Sellers wanted

It’s no surprise that the February pending home sales somewhat leveled off with home inventory down. However, according to the National Association of Realtors (NAR), pending sales are at the second highest level in almost three years.

The pending home sales index (PHSI), which is based on executed contracts and not sales, dipped 0.4% in February when compared to the previous month.

However, last month’s PHSI was 8.4% more than in February 2012. Sales contracts on homes has been more than last year levels for the past 22 months.

Prior to this year, the previous time the index showed a higher reading was in April 2010, which was just before the expiration of the home-buyer tax credit.

The limited home inventory is preventing the housing market from further strengthening in many areas of the country.

The chief economist of NAR, Lawrence Yun, believes new construction will minimize the inventory shortage and housing starts need to increase 50% from current levels. At the root of the problem is that home builders, who are mostly small businesses, do not have the capital or access to loans to develop properties. Construction also benefits the overall economy by increasing employment, fueling sales of building materials and appliances and related sectors.

Regionally, the PHSI in the Northeast decreased 2.5%, but that is still almost 7% above February 2012. In the Midwest, the PHSI increased 0.4% and 13.2% more than a year ago. In the South it decreased slightly, 0.3 %, but was 12.1% above February 2012. In the West, the index increased 0.1% in February, but is 0.8% lower than a year ago.

Mr. Yun forecasts existing-home sales to increase by approximately 7% this year. The national median existing-home price is projected to increase nearly 7% this year as well. Last week the S&P/Case-Shiller index of property values for January in 20 cities (which is based on a three-month average, so transactions in November and December were factors) rose 8.1% as compared to January of last year.

This increase surpassed the 7.9% median forecast by Bloomberg economists. This gain is the third best forecast of home prices in the last couple of years, according to Bloomberg analysts. This indicator of property values rose 6.8% in the year ending in December.

Of note is that all 20 cities in the index showed a year-over-year improvement. Phoenix, Ariz., had the largest increase in the median existing-home price at 23.2%. The home prices in New York were up 0.6% and made the turn after declines of the previous 28 months.

Reports of rising home values will attract more buyers, motivate my sellers to put their properties on the market and prompt builders to develop properties.

An improving economy, low interest rates, and the easing of lending restrictions will strengthen the real estate market.

In Greenwich, the inventory of homes is significantly down and there are qualified buyers ready to buy. Renovated, nearly new and new properties are being sought by buyers. It is good time to list if you were planning on selling.

 

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected] or she may be reached directly at 203-249-2244. 

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