The National Association of Realtors reports that the Pending Home Sales Index has increased for five consecutive months. This indicates that home sales are picking up, and prices may have hit bottom. This is due to low interest rates, lower home prices, and the large selection on the market, not to mention the $8000 tax credit available for first time buyers (but remember, the sale must close by November 30 to be eligible).
In addition, the Housing Affordability Index is also improved. The average family would devote 15.7% of gross income to payments of mortgage principal and interest, which is well within the upper limit guideline of 25%.
It is expected that home sales rates will gradually rise over the rest of the year as the recession recedes and prices bottom out. The large inventory of unsold homes should decrease, putting upward pressure on prices and decreasing available choice.
The bottom line: this may be the best time for people wanting a home in the North San Diego County communities of Encinitas, Cardiff, Carlsbad, Oceanside, or San Marcos, to start shopping. As the market reaches its bottom, prices are likely to rise, so don’t delay.