The number of pending home sales bounced back in May, according to the National Association of Realtors (NAR). The levels reached in May were significantly higher than the prior year and the highest level in the past two years.
According to Florida Realtors, NAR’s Pending Sale Home Sales Index, “a forward-looking indicator based on contract signings, rose 5.9 percent to 101.1 in May from 95.5 in April; and it’s 13.3 percent above May 2011 when it was 89.2. The data reflect contracts but not closings” (Florida Realtors).
The index reached 101.1 in March 2012, however, at that time, buyers were rushing to beat the deadline for homebuyer tax credit.
NAR chief economist, Lawrence Yun, said “The housing market is clearly superior this year compared with the past four years… The latest increase in home contract signings marks 13 consecutive months of year-over-year gains. Actual closings for existing-home sales have been notably higher since the beginning of the year, and we’re on track to see a 9 to 10 percent improvement in total sales for 2012” (Yun).
Additional encouraging signs indicate that the median existing-home price is expected to increase 3% over the next year and another 5.7% in 2013.
While pending sale numbers could be higher, they have been restricted due to a decreased home inventory. The short version– less homes are available for sale. While there are many reasons why there might be a limited number of homes available, part of the reason is that “underwater” homeowners are unwilling to list their homes for sale. Underwater homeowners might have to endure the short sale process or require additional cash to complete a transaction.
One way to combat a limited home inventory would be to increase home construction, which Yun expects to happen moving forward. Yun expects home construction to increase by 26% in 2012 and another 50% in 2013.
Either way you look at it, the real estate market has made significant strides since the downturn in the mid-2000’s. Though inventory levels are down right now, those looking to sell should have an easier time doing so, as home prices would rise as a result.
If you have interest in property on Florida’s Gulf Coast, please click here, Southwest Florida Real Estate For Sale. For more information on a specific property, please contact Jim Mulligan, Suncoasteam Realty at 941-235-7474 or jim@suncoasteam.com.