Signed deals for home sales rise in November-2012

Signed deals for home sales rise in November

WASHINGTON -- The number of Americans who signed contracts to buy homes in November rose to the highest level in a year and a half.

The best reading on pending homes sales since a federal home-buying tax credit expired appeared to encourage traders on Wall Street. The Dow Jones industrial average finished up 136 points.

However, the National Association of Realtors cautioned that a growing number of buyers are canceling their contracts at the last minute, making the gauge less reliable.

The Realtors group said Thursday that its index of sales agreements jumped 7.3 percent last month to a reading of 100.1.

A reading of 100 is considered healthy. The last time the index was that high was in April 2010, one month before the tax credit expired.

Contract signings usually signal where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.

But a sale isn't final until a mortgage is closed and many are falling apart before that happens. One third of Realtors say they've had at least one contract scuttled in November and October, according to the Realtors' group. That's up from 18 percent in September.

Greater Las Vegas Association of Realtors President Paul Bell said he's noticed a trend of more homes going into contract since early November, and expects December's escrow closings to be the highest in several years.

"We think there's pent-up demand nationwide and locally," Bell said Thursday. "We've seen sales come in stronger than expected in September and October and November. Escrow companies are working on a lot of files. They're burning the midnight oil."

The Realtors association reported that 9,780 single-family homes, roughly half of the 20,818 units on the Multiple Listing Service, were available without pending or contingent offers in November. That's down 22.3 percent from a year ago.

The median list price of available units without offers was $139,000 in November, a 2.5 percent decrease from a year ago. Realtors added 3,612 new listings to the Las Vegas MLS during the month.

Pierre Ellis, an analyst at Decision Economics, said potential buyers are "feeling comfortable with their personal situations and with the house-price trend." But the demand for homes is running into significant obstacles, he said, including tougher lending standards and bigger required down payments.

Homes are the most affordable they've been in decades. Long-term mortgage rates are at historic lows and prices in most metro areas have tumbled since late 2006.

Yet this year will likely be the worst year for new-home sales in history. Sales of existing homes are just barely ahead of 2008's dismal figures -- the worst yearly showing since 1997.

Americans are postponing buying a home for several reasons. High unemployment and weak job growth have deterred many potential buyers. Loans are harder to get. Lenders are requiring bigger down payments and strong credit scores to qualify.

Even those with good credit and stable finances are hesitant to buy out of concern home prices will keep falling.

Bell said Las Vegas is a growing retirement community with affordable home prices, and low interest rates are helping new homeowners like the couple that locked in at 3.87 percent.

"A lot of lenders doing short sales and foreclosures want to get properties off the books by year end," he said. "We see transactions spilling over to January."