Florida mortgage borrowers looking to finance a new home may see home prices drop a bit as pending home sales for November are down.
Reaching a 3-year high just one month ago, the National Association of Realtors® Pending Home Sales index plunged in November. Remember that “pending” home sales refer to those homes that are under contract to sell, but have not yet closed.
The 16 percent decrease signals the first drop in Pending Home Sales since January of last year. As such, we can look for housing prices to be a bit softer this month. This is because, historically, 80 percent of Pending Home Sales convert to “closed sales” within 60 days, and most of the rest close within 120.
With Pending Home Sales down, the housing market should lose some of its momentum. For today’s home buyers, this kind of slack can represent a terrific opportunity.
The price of homes is based on the law of supply and demand; of buyers and sellers. When buyers outnumber sellers, competition leads to bidding wars, ultimately, and higher home prices overall. Buying a home in multiple bid situations means possibly paying too much for that home.
When buyers are sparse, on the other hand, the psychology of real estate shifts.
Home sellers know when the market dips, trust me. It’s at this point that seller fear can creep in and it becomes a buyer’s best time to buy.
Based on November’s Pending Home Sales data, it’s clear that home sellers are in abundance right now. If you’re in the market to buy a home over the next month or so, then you have leverage. But this leverage may not last.
With Florida mortgage rates easing lower this week, the federal home buyer tax credit still in effect, and the Holiday Season officially over, buyers are getting back to business in Winter Haven and everywhere.
Plus, with the tax credit deadline of April 30, 2010 fast approaching, buyer activity should increase over the next 4-6 weeks.
The market looks ripe for a buy but don’t rush it. Take your time and bid right. But when you’re ready, be ready — once the market momentum shifts back to sellers, you might lose all that leverage you built up through the winter.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 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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