Home Sales Index Rising: Thanks to Foreclosure Buyers
June 11th, 2008 by 
Joseph Smith
For many months now, the real estate industry has suffered much from the mess brought about by the enduring foreclosure crisis. But to the surprise of many experts, the National Association of Realtors‘ home sales index for the month of April leaped to 88.2, from 83.0 last March.
Such good news is indeed welcome considering that economists even predicted that pending home sales might fall even further for April. As these real estate experts analyzed the data, it was discovered that places where foreclosure rate is high and home price decline is great are where home sales have been greatly improving. It certainly looks like savvy consumers have finally discovered how falling home prices can work to their advantage.
Although the large inventory for foreclosed properties has greatly influenced home prices adversely, it also has given buyers confidence to buy real estate properties even with the present economic condition. And why would not they? Foreclosure homes have always been known to offer amazing return potential, as long as you do your homework as a smart buyer.
Places where home sales are on the rise include Sarasota, Sacramento and San Diego. Coincidentally, these areas possess one of the highest foreclosure rates in the country. On the other hand, market recovery for cities Seattle, Nashville and Austin have yet to see any market recovery, despite the fact that home prices in these areas peaked last year. With the many choices of affordable repossessed homes in other places, it is not surprising that home sales in these cities have become quite sluggish.
Considered as one of the leading indicators of the housing market, the pending home sales index uses signed sales contracts as basis. These contract signings usually end up as sales closings after one or two months.
