Apr 6th

2010

Pending Home Sales Jump In February – Buyers Are Taking Action.

It was no surprise that Pending Home Sales shot higher in February, boosted in part by the federal home buyer tax credit’s April 30 deadline.

February’s Pending Home Sales index rose 8 percent versus the month prior, but remains well off the highs set last October.

For today’s home buyers and sellers, the Pending Home Sales Index is an important measurement. This is because a “pending home” is a property that is under contract to sell, but not yet closed.

According to the National Association of Realtors®, 80% of homes under contract close within 60 days, historically. Therefore, a higher Pending Sales figure in February projects that April’s Existing Home Sales will be higher, too.

On right-priced homes, multiple offer situations are more common; sales prices are settling closer to listing price; days on market is falling. These are the signs of a buyer-heavy market.  It drives home supplies down and home prices up.

It’s a good time to be a seller, in other words.  Especially as buyer activity looks poised to peak.

When the home buyer credit faced its last expiration in November 2009, we saw a pattern of buyers rushing to beat the deadline.  There’s no reason to expect that won’t happen again. And as it does, Pending Home Sales should continue to climb. Average home sale prices should rise.

Home buyers may find it smart to go under contract sooner rather than later. Pending Home Sales is a warning shot.  Higher home sales figures are ahead.