NAR Report: "Pending Home Sales Up Sharply." - What About Asheville, NC?

Daily Real Estate News | October 8, 2008

"Pending Home Sales Up Sharply"

These were the headlines that the National Association of Realtors® has presented on the NAR magazine web page.

For the full story go to http://www.realtor.org/RMODaily.nsf/pages/News2008100801?OpenDocument.

Those headlines made me look deeper into how they relate to the market in Asheville, NC.

Every month, for the last 7 years, I compile market reports for the Buncombe County market, which includes Asheville, Leicester, Black Mountain, Arden, Skyland and Weaverville.

I (Realsearch) track New Listings, Number of Pending Listings, Sold Listings and Number of Expired Listings, each month.

According to the NAR report "Pending home sales activity surged as buyers took advantage of low home prices and affordable interest rates, according to the NATIONAL ASSOCIATION OF REALTORS®."

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in August, jumped 7.4 percent to 93.4 from an upwardly revised reading of 87.0 in July, and is 8.8 percent higher than August 2007 when it stood at 85.8. The index is at the highest level since June 2007 when it stood at 101.4.

The numbers for Buncombe County tell a very different story.

In August 2008, the Pending Home Sales in Buncombe County were up 1% (5 listings) from the month of July (not exactly a surge) and were down 18 % from August 2007.

The number of Pending Listings for the month of September 2008 are the lowest since I have been collecting data, but that may be because all Pending Sales for the month of September may not have been reported at the beginning of October, when the data was collected. Pending Sales data are not high quality indicators of the market conditions unless they are collected two to three months after the month indicators are desired. The North Carolina Mountains MLS does not enforce the rules on reporting Pending Sales, like is does on Closed Sales.

Improved Affordability

Lawrence Yun, NAR chief economist, says home buyers were responding to improved affordability. "What we're seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island, and the Washington, D.C., region," he says.

"The improvement also reflects the drop in mortgage interest rates after the government takeover of Freddie Mac and Fannie Mae. It's unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we're hopeful most of the increase will translate into closed existing-home sales", adds Yun.

So far the number of Sold Listings in Buncombe County for the month of September 2008 are the lowest of any month since February 2004 yet the inventory are close to record highs and the Average Asking Price is also close to record highs, albeit, now declining slightly, and there are signs this is changing.

When homes sit on the market at record high numbers but Pending Listings decline in a noticeable manner, prices will begin to adjust. Asheville should be the place to be in 2009 when the reality of the current markets across the country is fully understood.