Pending home sales up

June 21, 2011


Pending home sales in California rose in May, marking the first year-over-year increase in a year and a half, according to the California Association of Realtors (CAR).

The association’s pending home sales index was 118.3 in May, up 1.6 percent from April and up 12 percent from the year prior. CAR says May saw the largest year-over-year increase since August 2009.

A sale is listed as pending after a seller has accepted a sales contract on a property. Most pending home sales usually become closed sales transactions within two months, according to the association.

The index is an indicator of future home sales and may be telling of the direction of the housing market.

“May’s increase in pending sales is consistent with our expectation that home sales in the second half of 2011 should be higher compared with the second half of 2010, and as a result, annual sales for all of 2011 should match or exceed last year’s annual pace,” said CAR President Beth L. Peerce in a statement.

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Of course, the article means nothing. Home sales could be up because more people are going under and selling their homes for cheaper. That’s probably what it is. Wealthy investors swoop in and pay cash for these foreclosed homes. Problem is prices continue to drop. Homes are cheaper this year than they were last year. So even the wealthy investors have lost money so far.

Many inland places in CA are back to mid 90s prices. But who wants to live there? Here, prices are still inflated. I think they’ll stay inflated if we get the unemployment down but if we can’t and unemployment stays where it is or goes even higher, there’s a lot of shadow inventory that’s going to continue to drive prices down.

I’ve heard it’s up, I’ve heard it’s down. Then I remember: I don’t trust “published figures” anymore. No one puts out something that negatively effects them, it seems. Take it all with a grain of salt. Wait a month for the page B7 correction in 8-point type.