Pending Traverse City Home Sales Up 3 Months in a Row!
Pending home sales rose for the third consecutive month in April, according to a report from the National Association of Realtors; with some economists saying enough consecutive positive traction has occurred to call a possible bottom in the U.S. housing market. According to a Tuesday release by NAR, the trade organization’s gauge of contracts signed in April rose by 6.7% to 90.3, up from March’s reading of 84.6.
The jump in sales was driven primarily by continued historically-low interest rates, and low home prices and a new $8,000 first-time home buyer tax credit, according to the industry trade group. “Housing affordability conditions has been at historic highs, and now the [tax credit] is beginning to impact the market,” said Lawrence Yun, chief economist for NAR.
The jump in pending home sales was much better than Wall Street’s expectations for a rise of .5% in the index, giving stocks a moderate bounce in early morning Tuesday trading.
“We suspect sales are on their way back toward the close to 5 million pace that prevailed from the fall of 2007 to October 2008,” said Abiel Reinhart with JPMorgan Chase & Co. “Large volumes of distressed sales, improved home buyer sentiment, and a slowly stabilizing economy have the potential to then push sales higher.
Pending home sales are a gauge of home sale contracts signed but not sales that are finalized and closed. With credit conditions remaining tight and the overall economy remaining weak, people who signed contracts for a home may not be able to acquire the financing necessary to complete a purchase. “Mortgage processing time has increased and some sales are falling through at the last moment,” said Yun.
The Traverse City Real Estate market is picking up with this trend too. We are seeing a lot of inventory starting to move in the area. Regionally, the Northeast saw a major jump in contracts signed during the month of April, with sales jumping 32.6% in April. Northeast sales activity is now higher by 0.8% from a year ago. In the Midwest, sales rose 9.8% and are now 11.1% higher than a year ago while the South saw sales slip 0.2% but are 3.5% higher than a year ago. The struggling West saw sales rise 1.8% but remain down 2.9% from a year ago. The average price of a single-family home declined by approximately $5,000 to $169,800 in April, according to the association.
“Here’s hoping [sales keep rising],” said Ian Shepherdson with High Frequency Economists. “But remember that even if sales volumes rebound, home prices will keep falling under the weight of the massive inventory overhang.” Hang in there everyone! The Traverse Real Estate market WILL be back and in the meantime sit back and enjoy all of the powerful online marketing tools we use to sell your home such as interactive 360 home tours, distribution, and professional photography.