The 1.2 million member National Association of Realtors released their June pending sales report on August 4th, 2009. For the fifth consecutive month, pending sales increased significantly and were substantially higher than year over year sales. In fact, June 2009 sales were 6.7% higher than in June 2008. June pending sales rose 3.6% over May sales. The last time there were five consecutive monthly gains was in July 2003.
The bottom line is that residential real estate is selling. The current market features low mortgage rates, depressed pricing and the availability of the $8000 tax credit for first homebuyers.
For the past several months, the FHA has been reviewing their appraisal policies. A recent ruling requiring participation of local appraisers has helped to quell some unrest among investors.
The NAR maintains a Housing Affordability Index. The index tracks important criteria and is a reflection of the overall buying climate. The June affordability index stood at 159.2. While down a bit from recent months, the index is 36.6 points more favorable than a year ago. The slight rise in the interest rate from record lows still makes it a desirable marketplace.
The affordability index is so favorable that a median-income family earning $60,000 per year can now afford a home costing $289,000, well above the average selling price in June.
The Pending Home Sales Index is a leading indicator representing about 20% of transactions for existing home sales. The index is based upon activity from the year 2001. June 2009 is 59.2% ahead of the 2001 pending sales.
Many of these pending transactions are investment sales, short sales or foreclosure sales. These areas are providing strong buying opportunities for investors. Today’s real estate market is loaded with opportunity. Experienced investors are getting pre-qualified and playing that chip to strengthen their position. If there was ever a buyer’s market, this is it.