Bidding Wars Are Back!
According to an article from The Wall Street Journals, home buyers are facing the fact that bidding wars are back. The article pointed out that nationwide many buyers are increasingly competing for the same house. This surging sales are a reflection of supply shortage on the current market. Andy Aley is a 31-year-old attorney who is looking to buy his first home in Seattle's Beacon Hill neighborhood. "It's a little surprising because we thought bidding wars were done with," he said. Now he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.
According to the article, this bidding wars caused by tight inventory suggested that the housing demand is starting to pick up after a six-year-long slump. The National Association of Realtors' latest Pending Home Sales Index also showed that pending sales of existing homes rose to their highest level in nearly 2 years in March. The index showed that "pending sales were up 10.8 percent from the same time a year ago on a non-seasonally adjusted basis." Right now it is at the highest level 111.3 since April 2010. Lawrence Yun, an NAR chief economist, pointed out that "first quarter sales closings were the highest first quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good.”
NAR's Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. "A sale is listed as 'pending' when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing." It seemed that the housing market has finally turned the corner, especially in the West. Pending sales rose 8.7 percent month to month, to 108. Rising sales are melting down inventory and created a more positive-looking and healthy house market. Links: March Pending Home Sales Rise, Market Recovering.