Lake Geneva Real Estate Pending Home Sales Drag In January, But Should Rebound For Spring
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Fewer homes went under contract in January as the Lake Geneva real estate housing market continues to limp through the winter months.
According to the National Association of Realtors®, the Pending Home Sales Index fell to its lowest level in 3 quarters this January. By contrast, in October 2009, the index had touched a 3-year high.
The Pending Home Sales Index measures the number of homes that have gone under contract to sell, but have yet to close nationwide. It’s compiled using data from more than 100 regional listing services and 60-plus brokerages — the sample set encompasses 20 percent of all home resales in a given month.
Economists have come to rely on the Pending Home Sales Index because of its high correlation to actual home sales. 80% of all home marked “pending” close within 60 days. Many of the rest close within 120.
Therefore, when we see Pending Home Sales show weakness like it did in January, we can infer that home resales will remain weak through the spring.
But will they really?
- Fewer sales should drag down home prices, bringing more buyers into the market.
- Mortgage rates are still very low, but are poised to rise in just a few weeks.
- The home buyer tax credit requires buyers to be in contract by April 30, 2010
In other words, there’s a confluence of factors that could lead to a rush of sales for Lake Geneva real estate and around the country over the next two months, reversing the housing market’s recent momentum.
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Thanks.
Warmly,
Travis Egan
Lake Geneva Real Estate, Lender
United States pending home sales climbed in April beyond expectations as buyers signed contracts to gain a government tax credit. The National Association of Realtors’ index for pending sales of used homeswent up by 6.0% to 110.9 in April, the industry group said Wednesday. The gain was the third in a row. Economists surveyed by Dow Jones Newswires had expected pending home sales would climb in April by 5.0%. First-time home-buyers raced to beat the April 30 deadline for the tax credit. The incentive was an extension of a subsidy originally enacted in February 2009.
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