The National Association of Realtors (NAR) stated that  its Pending Home Sales Index, based on contracts signed in July, rose 3.2 percent to 97.6, the highest level since June 2007.

Reuters polled analysts, who had forecast pending home sales to gain 2 percent in July.  Pending sales are 12 percent higher than they were last July. 

There is a one to two month lag between a contract and a home sale, so this index is a barometer of how contracts signed this month will turn into sales in the next couple of months.

With “normal” purchasers dropping out of the market after the summer selling season, we’ll be keeping a close eye on home prices in the fall.  Fewer “normal” buyers and more investors could mean that more homes sell on the lower end of the pricing spectrum. 

Also of concern is the end of the first-time homebuyer federal tax credit of $8,000.  This program ends on December 1, and you must SETTLE on your home (not just go under contract!) by November 30, meaning you need to be under contract by the middle of October to ensure you can close in time to cash in.

We anticipate a vigorous market through October for this reason, but primarily in the entry level price ranges.

Stay tuned!