I heard in a news report on Tuesday that the amount of homes that went pending in February was down 1.9%. Of course this is a national average. I was sort of surprised because here in my office our open escrows have grown since January. As I looked closer at the data I found some really good news for us here in the Western states.
The Pending Home Sales Index is a forward-looking indicator based on contracts signed in February. The PHSI in the Northeast rose 3.2 percent in February (to 71.8) but remains 25.4 percent below a year ago. In the Midwest, the index declined 3.7 percent (to 82.7) and is 17.4 percent lower than February 2007. The index in the South fell 5.5 percent in February (to 85.0) and is 30.3 percent below a year ago. In the West, the index rose 2.1 percent in February (to 95.8) but is 6.1 percent below February 2007.
As you can see from this data the West is still putting more homes into escrow, meaning more homes are selling here than other places in the country. I have stated this before; in California we always grow quicker, decline sharper, and rebound faster than almost every state in the union. We are not out of the woods yet. The National Association of REALTOR's states that they predict a national decline this year of about 1.4%. NAR chief economist Lawrence Yun stated, "Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure." He said, "We're looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met."
I am excited to see what will happen this summer. Most of my clients are very anxious to get out and buy a home. There are still loans available that are at low rates with low down payments. Most of my buyers are going FHA and the sellers are willing to pay up to 6% in closing costs. This will cover all the closing costs and the 3% FHA down payment. If you are renting, look at what you are paying and check with a lender to see what you can afford to buy. Then look at what the tax advantages are to owning a home. If you have any questions about those tax benefits give me a call.
Sincerely Kevin Williamson Coldwell Banker Shepherd Group www.williamsonteam.net