Figures released today by the National Association of Realtors are a good indicator that the market continues to improve – though at very modest levels. I’ve been saying for months that the market is, in this post recessionary period, improving though will continue to do so with minor bumps in the road along the way.
Last month’s lower than expected sales figures were just that, a bump in the road. We saw the slip partly due to seasonality and partly due to the expiration of the tax credit.
Now, one month later, we’re seeing numbers rise. According to the National Association of Realtors’ Pending Home Sales Index, pending home sales rose 5.2 percent to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June.
According to Lawrence Yun, NAR chief economist, “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”
Now of course this is a national perspective and we all know that real estate is local. Locally we’re seeing some pockets of strength. Some of the most sought after neighborhoods continue to see strong sales while those that may be challenged due to proximity to jobs and commerce, are seeing bigger lags.
Overall what we’re seeing most is buyers want to take advantage of the low interest rates and realize that thanks to those rates, they have particularly higher purchasing power right now. From a move-up buyer perspective, we’re seeing a lot of sellers consider selling right now. Yes, they realize they may take a hit from the flurry days of the early part of the decade but when they compare it to what they can purchase on the move-up side and what their monthly payment will be, they truly see a benefit. These indicators are really helping to drive our market right now.
The bottom line is, we are on a good recovery path. And an interesting report this week underscores that. Bankrate revealed numbers that provided a good look at consumer confidence. An overwhelming 90 percent of homeowners say they don’t regret buying their current home. That is even in the face of stagnant – or sliding – home prices home owners have suffered. It is comforting to see this number because regardless of where market conditions currently are, consumers continue to understand that real estate is a good, long term investment.
