Pending Home Sales 2011 07 26Posted: July 26, 2011
The following graph illustrates a running three-month average of pending home sales in Loudoun County since March 2008. Pending home sales are those listings with contracts or contingent contracts that are awaiting settlement within 30 to 60 days (typically). Pending home sales are seen as an indicator of future closings. A three-month average is used here to dampen the volatility of this indicator and compensate for seasonal fluctuations. Nonetheless, the seasonal trends are clearly evident with the characteristic bell curve of activity shown below. Existing home sales trough every year in the winter with steadily rising activity through the spring followed by declines in the second half of the year.
The concern in June 2011 though is that pending home sales are probably at the annual peak and the three-month average was 13 percent below the comparable figure last June. It would be fair to say though that 2010 had artificial demand as a result of the First Time Buyer’s Credit program. However, comparing June 2011 to June 2009 generates a similar result (-14 percent).
The exceptionally low pending sales in June suggests there is little hope that 2011 will rebound in Loudoun County to previous years’ sales levels.