Charlotte Real Estate, Foreclosures, Short Sales

Pending Home Sales Surge to 3-year High

As home buyers scramble to take adavantage of the tax credit that was set to expire at the end of November, the amount of signed contracts to buy previously occupied homes in the U.S. rose for the eighth straight month in September. The National Association of Realtors said that its seasonally adjusted index of sales agreements rose 6.1 percent from August to 110.1. It was the highest reading since December 2006 and more than 21 percent above a year ago. Economists surveyed by Thomson Reuters expected the index would be level at 103.8.

With foreclosures continuing to surge, "an extended and expanded tax credit would help absorb this incoming inventory," Lawrence Yun, the Realtors' chief economist, said in a statement. "We're clearly not out of the woods because an excess of homes remains on the market despite recent improvements," he said. "Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory."

Pending sales were up 10 percent in the West and 8 percent in the Midwest. They were up 5 percent in the South and were down 2 percent in the Northeast.

In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008. In the West the index jumped 10.2 percent to 143.8 and is 23.7 percent above a year ago.

The Senate has agreed on a compromise to extend and expand the home buyer's tax credit that is set to expire at the end of November. Terms of the deal have been explained by Senators Chris Dodd (D-Conn.), who chairs the Banking, Housing and Urban Affairs Committee, and Johnny Isakson (R. Ga.), a former real estate professional. The compromise expands the tax creidt to non first-time buyers and also adds an increase to the income limits. Additionally the deadline has been extended to April 30, 2010.

Under the new proposal, people who have lived in a primary residence for five consecutive years would be eligible for a $6,500 credit when purchasing a new property.

Incomes limits will be raised to $125,000 for individuals and $225,000 for couples, vs. $75,000 and $150,000 previously.

The maximum house value rises to $800,000.

The Senate has agreed to pass the extension, but Congress still has to vote on it and that could be as early as Tuesday night.