Pending Home Sales Show Improvement and Stabilization

My news sources out of the National Association of Realtors in Washington, DC, show improvement continues in pending home sales. For new readers, the Pending Home Sales Index is a tool for measuring U.S. residential sales. A pending home sale is a home under a written contract, but not officially closed. Usually, these pending sales officially close within 1-2 months.

This index uses a level of 100 to be equal to the average home contract activity of 2001. This was year one in utilizing the “PHSI” and it was the first of five back-to-back record years, in existing-home sales. NAR’s data on the “Index” figures, combined with comments from Lawrence Yun, confirmed my views on recent Smokies’ home sales. Mr. Yun is NAR’s chief economist and his comments are valuable in understanding U.S. real estate trends. The chief economist feels last year’s home market responded to the homebuyer tax credit stimulus. We saw robust activity in the Smokies and across the U.S. as the homebuyer stimulus approached it’s deadline. Congress later renewed and expanded the homebuyer tax credit for qualified buyers, to get new homes under contract by April 30, 2010. Buyers have until June 30th, 2010 to finalize their contracts and be eligible for the tax credit. In retrospect, last year’s home market was driven by lower-end new home sales and by deep-discount foreclosures. Sales reached a crescendo with the deadline of the home buyer stimulus. Activity plummited with the end of the first tax credit.

However, the expanded extension of the homebuyer tax credit is slowly rebuilding a momentum that will likely peak in April of this year, and then possibly back off. The analysis of monthly raw data always lags current activity, but here is the latest PHSI data. November of 2009 dropped 16.4% from its upward trend in previous months to an index reading of 95.6. Then December of 2009 increased 1% to an index of 96.6. This gain is most likely stimulus-driven, but it remains 10.9% above December of 2008.

Feb. Index

 A quick look at this material indicates a home buying market that was government-driven. However, a deeper focus reveals some positive indicators. The underlying trend seems to be a firming in price stability and a gradual improvement in overall home buyer sentiment. The downturn in new home construction is not building the inventory of homes for sale. The current lack of a good safe haven for people’s savings combine with uncertainty over the future of the U.S. dollar. This makes real estate attractive as an investment. Market demand for low priced homes and discounted foreclosures removes their lingering influence from forcing home values lower, thus allowing prices to stabilize.

Today’s real estate buyer or seller faces uncertainty across a global economy. At some point each individual must decide for themselves what is best. Here in the Smokies, we have; location, climate, and natural beauty in our favor. Currently, mortgage rates are near historic lows, and there is a good inventory of property for sale. If you are buying or selling real estate in Tennessee’s Great Smoky Mountains, enlist a professional with a great track record. Please contact me, Jason White, at the  Jason White Team today to get started on your goal.

                                  Here are a Couple of My Latest Listings:

Mt LeConte Views from Gatlinburg Home!!
Custom built,many hand crafted features,gourmet kitchen with Brazilian granite counter tops,plus huge master bedroom on the main level. Even a separate living quarter on lower level.
Type: Single Family Home
Location: Gatlinburg ,Tennessee
Price: $598,700
Get more information >
Level Lot/ Walk to Club House,Ski Resort
This gently rolling property is convenient to everything. community pools, tennis courts, ski resort and tram to take you into town.
Type: Land
Location: Gatlinburg ,Tennessee
Price: $35,000
Get more information >