Decline in Home Sales Not Yet Concerning; More Homes Need to Be Built by Elaine360

Elaine Golden Gealer, Brentwood condos, Brentwood townhomes, Brentwood real estate, Brentwood new construction, Brentwood condominiums, Westwood condos, Westwood townhomes, Westwood real estate, Westwood new construction, Westwood condominiums, Westchester condos, Westchester townhomes, Westchester real estate, Westchester construction, Westchester condominiums, Toluca Lake condos, Toluca Lake townhomes, Toluca Lake real estate, Toluca Lake construction, Toluca Lake condominiums, North Hollywood condos, North Hollywood townhomes, North Hollywood real estate, North Hollywood new construction, North Hollywood condominiums, Sherman Oaks condos, Sherman Oaks townhomes, Sherman Oaks real estate, Sherman Oaks new construction, Sherman Oaks condominiums, Encino condos, Encino townhomes, Encino real estate, Encino new construction, Encino condominiums, Beverly Hills condos, Beverly Hills townhomes, Beverly Hills real estate, Beverly Hills new construction, Beverly Hills condominiums, West Los Angeles condos, West Los Angeles townhomes, West Los Angeles real estate, West Los Angeles new construction, West Los Angeles condominiums, West Hollywood condos, West Hollywood townhomes, West Hollywood real estate, West Hollywood new construction, West Hollywood condominiums, Santa Monica condos, Santa Monica townhomes, Santa Monica, real estate, Santa Monica new construction, Santa Monica condominiums, San Fernando Valley condos, San Fernando Valley townhomes, San Fernando Valley real estate, San Fernando Valley new construction, San Fernando Valley condominiums.The National Association of Realtors® (NAR) blamed higher interest rates for the slipping home sales numbers reflected in its pending home sales report. The Pending Home Sales Index (PHSI) figures released today were down 1.3 percent from 110.9 in June to 109.5 in July.  The PHSI is a forward looking indicator based on contract signings.  Completed transactions are generally expected to follow within 60 days.

While recent contract signings are down, the July PHSI is still 6.7 percent higher than its level in July 2012, 102.6.  The index has remained above year-ago levels for the past 27 months.

Lawrence Yun, NAR chief economist, noted the uneven pattern of the index in the various geographic regions.  “The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown.  However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West,” he said.  “More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems.”

The PHSI in the Northeast fell 6.5 percent to 81.5 in July but is 3.3 percent higher than a year ago.  In the Midwest the index slipped 1.0 percent to 113.2, remaining 14.5 percent above year-earlier figures. Pending home sales in the South rose 2.6 percent to an index of 121.5 in July, 7.7 percent higher than a year ago.  The index in the West fell 4.9 percent in July to 108.6, and is 0.4 percent below July 2012.

NAR expects existing home sales to increase 10 percent this year to about 5.1 million units and rise to approximately 5.2 million sales next year.  Due to inventory shortages prices are expected to grow nearly 11 percent from 2012 to 2013 and then moderate to a 5 to 6 percent increase in 2014 as increasing construction of new homes takes some pressure off of prices.

The PHSI is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales.  The index base of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined and, by coincidence a year which fell within the normal range of home sales – 5.0 to 5.5 million.

 

Elaine                                                     
DRE #00598428
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed

“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”

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