Pending sales bounced back in May, hitting their highest mark in two years.
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.
Jack Persin, the managing broker of Ryan Hill Realty and co-president of the Mainstreet Organization of Realtors, said that contract activity has been “brisk” in the Naperville and Aurora markets, such that he is seeing not only multiple offers on properties, but also some communities with no available inventory.
“The Absorption rates for single family homes in Naperville has seen the most significant change from 12.8 months rate April 2012 to 6.82 months inventory as of June 26,” Persin said. “And more significant, single family median sale price has increased from $390,000 June 2011 to $400,100 this June.”
Pending sales in Naperville, Persin continued, have been consistent across all price ranges. For homes under $300,000, there are 34 pending; for $300,000 to $400,000, 54 are pending; for $400,000 to $500,000, 43 are pending; and for $500,000+, 46 are pending. The activity, Persin said, gives him hope for 2013.
“I am optimistic that the second half will lead us into a strong 2013,” he said.