Pending Home Sales at a 6 year high

From MarketWatch:

Pending home sales jump to six-year high in May

Pending home sales jumped in May to reach a six-year high, the National Association of Realtors said Thursday. The NAR’s pending home sales index climbed 6.7% to 112.3 in May, from a downwardly revised 105.2 (from 106.0) in April. The index was up 12.1% from May 2012 levels. The NAR said the rise in mortgage rates has prompted some would-be buyers to move. “Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher,” said Lawrence Yun, chief economist of the NAR. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. The NAR upgraded its median price forecast for 2013 to nearly $195,000 from exceeding $190,000 and its existing home sales forecast to a seven-year high of 5.07 million from “about” 5 million.

From Bloomberg:

Pending Sales of Previously Owned U.S. Homes Jumped 6.7%

More Americans signed contracts in May to buy previously owned homes than at any time in more than six years, a sign of bigger progress in the industry.

The index of pending home sales jumped 6.7 percent to 112.3, the highest since December 2006, figures from the National Association of Realtors showed today in Washington. The increase exceeded all estimates in a Bloomberg survey of economists and was the biggest since April 2010.

More contract signings show Americans who had been holding off on purchases entered the market as mortgage rates started to climb, reaching an almost two-year high this week. Further gains in sales of previously owned properties will probably encourage a pickup in purchases of home furnishings, spurring economic growth.

“The housing market is pretty healthy,” Guy Lebas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the report. “When you buy a home, either new or existing, you’ve got to furnish it. It’s sort of the secondary benefits of greater home sales that support growth.”

Pending sales fell a revised 0.5 percent in April, previously reported as a 0.3 percent gain.

Estimates for pending home sales ranged from a decline of 0.9 percent to an increase of 5.5 percent, according to 43 economists surveyed by Bloomberg.

This entry was posted in Economics, Housing Recovery, National Real Estate. Bookmark the permalink.

57 Responses to Pending Home Sales at a 6 year high

  1. Tiny Violin says:

    About to close on a house in Fair Lawn. Listed on a Friday, by Tuesday had 9 written offers, two well above ask, and one all cash @ 10% above, with 30 day close. Property is being sold “as-is”. Town said they are overloaded with CO requests, which are required to close. Inspections are well into end of July. Scheduled mine before listed.

  2. anon (the good one) says:

    corporate competing agendas.
    who made/makes money from Iraq?
    who got/gets a bullet on the head?

    “We could give 500 Million dollars to every city with a population over 100,000 for what the cost of war has cost us since 2001. We could have paid every single student loan in existence in the USA with that money or free health care to every resident in the USA for life. (costofwar.com)”

    anon (the good one) says:
    June 26, 2013 at 7:59 am
    Grim, yes, good point.
    One could say that the same applies to voting. to lawmaking. the US Supreme Court. our Democracy. All staged by competing corporate agendas and further amplified by the media.

    7.
    “Aren’t all these protests really just acting, staged by the competing corporate and political agendas, further amplified by the media into more than they really are?”

  3. What could be wrong with a guy in Bangalore going over your appraisal docs?

    It should also work well when the mortgage market moves back into fog-a-mirror mode.

  4. freedy (3)-

    Hurry. Bring your checkbook. Never a better time to buy.

  5. grim says:

    What could be wrong with a guy in Bangalore going over your appraisal docs?

    Not sure, but I know it can’t possibly be worse than a guy in Nigeria with my appraisal docs.

    It should also work well when the mortgage market moves back into fog-a-mirror mode.

    Is it considered robosigning if it’s done by 2000 Indians in a sweatshop in Chennai?

  6. Buy that shiny new house on a 3/27 ARM. You can’t lose. Either refi out of it or sell it if things start to turn.

    Everyone’s a winner.

  7. Gonna be hard to arrest a guy in India or Nigeria when a $9 an hour janitor gets a 750K mortgage and defaults on it after two payments.

    Sheer brilliance.

  8. grim says:

    If US wants to stop outsourcing of stuff like this, the approach is simple.

    Propose new legislation that matches the European data protection directives.

    Would make SOX look like a walk in the park.

  9. Anon E. Moose says:

    Lib [63, yesterday];

    after the last super quit for the richer pastures of Rye New York after regularly boasting of great gains in closing the gap, the truth that no gains have occurred finally surfaced.

