Pending home sales up
According to the National Association of Realtors, pending home sales (based on number of contracts signed) are up 1% from November to December and is 10.9% from December 2008. After a rough November that resulted in a 16.4% drop from October, the small rise in December speaks volumes of buyer sentiment and willingness as the pendulum looks to be slowing as it nears the center.
NAR’s Chief Economist, Lawrence Yun noted that “there are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded. These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”
The almighty tax credit
Yun said that “while new-home sales will remain low due to a lack of construction, existing-home sales are projected to rise to around 5.6 million in 2010.” According to the NAR, in 2009, there were 5.16 million existing home sales.
With the NAR’s television commercial campaign promoting the tax credits, consumers are informed of the credits and likely have a firm grasp on their impermanence. But what happens when they’re gone? D.R. Horton anticipates making adjustments for a slow down but independent agents don’t have the pockets that the nation’s second largest builder does, so will agent savings go up? Will vendor services be cut later this year as a knee jerk reaction? Will demand even slow down?
Regardless of the outcome and whether or not there is a storm, it looks like right now, there is a calm.