Bay Area Home Buyers-Home Sales Unexpectedly Spike In May

Bay Area Home Buyers-Home Sales Unexpectedly Spike In May

Pending Home SalesThe summer housing market is heating up. According to data from the National Association of REALTORS®, the Pending Home Sales Index smashed analyst expectations, jumping 8 percent on a monthly basis in May.

Wall Street calls were for an increase of just 0.5 percent.

Stronger than Expected New Home Sales

It was a surprise result that, coupled with the recent stronger-than-expected New Home Sales and Existing Home Sales readings, has sparked housing market optimism in California and nationwide.

The biggest reason for the optimism is because of what the Pending Home Sales Index measures.

In contrast to “traditional” housing data which reports on how housing performed two months ago, for example, the Pending Home Sales Index is a forward-looking indicator; a predictor of future market activity based on freshly-written contracts between Bay Area buyers and sellers.

An Indicator of the “Future” Housing Market

In other words, the Pending Home Sales Index looks ahead — not back. This is reflected in its methodology which states that 80% of homes under contract close within 2 months, and a large percentage of the rest close within Months 3 and 4.

Because May’s Pending Home Sales Index rose sharply, therefore, we can expect similar jumps in the Existing Home Sales figures of June and July.

For housing and home prices, this is a positive but the gains won’t apply to each home equally. The Pending Home Sales Index is still a national report for a market built on local sales. What’s happening on your particular street in your particular neighborhood may not reflect what’s happening somewhere else. I always encourage you to contact a LOCAL Realtor. I would be happy to refer you one that can help meet your goals.

Buyers : Stay Ahead Of Price Increases

Not every market in the Bay Area Jumped up 8%. There are many deals to be had for investors, first time home buyers and individuals looking for a long term home. Have a plan in place and be Pre Approved. I love to work with my readers and help you accomplish your goals. I work at Vintage Mortgage Group in Pleasanton a local trusted Mortgage Company situated to match you with the best loan program. Message me below today to get started.

 

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