A national housing index based on the number of contracts signed by home-buyers rose to its highest level in two years last week, generating more assurances that the market is stabilizing and the time to buy or sell a home is now.
Indicators that the housing market is settling down have been growing, so if you’ve been waiting for a better market, it’s here.
The latest information from the National Association of Realtors says contract signings were up 5.9 percent in May compared to April and 13.3 percent above a year ago. These are measured in an index called Pending Home Sales. Lawrence Yun, NAR’s chief economist, suggested looking at longer-term comparisons.
“The housing market is clearly superior this year compared with the past four years,” he said in NAR’s news release. “The latest increase in home contract signings marks 13 consecutive months of year-over-year gains. Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012.”
Take a look at these other bits of information:
- Nationally and locally, mortgage rates remain at near or record lows. Don’t expect them to stay that way.
- Both S&P/Case Shiller and the Federal Housing Finance Agency say house prices overall are stabilizing and, in fact, are rising in some places.
- The National Association of Homebuilders monitors improving metro areas. Those that enjoy sustained improvement in employment, housing pricing and single-family home permits over six months make it into their index. Nationally, they started with 11 markets; now they’re up to 83 including one in South Jersey.
Locally, we are seeing modest improvements in the market both allegorically and through hard data. For instance, comparing Morris County from June 2011 to June 2012:
- There were more sales (427 in 2011 vs. 290 in 2012),
- Fewer homes available (3,949 in 2011 vs. 3,365 in 2012), and
- Fewer sellers for each buyer (meaning more buyers in the market) as illustrated by the 9:1 seller-to-buyer ratio in 2011 vs. the 7:1 ratio in 2012
- There was a 9.2-month inventory of homes on the market in June 2011 vs. 6.9 in June this year.
Challenges remain on both sides of the sales equation. But those working with a reputable Realtor instead of going it alone will receive good counsel and discover that conditions have rarely been better to buy and are rapidly improving to sell. In fact, in some areas, there are inventory shortages of certain types of homes.
“The market” is the immediate area where you’re buying or selling a home. If you’ve been thinking about doing either, discuss it with a local Realtor who knows those markets. Talk about all your concerns and fears. He or she will help you decide whether the time is right, how to accomplish your goals and how to get the best deal.