The National Association of Realtors’ Pending Home Sale Index bounced back to positive territory in May, rising 5.9 percent to its highest level in two years.
With a reading of 101.1, the index is 13.3 percent higher than a year ago, when it was 89.2, and that’s the highest it’s been since April 2010, when contract activity increased from the first-time homebuyer tax credit.
Other details NAR singled out were:
- Contract signings have increased year-over-year for 13 consecutive months.
- The market is on track to see a 9 to 10 percent improvement in total home sales for 2012.
- Regionally, the index rose in the Midwest by 6.3 percent, where it’s 22.1 percent higher than last year, and in the South, the index was up 1.1 percent monthly and 11.9 percent year-over-year.
- Going forward, NAR Chief Economist Lawrence Yun said that low inventories could impact contract activity. “If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers,” he said.
Lisa Dempsey, a branch manager for the newly-franchised Better Homes and Garens Real Estate Gary Greene, said that lower inventories have definitely been a recent development in Houston’s markets.
“It’s not a complete shortage yet, but what we are seeing is we have a lot of markets with three months of inventory,” Dempsey said.
However, Dempsey was quick to point out that even with lower inventories, Houston is not quite a seller’s market yet; buyers are still as selective as ever on the properties they choose to pursue.
One area, though, where demand has been particularly high has been The Woodlands, Dempsey said. There, the average home on the market is less than 30 days, and the properties are selling with multiple offers. Part of the demand is the new Exxon Mobil corporate headquarters, but Dempsey said international buyers have also flocked to the area, a trend we’ve covered before.