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Vero Beach Real Estate Listings
Pending home sales on a record roll
Contract activity for pending Vero Beach home sales has risen for six straight months, a pattern not seen in the
history of the index since it began in 2001, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent
to 97.6 from a reading of 94.6 in June. It’s also 12.0 percent higher than July 2008 when it was at 87.1. The index
is at its highest level since June 2007. Homes for sale in Vero Beach Florida are seeing similar activity.
Lawrence Yun, NAR chief economist, says the Vero Beach Fl. housing market momentum has clearly turned for the
better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record
highs this year with the added stimulus of a first-time buyer tax credit.
“Other buyers are taking advantage of low home values before prices turn higher,” Yun says. “Nationally, the
typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median
priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as
home buyers stay within their budget, mortgage payments will be very manageable.”
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this
year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have
little time to act because they must complete the transaction by Nov. 30 to qualify for the credit. Unless
extended, contracts signed but not completed by that date will not be eligible - it is taking approximately two
months to complete home sales in the current market.
The Pending Home Sales Index in the Northeast declined 3.0 percent to 78.8 in July but is 4.7 percent higher than
July 2008. In the Midwest, the index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago. In the South,
pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008. In
the West the index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago.
NAR President Charles McMillan says Congress needs to keep the momentum going. “Even with a good recovery taking
place, the market is not yet back to normal. With a gradual absorption of inventory, we are on the cusp of a
general stabilization in home prices,” he says. “To ensure that housing has a broad stimulus to the overall economy
and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all
buyers of primary residences. The faster we stabilize home prices, the fewer families will face foreclosure and the
quicker the credit can be extended to other sectors of the economy.”
NAR’s Housing Affordability Index (HAI) stood at 158.5 in July - below the peak set in April but still 36.0
percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent
values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and
family income.
Yun expects existing-home sales to rise through the fourth quarter. “Unless the tax credit is extended, no one
should be surprised to see home sales drop in the first quarter of next year,” he said. “However, the fundamentals
of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second
quarter of 2010. The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,’ to ‘I don’t
want to miss out on a recovery.’”
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