Pending Home Sales Rise to 22-Month High!

The housing market appears headed for a strong spring season. After a brief setback in December, the Pending Home Sales Index resumed its climb in January, posting a 2 percent gain over the month prior. The data puts pressure on Orange County home buyers. This is because a “pending home” is a home that’s under contract to sell, but has not yet sold. It’s tracked by the National Association of REALTORS® and, among all housing statistics, it’s the only one that’s “forward-looking”.

The Pending Home Sales Index is important to home buyers throughout California because 80% of homes under contract to sell close within 60 days of contract. In this way, the Pending Home Sales Index forecasts the housing market 1-2 months into the future. This is very different from how NAR’s Existing Home Sales report works; or, how the Census Bureau’s New Home Sales report works. These two metrics tell us what’s already happened in housing. By contrast, the Pending Home Sales Index tells us what’s coming next.

January’s Pending Home Sales Index reading lifts the monthly metric to its highest level since April 2010 — the month during which the 2010 federal home buyer tax credit expired — foreshadowing a strong housing market through March and April 2012, at least. This should not be news, of course. The nation’s home builders have said “foot traffic” is rising and home supplies are scarce nationwide. The only wild-card for housing is the high contract cancellation rate. As compared to last January when just 9 percent of home purchase contracts “failed”, this January saw 33 percent of contracts fail. High failure rates undermine the Pending Home Sales Index’s viability as a forward-looking housing market indicator.

Despite contract failures, though, the combination of low mortgage rates and low home prices is enticing to today’s home buyers. Expect home sales to climb in the coming weeks which will lead to a strong spring season for housing.

Kurt Galitski

Meet Kurt Galitski - The Kurt Real Estate Group, your new best friend. Distinctive Strategies that Deliver Record-Setting Results. When you combine Kurt’s passion and knowledge of the real estate market, you really gain an appreciation for what makes Kurt different. But what truly sets him apart from the crowd are his 5 distinctive strategies and his property management… For Kurt, getting into real estate was not an accident, it was a deliberate and calculated decision to deliver a better experience to home buyers, sellers, and landlords that they have ever received before. Today, you could ask any one of hundreds of clients, read his Yelp reviews, or look at his track record of being featured in Orange Coast Magazine in excess of eight consecu­tive years and you too will say mission accomplished. www.KurtRealEstate.com www.KurtPropertyManagement.com 877-957-6677

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