HOMES SALES ARE STILL ON THE RISE!!!!

Dear Friends,


According to the NATIONAL ASSOCIATION OF REALTORS®, pending home sales have risen for three consecutive months. But I submit that much of this is less reflected by the impact of the home buyer tax credit but more from favorable housing affordability conditions and the temporary drying up short sales. The Pending Home Sales Index (PHSI), rose 6.0 percent to 110.9 based on contracts signed in April, from an upwardly revised 104.6 in March, and is 22.4 percent higher than April 2009 when it was 90.6. That follows gains of 7.1 percent in March and 8.3 percent in February.

Although I disagree with Lawrence Yun, the NAR chief economist who stated, “There were concerns that only a small pool of buyers were left to take advantage of the tax credit extension. But evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales. The housing market has to get back on its own feet and now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs.”

As I previously reported in "Maximizing Your Buyer's Credit,"  that 65 percent of First Time Home Buyers did not consider the tax credit when making their decision to buy. Instead it was having a low, fixed interest rate was the main factor in buying. 
Regardless of the findings, the bigger concern for all First Time Home Buyers looking to reap the benefits of the tax credit is closing by June 30th.  When buying a short sale, two months is normally enough time from contract signing to settlement date.  However, the recent housing cycle has brought long delays related to the short sales approval process by banks and from ongoing appraisal issues.  The laws changed in April 2010 to create guidelines that banks must adhere to in expediting the closing of escrow.


There are a sizable number of home buyers who used the tax credit incentives, but may encounter problems meeting the settlement deadline by June 30th. Because of these market challenges, NAR has asked Congress to provide flexibility on the deadline for closing. So be on the lookout for a possible extension!

 
Based on the PHSI, here is what's happening around the region:

Northeast: jumped 29.5 percent to 97.9 in April and is 24.5 percent above a year ago.
Midwest: rose 4.1 percent to 104.2 and is 17.9 percent above April 2009.
South: slipped 0.6 percent to an index of 123.9, but is 31.3 percent higher than a year ago.
West: increased 7.5 percent to 107.9 and is 12.0 percent higher than April 2009.

Do not hesitate to ask questions, I am here to help.  Contact me now to buy, sell or finance your home today!

Namaste.