Pending Home Sales - November 2008

From CNNMoney.com - "Pending home sales sink to 7-year low":

The number of homes under contract to be sold fell 4% in November, according to a report released Tuesday.

The Pending Home Sales Index fell 4% to 82.3 for the month of November, to its lowest level since the series began in 2001, according to the National Association of Realtors (NAR). That's a drop from a downwardly revised reading of 85.7 in the month of October.

The November index is 5.3% below the same month a year ago, when the Index stood at 86.9.

What's the problem (as if we didn't already know)?

A combination of factors kept home buyers side-lined, according to Mike Larson, real estate analyst at Weiss Research. "You have the recession, rising unemployment, slumping consumer confidence and tighter mortgage standards are the icing on the cake," he said.

What happened in your neighborhood?

Pending home sales across all regions were down from October to November. But sales in the West were actually up significantly from November 2007.

The pending home sales index fell 7.2% to 63.2 in the Northeast and stood 14.6% below its November 2007 levels. In the Midwest, the index slipped 6.7% to 74.2 and was down 10.1% year-over-year. In the South month-to-month losses were more modest, with the pending home sales index down 2.2% to 85.3, but it was off 12.7% from a year ago.

In the West, however, while the index was down 2.4% in the month to 101.2, pending sales jumped 19.3% from November 2007. That sales increase is due to the dramatic drop in home prices in states like California, Arizona and Nevada, which has spurred new deals, according to Larson.

The pending home sales continue to trend in the right direction in the West as values have plummeted and buyers are taking advantage of the deals. Will this trend continue to help mop up the absurd inventory levels or is this merely a fleeting moment of hope that will soon disappear into continued housing despair?