There are a lot of short sales with slow banks and picky requirements. I am not sure pending home sales is a safe metric to bet predictions on.
-Tyler
One trend we are seeing in our market here in northern virginia is pending sales rising but actual closings going down. Only 75-80% of actual pending contracts are making it to closing. The banks and specifically short sales, are the reason for the huge increase in failed sales. Not sure if this is happening elsewhere but it is definitely a problem here and undermines the impact of higher pending sales. As of today we have almost 3 months of pending deals when the previous normal level was about 40 days.
While a trend might not apply to your neighborhood, it's good to see nevertheless.
Right,what you think that whether housing market will show such behavior in future also and what is the time required to look this market in full boom again.thanks
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I think we need to be careful when we hear this "good" news about the market. Yes while housing statistics are up from the previous month I think we need to look at the same period the previous years. I think most markets with find real estate statistics on home sales and housing starts down. Lets put it in perspective and call it what it is.
A step in the right direction!
Well, in summer such activity takes place. People move and buy new places. Seems like a good sign tough.
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