Pending home sales surge higher, but economists warn that the housing market could ‘soon hit bottom.

Hi everybody,  It’s Joe Hillner with Your Home Sold Guaranteed Realty, where we guarantee the sale of your home, or I’LL buy it! 
Ok, so every week, I share market data to keep you informed with the local real estate market.  
Here is this week’s Boca Market Watch.

First, Single Family Homes:

This past week, a  decent week with 47 new homes on the market, ranging from $275,000 to $12 Million. Only 14 homes back on the market, virtually nothing, while 26 homes listed took a price decrease, and 8 sellers raised their asking price.  And  a light week with only 49 different properties under contract, and another 24 going pending.  36 homes were unsuccessful in selling and were taken off the market or the listing expired outright.  92 homes were sold in the past week, a very busy week and those sales ranged from $221K to $3.7M. 

Next up, Condos and Townhomes:

Only 63 new listings, very low, and ranging from $65 Grand to $6.5 Million.  
23 units came back on the market, 20 properties with a price decrease, and 11 sellers with an increase, in total, not very many.  54 different properties went under contract, and just 44 went pending, a so so week. And 36 condos or townhomes were unsuccessful in selling and were taken off the market or the listing expired, still on the low side!  123 closed sales this week, the biggest week I've seen in a long time, and ranging in price from $44 Grand to $6.2 M!

Here's what's making news right now.

Pending home sales rose 8% in May compared with April, the National Association of Realtors reported Wednesday. Economists polled by MarketWatch, an industry online news outfit, had projected a 1% decrease for pending home sales in May.  That's a surprising result and a significant difference, especially in light of the decline of pending sales in April and the erosion in home affordability.  

Economists predict that more homes will be listed in the latter half of the year, which would help to slow the pace of home-price growth.

Still, economists generally anticipate that the second half of 2021 will see a slowdown in real-estate transactions. To get an idea of where home sales are headed, look no further than the data for mortgage applications.  Sales lag mortgage applications, and the 26% plunge in the apps between December and April is now working its way through the sales numbers,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote. He went on to predict that “sales will soon hit bottom, given the flattening in mortgage demand over the past couple months.”


The latest mortgage-applications data from the Mortgage Bankers Association would back up that prediction. Their index that measures the volume of applications for loans used to purchase homes was down 17% from a year ago, as of last week, and had declined 6% from the previous week.  Why is that happening?  
The average loan size for total purchase applications increased, indicating that first-time homebuyers, who typically get smaller loans, are likely getting squeezed out of the market due to the lack of entry-level homes for sale.

The lack of housing inventory has limited how many sales can happen, while also driving up the price of homes. Now that mortgage rates are rising again, many home buyers could be pushed out of the market as purchasing a property becomes less and less affordable.

The good news for you buyers out there is that the cost of building materials has been moderating over the last month or so, which should lead to more construction.  And as more resale homes become available, if these experts are right, that will move us towards a more balanced market.  We'll just have to watch and see how things unfold...