    Reminds me of this brand new blog “My Startup Has 30 Days To Live” (some think its a fake, but anyway…):

    This is where we made the first in a series of many mistakes

    We listened to our investors

    They were proven entrepreneurs that had made millions (sometimes nefariously…) and they believed in us. If only we would:

    . . .

    “Grow $VANITY_METRIC so you can show a hockey stick at demo day and look good”

    Sounds like something similar happened at 10 years of school board meetings.

  10. freedy says:

    http://dealbook.nytimes.com/2013/06/27/u-s-to-announce-civil-charges-against-corzine/?_r=0

    Does anyone really believe that this bum will suffer ? He walks with a fine or perhaps even a pardon after winding thru the system for a few years

  11. Painhrtz - Disobey! says:

    Freedy in a normal world Corzine would be watching his backside wtih Madoff along with Mozillo and a host of other criminals. We have gone through the looking glass to banna republic so long ago I have no faith in the justice system it is all bought and paid for.

  12. chicagofinance says:

    for JJ’s review before he trolls the bars in Long Beach this weekend….
    chicagofinance says:
    June 27, 2013 at 11:35 pm
    remember to save for AM for JJ:
    http://www.youtube.com/watch?v=ljWrB1Dk34k

  13. Dissident HEHEHE says:

    I am glad at least “something” is now happening to Corzine. Reality is the gal he married has more dough than he ever had so even with any civil liability he’s golden.

    One thing I hated about Corzine when he was Governor and Senator was his full scale embracing of the crooked Hudson County polls. Saw Christie doing the same thing a few weeks ago trying to steal any thunder or thoughts Booker may have had of running for governor. Politicians are all scum.

  14. Nothing changes until people are willing to cap thieves like Corslime. Amazing how much ethical behavior will increase when there’s a fear of catching one between the eyes.

  15. joyce says:

    Scrapple,
    I’m sure you read this already:

    “When you think about Switzerland, you have to extricate UBS and Credit Suisse because they became multiples of GDP… when you look at the rest of the banking system, they don’t have banks go down. Do you know why? Because the officers and directors of the bank become personally liable for the assets of the bank. So the give-a-shit factor is pretty high.”

    http://www.businessinsider.com/kyle-bass-explains-the-real-reason-banks-fail-the-give-a-ht-factor-2010-11

  16. chicagofinance says:

    The End Is Nigh (clot Euro-Trader Edition):
    note the date…..the guy may be right, but has yet to be proven so…..
    fast forward to 2:30 for the lol ……
    http://www.youtube.com/watch?v=pRHCYu4tafw

  17. Bystander says:

    And now a break back to reality..things going well at my consulting gig. Making good cash but for how long? They will extend me a few more months then back in the wilderness. One discussion of FT job that will probably go nowhere. Recruiters call constantly with BA/PM jobs for $50-70 hr, no benefits. There is almost no distinction between someone with 5 years experience or 15 like myself. On a real assignment that difference would be very apparent. Love it when tjey forward hiring mgr comments by sloppiness or accident. One said “I expect to get someone qualified for much lower rate than in the past”. If the job market is better, I don’t see it.

  18. Libtard in Union says:

    Is anyone working today besides me? Going to test the Bermuda Triangle on a free cruide on Sunday. Will most likely be radio silent for the week. Toodles and great job Grim!

  19. Richard says:

    Tiny Violin, thanks for the anecdote. Seems that is a sweet spot these days. Wonder how high end is doing.

    Is there anywhere that has useful market information about data in NNJ – trends in number sales, price/asking, num failed sales etc. Would be nice to know what different parts of the market are doing in different towns. I guess RE people keep this quiet as this is what they’re useful for.

  20. Bystander says:

    Tiny,

    Obviously it was a strategy to underprice the home. I can pull listing after listing of homes sitting for months b/c sellers pawning a dump or listing at their 2006 purchase price. I believe good homes with good locations, priced well have been moving. Media is not focusing on homes rotting bc no one wants them. It does feed their ultimate goal of attracting the suckers to buy those rat boxes.

  21. Brian says:

    I think a general lack of transparency in the NJ RE market might be one of the reasons this blog exists.

    20.Richard says:
    June 28, 2013 at 12:18 pm
    Tiny Violin, thanks for the anecdote. Seems that is a sweet spot these days. Wonder how high end is doing.

