There was a national story that circulated late last month that caught my interest, claiming that “Exceptionally large numbers of signed real estate contracts fell apart last month.”
Here’s a brief excerpt: Economic uncertainty leads to canceled home contracts
Are homebuyers walking away in droves from the contracts they’ve signed? Or are they essentially fouling out of the game, unable to close deals because of financing and credit issues?
Whatever the answer, this much appears to be certain: Exceptionally large numbers of signed real estate contracts fell apart last month, failing to reach settlement. According to the National Association of Realtors, one of every six real estate agents polled in June reported having signed contracts canceled before closing — up from just one in 25 the month before. The typical monthly cancellation rate over the past 16 months has ranged in a narrow band between 8 percent and 10 percent.
Since the latest NWMLS numbers came out last week, and the pending to closed relationship is something I’ve been watching for a while, I thought it would be interesting to take a look at the latest numbers and see if there is indeed a surge in failed pendings.
Here’s a chart of King County single family home sales, with pending sales shifted forward a month on the horizontal axis and a series of points added to show the difference between each month’s closed sales count and the previous month’s pending sales count.
As far as I can tell, there has not yet been an “exceptionally large numbers of signed real estate contracts” falling apart in the Seattle area in the last few months.
The average difference between a given month’s closed sales and the previous month’s pending sales has in the six months prior to July was -29.6%. July came in at -29.7%, almost right on the average.
It’s possible that there is some sort of massive pending sale exodus everywhere else in the country. Or it’s possible that something is screwy with the NAR’s methodology. Either way, there doesn’t appear to be any more contracts failing here in Seattle than there already have been the last few years.