Pending home sales
reached their highest level in January in nearly two years, according to
NARâ€™s report this week, rounding out a handful of positive news for
housing markets in the last week or two.
Pending sales trending
upward is an interesting trend to watch considering the recent rise in
cancelled contracts. I say this because pending sales at least gives us
an indicator of buyer sentiment since many of the failed contracts seem
to be due to things that are out of buyersâ€™ control like not securing
financing needed to purchase the home or the appraisal coming in below
the contract price. With a rise in pending sales, we at least know that
buyer intent is on the rise and more folks are trying to buy homes.
pending home sales index was up 2% to 97 in January from 95 in
December, and is 8% higher than January 2011. The January index is the
highest since April 2010, when it reached 111.3 as buyers were in a mad
dash to take advantage of the home buyer tax credit.
Other positive happenings for housing:
Improving job market:
In January, unemployment hit its lowest level in three years,
continuing a five-month streak of improvement. Without jobs, people
donâ€™t buy or move so this obviously is a good thing.
Home builders are gaining confidence:
Home builder sentiment, tracked by the National Association of Home
Builders and Wells Fargo, in February reached its highest level in
nearly five years. This basically means that home builders are more
confident that market conditions are improving to the point that new
home sales will be positively impacted.
Housing stocks are up:
The stock market is a far-from-perfect indicator, but it at least gives
a reading of how investors are feeling. The nationâ€™s home builder
companies have seen share prices increase 60% since October, according
to an analysis on Timeâ€™s website.
the Bay Area, we have all the amazing economic trickledown activity
from major tech company IPOs â€“ recently game developer Zynga and
Facebookâ€™s pending IPO in May â€“ to look forward to in housing. In fact,
some of our local markets such as San Francisco have already seen the
positive housing news that comes along with that.
Overall, 2012 is
looking to be a great year for housing compared to the last five or
six. The presidential election likely will also ward off any major
controversial policies that could negatively impact the market. With all
this in mind, I think weâ€™re looking at our big comeback year. It will
be particularly good for certain segments of our local markets and
marginally improved at the national level. Not a boom by any means, but
weâ€™ll take it!!!