Pending home sales down 4.6% in September
Pending home sales fell on the heels of a strong gain a month earlier as credit tightened and economic conditions deteriorated, according to the National Association of Realtors®. The Pending Home Sales Index, a forward-looking indicator 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.
Lawrence Yun, NAR chief economist, said pending sales have been above year-ago levels for two months in a row. “The month-to-month weakening in pending home sales is understandable, but because the index remains above year-ago levels it means we’re still in a broad period of stabilization,” he said.
“Conditions remain mixed around the country, but markets that are showing annual sales gains include Long Island, N.Y.; Boston; Minneapolis; Denver and Washington, D.C., in addition to consistent solid gains in California and Florida.” The 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.
REAL Trends Comment: In a snap survey of 75 large residential brokerage firms, there were indications that October pending sales were down significantly from both September 2008 ( more than the usual decline due to seasonality) and from October 2007. However in several markets where activity has been hot recently, such as California, Nevada and Arizona, pendings held up remarkably well.
From Real Trends