Is the Pendulum Swinging?
According to the National Association of REALTORS (NAR), we have seen pending home sales rise for the ninth month in a row now. The Pending Home Sale Index is an indicator that looks forward based upon properties that were put under contract (or pending) the month previously. In this case it would be for October 2009 that they are reporting on.
For those number crunchers out there, the Index increased 3.7% to 114.1 up from 110 in September, and it is 31.8% above October 2008 when it was 86.6. The rise from October 2008 to now is the biggest annual increase ever recorded for the Index. The Pending Home Sale Index is at the highest level it has been since March 2006 when it was 115.2.
According to Lawrence Yun, the chief economist for NAR, home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year”. He sites that the first time home buyers tax credit is probably helping to unleash pent-up demand. Whether this will continue remains to be seen. Many factors contribute to the health of the housing market.
In Ocean City, we do not have as many first time home buyers, but we have seen the positive trickle down effect as a result of the overall stimulation in the real estate market.
Many buyers that have delayed purchasing their second homes and/or investment property have come back. Competitive prices and low interest rates have aroused the interest of the savvy real estate purchaser. They are some great deals out there and people are starting to realize it. We will more then likely slow down over the Holiday, but our spring market, (which begins around President’s weekend in February) should see increased activity.