Pending Home Sales Up

Pending home sales (contracts signed but not closed) rose 6.7% for contracts signed in April. The April reading was 90.3 versus 87.5 in March. Low interest rates, lower home prices and government incentives were all factors in pushing up the index.

Of some interest was the geographical disparity in the numbers. From the National Association of Realtors:

The Pending Home Sales Index in the Northeast shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

That’s kind of odd. The West, particularly California, Arizona and Nevada have seen sales soar over the past couple of months particularly in the lower cost segment of the market. Most of the gains have been fueled by new home buyers and investors. One has to wonder if the lower figures for the West might indicate that the sales surge in that region has any legs. We’ll see over the next couple of months.

On a related subject, Lennar, the nations second largest shareholder, appears as if it’s going to get clearance from the bankruptcy court to buy up to a 15% in Newhall Ranch for $140 million. What makes this interesting is that in 2007 Lennar sold its interest in Newhall Ranch to the California Public Retirement System for $970 million. Newhall Ranch is one of the few parcels of developable residential land left in Southern California.

The retirement systems interest in now worth zero. Ouch!

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