Challenges Impedes Housing Market Growth as Pending Home Sales Index Dip in June

The U.S. housing market is faced with many challenges that impedes its full scale potential despite showing recover the past couple of years, Lawrence Yun, chief economist at the National Association of Realtors made the statement as he reported that the Pending Home Sales Index dipped 1.1 percent to 102.7 in June from 103.8 in May, and is 7.3 percent below June 2013 (110.8).

The Pending Home Sales Index is a forward-looking indicator based on contract signings. He said that after three consecutive months of solid gains, pending home sales slowed modestly last month.

Yun said, “Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” he said. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.”

Despite June’s decrease, the index is above 100 – considered an average level of contract activity – for the second consecutive month after failing to reach the mark since November 2013 (100.7).

Despite these headwinds, Yun ultimately expects a slight uptick in sales during the second half of the year. “The good news is that price appreciation has decreased to its slowest pace since March 20121 behind much needed increases in inventory,” he said. “With rents rising 4 percent annually, potential buyers are less likely to experience sticker shock and can make smart decisions on whether or not it makes sense to buy or continue renting.”

The PHSI in the Northeast fell 2.9 percent to 83.8 in June, and is 3.2 percent below a year ago. In the Midwest the index rose 1.1 percent to 106.6, but remains 5.5 percent below June 2013.

Pending home sales in the South dipped 2.4 percent to an index of 113.8 in June, and is 4.3 percent below a year ago. The index in the West inched 0.2 percent in June to 95.7, but remains 16.7 percent below June 2013.

Yun forecasts existing-homes sales to be down 2.8 percent this year to 4.95 million, compared to 5.1 million sales of existing homes in 2013. The national median existing-home price is projected to grow between five and six percent this year and in 2015.

To boost home sales, realtors are tapping new technology, particularly visual platform that allows them to advertise their products through the Internet.

Real estate digital media company RealBiz Media Group RBIZ offers internet videos to property buyers who may want to check out realtors’ home listings.

Through RealBiz’s video processing technology, property buyers need not go to the actual site to check out the property. RealBiz offers video streaming to real estate agents and brokers for them to get clients even from other parts of the world.

The company does it through its HomeTourNetwork operation by which the company offers a Television video-on-demand network, a MicroVideo App (MVA) network, and an existing Virtual Tour network.

The Virtual Tour allows clients to have an interactive tour of a property without the need to be physically present in the site.

Since RealBiz rolled out its video platforms, there are 15,350 active agents using MVA and Nestbuilder Agent, and at least 24,000 videos of agents’ videos published daily.

Challenges Impedes Housing Market Growth as Pending Home Sales Index Dip in June