By With all the information floating around about the health of the real estate market, it is wise to focus on a forward look indicator, the Pending Home Sales Index.
As reported by the National Association of Realtors®, the Pending Home Sales Index posted its 8th consecutive monthly gain in September nationwide.
The index now stands 21% higher than it did one year ago and Pending Home Sales are now at their highest levels since December 2006.
A Pending Home Sale is a home under contract to sell, but not yet closed.
The following Pending Home Sales Reports are taken from our October Market Metric Reports available at www.bayareamarketmetrics.com.
These graphs cover a two years period and as you can see below, San Mateo County and Santa Clara County Pending Home Sales are at their highest point in the past two years.
As seen in these graphs, Alameda and Contra Costa Counties are reporting a steady number of Pending Sales at an elevated level when compared to two years ago.
When the Pending Home Sales Index rises, it tells us that market activity has picked up. October’s data confirms what we’ve been noticing since February — the Buyers Market is coming to an end.
With more homes under contract in the marketplace, home buyers typically face one or more of the following:
1. Competitive, multiple-offer situations
2. Reduced purchase price leverage over sellers
3. Few if any seller concessions
Therefore, if you’re planning to buy a home in the next several months, know that the 8-month increase in Pending Sales has lead to an increase in closed sales which in turn results in higher home prices and reduced affordability.
Further evidence can be seen in this recent Case-Schiller Report.
If you intend to buy while rates are low and affordability factors are still favoring buyers, you should be actively working with an agent now. If you are thinking of selling but have been holding off until the market was showing clear signs of improvement now would be the time to talk with your agent about preparing to list your home.
Whether you are considering buying or selling speak to your agent about ways to get the most of the this evolving market.
