Is the Demise of the Buyers Market at Hand?

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The Bay Area Home Activity Reports for October 2009 are now available at www.bayareamarketmetrics.com.  Read on for the latest market news about the Home Buyers Tax Credit extension and expansion, plus why the continuing increase of the Pending Home Sale Index is revealing the Demise of the Buyers Market.

First, the Tax Credit-As I mentioned in my blog and video last week, the Federal Tax Credit has been extended at expanded to include not only first time buyers but also move up buyers that have been in their homes more than five years.  This chart details the old and new programs and can be found under Quick Links on our home page at www.aboutbayareahomes.com.

Today I will focus on the forward indicator of market momentum, the “Pending Home Sales Index”.

As reported by the National Association of Realtors®, the Pending Home Sales Index posted its 8th consecutive monthly gain in September nationwide.

The index now stands 21% higher than it did one year ago and Pending Home Sales are now at their highest levels since December 2006.

A Pending Home Sale is a home under contract to sell, but not yet closed. 

The following Pending Home Sales Reports are taken from our October Market Metric Reports available at www.bayareamarketmetric.com. 

These graphs cover a two years period and as you can see below, San Mateo County and Santa Clara County Pending Home Sales are at their highest point in the past two years. 

As seen in these graphs, Alameda and Contra Costa Counties are reporting a steady number of Pending Sales at an elevated level when compared to two years ago. 

When the Pending Home Sales Index rises, it tells us that market activity has picked up.  October’s data confirms what we’ve been noticing since February — the Buyers Market is coming to an end.

With more homes under contract in the marketplace, homebuyers typically face one or more of the following:

   1. Competitive, multiple-offer situations
   2. Reduced purchase price leverage over sellers
   3. Fewer seller concessions

Therefore, if you’re planning to buy a home in the next several months, know that the 8-month increase in Pending Sales has lead to an increase in closed sales which in turn results in higher home prices and reduced  affordability.

Further evidence can be seen in this recent Case-Schiller Report.

If you intend to buy while rates are low and affordability factors are still favoring buyers, you should be actively working with an agent now.  If you are thinking of selling but have been holding off until the market was showing clear signs of improvement now would be the time to talk with your agent about preparing to list your home. If you have an interest in Bay Area Homes you will find what you are looking for at www.AooutBayAreaHomes.com.  Quick Links is visible when the page opens.

Quick Links 

There you will find links for home search, listings for bank owned and short sales, home loans, market activity reports, home seller ideas, staging, my book "Let's Make a Deal, The Insiders Guide to Buying and Selling Real Estate" and more.  Of course I am always available to discuss your real estate or mortgage questions or concerns, just call, text or email me for a prompt response.