Law Office of Ryan S. Shipp, PLLC

Pending home sales plunge again across the US

While the housing market has enjoyed gradual increases in property values, buying throughout Florida and the rest of the nation are suffering from a dwindling supply of options. In late August, the National Association of Realtors published its closely watched pending home sales index, which has posted lower numbers on four occasions over the last five months. On a year-over-year basis, pending home sales have decreased by 1.3 percent while the index has lost 0.8 percent in July.

Low inventories and tight supply are two reasons that explain the drop in pending home sales, but there is also the issue of home affordability and market uncertainty. Although the American real estate market has been in recovery mode since 2012, wages are not rising along with home prices. In July 2017, the number of homes listed for sale in the U.S. dropped to 1.92 million units, which represents a loss of 9 percent over the last 12 months. The national median sales price of $258,300 is not something that many prospective buyers can afford.

Construction of new residential real estate projects has remained shy this year, mostly due to political uncertainty. The Trump administration was supposed to have rolled out economic stimulus packages by now, but this has yet to be formalized. Infrastructure projects can spur land development, but home builders are still waiting to hear solid news on this issue.

In the meantime, real estate attorneys in Florida are staying busy with short sale cases, resolving title issues, working on lack of disclosure disputes and arranging residential development deals. Florida is not completely impervious to the cyclical nature of the housing economy; however, there is still hope that the local markets will continue to perform well.

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