San Fernando Valley Real Estate Blog

The National Association of Realtors® reported the Pending Home Sales Index had its 8th consecutive monthly gain in September. A Pending Home Sale is a home under contract to sell, but not yet closed. It's the longest winning streak in the history of the index, and Pending Home Sales are now at their highest levels since December 2006.

When the Pending Home Sales Index rises, it tells us that market activity has picked up. September's data confirms what we've been noticing since February; the Buyers Market is ending.

With more homes under contract in the marketplace, homebuyers typically face one or more of the following:

1. Competitive, multiple-offer situations
2. Reduced purchase price leverage over sellers
3. Fewer seller concessions

If you are thinking of buying a home in the next several months, know that the 8-month run in Pending Sales should result in higher home prices, too.

The national housing supply fell to a 2-year low last month, according to the National Association of Realtors®. This major housing supply reduction helps to explain why multiple-offer situations have been so common lately.

Moreover, the same report from NAR showed sales activity reaching its highest point since July 2007, too. If you're looking for evidence that the long-standing Buyers Market is ending, this month's Existing Home Sales report might be it.

Even median sales prices -- typically brought down by distressed and foreclosed properties -- declined at its slowest pace in a year. Home prices are rooted in the basic economics of supply and demand.

• When supply outweighs demand, home prices fall
• When demand outweighs supply, home price rise

Since March 2009, the market has been moving in the right direction. Low mortgage rates, ample housing supply and a first-time home buyer tax credit fueled buy-side demand so that home prices are now rising in many U.S. markets. If home supplies stay on this path into 2010, expect home prices to rise even more.