Nationally: May Pending Home Sales Reach Highest Level in Over Six Years

Pending sales have been above year-ago levels for the past 25 months.

Palm Coast, FL – June 27, 2013 – Nationally, pending home sales rose in May to the highest level since late 2006, implying a possible spark as mortgage interest rates began to rise, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, increased 6.7 percent to 112.3 in May from a downwardly revised 105.2 in April, and is 12.1 percent above May 2012 when it was 100.2; the data reflect contracts but not closings.

Contract activity is at the strongest pace since December 2006 when it reached 112.8; pending sales have been above year-ago levels for the past 25 months.

Lawrence Yun, NAR chief economist, said there may be a fence-jumping effect.  “Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher,” he said.  “This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand.”

Yun upgraded the price forecast for 2013, with the national median existing-home price expected to rise more than 10 percent to nearly $195,000.  This would be the strongest increase since 2005 when the median increased 12.4 percent.

Existing-home sales are projected to increase 8.5 to 9.0 percent, reaching about 5.07 million in 2013, the highest in seven years; it would be slightly above the 5.03 million total recorded in 2007.

The PHSI in the Northeast was unchanged at 92.3 in May but is 14.3 percent above a year ago.  In the Midwest the index jumped 10.2 percent to 115.5 in May and is 22.2 percent higher than May 2012.  Pending home sales in the South rose 2.8 percent to an index of 121.8 in May and are 12.3 percent above a year ago.  The index in the West jumped 16.0 percent in May to 109.7, but with limited inventory is only 1.1 percent above May 2012.

The Flagler County/Palm Coast housing market is becoming constrained by the reduced number of distressed properties on the sales block. Until recently, distressed sales have accounted for more than 50% of all sales. Of 762 single-family Flagler County homes for sale, only 13.4% are either REO or short sales.

2 replies
  1. John Boy
    John Boy says:

    Flagler Prices

    Toby, using your own figures, I cannot understand what’s going on. It appears to me that some group is controlling the Real Estate marketplace.

    Over 75% of the homes sold are less than $100. psf and that includes land.

    75% of the new homes are over $100. psf and usually builders do not include the land price unless it is a spec home.

    Almost all the condo’s sold have a PSF price of over $100. and by definition does not include any land and common elements don’t really drive price.

    Saltwater home prices are so low it’s almost comical. I cannot find any other location in the entire country with prices less than double what we see here. the pending foreclouser sales for next month list 6 of 6 saltwater homes values as under $200k. All colder climate area have prices that I would never consider relative to boating seasons.

    What’s going on? Would appreciate your comments

  2. toby
    toby says:

    Reply to John Boy

    The numbers are what they are. Many existing homes are selling at prices below replacement value. We are up from the market bottom, but remember, we dropped well over 50% in many market segments. We haven’t reached normal pricing yet.

    In spite of the publicity of being the fastest growing county and city in the U.S. for two years, Palm Coast and Flagler County remain largely undiscovered. As long as I’ve been tracking local data, our median prices have been well below both state and national figures. Factor in our lifestyle and it becomes even more difficult to believe.

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