Don’t jump to conclusions when you hear that a listing sold for more than the asking price. You need more information. Are prices are heading up in your area, or did the sellers intentionally price low to stimulate multiple offers?

There was good news about the housing market recently. In October, pending sales rose 9.2 percent from the same month a year earlier, according to the National Association of Realtors. Pending sales are a leading indicator, and the index is a measure of homebuying interest.

Unlike recorded home sales, a certain number of pending sales don’t close. Even so, this is a positive sign in the midst of a volatile market.

In some areas where job growth is strong and there aren’t many homes for sale, home prices are starting to rise. But at this point, these areas represent a small part of the overall housing market.

Unless you’re selling in a high-demand, low-inventory market, it’s risky to list your home under market value. Some sellers use this strategy to increase their chance of multiple offers and a quick sale for over the asking price.

This strategy could backfire if you are priced low and receive only one offer for the asking price or less. It’s difficult to negotiate buyers up on price when they’re not in competition with another buyer.

On the other hand, if you know there is strong demand for a home like yours, pricing on the low side could generate enough action to get your home sold at or over the list price. But you shouldn’t price lower than a price you’d be willing to accept if you receive only one offer.

HOUSE HUNTING TIP: Sellers should have a good understanding of the pricing dynamics currently operating in their neighborhood before they select a list price for their home. Are listings sitting on the market for months or are they selling quickly? Are certain locations or price ranges more active than others? How does your home compare to those that sold recently? Pricing right for the market is critical to selling in today’s market.

Like sellers, buyers should become price experts on the areas where they would like to buy. The Internet makes this chore a lot easier. But you’ll get a better feel for valuation if you see homes that would satisfy your housing needs in person.

Don’t focus on list prices. Sellers often make the mistake of listing for more than their neighbor’s second-rate home. However, if the neighbor’s home is priced too high, this isn’t a good benchmark. Also, consider that the reasons you think your home is better may not be in sync with the way a buyer may view your home.

It’s difficult for buyers and sellers to be objective about buying and selling homes. Most sellers have strong attachments to their home and have a hard time divorcing themselves from it emotionally. This can cause them to reject a good offer and later regret the decision.

Buyers can be so objective that they find it impossible to buy a house. The perfect house does not exist. Neither does the perfect deal. Compromises need to be made, but with full understanding of the pros and cons. In other words, you should make rational decisions about the price you pay and what you’re willing to live with.

Knowledge of local pricing is essential for buyers in market niches that are hot compared to the rest of the market. Be sure to find out the sale price of homes that you’ve seen and liked or bid on and lost.

THE CLOSING: This way you’ll be in a better position to have a shot at winning in competition the next time.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

RSF Market Update: Single Family Homes

Tuesday, January 24th, 2012, 12:40 pm

Mortgage servicers filed roughly 61,500 notices of default in California during the final three months of 2011, down nearly 12% from the same level the year before, according to real estate analytics firm DataQuick.

The pace is the second-lowest level in more than four years. In the second quarter, notices of default totaled roughly 56,600 but increased the next three months to more than 71,200.

From there, DataQuick said, new foreclosure filings dropped 13.7% in three months ended Dec. 31. More than half of those notices of default were filed by Bank of America (BAC: 7.27 -0.27%), Bank of New York Mellon (BK: 20.82 -1.98%) and Wells Fargo (WFC: 30.17 -1.21%).

DataQuick said the peak occurred in the first quarter of 2009 when mortgage servicers filed more than 135,400 default notices. DataQuick President John Walsh said it’s difficult to tell if the lower numbers, which are half the levels of two years ago, are a result of an actual recovery in the market or shifts in policy.

“Five years ago almost all mortgage payment delinquencies would have triggered a default notice after a certain amount of time,” Walsh said. “Strategies now include short sales, refinances, interest rate changes, principal reduction as well as just plain waiting longer. It will be interesting to see how this plays out as the economy improves and the housing market finds its footing.”

The steepest decline came in Madera County, just north of Fresno, Calif., where notices of default dropped nearly 32% from the end of 2010.

Borrowers were behind a median of nine months on the mortgage before the lender filed a notice in the fourth quarter. The loans that completed foreclosure in that period spent an average 9.7 months in the process, up from 8.8 months a year earlier.

Most of the mortgages hitting foreclosure were originated in the middle of 2006. This has been the case for three years now, indicating how weak underwriting standards were then, DataQuick said.

The share of REO as part of the market in California dropped to 33.7% in the fourth quarter, down steadily from a peak of more than 57.8% in the first three months of 2009. Short sales, meanwhile are growing slightly more popular, reaching 19.8% of all home sales from 16.4% at the end of 2009.

CoreLogic’s chief economist Mark Fleming says housing statistics and the duration of the downturn to date indicate 2012 may be the year the housing market begins to turn the corner.

In the first release of CoreLogic’s new MarketPulse newsletter Wednesday, Fleming explained his rationale for such an assessment.

He notes that housing is an industry with long business cycles. Regional housing recessions have typically taken anywhere from three to five years to find their bottom, and Fleming says the national housing recession has behaved similarly in that it has bounced along a bottom for the past two years.

Fleming points out that housing affordability is rising dramatically due to a combination of home price deflation and rock-bottom mortgage rates. In fact, he says, after adjusting for inflation, this has been a “lost decade” for housing as prices are the same as at the beginning of the millennium.

“The time is right in 2012 for prices to begin growing again,” Fleming said, “and housing affordability will put a floor under any further significant declines.”

Fleming says he will be watching the spring and summer buying season closely for positive signs of demand.

He points out that households are paying off their debts and at the same time accessing credit more easily, with some even adding Home Equity Lines of Credit in the third quarter of last year – the first such movement for these second-lien mortgage products since the financial crisis began.

Fleming cites a quarterly survey by the New York Federal Reserve Bank, which shows total household debt continues to decline. At the same time, consumer sentiment rebounded strongly in the latter part of 2011, posting a six-month high in December – an indication that consumers’ confidence in the strength of the economy is growing, according to Fleming.

Most housing statistics basically moved sideways in the latter part of 2011, but Fleming finds several positives in the numbers. Although market indicators are coming off of very low levels, he notes that both existing-home sales and single-family housing starts have begun to increase, homebuilder confidence is improving, and affordability is at an all-time high.

Putting all of these statistics together suggests that while there is a very long way to go, the housing market is likely to sustain these upward movements in 2012, according to Fleming.

“While we cannot say with a high degree of certainty what 2012 has in store for us, indications based on the latter part of 2011 are that both the broad economy and the housing market are moving toward positive growth in 2012,” Fleming said.

He concedes that some impediments do exist, including slower global economic growth, a recession in Europe, and fiscal and political uncertainty in the United States.

But Fleming says when you look at the big picture, “we are bullish on the prospect of improving economic performance in 2012 from 2011.”