Pending home sales in the West fare better than the rest of the country
We reported yesterday that the number of homes placed under sales contract took a dive in November from the previous month. But a different story appears be playing out in the West.
The National Assn. of Realtors said Tuesday that its pending home sales index fell 16% to 96 from an upwardly revised 114.3 in October. The index was 15.5% higher than for November 2008, when it was 83.1.
But the numbers for the West paint a rosier picture. In the West the index declined only 2.7% to 124.6 and is 21.4% above November 2008.
Compare that with other regions and you see a definite distinction.
In the Northeast, the index dropped 25.7% to 74.4 in November and is 14.7% above a year ago. In the Midwest, the index fell 25.7% to 82 and is 9.2% higher than November 2008. Pending home sales in the South fell 15% to an index of 97.8 and is 14.7% higher than a year ago.
What’s going on?
Dean Baker, co-founder of the Center for Economic and Policy Research, takes a stab at answering that question in his weekly housing monitor report, published today. An excerpt follows:
"Part of the story in the West is that sales peaked in September (October numbers were down by 10.9 percent), but it is also likely that there is a different dynamic taking hold. With prices down by 50 percent or more in some of the former bubble markets, there are likely many investors moving in to buy large numbers of homes. This is helping to place a bottom on these markets.
While this is good news for the West, there is likely to be considerably more weakness in the rest of the country than is generally recognized."
-- Alejandro Lazo