Nine solid months = recovery?
For the ninth month in a row, pending home sales are up, according to the National Association of Realtors.
From the NAR: “The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.”
“This fact is extremely relevant because it’s an indicator of consumer confidence. This time around, we have well qualified buyers, getting homes at good prices with low interest rates and enough equity going in to make sense long term. These are solid purchases and will continue to drive home sales up,” said Keller Williams Realtor Jennifer Klaussen.
NAR Chief Economist said, “still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families.”
This is all good news, but I still have to wonder about predicting recovery conditions when foreclosures, delinquencies as well as bankruptcies are at record highs, and builders are suffering massively, what say you?
Eric Hempler
December 2, 2009 at 12:11 am
Just like you can’t predict the bottom or the top I don’t think you can predict the recovery. In the Twin Cities I’ve been hearing rumors of another wave of foreclosures coming up. I also know in my market homes under $150K are experiencing a Seller’s Market, homes between $150K – 250K have a balanced market and homes above 250K have a buyer’s market. I don’t see the economy recovering until more jobs are created, which will make more buyers.
bficker
December 2, 2009 at 1:14 am
The number of home sales doesn’t mean much when the price in our market is down over 50% and still falling. The stuff selling is under $100k…
Greg Cooper
December 2, 2009 at 9:19 am
Our market will be very busy through mid 2010 starting from just after the first of the year. When the homebuyer incentives run out, the seasonality is done (big for us each year after mid July) and the looming interest rate increases become reality sometime later next year, we’re in for a prolonged slow period. Could be a devastating period. For those who believe in the double dip, that’s where it starts. The people who believe we’re in a true recovery are the same ones that don’t get that once the bank stimulus runs out, the stock market is headed south in a big way.
Ken Montville
December 2, 2009 at 9:56 am
I’m not as much doom and gloom as Greg but I do believe this housing spike is directly related to the stimulus. Another hopeful spot are the new Treasury guidelines for short sales. If we can shake some of the inventory out of the market we may have a chance at true equilibrium that will not be so stimulus dependent.
Benn Rosales
December 2, 2009 at 10:00 am
It’s like sand eroding at the foot of a statue made top heavy by the weight of the burden on its shoulders- the mini bubble.
Joe Loomer
December 2, 2009 at 5:09 pm
Not happening here – we’ve had three good months, with November coming in at least 27% better than last year, but it’s all last-minute folks that didn’t know if the tax credit would be extended. Our inventory is literally stationary – and has been since January of last year – no matter how many sales take place each month. That in itself is a little weird, but consider many folks are only now deciding to test the listing waters after such a bleak sales landscape since 2006.
I think we may be finding out what the new “real” is here – but then again we also never had the Sellers Markets experienced in the hardest hit areas (our record low absorption rate was 4.9 months in 2005).
Navy Chief, Navy Pride