At SkyBlue Portland, we track monthly housing numbers like hawks, eyeing the horizon for signs of directional movement in the market. The market determines the value of any home at any given time and being able to precision price a home for sale is the number one advantage of working with a real estate team to sell your home. (The number two advantage is ensuring you have a full-time marketing team focused on selling, not just listing, your home.)
Our comprehensive comparative market analysis (CMA) enables our team to position a home for sale at best competitive advantage in today’s market–not too high and not too low. It’s part art and part science. When we hit the sweet spot for a home, it sells quickly, at or above asking price. The goal is to encourage multiple offers, which tends to bid up the price.
The Trend Line to Watch
Now most people think that the trend line to watch is how many homes SOLD in the past quarter and past month. But this is a lagging indicator and does not accurately reflect how many homes are likely to sell NEXT month and quarter.
This is where the Pending Home Sales Index (PHSI) comes in. It’s produced by the National Association of Realtors® (NARs), which represents 1 million members involved in all aspects of the residential and commercial real estate industries.
The Pending Home Sales Index measures housing contract activity based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it’s sold, the PHSI generally leads Existing Home Sales by a month or two.
The PHSI is the indicator that we pay closest attention to.
Pending Homes Sales Trending Up for July 2014
According to NARs, pending home sales nation-wide rebounded in July and have now risen in four of the last five months. All major regions experienced healthy gains except for the Midwest, which saw a slight decline.
Now, to look at the numbers, keep in mind that 100 is considered an average level of pending contract activity. An index of 100 is equal to the average level of contract activity during 2001, the first year the indicator was tracked. The volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered typical for the current U.S. population.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales.
This said, the nation-wide PHSI is above 100 for the third consecutive month. Overall consumer confidence, job growth, low interest rates, moderate home price increases, and inventory increases are cited as contributing factors to the overall growth in pending sales.
The index is at its highest level since August 2013 (107.1). The index climbed from 102.5 in June to 105.9 in July–a 3.3% increase. However, it’s still 2.1% below July 2013, which hit 108.2.
In the West, the Pending Home Sales Index rose 4.0 percent in July to 99.5, but remains 6.0 percent below July 2013. This calls for MEASURED confidence in the forward housing market.
It’s officially a sellers’ market, but that doesn’t mean any price goes. Buyers are still guarded when it comes to home values. They don’t want to be caught on the wrong side of a future downturn, with a home that has lost a good portion of its value. No one has yet forgotten the housing catastrophe that rocked the nation not so long and from which we are still recovering. In today’s real estate market, buyers are looking for the most value for their money. That’s where competitive shopping comes in. When it comes to pricing your home for sale, make sure that it’s competitively priced, based on pending sales of like homes in your neighborhood. That’s the best way to ensure a quick sale at top market dollar.
At SkyBlue Portland, we do business differently. Your goals are our ONLY goal. It’s just that simple. Give us a call today at 971-804-4618. We’re always around and happy to help.
Tell Me More
- Pending Home Sales | National Association of Realtors
- Pending Home Sales Pick Up in July | National Association of Realtors
- The Most Important Report in Real Estate? | Keeping Current Matters
- Pending Sales Resume Upward Trend | Eye on Housing
- Pending Sales of U.S. Existing Homes Increase More Than Forecast | Bloomberg