Irvine OC Real Estate Blog

Some improvement is projected for existing-home sales in the months ahead, with broader gains seen by the fourth quarter as buyers take advantage of new provisions provided through the recently passed housing stimulus bill, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index is a forward-looking indicator based on contracts signed in June. This index rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4.

The fluctuating data indicates a housing market in transition -which is no surprise. However, the rise in pending home sales was country wide with all four regions showing gains. This is a welcome development because a rise in contract activity is necessary for an overall housing recovery. Analysts are expecting that with the tax credit now available to first-time home buyers and increases in home sales with trend could be sustained into 2009

Across the Region

• South: jumped 9.3 percent to 92.4 in June but is 16.6 percent below June 2007.
• West: rose 4.6 percent to 101.0 in June but remains 1.7 percent below a year ago.
• Northeast: increased 3.4 percent to 79.6 but is 15.4 percent below June 2007.
• Midwest: rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago.

The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains

What about distressed properties?  There is a lot of competition for distressed properties, often generating multiple offers. Many are still selling for above their asking price. Plus, time on the market is relatively short so you must plan to act quickly!

 The current expected market time for foreclosures is 1.5 months.  Approximately 20% of the distressed inventory is foreclosures.  In comparison, approximately 80% are short sales.  The market time for short sales is just over 8 months.  The latest statistics are showing only 25% of listed short sale homes are actually closing escrow. Many short sales do remain on the market until they receive formal lender approval which probably contributes to the long market time, but also many people are avoiding them because of the process associated with purchasing this type of property.  Currently we are seeing many of these homes go off the market-not sure why? -But could be due to the increased willingness of lenders to negotiate loan modifications. Expect competition on all on short sales as well but be prepared to wait for as long as 45 days to hear an answer. Much of the current non-distressed properties are very competitively priced so don’t overlook some of the great homes that won’t require this tedious process!