Pending Homes Sales Rise in San Diego

San Diego County pending home sales surged in April, mirroring the national trend and adding further evidence that the housing slump may be ending soon.

The National Association of Realtors said yesterday its pending home sale index rose 6.7 percent year-over-year to 90.3 in April, based on a survey of multiple listing services and large brokerages.

The pending sales counts are based on the number of homes that entered escrow or involved a sales contract in a particular month. It can take several weeks or months before the sale is completed. Economists consider pending sales a leading indicator of home sales activity.

There is no index for pending sales in San Diego, but Peter Dennehy, senior vice president at the Sullivan Group Real Estate Advisors firm, found that pending sales in April jumped 33 percent from April 2008 to 3,740 properties.

It was the biggest year-over-year increase for any April this decade and the highest number of pending sales for that month since the peak of the boom in 2005.

“It's actually getting pretty good,” Dennehy said of the pace of sales.

Dennehy said buyers are prompted by falling prices that make homes more affordable, relatively low interest rates, falling inventories of homes for sale, a rising stock market, improving consumer confidence and predictions that the recession may end this year.

“The overall market is starting to move in the right direction,” Dennehy said.

Most sales still involve distressed properties, worth $350,000 or less, that were previously foreclosed on or sold for less than the loan amount. Higher-priced homes and luxury properties are not selling at their usual pace.

Lawrence Yun, chief economist of the national realty group, said the increase in pending sales may owe part of its surge to the $8,000 federal tax credit to first-time buyers; a separate $10,000 state credit is available in California to new-home buyers.
“We expect greater activity in the months ahead,” Yun said, because the federal credit is only available to buyers who close escrow by Nov. 30.

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SOURCE: San Diego Union-Tribune 6/3/2009