In news out of the nation’s capital, I was delighted to read that pending home sales have increased for the seventh straight month. Sources for this information were; Charles McMillian, President , and Lawrence Yun, Chief Economist, of the National Association of Realtors. The National Association of Realtors represents1.2 million members of all segments making up residential and commercial real estate in America. It is also the largest trade association in the United States. For recent viewers of my blog, the data we are analyzing involves figures from the Pending Home Sales Index. This index was first used in 2001 and is derived from a large national sample. Typically the “Index” looks at approximately 20% of all pending home sales across America. A home sale is pending when contracts are signed, but the official closing has not occurred. Usually the transaction is finalized within 1-2 months of pending status.
Figures for the Pending Home Sales Index showed the following results:
*A Pending Home Sales Index reading of 100 is equal to the average level of home sales contrast activity during 2001. (2001 was the first year the index was used and it was the first of 5 consecutive record years in sales of existing homes).
This seven month run of increasing levels in pending home sales is important because it has never occurred since the “Index” was utilized in realty-sales calculations. The overall PHS Index results comparison; August 2009 Index reading-103.8* up 6.4%, and from July 2009 at 97.6* up 12.4% vs. August 2008 at 92.4. (*Highest index level recorded was March 2007 at 104.5). As a real estate professional, this is great news.
However, the article also advised people to be cautious and I want to urge my blog readers to do the same. Here are some potential roadblocks to a full recovery in real estate. First, the deadline for the $8,000 tax credit for new homebuyers is rapidly approaching. Due to time lag in the pending vs. closing process, this October’s close will probably be the end for new home buyers rushing to purchase a house. This new homebuyer tax credit has amped up home buying and unless it gets extended in some fashion, house purchases could decline. A second potential roadblock is the extended delays for final closing caused by foreclosures and short sales. The lengthy delays here have sometimes resulted in buyers signing another contract for a different property. Other factors like; excess inventory of homes for sale, delays in the foreclosure process, new federal guidelines, etc. could have unseen consequences for real estate.
Still, there are many reasons to consider buying or selling real estate in today’s economy. Here are some to consider. Real estate is a hard asset that holds value when currency supply and valuations fluctuate. Selling a property could free up cash for a real estate upgrade. The current inventory of new and existing homes gives today’s buyer a better selection than we have seen for some time. These are just a few reasons to consider real estate sale or purchase at this time. For buying or selling real estate in the Smokies contract The Jason White Team for dependable professional guidance on your property adventure.
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