    Is there anywhere that has useful market information about data in NNJ – trends in number sales, price/asking, num failed sales etc. Would be nice to know what different parts of the market are doing in different towns. I guess RE people keep this quiet as this is what they’re useful for.

  22. 1987 Condo says:

    Maybe Chifi can tell us if this is “common”

    Renting Out the Home to Pay Down Debt
    .
    Article Comments more in Wealth Management Journal | Find New $LINKTEXTFIND$ ».
    smaller Larger facebooktwittergoogle pluslinked ininShare.1EmailPrintSave ↓ More .
    .
    smaller Larger
    By AUSTIN KILHAM The couple, in their mid-50s, had a mountain of debt that included $180,000 in credit-card bills and a $185,000 line of credit against their home. And they still owed $700,000 on their primary mortgage.

    Enlarge Image

    image
    Closeimage.Also in Wealth Management:
    When a Client Enters a Higher Tax Bracket

    Voices: Jonathan Miller, on Advising Professional Athletes

    Visit the Wealth Management section
    .
    They were making inconsistent payments to eight different creditors, often only paying their minimums, which totaled about $3,100 monthly. But they realized they were in trouble. They wanted a plan to relieve their debt so they could keep their home and starting saving more money toward retirement.

    A friend referred them to Josh Koehnen, an independent financial planner in San Diego, Calif., who manages $70 million for 200 clients. “The couple was making good money and had good assets, but as I dug deeper I could tell they had a lot of confusion in their financial life,” he says. “This was a cash flow issue at heart.”

    Despite earning about $300,000 annually, the couple’s income wasn’t enough to cover their credit cards nor their $3,700 monthly mortgage, home-equity line of credit payments and retirement-savings needs.

    The adviser’s initial suggestion was to sell their home, which was worth about $850,000, and downsize. But the wife refused to sell the house.

    So instead, Mr. Koehnen crafted a creative plan that allowed the couple to keep their home–and pay down their debt.

    He started by making significant cuts to the couple’s monthly budget for basics like food, clothing and utilities. For example, they paid $100 per week for housekeeping and gardening, which Mr. Koehnen suggested they cut back to every other week to save $200 per month. Additional budget cuts resulted in $2,200 per month in extra cash to apply toward the debt.

    Those changes helped, yet their mortgage was still their largest expense. So Mr. Koehnen suggested that the couple move into their guesthouse–which they currently rented out for $1,200 per month–and instead rent out their main home for $4,000 per month.

    Although the move would allow them to cover their mortgage payments and free up additional income to pay down the debt, the couple thought the plan was too drastic, says Mr. Koehnen. “I thought the husband would fall out of his chair.”

    They finally came around when Mr. Koehnen quantified the effect the move would have on their cash flow: Rent from their main home provided an additional $2,800 per month. Combined with the savings from household budget cuts, they would have an additional $5,000 a month to put towards their debt. That increase would help them become debt free in 2 1/2 years and save $75,000 in interest payments (compared to their current practice of paying only monthly minimums).

    The numbers convinced them. They moved into the guesthouse, and though they’ve given up some creature comforts, Mr. Koehnen says they’re satisfied knowing that they’re quickly and dramatically cutting down their debt.

    Once the debt is paid down, Mr. Koehnen and his clients will reevaluate the situation, so the couple can decide whether to continue renting out the main house to help save for retirement and continue paying off their mortgage.

    “You don’t often see someone doing well with income and assets who gets surprised on the debt side,” says Mr. Koehnen. He adds that advisers sometimes have to help clients look outside their comfort zone to solve complicated situations.

    http://online.wsj.com/article/SB10001424127887323419604578573311217614722.html?mod=WSJ_WealthAdviser_WhatsNews_3_3_RightTop

  23. Libtard in Union says:

    ChiFi’s clientele don’t live in guest houses.

  24. 1987 Condo says:

    Not yet…

  25. Libtard in Union says:

    Nice.

  26. Juice Box says:

    Our Pool guy told me something anecdotal today about the Monmouth county area, allot of boomers now empty nesters keep their weekly pool service going so their dogs can go swimming.

  27. Anon E. Moose says:

    Brian [22];

    I don’t think its just NJ; in fact I believe that smaller markets are even less transparent — both to the ‘first order’ issues of price and availability, and ‘second order’ issues like gov’t land use diktats that affect the value of land. Could you imagine buying or selling farmland in W. Bumf&*k not knowing that your lot is about to get condemned to build a freeway, while the next lot over is going to be prime commercial RE because there’s going to be an interchange put there.

