Pending Home Sales Predicts A Stronger Spring Market In The Tri-Valley Area

Historically low interest rates and expiring tax credit may push more buyers into action

The Pending Home Sales Index rose slightly in December, climbing 1 percent from November.

A Pending Home Sale is a home that is under contract to sell, but not yet sold. It’s a figure compiled by the National Association of Realtors® using sales data from over 100 regional listing services and more than 60 large brokerages around the country.

Because each pending sale is a true measure of sales activity, the Pending Home Sales Index is purported to be the most reliable forward-looking indicator for housing.

Recent data supports this hypothesis.

After Pending Home Sales plunged 16 percent in November, Existing Home Sales fell by 17 percent in December.  Based on the most recent Pending Sales Index, therefore, we can expect January’s closed sales to be similarly level.

For home buyers in San Ramon , this is all a bit of good news. Home prices are based on the supply-and-demand balance that exists between buyers and sellers.  When buyers outnumber sellers, like they did through most of 2009, home supplies dip and, in fact, the national home inventory nearly halved during the 12 months ending November 2009.

With fewer homes for sale, multiple-offer situations were almost commonplace and home values rose as result.

Activity has since slowed, however, in some areas. The supply-and-demand equation has shifted back some. In December, home supplies rose for the first time in 7 months and January will likely show the same.

With mortgage rates still low and a looming deadline on the homebuyer’s tax credit, market activity should be strong between now and April. This is especially true for entry-level homes along the Highway 680 and Highway 580 corridor.   Take your time and bid right. And when you’re ready, be ready. The best deals likely won’t last.

If you have questions on this, contact Rodil San Mateo at RSanMateo@EastBayLoanTips.com or call (925)-922-0470.

Tagged as: Existing Home Sales, Pending Home Sales