Pending home sales were down from May to June, but were up year-over-year for the 14th consecutive month.
By Peter Ricci
Pending home sales rose year-over-year for the 14th consecutive month in June, according to the latest Pending Home Sales Index from the National Association of Realtors.
A forward-looking index based on contract signings, the Pending Home Sales Index (PHSI) rose 9.5 percent from June 2011, though it did decline a bit by 1.4 percent from May 2012.
Lawrence Yun, NAR chief economist, said inventory shortages were a factor in the index’s monthly slip.
“Buyer interest remains strong but fewer home listings mean fewer contract signing opportunities,” Yun said, echoing his statements for last week’s existing-home sales data. “We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”
And NAR’s Confidence Index does support Yun’s claims of an imbalance. While buyer traffic for the index was rated at a 60, seller traffic was just 41, showing an imbalance between housing supply and demand that has been present in the market the last couple months (a value of 50 signifies neutral market conditions).
Inventory levels have been low in greater Miami, but for Jeff Morr, the founder/CEO of Majestic Properties in Biscayne Corridor and Master Brokers Forum member, that has not negatively impacted sale volume.
“Inventory is low, but the market itself is on fire,” Morr said.
Such high levels of demand, he continued, do place pressure on buyers, who are forced to aggressively look for properties and, upon finding one, often pay more than the asking price to outbid the almost certain multiple offers the residence will receive.
And the upcoming condominiums, Morr believes, will not even satisfy that demand.
“Whatever has come on the market has completely sold out,” he said, referencing the high sale volumes for buildings in Brickell Avenue and Sunny Isle. In addition, he said there are plans for many more development in the Biscayne Corridor and Miami Beach.
“We’re in for a long period of good real estate,” he said.
Penni Chasens, a broker associate with Cervera Real Estate who is also a board member with the Master Brokers Forum, is currently working on Cervera’s The Grove at Grand Bay development, a new construction project that very much demonstrates the demand Morr references.
So far, Chasens said Cervera has only put the building’s north tower units on the market, and of 58 units available, 65 percent have already gone under reservation for buyers in 11 different countries. What’s more impressive, Chasens added that those reservations took place with very little advertising and marketing.