The National Association of Realtors published an update to the Pending Home Sales Index in late February. The index is an indicator of how many homes are under contract to be sold, and fluctuations in this number typically predict similar fluctuations in — home sales indexes a month or two later. The Pending Home Sales Index as of January 2018 was at 104.6, which is a drop from the revised December number. That means, on average, real estate agents may be looking at fewer closings in the first quarter of 2018.
The Pending Home Sales index was 109.8 (revised) in December. The January number reflects a 4.7 percent drop. It’s also the lowest the index has been since October 2014.
NAR chief economist Lawrence Yun says the news isn’t all negative, though. He points out that the economy is getting stronger, and many local job markets are also strengthening. At the same time, the lower-end housing market is being squeezed by supply and demand issues, and mortgage rate increases are causing some people to shelve home ownership plans while they wait for a change in those rates.
The first quarter isn’t always the strongest sales months for many real estate agents anyway, and the market supply usually increases substantially in the spring and early summer. Real estate agents who are seeing lackluster contract numbers will probably see an increase as the buying season heats up in 2018. Yun is estimating that the 2018 market will be fairly unchanged from the 2017 market when it comes to total existing home sale numbers.
In the meantime, real estate agents can bolster their own businesses by making good cash-flow decisions. One way to manage cash flow as a broker or agent is via commission advances, which let agents collect on the proceeds of a sales commission when a contract has been signed but the closing and commission payout hasn’t been finalized.
Commission Express, a commission advance company, works with brokerages of all types and sizes to provide these cash-flow benefits. Advances during slow seasons help real estate agents manage personal and business expenses in a more efficient and streamlined manner regardless of what the market might be doing that particular month.
Release ID: 321978