Florida mortgage borrowers looking to purchase new homes may want to take note – the recent pending home sales numbers point to higher overall home prices.
Released by the National Association of Realtors®, the Pending Home Sales Index posted its 8th consecutive monthly gain in September. The results from this report mark the longest overall upswing in the history of the index – with Pending Home Sales now at their highest levels since December 2006.
As its name suggests, a Pending Home Sale represents a potential sale that is currently under contract, but has not yet closed. It’s the precursor to an Existing Home Sale.
On average, roughly 80 percent of “pending” homes close within 2 months. The majority of those remaining close three to four months out.
What we can learn from the Pending Home Sales Index
When the Pending Home Sales Index rises, it’s an indication that market activity has increased. September’s data confirms what we’ve been noticing since February — the “Buyer’s Market” home sales period is coming to an end.
With more Florida homes under contract, homebuyers will begin to see more of the following:
1. Competitive, multiple-offer situations
2. Reduced purchase price leverage over sellers
3. Fewer seller concessions
Therefore, if you’re buying a Florida home in the next several months, you should understand that the 8-month run in Pending Sales will lead to a run in closed sales. It should result in higher home prices, too. Indeed, we’re already seeing it.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage loan originator, I’m your guy. Call me at 888-859-7418 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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I sure hope you’re right. I’m a broker in central Ca, and things are picking up here as well, but there is so much inventory, I’m beginning to wonder if this will ever end.
I think it is only a matter of time before higher home prices are back. People are starting to buy again because of the great housing deals that are out there. If you have the money to spend, now is the time to invest.
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