SAN DIEGO REAL ESTATE AGENT BLOG » San Diego pending home sales

Pending Home Sales Stabilize

Michael Carter - San Diego Real Estate Agent — Tue, 02 Feb 2010 21:40:26 +0000

Pending home sales have leveled from a market swing driven by response to the home buyer tax credit, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in December, increased 1 percent to 96.6 from 95.6 in November, and remains 10.9 percent above December 2008 when it was 87.1.

In November, the monthly index had fallen by 16.4 percent from surging activity in preceding months.

Lawrence Yun, NAR chief economist, says it’s important to recognize how the tax credit is skewing market data.

“There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he says. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels.”

December activity was the fifth highest monthly tally in two years.

The Tax Credit Impact

Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for a tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

Yun projects the extended and expanded tax credit will encourage 2.4 million households to take the credit in 2010.

“While new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010,” Yun says. Last year there were 5.16 million existing-home sales.

He added that one of the greatest benefits of rising sales will be firming home prices.

“For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down,” Yun says. “As a result, the housing wealth for many middle class families has begun to stabilize.”

Regional Data

Here’s a breakdown by region for the PHSI:

Northeast: rose 2.3 percent to 76.1 in December and is 14.9 percent higher than December 2008.
Midwest: increased 5.2 percent to 86.9 and is 8.7 percent above a year ago.
South: rose 2.2 percent to an index of 98.4, and are 5.5 percent higher than December 2008.
West: fell 3.8 percent to 119.9 but is 18.6 percent above a year ago.

NAR

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774

U.S. home prices rise for a second straight month

Michael Carter - San Diego Real Estate Agent — Tue, 25 Aug 2009 14:37:13 +0000

NEW YORK (Reuters) – Prices of U.S. single-family homes rose for the second consecutive month in June, exceeding expectations and adding to evidence that the three-year housing slump is easing, Standard & Poor’s reported on Tuesday.

The S&P/Case-Shiller composite indexes of 10 and 20 metropolitan areas both rose 1.4 percent in June from May, almost three times the 0.5 percent increases of the month before. May’s increases were the first in nearly three years.

Optimism over a housing recovery blossomed last week after reports showed rising confidence among homebuilder and sales of existing homes rose in July for the fourth consecutive month. Economists expect the sector’s recovery could help the nation emerge from recession and further stabilize financial markets that have suffered their worst crisis since the 1930s.

The 10- and 20-city indexes have dropped 54.3 percent and 45.3 percent from their 2006 peaks, respectively.

”This is just another month that supports those that think we have bottomed, or are nearing a bottom,” said Jesse Litvak, a managing director in mortgage- and asset-backed securities at Jefferies & Co. in Stamford, Connecticut.

Economists in a Reuters poll expected the 20-city index increased by 0.2 percent in June.

S&P said its U.S. National Home Price Index recorded a 14.9 percent decline for the second quarter, compared with a 19.1 percent year-over-year drop in the first quarter. Versus the first quarter, prices rose by 2.9 percent in the first such increase in three years, S&P said.

Regionally, only Las Vegas and Detroit posted declines in June over May, of 2 percent and 0.8 percent, respectively. Cleveland home prices registered the greatest increases for the past two months, topping 4 percent each time.

by Al Yoon

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774

Existing-Home Sales Rise 7.2%

Michael Carter - San Diego Real Estate Agent — Fri, 21 Aug 2009 14:42:02 +0000

WASHINGTON — Existing-home sales rose to their highest level in nearly two years from June to July as cheaper prices and the availability of tax credits continued to entice buyers.

Home resales rose more than expected, bouncing 7.2% — the highest month-over-month percentage increase in more than a decade — to a seasonally adjusted 5.24 million annual rate, the National Association of Realtors said Friday.

Analysts surveyed by Dow Jones Newswires had expected an annual sales rate of 5 million.

“The housing market has decisively turned for the better,” said Lawrence Yun, the NAR’s chief economist.

The NAR last month estimated June sales rose 3.6% to 4.89 million. That figure was not revised.

Foreclosures and short sales reflect 31% of sales in July. Distressed property sales have pushed prices lower, year over year, attracting buyers not sidelined by unemployment or tight credit conditions.

The median price for an existing home last month was $178,400, a 15.1% decrease from July 2008.

Previously owned home sales, year-over-year, were up 5.0% from the pace in July 2008, the NAR report said.

Weak demand has kept inventories of unsold homes high, driving down prices. Inventories of previously owned homes climbed 7.3% at the end of July to 4.09 million available for sale.

“The additional inventory likely is a result of some held back inventory coming back to the market,” Mr. Yun said.

That inventory level represents a 9.4-month supply at the current sales pace, compared to 9.4 months in June.

Regionally, July sales rose 13.4% in the Northeast, 7.1% in the South and 10.9% in the Midwest. July sales slid 1.7% in the West.

The average 30-year mortgage rate fell to 5.22% in June from 5.42% in June, Freddie Mac data show.

By MEENA THIRUVENGADAM

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774

Sharp Rise in New U.S. Home Sales as Prices Fall

Michael Carter - San Diego Real Estate Agent — Mon, 27 Jul 2009 14:54:12 +0000

WASHINGTON (AP) — The government said Monday that new home sales in the United States rose by the largest amount in nearly eight years last month, in another sign the housing market was bouncing back from the worst downturn in decades.

Sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000, the Commerce Department said.

It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.

Sales have risen for three consecutive months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier and down nearly 6 percent from $219,000 in May.

The report is another encouraging sign that the beleaguered housing sector is finally coming back to life. Last Thursday, the National Association of Realtors reported that home resales posted a monthly increase of 3.6 percent in June.

There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007.

Fallout from the housing crisis has played a central role in the recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.

By THE ASSOCIATED PRESS

Published: July 27, 2009

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774

Pending Home Sales Increase

Michael Carter - San Diego Real Estate Agent — Wed, 03 Jun 2009 00:19:19 +0000

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.

Lawrence Yun, NAR chief economist, said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

Geographical Breakdown

Northeast: The Pending Home Sales Index shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago.
Midwest: The index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008.
South: The index slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago.
West: The index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

NAR President Charles McMillan said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for downpayment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.

“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down payment. Buyers who are wondering about their options should contact a REALTOR, who can advise consumers on the housing assistance programs and resources available in a given area.”

Affordable Housing
NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, which makes it the second-highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.

Pending Vs. Existing Sales
Yun cautions that the reporting sample for pending home sales is smaller than that of existing-home sales, so it is subject to greater variability. “In addition, the relationship between contracts on pending home sales and closings on existing-home sales is taking longer than in the past for several reasons,” he said. “Mortgage processing time has increased, it is taking many months to close on those homes requiring short sales with lender approval, and some sales are falling through at the last moment.”

The total number of existing-home sales is expected to improve but with dramatic local market variation in the timing of recovery. “The market has already bottomed in some areas, but this is an unusual housing cycle with some areas improving rapidly while others languish or decline,” Yun said.

Existing-home sales for May will be released June 23. The next Pending Home Sales Index will be on July 1.

Source: NAR (06/02/09)

Michael Carter
San Diego Real Estate Agent
MTC Future Realty
(619) 488-5774