Northeast tops U.S. average in pending home sales

//February 4, 2010//

Northeast tops U.S. average in pending home sales

//February 4, 2010//

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NAR calls N.J.’s sales performance ‘strong.’New Jersey and other Northeastern states put up a stronger show than the nation as a whole in pending home sales in December compared to that of a year earlier, according to an index released Tuesday by the National Association of Realtors, in Washington, D.C.

The Northeast logged a 14.9 percent growth between December 2008 and December 2009 in the NAR’s Pending Home Sales Index, while the average national growth was 10.9 percent in that period. In regional comparisons, the Northeast did better year-over-year than the Midwest (8.7 percent growth) and the South (5.5 percent), but was outranked by the West (18.6 percent).

NAR said a sale is listed as pending when the contract has been signed but the transaction has not closed; the sale usually is finalized within one or two months of signing.

NAR did not release the underlying data or state-wide tallies, but “New Jersey’s performance has been strong” in the latest rankings on existing home sales, said spokesman Walter Molony. He pointed to NAR’s December report for the third quarter of 2009, where New Jersey logged 122,800 existing-homes sales — up 17.6 percent over that of the prior quarter, compared to the national average of 11.4 percent.

But Molony cautioned against comparing NAR’s rankings for existing-home sales and pending home sales, saying the latter is a relatively new index that’s based on a sampling of 20 percent of housing data. Data on pending home sales is hard to come by, he said.

Lawrence Yun, NAR chief economist, projected existing-home sales to rise to 5.6 million in 2010, from 5.16 million last year. He said he expects the extended and expanded federal tax credit for homebuyers will encourage 2.4 million households to take the credit in 2010; new-home sales, though, will “remain low due to a lack of construction.”

On Feb, 26, NAR will release its next report on existing-home sales for January, Molony said.

Yun said it’s important to recognize how the tax credit is skewing market data. “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring, and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth-highest monthly tally in two years.”

Buyers who have a contract in place to purchase a primary residence by April 30 have until June 30 to finalize the transaction to qualify for a tax credit of up to $8,000.

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