Across the U.S., Pending Home Sales Jump! Are Further Price Cuts Likely?
INDEX OF PENDING HOMES SALES UP 6.7% IN MARCH, THIRD MONTHLY JUMP IN A ROW - NATIONAL ASSOCIATION OF REALTORS!
Here in Chicago, and, apparently, across the U.S., the number of homes going under written contract, pending closing, has been on the rise! That's the good news!
The possible bad news?
Many of the homes going under contract are selling in distress! Short Sales! Foreclosures! Or, those on the brink of either! This according to a June 2nd Wall Street Journal Story by Reporter Nick Timiraos.
According to the National Association of Realtors, their Pending Homes Sales Index rose 6.7% in April versus March, 2009, and jumped 3.2% from April, 2008 figures. Homes Pending Sale Figures usually accurately predict actual closed sales 45 days out - not perfectly, however, since tighter loan underwriting standards knock out some buyers. But closely.
If sales continue to climb, will it be as a result of banks continuing to drop their prices on foreclosed properties they own (often referred to as REO Property, for "Real Estate Owned")? Will their aggressive price cutting drive down the prices on non-distressed homes?
And will this increase foretell a turnaround to the U.S. Housing Market, as well as the sluggish market for Real Estate in Chicago? Not so fast - a similar uptick in Pending Sales in April of last year did not prove to be a lasting trend.
Stay Tuned!
DEAN MOSS & DEAN'S TEAM CHICAGO
