Pending Home Sales Up - December 2008

From CNNMoney.com - "Pending home sales rise in December":

Plunging home prices and low mortgage rates pushed homebuying activity higher in December, according to a regular industry report released on Tuesday.

The Pending Home Sales Index, from the National Association of Realtors, measures the number of sales contracts signed each month. It rose 6.3% in December to 87.7, after dropping 4% in November to a record low of 82.5.

The index was 2.1% higher than its December 2007 level.

What happened in your local region?

Sales activity gained the most traction the South, where the index jumped 13% in December. The Midwest was also much higher at 12.8%. The Northeast, however, slipped by 1.7% and the index in the West fell 3.7%.

It appears that the significant drop in housing prices coupled with attractive mortgage rates (for those who can qualify for a loan) continue to spur improved home buying activity. We continue to experience this reality ourselves and hear reports from affiliates in different markets that the lower priced portion of the housing market is percolating with activity. In fact, many bank owned properties being dumped on the market at extremely aggressive price points are continuing to generate multiple offers over the asking price.

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?

October Pending Home Sales Numbers Stronger Than Expected

From CNNMoney.com - "October pending home sales slip 1%":

Despite a meltdown in financial markets, a credit freeze and soaring unemployment, housing markets fared better than expected in October.

Pending home sales fell just 1% year over year according to a report out today from the National Association of Realtors (NAR), and were down 0.7% from September. Analysts surveyed by Briefing.com had expected pending sales to slip by 3.6% year over year, and by 3% from September.

Different regions, drastically different numbers.

NAR found that sales in the West climbed 17.4% in October, compared with a year ago. Northeast sales plunged 14.1% year-over-year; Midwest sales dropped 6.8%; and sales in the South inched down 2.9%.

Real Estate is local! Values in many western regions have fallen so far it seems like some stabilization is trying to occur when you look year over year. No surprise as we should be getting to that point in areas like California. The problem remains the underlying economic conditions which will continue to slow down and negatively impact the stabilization process.

Pending Home Sales Report - September 2008

As reported by Bloomberg - "Pending Sales of Existing Homes in U.S. Fell 4.6%":

Fewer Americans signed contracts to buy previously owned homes in September, indicating the credit crisis will inflict more damage on the housing market.

The index of signed purchase agreements, or pending home resales, fell 4.6 percent, more than forecast, to 89.2, the National Association of Realtors said today in Washington.

The housing slump may extend well into a fourth year as banks turn away borrowers, foreclosures worsen the glut of unsold homes and job losses climb. Lower property values will keep eroding home-equity, causing consumers to retrench further and reinforcing the risk of a deeper recession.

The numbers by region (as reported by the National Association of Realtors pending home sales index report):

The PHSI (Pending Home Sales Index) in the West rose 3.7 percent to 113.6 in September and remains 39.5 percent above a year ago. In the Midwest the index slipped 0.7 percent to 83.3 and is 3.1 percent below September 2007. The index in the South fell 7.9 percent to 89.0 in September and is 11.3 percent below a year ago. In the Northeast, the index dropped 16.8 percent to 66.4 and is 9.4 percent below September 2007.

Nationally, pending home sales compared to last year:

The Pending Home Sales Index, ... based on contracts signed in September, declined 4.6 percent to 89.2 from an upwardly revised reading of 93.5 in August, but is 1.6 percent higher than September 2007 when it stood at 87.8.

The national pending home sales numbers have trended ever so slightly in the right direction, up nearly 2% year over year. In the West, the pending home sales numbers, as reported, remain nearly 40% stronger. Perhaps some bottom feeding and increased investor interest?

These reports suggest, in lieu of the current credit environment / crisis, that the housing aches and pains are here to stay and may experience increased pains along the way.

The housing "doomers" and "gloomers" are in their, "I told you so" glory. Regardless of how they based their premise and achieved their conclusions, can anyone really argue their overall assessment to the contrary?

The writing's on the wall in bold "RED" letters and continues to look for more space in which to write it's housing stories of devastation as more space it will need as more devastation there will be.

Pending Home Sales Report - A Trend Developing?

Article: Hot Market: Buyers Go West for Good Deals - by M. Anthony Carr


Anthony's assertion regarding October's pending home sales report:

"You've heard the news that pending sales are up across the country over 7 percent from July to August. While that's the broad brush news, when looking at the details, one sees just how many states in the West are experiencing a huge surge in the number of sales being registered on real estate boards across the region."

Markets showing the strength:

"Leading the way is Idaho, with a 51 percent jump between the two quarters. California was up 25.8 percent followed closely by Nevada at 25 percent. The fourth strongest statewide market was Arizona, up by 20.5 percent."

Anthony's conclusion:

"When news hit about this latest sales increase of 7.4 percent, hidden, again, in the fine print was the fact that sales year over year in the west had jumped a whopping 37 percent. The challenge facing markets now, of course, is the current credit crisis, which will determine if the trends of upward bound sales will continue."

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.