One of the signs of market recovery is the rise in The Pending Home Sales Index, a tool that measures the number of signed real estate contracts on existing homes. The index rose 4.1 percent in March to 101.4, reflecting an increase in the number of pending home sales. In comparison, the index is currently 12.8 percent higher than a year ago, when it sat at 89.9. If these pending home sales make it through to closing, it will bring down inventory across the country and bring balance to the real estate market.
The number of distressed homes for sale is down. In all, 29 percent of March sales were for distressed homes, compared to 34 percent a year ago. Foreclosures accounted for 18 percent of March sales, selling at an average 19 percent below market value. Deeply discounted short sales sold on average 16 percent below market value; patient homebuyers willing to wait out the bank represented 11 percent of the market.
Investors still see value in the real estate market. Investors buying homes in March accounted for 21 percent of all transactions, only a one percent drop from 22 percent in March 2011. First-time homebuyers share that optimistic outlook; 33 percent of all transactions in March were by first-time buyers, on par with numbers from a year ago.
House prices are starting to rise. Homebuyers might have to pay more for their dream homes, because house prices are starting to rise. The national median existing home price hit $163,800 in March, a 2.5 percent rise from March 2011 prices. Single-family homes and condos are 1.9 and 7.1 percent higher than a year ago, respectively.
In a sign that the market still has some way to go, the number of completed transactions on single-family homes, townhomes, condominiums, and co-ops declined in March. Total existing home sales dropped 2.6 percent to a seasonally adjusted annual rate of 4.48 million from 4.60 million in February.
The latest housing market news shows that the recovery is underway. The start of the year saw the highest first quarter sales closings in five years. The end of March saw the total housing inventory decline 1.3 percent to 2.37 million listings for sale—a startling 21.8 percent below the listed inventory available a year ago