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Jeff’s Number Crunch: Pending Home Sales

This number crunch article will provide analysis of listings under contract (pending status) in the Southwest MLS database. 2009 has seen significant increases in the number of listings under contract when compared to 2007 and 2008.

Definition of Terms
Pending Sales: SWMLS requires that a listing be put into pending status when, “A purchase agreement has been accepted by the buyer and seller to execute the sale of real property.” The pending sales numbers in this report include all listings that were changed to a pending status within a given month.

% Change: The percentage change of pending sales when compared to the previous year.

Chart A: Pending Sales in the SWMLS Market Areas.


Analysis of Chart A
2009 shows a significant change in the number pending sales being reported in our market. In 2008, the month reporting the highest number of pending sales was May 2008 (869 pending sales). In 2009, there have been four different months in which pending sales for single-family detached homes were 900 or greater.

There have also been five months in 2009 that pending sales exceeded the previous year’s pendings; June, July, August, September and October. The largest increase was in October 2009 when 900 pending sales were 56.52% higher than listings under contract for October 2008.

One of the reasons that there has been an increase in pending sales is because of the increased number of new home buyers taking advantage of the First Time Home Buyers Federal Tax Credit. Another reason is that the decline in home values in our market area has made housing more affordable for home buyers.

Days Under Contract for a Pending Listing
In 2005 or 2006, it wasn’t surprising to see a house go under contract and close/fund within 30 days. The current inventory of 1,174 pending listings on November 3, 2009 shows these properties are spending an average of 46 days under contract before closing/funding. Eleven properties have been under contract for more than a year, and two properties have been under contract for more than 1,000 days. Chart B shows the top 6 SWMLS areas with pending sales on November 3, 2009.

Chart B: Pending Sales by Area (Top 6 Areas on November 3, 2009)


Source: Southwest MLS, Inc. Information deemed reliable not guaranteed