Under Contract Homes Increase in May
More Homes Under Contract in May
The number of Pending Home Sales, or homes under contract, rose by 0.9% in May 2015 compared to the month of April and 10.4% compared to the May of 2014. Pending Homes Sales (PHS) is considered as an important guide in analysing the current market activities and strength. Since Pending Home Sales is an indication of future completed sales, in next 1 to 2 months, it is also used to forecast the home sales status in near future.
According to July 22, 2015, article by National Association of Realtors, NAR, the sales of the existing homes witnessed the highest paste in June 2015 over the previous 8 years. The report indicates the highest pace in sale of existing homes in 2007 of 53.9 million homes while 5.1 million homes were sold in June 2015.
Following our series of previously published articles on market conditions, we will examine the recent “Pending Sale” statistics in this segment. The pending sales represent the number of homes that are under contract and have not closed yet. The higher number of Pending-Sale is an indication of a good sign of positive momentum that the real estate market is enjoying these days. As previously discussed, one of the biggest hurdle on the way to a healthy real estate market has been the number of foreclosed properties. These properties need to be taken out of the market in order to reach any normalcy in the future real estate and construction sectors.
The upward trend in pending sales started in June of 2010, which perhaps coins that date as when the market hit the rock bottom and the start of a steady increase in home prices. The increase in sales contracts and home sales are great signs that we could finally see the lights at the end of the foreclosure era tunnel. To witness further improvement the under-priced foreclosed properties needs to be out of the inventory before we could see any sign of new construction.
With the recent increase in the number of the permits for new home construction, only hurdle standing in the way of recovery is the lenders who are still sitting on thousands of delinquent and foreclosed files. The fiasco of last year’s mishandling of these files has caused delays in the submission of delinquency notices to homeowners and subsequent foreclosure process. The banks and other lending institutions should move to get the remaining foreclosure properties into the market as soon as possible. Furthermore, they need to ease up the lending process for the new home buyers that they could pick these properties up from the real estate market.
Perhaps it is the time for these banks to help to rebuild the real estate market that they have so mercilessly destroyed.