Palos Verdes Real Estate Trends vs the National Housing
It was reported in one of the online trade journals
I subscribe to that pending home sales (this is an indicator of “now” activity
and measures how buyers “now” are voting with their dollars) have increased yet
again. What I would ask that you do is read the article below and then continue
on for a more localized report. How are Palos Verdes homes and real estate
around the Greater South Bay area faring in relation to these trends? Let’s
find out… at the bottom of this article you will see a chart for the South
National Association of Realtors reports
Pending Home Sales Up in May,
Continue Pattern of Strong Annual Gains
Daily Real Estate News | Wednesday, June
Pending home sales bounced back in May,
matching the highest level in the past two years, and are well above year-ago
levels, according to the National Association of REALTORS®. Both monthly and
annual gains were seen in every region.
The Pending Home Sales Index, a
forward-looking indicator based on contract signings, rose 5.9 percent to 101.1
in May from 95.5 in April and is 13.3 percent above May 2011 when it was 89.2.
The data reflect contracts but not closings.
The index also reached 101.1 in March, which is
the highest level since April 2010, when buyers were rushing to beat the
deadline for the home buyer tax credit.
Lawrence Yun, NAR chief
economist, said longer term comparisons are more relevant. “The housing market
is clearly superior this year compared with the past four years. The latest
increase in home contract signings marks 13 consecutive months of year-over-year
gains,” he said. “Actual closings for existing-home sales have been notably
higher since the beginning of the year, and we’re on track to see a 9 to 10
percent improvement in total sales for 2012.”
The national median existing-home price is
expected to rise 3 percent this year and another 5.7 percent in
The PHSI in the Northeast increased 4.8 percent to 82.9 in May and
is 19.8 percent above May 2011. In the Midwest the index rose 6.3 percent to
98.9 in May and is 22.1 percent higher than a year ago. Pending home sales in
the South increased 1.1 percent to an index of 106.9 in May and are 11.9 percent
above May 2011. In the West the index jumped 14.5 percent in May to 108.7 and is
4.8 percent stronger than a year ago.
Low inventory could hold back some
contract activity. “If credit conditions returned to normal and if we had more
inventory, especially in the lower price ranges, more people would become
successful buyers. In an environment of historically favorable housing
affordability conditions, it’s frustrating to see some consumers thwarted in the
process,” Yun said.
Low inventory results partly from underwater
homeowners who are unwilling to list their homes, which would require a lengthy
short sale process, or additional cash to complete the transaction. NAR
estimates 85 percent of homeowners have positive equity, with 15 percent in an
“Low inventory can be cured by increasing new home
construction,” Yun said. He projects housing starts to rise by 26 percent this
year and another 50 percent in 2013.
“If housing starts do not rise in a
meaningful way over the next two years due to the difficulty in getting
construction loans, and barring an unexpected shift in the economy, the steady
shedding of inventory could lead to shortages where home prices could get bid up
close to 10 percent in 2013,” Yun said.
Source: National Association of
For more information on real estate trends for the
Palos Verdes homes market please go here.