The National Association of Realtors released the pending sales data for November, and pending sales nationally fell 16% from October and 26% in the northeast region. (Associated Press article on Yahoo News.) Pending sales data reflects contracts signed during the month and an early indicator of closed sales performance in following two months.
A drop in November was widely expected because of the expiration of the $8,000 homebuyer tax credit set for October 31st (which has now been extended until April.) Realtor blogs around the country that I follow were reporting a surge of activity in October from buyers looking to find a house and get into contract before the Oct. 31st deadline to take advantage of the credit. The big question is whether the tax credit stimulated demand or merely stole it and moved it up in the calendar.
Notably, pending sales were off only 3% in the west and 15% in the south, the regions that first led the housing downturn and have settled into a post-foreclosure pricing reality, particularly in Arizona, Nevada, California and Florida. Sharply lower prices, the result of foreclosure sales and huge inventories resulting from speculative overbuilding, have stimulated demand. But here in the northeast we haven't generally seen those same eye popping prices that get buyers to pull out their checkbooks.
The proof of the pudding will come next spring, when both the extension of the homebuyer tax credit and the government program to buy mortgage backed securities (intended to keep mortgage rates low) are scheduled to expire. If both do expire, real estate will have to stand on its own.
