Pending home sales eased moderately in January for the second straight month, but remain 20.6 percent above the cyclical low last June, according to the National Association of Realtors®.The Pending Home Sales Index,* a forward-looking indicator, declined 2.8 percent to 88.9 based on contracts signed in January from a downwardly revised 91.5 in December. The index is 1.5 percent below the 90.3 level in January 2010 when a tax credit stimulus was in place. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
The pace of January existing-home sales actually rose by 2.7% from December to 5.36 million, slightly higher than NAR’s annual forecast for 2011. If contract activity stays on its present course, there should be an 8 percent increase in total existing-home sales this year. Foreclosures accounted for 37% of the January home sales, keeping pressure on pricing which sank to their lowest levels in nine years.
“According to Yun, chief economist of National Association of Realtors, “The broad fundamentals for a housing recovery are developing. He said “Job growth, high housing affordability and rising apartment rent are conducive to bringing more buyers into the market. Some buyers may be looking to real estate as a hedge against potential future inflation.” Whilst investors are becoming increasingly active in the housing market, traditional buyers continue to exercise caution due to unknowns such as the shadow inventory, increasing number of mortgage defaults and the pace of job growth. This pent up demand will definitely be helpful in strengthening the housing market once some of the uncertainty begins to fade.
Please contact Anju Bhatia http://www.rubyhillliving.com/ if you are considering purchasing a home in the Pleasanton, Dublin, Livermore or San Ramon areas.
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