With the recent market crash over the last couple of years, many people believe that we are still in bad shape. While things are not as rosy as they once were, they are definitely on the rebound. According to recent information released, pending home sales were at a three year high in September. If that s not good news, I don t know what is.
The housing market has affected every aspect of our lives. Many homeowners have been plagued by falling property values. This has crippled home owners from using the equity in their homes and put a damper on business in general. The subprime mortgage crisis affected banks and tightened up the purse strings on the available credit that was out there. That put the brakes on other industries as well. When the media starts forecasting doom and gloom, individuals tend to tighten up on their own budgets. Millions lost their jobs and couldn t sell their homes if they wanted to. All of these problems kind of compounded one another and it contributed to a large financial crisis.
With most people familiar with what has happened over the last few years, it appears that the worst is behind us. With September s news, this marks the eighth straight month that pending home sales have risen. This is a good sustained trend that is presenting itself. A big part of the reason that home sales have increased is the $8000 tax credit that has been put into effect. September was really the last month that you could take advantage of the credit. Therefore, first time home buyers kind of scrambled to get their hands on a house so that they could take advantage of the free money. Getting $8000 off of your taxes is a huge boost and it helped the real estate market get going again.
This particular index is a good predictor of future sales. There is up to a two month lag between the pending sale and the actual sale going through. This means that we should start seeing the benefit of these sales going through in another month or two.
With all of this movement in the real estate market, the question remains of whether this action can be sustained. After the tax credit is over, will buyers still want to come out into the market? This is a big question that remains to be seen. No one can predict the future, but most analysts think that we might see a little bit of a lull in the market. However, during this lull, the growth will still be steady. Times are not yet what they once were, but they are definitely on the way back. It may still be a few years before real estate home values rise to what they once were, but at least they are on the right track. Keep an eye on the monthly reports to see if the housing market can keep up with the precedent that it has set for itself over the last eight months.
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