The market appears to be exhibiting much improvement with the continued upward trend in pending home sales. Statistics from the National Association of REALTORS® show pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001. Local statistics also paint a healthy picture of the market.
According to NAR, the Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, increased 3.7 percent to 114.1 from 110 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2.
In Santa Clara County, the news is even better, according to the Silicon Valley Association of REALTORS®. Year-over-year pending sales in the county have increased each month this year. In October 2009, there were 1,356 pending sales of single family homes in Santa Clara County, up from 735 in October of 2008. There were 516 pending sales of condos/townhomes, up from 254 in October 2008.
"This is a sign that we have a healthy market," according to Julia Truesdale Keady, president of the local trade association.
Keady and other REALTOR® officials attribute the rise in pending sales to a combination of factors – improved housing affordability due to lower home prices, record low interest rates, incentives like the extension of the higher loan conforming limits, the federal first-time home buyer tax credit and, for Californians, the state's $10,000 tax credit for the purchase of new homes, have prompted buyers to act this year, rather than wait.
"It's a golden opportunity for home buyers," Keady said. "With the extension and expansion of the home buyer tax and the extension of the higher loan conforming limits, we are hopeful the healthy pace will continue next year."
While acknowledging the weak job market remains a major concern and could slow the recovery process, NAR chief economist Lawrence Yun is also positive. Yun said, "As inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families."
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 email or call the SILVAR office at (408) 200-0100.