Pending home sales on the rise

By Jason • November 2nd, 2009

In a rush to avoid losing out on the soon to expire home buyers tax credit, first time buyers have been fueling the residential real estate market. According to the most recent Pending Home Sales Index for September, a forward-looking indicator based on contracts signed in September, rose over 6% marking a 21.2% increase over last September.

“In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008.”

This comes on the heals of the latest Case-Schiller study I wrote about last week (Residential real estate in the news.) We are all excited about the prospect of extending the tax credit into next year and including move up buyers. However, many of the builders I speak with regularly are, although excited, staying reserved about their near term futures because of still high inventories and the current lack of available credit for construction.

Raleigh area builders I am seeing succeed now are those that have adjusted their pricing to entice the hottest pool of existing buyers, first timers.  They are holding back on some of the high end features while keeping prices in check to continue to draw buyers to new construction instead of resale. They are also building on tighter margins than before which is just another incentive for home buyers to get into the market.

Walter Molony.Pending Home Sales Rise for Record Eight Straight Months. National Association of Realtors. 11/02/09. http://www.realtor.org/press_room/news_releases/2009/11/rise_eight
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