Pending Home Sales Rise Significantly

According to the National Association of Realtors "Pending Home Sales" report, pending home sales surged significantly for the month of August up 7.4% from July to August nationwide.

The western region led the charge with a reported rise of 18.4%. The index for the western region is up 37.8% from a year ago. The southern region showed the smallest gains in the pending home sales index up merely 2.3% from July 2008 but down 2.1% from a year ago.

We believe the stark differences in numbers between the western and southern regions can simply be explained by a transition of home equity. The southern region, in large part, was the recipient of a spill over effect.

As home prices surged significantly in the west during the housing boom, a large influx of equity from investors and relocating home buyers spilled over into the southern and midwest regions bolstering, to a an extent, their housing markets.

Initially, the run up in California spilled over to areas (amongst others) such as Boise, ID, Phoenix, AZ, and Las Vegas, NV. Next and last in line to receive the spill over effect during the housing market boom were areas such as Charlotte, NC, Kansas City MO/KC, and Nashville, TN.

Even though there have been positive indicators, especially in the western region, there is not enough positive data to call this a trend. However, we do believe the bleeding is slowly coming to an end.