Today, the National Association of Realtors released the Pending Home Sales Index for contracts signed in October 2008. On a seasonally adjusted basis the index was at 88.9% down 0.7% from September 2008 and down 1.0% compared to October 2007's figure of 89.8. 2001 was previously the slowest year for pending home sales on record. October 2008 was 8.0% lower than October 2001's sales pace. Pending sales were bolstered by strong sales in the West. Seasonally adjusted the West saw a decrease of 8.7% month over month but an increase of 17.4% year over year. The other regions increased by an average of 1.2% month over month and decreased by an average of 7.9% year over year.
Pending home sales are being helped by a large decrease in home prices in the West. Median home prices in the West dropped from $255,100 in September to $231,400 in October (-9.3%). The median home price in the West is down 27.0% year over year. The other three regions are down by an average of 6.2%.
The NAR made a downward adjustment in their median home sales price forecast for 2008 to $198,500 and they lowered their 2009 median home sales price forecast to $199,200. Just a few months ago, their forecast for median sales prices in 2009 was $215,800. We are now entering into a period where pending home sales slow down dramatically. The credit crisis is exasperating things.
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