All opinions are those of Michael Haigh or the Guest Blogger featured.
They do not necessarily reflect the opinions of W.J. Bradley Mortgage Capital, LLC


Pending Home Sales Data Forecasts Higher Home Values Next Month

Pending Home Sales Index October 2009When a home seller accepts a contract on an MLS-listed property, the property’s status changes from “Active” to “Pending”.

This means the home is scheduled to sell, but not yet sold.

Each month, the National Association of Realtors® tallies the number of pending homes and publishes the data as the Pending Homes Sales Index report.

In October, for the 9th straight month, the index gained. It’s the longest such streak in Pending Home Sales history.

Because a “pending” home sale is just a contract between buyer and seller, it’s not as important to the economy as actual home sales. However, the Pending Home Sales Index can be a fine predictor of future activity.

Historically, 80 percent of homes under contract “close” within 60 days, and most others close within 120 days. Recent Existing Home Sales data corroborates this. Home sales activity is at its highest pace in nearly 3 years.

The Pending Home Sales Index does have some shortcomings, though:

  1. It doesn’t account for newly constructed homes, a small but important part of the real estate market
  2. It doesn’t track For Sale By Owner properties and other non-MLS listed homes
  3. Its sample set is small, measuring just 20 percent of all MLS-listed sales

Despite this, however, Pending Home Sales is a terrific measure of real estate market strength. Homes are going under contract at a dizzying pace. It’s thinning out home inventory supplies and pressuring prices to rise.

This chain reaction is what makes Pending Home Sales Index worth tracking. As the number of homes under contract increase, home prices can’t be far behind.

Be Sociable, Share!

Related posts:

  1. Pending Home Sales Data Points To Higher Home Prices This Fall
  2. How To Make Sense Of The Pending Home Sales Index
  3. Higher Home Prices Ahead, Says The Pending Home Sales Index

About

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

  • About the Team

    The Michael Haigh Team specializes in providing a professional, efficient and educational loan experience. We strive to find you the best real estate loan to suit your needs without putting you at risk—even if it's not from us! Our site will provide you with a plethora of information that will help you to figure out the loan process, answer your question, calculate the estimated value of your home, and calculate your estimated closing cost. On top of this you should check out our blog where we have frequent updates from Michael and other contributors on a multitude of topics related to mortgages.

    Backed by W.J. Bradley and Michael Haigh's notable history in the mortgage industry, The Michael Haigh Team is able to provide loan decisions much faster than large banks. Every aspect of your loan will be handled quickly and correctly so you know that nothing is left to chance. We're here to make this process as easy as possible for all parties involved and pride ourselves on making it right for every client. Contact us today to learn what we can do for you!

  • Michael Haigh Team

    1860 El Camino Real
    Suite 250
    Burlingame, CA 94010

    Privacy Policy
  • Web Analytics