Pending Home Sales Exceed Forecaster Expectations

This morning the National Association of Realtors’ released their May numbers for existing home pending sales. Nationally that number increased by 44.3%, a number which far exceeded experts prediction of a more modest 19.3% gain.

Here in the Sacramento area this likely comes as no surprise to buyers and sellers that are currently active in the market. Priced-right properties continue to receive multiple offers after only a few days on the market. Many buyers lament the lack of inventory and the increasingly competitive environment they find themselves in. I am hopeful that strong real estate news like that which was reported today will help to motivate sellers on the fence about selling. In 2007 I spoke with many sellers that were trying to time the market’s peak so that they didn’t “leave any money on the table.” Attempting to time the market so precisely has been known to have unfortunate consequences.

I get asked on a near daily basis where I think our local real estate market is headed. On one hand I read articles that covid-19 cases are increasing, more shutdowns are imminent and 40+ million Americans remain unemployed. On the other hand, I read articles like I did this morning which point out new pending sales on existing homes increased at a record setting level and interest rates continue to be at the lowest levels they’ve ever been.

A better way for me to look at the question is this - what would I do in different scenarios? If I were a buyer with a stable job outlook who was looking for my first home I would definitely take advantage of the low interest rates and buy. I’d say the same if I were a seller that is looking to move-up and sell my current home in order to purchase another. Right now may be the easiest environment to complete that somewhat complicated transaction in. I’d also seriously consider selling right now if I knew I’d need to sell in the next 6-9 months anyway. But if I were strictly looking at this from the eyes of an investor I’d personally wait and use time to my advantage. Interest rates are forecast to remain low for the foreseeable future, while those negative uncertainties remain on the horizon.

In short, I take my fiduciary duty to look out for my client’s financial well-being very seriously. My advice is never that it is always a great time to buyer and sell no matter what. To discuss your situation in detail and weigh your options, feel free to call, text or email me.