    One very potent change driver could be Fannie and Freddie regs. If you want the federal gov’t to fund your mortgage, the sales process will comply with X, and Z practices (TBD) that protect the buyer. Cash sale or purchase money mortgage that the gov’t has no hand in — do what you want. The reality is that except at the very top and very bottom of the market, no seller would want to cut themselves off from 90% of potential purchasers, so they would comply.

    They have a “Multiple Listing Service” to benefit the sellers; How about a “Multiple Bidding Service” to benefit the buyers?

  28. Libtard in Union says:

    A big part of the problem (imo) is that there is simply not enough data for any local and RE is very local. Take my town for example. In the average month, maybe three properties close. All of these properties may be extremely different in quality, size, etc. How does one really determine what is a trend and what is noise when the sample size is just too small. I think the best thing one can do is to find a RE agent you can trust. At the start, our buying agent was like most. But, after the first year of looking, she finally understood that she need not try to BS us anymore. Like a car or mattress salesperson, the more they can BS, the greater their commission can be. You really can’t blame them. If I sold on commission, I would be like Pinocchio. So ultimately, about the best you can do is develop a relationship with a reputable realtor. If they do a lot of business, you will be able to get a decent gauge for what a home is really worth. Ours estimated our multi within 10K (call it 2%) of what our last two mortgage appraisers came in at. Enough said.

  29. Juice Box says:

    Tard if the weather holds tommorrow I will be up at a BBQ in your town. Is it OK to make sexist jokes in your town?

  30. chicagofinance says:

    Common? No……something is way out of whack there…..the surface is just scratched….the only thing that makes sense is that there is a ton of money in a place where these people can’t access it (e.g., trusts, 401(k)’s, insurance products)…..the simple answer is sell the house…..if I was that financial planner, and I said that and was ignored, I would fire the client.

    In the long run these people are screwed because of who they are, not their circumstances. They will never be able to regulate themselves for life…..

    1987 Condo says:
    June 28, 2013 at 2:28 pm
    Maybe Chifi can tell us if this is “common”

  31. Libtard in Union says:

    Sexist jokes are very welcome, but I won’t be around to defend you unfortunately.

    Chi:

    I read it the same way. A family making 300K per year should have zero debt besides their mortgage and perhaps an occasional car loan at low interest.

    Funny, I went to the photocopier at my print plant in Union and one of the production leads had output a copy of their mortgage statement but probably forgot to pick it up. I was impressed with the small size of the mortgage, 250K, but their interest rate 5.625% was a little high to me. I then looked a little closer and I can see that he is treating his mortgage like a credit card and not paying in full each month. It’s sad as I know this guy does OK and his wife works too. What happens to these debts when people die?

  32. grim says:

    Is it OK to make sexist jokes in your town?

    No, and if I may make a suggestion, you might want to spin by the Salvation Army in Paterson and pickup an “O” shirt. Can you rent a Prius?

  33. grim says:

    Oh wait, we aren’t talking about Montclair anymore, no, never mind.

  34. chicagofinance says:

    The End Is Nigh (JJ Baseball Highlights Edition):
    Pennsylvania couple having sex in public park busted by 25 bike cops

    Richard McBride, 37 and Jennifer Harvey, 41, were caught by 25 police officers on bikes as they had sex in Naylor’s Run Park in Upper Darby, Pa, on Tuesday afternoon.

    Get a room!

    A pair of Pennsylvania horndogs spent a night in the slammer after they were caught having sex in a public park by 25 bike cops cruising by on a training ride.

    Richard McBride, 37, and Jennifer Harvey, 41, were having sex near a baseball diamond at Naylor’s Run Park at around 4 p.m. Tuesday when the swarm of cops from surrounding towns rolled on a bike patrol training ride, Philly.com reported.

    “There they are, on the first base line,” Upper Darby Police Superintendent Michael Chitwood said, according to Philly.com.

    “There’s a bench, she is bent over the bench and our friend is behind her with his pants down to his ankles banging away.”

    The couple, who are from Philadelphia, were arrested and charged with lewdness and disorderly conduct.

    The ride was part of a weeklong program that trains cops on how to conduct bike patrols.

