There was more good news on the home buying front last month. The National Association of Realtors, or NAR for short, reported that pending home sales were up from February by 3.2 percent. Pending home sales is a forward looking indicator that counts the number of contracts signed. The Analysts were predicting no increase, but for the market to remain flat.
Not only were the numbers up from February, 2009, there was also a 1.1 percent increase over March of last year, right around the time the economy began it’s decline.
Pending home sales are not yet actual sales, just signed contracts awaiting loan approval. They are still considered a very good gauge to the overall health of the housing market. The positive numbers could be thought of as an anomaly in an otherwise severely depressed economy. The next report will give more of an idea if the housing market is gaining momentum. Two months of positive growth will be good news for the overall health of the U.S. Economy. Three months of positive numbers will not bear well for those sitting on the sidelines waiting for property values to contract yet further. That will show that the population is out buying in force, and when that happens the best deals will be snatched up quickly.
Once the real estate market gets some momentum behind it, there is a good chance that home prices and interest rates will rise quickly. The theory behind such a prediction is simple supply and demand. Right now there is a glut of housing on the market,. Builders are holding to much inventory for to long, and what they have been able to sell has been at deep discounts, often below costs. People wanting or needing to sell homes are sometimes forced to take much less than the homes value as recently as last year. Then there are the foreclosures the banks are trying to get rid of. All of this makes for an over burdened market ready to explode.
Prices and interest rates are at almost historic lows. When the housing bubble and the failing economy met, it left many people hurting while opening up a once in a lifetime opportunity for buying or investing in residential real estate properties. Brokers and agents around the country are reporting an increase in activity and sales. The people are coming out and looking again.
Going into and at the height of the real estate bubble buying rundown properties and fixing them up to re-sell at a profit was popular. Many people missed the opportunity, but it is back again. There are decent properties out there that can be picked up at substantially lower prices than what they are worth. There has been evidence of this already. It’s an easy way for aspiring entrepreneur to make substantial profits with little investment.
The biggest incentives in history are being offered by the Government. An up to $ 8000 tax credit is available for qualifying first time home buyers. This program alone is expected to bring 30000 new home buyers to the market. That could very well be the beginning of the end for bargain hunters.
The time to buy if one is intending is now. Many analysts and economists both are optimistic about the economic recovery happening soon, if not already in it’s early stages. Those that wait to long for better deals may get left behind as we leave the contraction behind and start working on a new and prosperous future.
Joel Weihe. We are a small company offering personal care with all the resources of a big one here to serve all of your real estate needs.