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Pending Home Sales Continue Upswing

Wednesday, May 5, 2010

Pending home sales increased again in March, affirming an upswing of home sales is unfolding for the spring home buying season, according to the National Association of REALTORS®.

The Pending Home Sales Indexis a forward-looking indicator of the housing sector based on pending sales of existing homes. A sale is listed as pending when the contract has been signed, but the transaction has not closed. The sale usually is finalized within one to two months of signing. Contracts signed in March rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85; this follows an 8.3 percent increase in February.

Lawrence Yun, the national Realtor group's chief economist, said favorable affordability conditions have been working with the tax credit. "Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales," he said. "Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing."

"Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages. As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up," Yun added.

For people ready to buy a home, the timing couldn't be better, according to Jeff Bell, president of the Silicon Valley Association of REALTORS®, especially in California, which has the added incentive of a new state home buyer tax credit this year. "Buying conditions continue to be more favorable than they have been for years," Bell said. "Affordability has improved and interest rates are still very low. Even better, in California home buyers can take advantage of the 2010 state home buyer tax credit, which is available for those who purchase a qualified principal residence beginning May 1 through December 31, 2010."

More information on the 2010 state home buyer tax credit and rules on obtaining the tax credit may be found at the State of California Franchise Tax Board Web site at www.ftb.ca.gov.

"Homeownership is part of the American dream. It's an investment in your future," Bell said. "If you're in the fence about whether or not now's the time for you to make that investment, talk to a Realtor who can explain the process, identify opportunities in your local market, and show you options that best fit your situation."

The national Realtor group's report indicates the PHSI in the Northeast declined 3.3 percent to 75.1 in March but remains 27.2 percent higher than March 2009. In the Midwest the index increased 1.2 percent to 98.9 and is 18.5 percent above a year ago. Pending home sales in the South jumped 12.7 percent to an index of 121.2, which is 28.3 percent higher than March 2009. In the West the index rose 1.9 percent to 99.9 and is 8.8 percent above a year ago.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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