I am very excited to pass along some uplifting news released this month by the National Association of Realtors® (NAR) showing an increase in pending home sales for nine months in a row!  In fact, this is the first time this has ever happened since the inauguration of the Pending Home Index in 2001.

For those that aren’t familiar with the Index, it is based on a national sampling of pending sales for existing homes.  Research has proven that signed contracts mirror actual closings within a 30 to 60 days time frame, so reporting on pending sales as opposed to closed sales has been accepted as the standard.  They do report both month-to-month and year-to-date percentages, but in my opinion the year over year figures are much more telling of the actual trends that are occurring.  And, as of October 2009 there was a 31.8% increase over October 2008 representing the largest annual increase ever!

Lawrence Yun, the chief economist for NAR, has stated that while we may see a small dip month over month in closed sales as the “pendulum” swings back between now and Spring time, we should reach “self-sustaining housing conditions and firming home prices in most areas around the middle of 2010.”^₁ Is this good news or what?  The prediction is that we will see at least a 20% increase in home sales by the middle of 2010, with an increase in median home values somewhere between 2-4%.  Of course, the extension on the deadline for the tax credit for first-time home buyers will be beneficial for this as it enables an additional 2.6 million households to qualify for the credit on top of the 1.8 million already qualified through the fourth quarter of this year. 

With the increase in the numbers above coupled with the fact that interest rates on mortgages are certain to rise, those of us in the residential real estate profession should be gearing up for an exciting year!  There is no doubt that we have definitely been tested over the last few years, but we are finally beginning to see some relief and we need to be ready for it.  Of course, it doesn’t hurt that we live in one of the most beautiful places in the country here in Southwest Florida!

Stay tuned for the release of the November home sales coming out in the next few weeks followed by the release of the Index numbers for November in early January.

^₁www.realtor.org