Pending sales hit 14-month high
Real estate brief
By Inman News, Wednesday, October 8, 2008.Pending sales of U.S. resale homes rose 8.8 percent in August compared to the same month last year, the National Association of Realtors reported today, rising to the highest level since June 2007.
The index offers an indication of future sales, as it measures the volume of signed contracts for sales transactions that have not yet closed -- sales are typically finalized within one or two months of signing, though some deals fall through before the transactions are closed.
"It's unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we're hopeful most of the increase will translate into closed existing-home sales," said Lawrence Yun, NAR chief economist, in a statement.
NAR's Pending Home Sales Index reached 93.4 in August -- an index level of 100 is equal to the average level of contract activity in 2001, which was the first year to be examined for the index and first of five straight record years for sales of resale homes.
Regionally, the index rose 37.8 percent in the West, 6.6 percent in the Midwest, 2 percent in the Northeast and sank 2.1 percent in the South in August compared to the same month last year. The nationwide index rose 7.4 in August compared to July.
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Submitted by Bob Wegener on October 8, 2008 - 3:55pm.
Could this be the first sign of a bottom?
Bob Wegener
Hacienda Real Estate
http://www.bobwegener.com
http://lamorindarealestateblog.com
Submitted by Jeff Manson on October 8, 2008 - 4:17pm.
@Bob - I do not think so. Things are going to get worse before they get better. Beleive me, I wish they would get better sooner than later, but the economy is not looking good :-(
Jeff Manson
American Dream Realty
Oahu real estate
Kauai real estate
Submitted by Mike Cleaver on October 9, 2008 - 7:14am.
Lets not get too carried away.
The NAR's forecasting has been questionable, somewhat akin to Michael Fish's weather forecast in the UK several years ago when he said there was no threat of a storm, then half of southern England was blown away!
There was probably a lot of activity during September due to the impending demise of DPA's. Some of us will have cheered some will have cried. October 1st saw the end of DPA's, however according to one of the DPA companies I spoke with assured me that as long as the sale was under contract and the loan was in place before October 1st the DPA would still fund. Some sales are expected to close as late as early 2009, new construction for example.
I wonder how many of these "pending" sales will actually complete? How many are short sales? I have had two short sales fall apart at the last minute because the selling bank changed their mind, that after months of waiting.
I hope that we are seeing a bottoming out for real estate prices. I hope that when the market gets over the shock of all the banking troubles and all or most of the perpetrators are behind bars after paying back the money they stole, that we will see some sense return to the real estate market.
How sustainable was a market where prices far exceeded the buyers ability to buy?
I hope we are near the end of the madness.