Joe Moshe, Broker/Owner, Charles Rutenberg Realty, says the surge in pending home sales during the month of October is due to favorable economic indicators and the resurgence of new home construction permits, but adds that the housing market has yet to make a full recovery and that a sudden downturn in the economy may result in the cancellation of these sales contracts.
The National Association of REALTORS reported today that the pending home sales index (PHSI) during the month of October increased 10.4% to 93.3, compared to September's figure of 84.5 and was 9.2% higher than the October 2010 figure of 85.5. (These figures do not reflect the number of closings.)
Mr. Moshe says the increase in building permits has led to more new home construction, meaning more builders went back to work. The Commerce Department recently reported that, in October, 653,000 building permits were issued for new residential construction - up 10.9% from the previous month. That same month, the unemployment rate - which usually dictates how the Real Estate market will fare - fell, albeit slightly, to 9%.
"Those people who have since gone back to work now have the disposable income to make a down payment on a house," he said. "The fact that more permits are being issued shows that there should be an improvement in the Real Estate market, but that will not happen overnight." Mr. Moshe also believes that much of the activity in the uptrend in sales may be due to the buyers who were waiting on the sidelines have finally decided to buy a home because home prices are so low and the mortgage rates are also favorable. Mr. Moshe feels this is a great time for buyers to buy a house.
Mr. Moshe said that, despite the number of contracts signed, it will be difficult to determine how many of those contracts will still be pending. "The economy has gone from one extreme to the other," he said. "The process of entering into a contract between filing the paperwork and getting the approval takes a couple of months, so anything can happen. If the economy goes south during that time and that prospective homebuyer loses his job, he may ask to cancel that pending sale. More cancellations will mean more homes that will remain unsold." Hopefully, this will not happen.
Charles Rutenberg Realty is one of the nation's fastest-growing Agencies with more than 1,300 Agents on Long Island, Queens, Westchester, and Manhattan. For more information, call (516) 575-7500, or visit www.crrli.com.
About Charles Rutenberg Realty
Founded in 2006, Charles Rutenberg Realty of New York is one of the nation's fastest-growing, most progressive Real Estate Agencies with over 1,300 Agents on Long Island, Queens, Westchester and Manhattan. Charles Rutenberg Realty specializes in residential properties in Nassau, Suffolk, Queens, Kings and Westchester Counties. Among the 1,900 independent Real Estate offices represented by Multiple Listing Services (MLS), Charles Rutenberg Realty has the highest market share for available inventory, listings taken for the first six months of the year and listings under contract. Its Agents are trained in the latest creative marketing programs and can fulfill all their clients' financial and personal needs when buying or selling a home. Charles Rutenberg Realty is headquartered in Plainview, New York, with offices in New York City, Florida and Illinois. For more information, call (516) 575-7500 or visit www.crrli.com.