On Monday the National Association of Realtors (NAR) released their monthly statistics on pending home sales and the good news is the numbers are up 14.4% percent nationwide as compared to July 2010. In less good news, the numbers declined month over month (June 2011-July 2011) across the U.S. with the exception of one bright spot: the West. This region is not only seeing improvement, but has the highest level of sales contract activity.
The Pending Home Sales Index (a forward-looking indicator based on contract signings) shows a decline in pending home sales for the month of July in the Northeast by 2.0%, in the Midwest by 0.8% and in the South by 4.8%. In the West however, the index rose 3.6%.
NAR chief economist, Lawrence Yun, gives his take on the realities behind the numbers, “The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”
We checked in with our own Jesse Gibbs of Century 21 M&M for a local System member’s perspective on the positive numbers in the West. He shared, “The West was one of the first regions to experience high foreclosure rates and now is experiencing some stability. With home prices down and interest rates at record lows, many buyers are seeing this as the time to buy, especially when their mortgage is less than what they are paying in rent.”
Jesse continued, “We also have many investors who have brought cash into the market and are taking advantage of the great prices. Many investors know real estate is a solid investment in the long term! Our market is seeing many types of transactions including traditional sales, short sales, investor flip properties and bank owned sales all contributing to the upswing in numbers this past month.”
Realtors – what are the bright spots in your local market that will allow you to follow in the West’s footsteps?