The number of homes under contract to sell is rising, another signal that the housing market may be regaining its footing.
As reported by an industry trade group, the Pending Home Sales Index gained 2 percent in February. The report measures MLS-listed homes in “pending” status — sold but not yet closed.
Pending Home Sales is not a perfect statistic, though, by any means.
For one, the Pending Home Sales Index doesn’t account for non-MLS listed homes including For Sale By Owner properties and mass Foreclosure auctions. In certain markets nationwide, these two categories represent a large percentage of the overall transaction volume.
Secondly, Pending Home Sales samples just 20 percent of all MLS-based transactions — hardly a complete listing.
But most importantly, a “pending” home sale is not the same as a closed home sale. A lot of things can go wrong between the time a home goes under contract and the supposed closing date. For example, the home inspection could fail, the contract could fall apart, and/or the buyer’s financing could be denied in underwriting.
All things equal, though, Pending Home Sales is a fair forward-looking indicator for the housing market as a measurement of buy-side demand for homes.
When Pending Home Sales rise, it’s tells us that buyers and sellers are matching up, clearing out market inventory. And actual home sales often follow “pending” ones — 80 percent of Pending Home Sales will close within 60 days.
In the North Georgia Mountain Real Estate Market we have seen a steady increase in Homes For Sale going Under Contract. Take for instance Union County, which is the Blairsville Real Estate Market. In January there were 20 Homes Under Contract, in February 35, and in March there were 40 Homes Under Contract. That is a 100% increase over the 3 month period.
In Fannin County, which is the Blue Ridge Real Estate Market, in January there were 13 Homes Under Contract, February 15, and in March there were 36 Homes Pending or Under Contract! That is an amazing 177% increase.
Now I know we are still looking at much lower numbers than what we were seeing before this housing crisis hit, but it is a positive current outlook. We continue to see positive signs that North Georgia Real Estate and Home Sales are improving. I am not so sure if we are seeing the Bottom, that will take some more time to determine, but I will have a very optimistic look on the months ahead. Typically in years past we experience an increase in North Georgia Home Sales due to the change of Season and the new life that comes with Spring here in the North Georgia Mountains.
If you are looking to Buy or Sell here in the North Georgia Mountains and you are not currently working with a Realtor, I would really appreciate the opportunity to work with you in your search or the sale of your North Georgia Mountain Home or Cabin. My name is Chad Lariscy, Contact Me or call me at 706.633.8186 to set up an appointment. I look forward to meeting you.
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