Pending Real Estate Sales Slow But Remain Higher Than Last Year

Activity for pending home sales fell after a surge of contracts in preceding months.  Now that the deadline for the first-time home buyer tax credit has been pushed back to Spring, pending home sales remain well above a year ago, according to the National Association of Realtors report released by NAR’s chief economist Lawrence Yun.

Perhaps the biggest test for the effectiveness of the federal tax credit for stimulating real estate sales will be when it ends.  If the market is able to continue the momentum without the artificial incentives, many in the Chicago real estate industry will be pleased to possibly see the light at the end of the real estate slump.  The Pending Home Sales Index, an indicator based on contracts signed in November 2009, fell 16.0% to 96.0 from an upwardly revised 114.3 in October, but is 15.5% higher than November 2008 when it was 83.1%.  Got it?

As we enter the doldrums of the winter market, we will be looking for positive indicators in the form of new jobs.  Jobs are perhaps the biggest drag on the real estate market and when employers begin to hire again, real estate values may stabilize if the rate of foreclosures slow due to increased economic activity.  Check out the National Association of Realtors report on pending home sales.