C21AGVoices

The Pending Home Sales Index shot higher in April as low mortgage rates and a soon-to-expire federal tax credit spurred home buying in Philadelphia and across the county.

A “pending home sale” is a home that’s under contract to sell but not yet closed.

Region-by-region, April’s pending home sales varied versus March’s data:

• Northeast Region: +29.5%
• Midwest Region : +4.1%
• South Region : -0.6% (after a +15.9% posting in March)
• West Region : +7.5%

On an annual basis, the Pending Home Sales Index is higher by 22 percent.

April marks the third straight month that pending home sales are up and today’s buyers should take note. This is because, according to the National Association of Realtors®, 80% of homes under contract close within 60 days.

In other words, May and June’s existing home sales data should be similarly strong, causing the South Philly real estate market to gently shift in favor of sellers.  In fact, already, we’re seeing home resales touch multi-year highs while new home supplies fall to multi-year lows.

All of it tends to push home prices higher while simultaneously reducing buyer negotiation leverage. That, coupled with the high probability of higher mortgage rates ahead, means that finding “deals” will get tougher for the average home buyer.

In looking at the housing market data, it appears that the best month in which to have bought a home this year was February.  The next best time may be right now. It certainly seems as if the financial benefits of owning a home are now outweighing the concerns consumers have had. With the historically low mortgage rates, buyers may find themselves regretting their lack of action if they don’t move now on buying a home. We may be back to the old real estate saying “its better to buy real estate and wait than it is to wait and buy real estate.”

Talk to your real estate agent if you’re planning to buy a home this year.  It may be sensible to move up your time frame a few months.