Miami Home Sales Are Up

23
Feb

 

The National Association of Realtors (NAR) just informed the world that October 2011 saw an increase in the forthcoming sales of houses in Miami, and they continue to surpass those of the year before.

The future home sales indicator, the Pending Home Sales Index (PHSI), was at 84.5 in September of last year but in October was found to be at 93.3, a full 10.4 percent increase in contract signings. In October of 2010, the index was only at 85.5. This indicates that the PHSI was up 9.2 percent one year later. This is good news, but people must remember that the PHSI measures contract signings rather than closings.

Lawrence Yun, the NAR’s chief economist noted that Miami’s home sales have been below where they are expected to be at the same time that interest rates are at their lowest levels. This has created an atmosphere where people are ready to buy when they were unwilling to do so in years past. According to Yun, this could mean that people are ready to purchase homes now that they are becoming so affordable again. From 2010 until now, mortgage defaults have decreased to levels that have not been seen ever in the history of the housing market. The notable fact that inventories have been declining gives us another positive sign, according to Yun, who stated that declining inventory means the housing market is in recovery.

The PHSI also indicates that the same trend is occurring in the Northeast with the PHSI at 71.3 percent in October of last year, an increase of 17.7 percent. This number is also above the PHSI for the same month in 2010, and indicates an increase for the year of 3.4 percent. Following the trend is the PHSI for the Midwest where it rose to 88.7 in October of 2011, demonstrating a 24.1 percent increase. This makes its 2011 numbers 13.2 percent higher than those recorded in October of 2010. The South’s numbers were at the even higher levels at 99.5, an 8.6 percent increase from month to month. It was up 9.7 percent from October of 2010. The West is the only area where the PHSI went in the opposite direction. The indicator showed a decrease of 0.3 percent to 105.5 in October of 2011 but this number is still 8.1 percent higher than it was in October of 2010.

Yun reminds everyone that although contract signings are increasing, this does not necessarily mean that all of these contracts will close. Sometimes, while people are in the process of qualifying for their mortgage loans, they inadvertently perform actions that jeopardize their chances, such as taking on new and unnecessary debt. These actions may prevent them from receiving the loan or they can make it so that they receive much higher interest rates.

 

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