Huge move after 4 straight declines
Our mid month state of the market reports for the north county region start off with some very, very good news. After dropping for 8 of the last 9 months pending homes sales have moved higher and it was a significant jump. In fact, we have to go back to October 15th of last year to see more homes under contract. We still lag behind the highest number we enjoyed back in May of last year by 30% but this is a wonderful sign of strength coming back to the market. These numbers point to higher sales levels ahead which could help drive local home prices higher despite rising inventory levels.
A few days ago we reported single family home prices up for the third straight month even with falling sales and higher inventories. A very clear sign that buyers are reacting positively with more inventory to choose from and willing to pay higher prices. Interest rates, that have been down now for 7 straight weeks, certainly have a positive impact on sales but we wonder just how long these drops can continue even with poor economic news.
Despite recent poor economic reports, especially in regards to job creation, many of the nation's top economists expect the overall economic recovery to gain steam this year. The jobless rate which fell in January to the lowest level we have seen in over 5 years is a positive sign. Even with the drop in the Dow early in the year and home prices that have until recently floundered Americans are feeling better about the economy and their financial position.
In our next report we will dig into the changes since last month in inventory levels and let's just say buyers keep on having more options to select from. We also will be looking into investor activity which remains strong and why so stay tuned. Always interesting, always fun.