Pending Home Sales since 2013 + Market Update | June 2016

by Scott Westlotorn

Real estate sales had steadily increased since the beginning of 2016 until May when pending home sales let up and declined year-over-year for the first time in almost two years, according to the National Association of Realtors®.  The national “Pending Home Sales Index” declined 3.7% in April. All four major regions experienced a decline in contract activity last month. Realtors® are experiencing buyer frustration because there not enough affordable homes for sale in their respective markets.

Persistently low mortgage rates and low inventory has caused a rapid rise in home prices. Many buyers have either been priced out of the market or caused them to purchase homes in areas they hadn’t previously considered. Total housing inventory at the end of each month has decreased year-over-year. The demand is there but the number of homes coming onto the market has not kept prices in check with inflation and wage growth.

In the short term, volatility in the financial markets will keep mortgage rates low and demand from foreign buyers should increase as US real estate is deemed a safe place to invest cash. On the other hand if the Brexit vote causes sustained market angst and ongoing economic uncertainty in Europe it could impact our economy and temper home buying.

Homes that are priced well, in reasonably good condition and in a desirable location will continue to sell. If you’d like more information about getting your home sold in this market contact us for a discreet market consultation.