    “Imagine being arrested by 25 cops,” Chitwood mused to Philly.com.

    “They were as shocked as the police were.”

    The pair was released on $30,000 and was due back in court in July.

  35. JJ says:

    Cops suck today, back in the old days just hit the guy a few times with a nightstick and be done with it.

    Chifi buy any munis this week? I bought 50K worth midweek, first time in a long time I was putting in bids 100bp below ask and getting executed. Favorite was a non-callable NYS Dorm bond with a 5.75% coupon at height of sell off. That bond was 15% off the early May price. Quite a movement on a NYS Dorm bond that is also insured.

    chicagofinance says:
    June 28, 2013 at 4:00 pm

    The End Is Nigh (JJ Baseball Highlights Edition):
    Pennsylvania couple having sex in public park busted by 25 bike cops

  36. A.West says:

    Chifi, 35,
    Check out the photos of the perps below and you’ll understand why the cops arrested the couple. Someone could have been blinded by the sight of what was going down. I think some of the cops may need post-traumatic therapy after what they witnessed.

    http://www.opposingviews.com/i/society/crime/25-cops-catch-jennifer-harvey-richard-mcbride-having-sex-park

  37. Thanks for helping me into my daily upchuck into my mouth.

    Feeling much better now.

  38. chicagofinance says:

    Rags…..I got a “save the date” to your shop for September 10……will you be around?

  39. Ragnar says:

    Chifi,
    I looked at the draft agenda, and it looks like I’m not a scheduled speaker for that forum. I suspect I’ll be in the office, and would be happy to walk over to Starbucks with you after it’s over.

  40. Ragnar says:

    Whoops, lost my pen name.

  41. Ragnar says:

    Now they’ve got videos of a bunch of us on the company website linked to our bios. Found one of myself, probably from a similar event a year ago, but I refuse to watch.

  42. chicagofinance says:

    Rags: checked you out….excellent topic; I inadvertently made a massive mint on my portfolios because of the largest Japan manufacturer……I was going for the cyclical play and did not want to hold the best US version; all of a sudden it became an effective short of the Yen…..I have 50-100% gains on positions put on in the last 6-18 months…..mostly November 2011…..dumb luck really…..

    It would be great to hear your opinions on China, but September is going to be too late….anyway, I will make note of it as the date comes closer…..

  43. chicagofinance says:

    I’ve been trying to place this music…….somewhere between Yanni & Midwest Insurance Company hold background music……..thoughts?
    http://rtvpix.com/RE-9130-ZW8FM5-01

  44. chicagofinance says:

    Wow……talk about throwing up in your mouth…..
    http://www.youtube.com/watch?v=VRD7VyWscWg

  45. Grim says:

    Hope Yanni made it through the Greek crisis ok…

  46. Grim says:

    Isn’t Live at the Acropolis the second best selling music video of all time behind Thriller?

  47. greek crisis = buggered in the arse

  48. Grim says:

    Stu – picking up the ev tomorrow

  49. Libtard at home says:

    Grim you bastard! From which dealership?

  50. Grim says:

    Paul Miller

  51. chicagofinance says:

    The End Is Nigh (Chinese Construction Values Edition):
    A COUPLE are believed to have fallen to their deaths when a window they were having sex against gave way, say reports.
    The horrific accident allegedly happened in China when the glass pane shattered.
    The tragic man and woman are then understood to have hurtled to their deaths.
    Eyewitnesses said the couple both fell to the ground as they clinched on to each other.
    A source in China said: “With the two of them holding each other tight, they fell out of the building”.
    Shocking photos in China appear to show the couple on the ground under sheets.
    Blood is splattered near their bodies on the pavement.
    Medical staff and what appear to be police officers can also be seen examining the scene.
    The man and woman are thought to have fallen out of an apartment in the city of Wuhan, central China.
    Local sites suggested windows in the building were of poor quality.

  52. NJCoast says:

    David Byrne burned down the house, Grim were you there? Tomorrow Buddy Guy.

  53. chicagofinance says:

    I would kill to see Buddy Guy……can’t shake free……

    NJCoast says:
    June 28, 2013 at 11:12 pm
    David Byrne burned down the house, Grim were you there? Tomorrow Buddy Guy.

  54. On a year-over-year basis, pending home sales, which reflect contracts but not closings, have risen 18 months in a row.

Comments are closed.