Pending home sales slide as available supply dips
WASHINGTON - A measure of Americans who signed contracts to buy homes fell last month after reaching a 2½-year high in November. Sales were held back by a limited supply of available homes.
The National Association of Realtors said Monday that its seasonally adjusted index for pending home sales dropped 4.3 percent in December from November to 101.7. That's still 6.9 percent higher than a year ago.
The decline signals that sales of previously occupied homes may cool off in the coming months. There's generally a one- to two-month lag between a signed contract and a completed sale.
The Greater Las Vegas Association of Realtors reported 14,601 single-family homes available for sale in December, with nearly 11,000 homes contingent or pending sale.
Half of those homes may never close escrow for various reasons, said Tim Kelly Kiernan of ReMax Extreme in Las Vegas. About 10,000 homes are under contract as short sales and have lingered in the system for months waiting for lender approval, he said.
Still, the broader trend in home sales remains solid.
Completed sales of previously occupied homes rose last year to their highest level in five years, one of many signs of recovery in the housing market last year. Las Vegas Realtors sold 44,902 homes in 2012, the third-highest year on record.
The national Realtors' group forecasts that sales will rise 9 percent this year as the recovery strengthens. Other economists have similar forecasts.
"We believe the disappointment represents just a brief lull in what are volatile data rather than a fundamental change of direction," said Jim O'Sullivan, an economist at High Frequency Economics.
Stable job gains and record-low mortgage rates have encouraged more people to buy homes. And a tight supply of homes for sale has pushed up prices and made builders more confident to step up construction.
Completed sales of previously occupied homes dipped in December from November, primarily because the number of homes available for sale fell to an 11-year low. And stable price gains could draw more sellers in the spring, when the traditional home-buying season begins.
More people are also moving out on their own after living with friends and relatives in the recession. That's driving a big gain in apartment construction and also pushing up rents.
Builders, meanwhile, started work on the most new homes in 4½ years in December. Last year was the best year for residential construction since 2008, just after the recession started.
In December, the index of contracts signed fell in the Northeast, South and West. But it ticked up in the Midwest. The supply of homes costing less than $100,000 was particularly tight in the West, the Realtors said.
Review-Journal writer Hubble Smith contributed to this report.
