A surge in foreclosure sales and distressed properties was the primary driver behind a notable improvement in the Pending Home Sales Index.
In December, the PHSI rose 6.3% from an upwardly revised reading in November. The more important year-over-year reading was a more modest 2.1% increase versus December 2007.
The regional breakdown was quite significant:
Northeast PHSI fell 14.5% below a year ago
Midwest index was 1.2% below December 2007.
South surged was 1.6% above a year ago.
West index jumped a huge 17.5% above December 2007 levels.
Given what we know about the foreclosure-driven existing home sales out west, this last data point is no surprise.
It wouldn’t be a housing release without some absurd spin from the usual suspects, and the dopes at the NAR did not disappoint. Their headline was Pending Home Sales Show Healthy Gain.
Well, if you call distressed sale and foreclosures driving contract signings, then you can call it healthy. But given how disproportionately the West is impacting sales, it is hard to call this national index “healthy” — at least with a straight face.
PHSI year over year
Media Gets Pending Home Sales Wrong (Again!) (August 2008)
Revisiting Housing Seasonality & the Perennial Bottom Callers (July 2008) http://bigpicture.typepad.com/comments/2008/07/revisiting-seas.html
Pending Home Sales Show Healthy Gain
NAR, February 03, 2009