*475 went pending in the month of September

If you recall last month's update, we are tracking "distressed" properties because I believe it is the key factor in predicting when the real estate market will turn around. In September we saw the number of active listings decrease while the percentage of distressed properties increased from 20% to 23% - this in combination with a huge jump in short sale listings. Pending property counts were up as a whole in September, but the percentage of distressed pending properties was down 3% from last month's 26%. Sold properties as a whole were about the same this month as last, but the percentage of distressed properties being sold was up from 25% to 34%.

Great stats, but what do they mean? In a nutshell, more distressed properties are on the market with fewer under contract. Sales are up, but we are still experiencing a increase of "distressed" home owners. The real estate market has not turned the corner as of yet. When interest rates start to rise and the $8,000 tax credit goes away, we may see an even slower rate of recovery. Also, watch the unemployment numbers - without jobs or confidence in job security people won't be buying homes!

Current interest rates are hovering  around 5.125% with all indications leading to a rate increase in the near future.