Industry News

Pending real estate sales index drops

Economist says slower sales have 'likely bottomed-out'

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A National Association of Realtors gauge of pending home sales fell 11.4 percent in November compared to the same month in 2005, and dropped 0.5 percent compared to October 2006. Based on contracts signed in November, the Realtor group's Pending Home Sales Index was 107. An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales, the association noted. The index is based on pending sales of existing homes, and a sale is listed as pending when the contract has been signed and the transaction has not closed. The index is considered a leading indicator for home sales because pending sales are typically finalized within one to two months of signing, according to the Realtor group. The index is based on a large national sample that typically represents about 20 percent of all existing-home sales transactions. "The decline from year-ago levels has been steadily narr...