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Pending Home Sales Decrease due to Low Inventory, But Housing Market Remains on Right Track

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Friday February 26, 2021
Pending Home Sales Decrease due to Low Inventory, But Housing Market Remains on Right Track

According to the National Association of Realtors (“NAR”), the index measuring pending home sales (by tracking the number of real estate contracts signed but have not closed) has been dropping since August 2020; January 2021 saw a 2.8% (7.8% in the Western regions) decrease in this index. Many analysts expect this index to decrease by roughly .5% per month moving forward.

While these numbers may be concerning, it only confirms what we already know; inventory is at a record low, so less houses will sell (you can’t sell something that doesn’t exist, unless you work on Wall Street). Moreover, these projections aren’t entirely realistic, as the new construction sector of the housing market has been booming; as more houses are constructed, this index will necessarily increase (because there are more homes to purchase). Finally, these numbers don’t account for the fact that sales are up 13% from 2019. In other words, the housing market might be slowing down because of low inventory, but inventory is increasing, and the housing market is still light-years ahead of where it was.

At the Chernov Team we understand knowledge is power, and knowledge of how the market is behaving is powerful knowledge indeed. The power that comes from knowledge is increased exponentially when there is also a deeper understanding of what story the information is telling, and the story here is that the market will remain robust. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.

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