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Latest figures reveal home sales remain sluggish

LAKE GENEVA — Pending home sales are down nationwide and additional declines are expected from abnormal weather conditions, according to the latest figures released by the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.6 percent from a month ago.

Economists have come to rely on the Pending Home Sales Index because of its high correlation to actual home sales, according to the TravisEgan.com real estate blog. It reports that 80 percent of all home marked “pending” close within 60 days. Many of the rest close within 120.

Lawrence Yun, National Association of Realtors chief economist, said weather is likely to impact housing data. “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February,” he said.

But the numbers in the Lake Geneva market could turn around shortly, according to Egan.

He cites:

1. Fewer sales should drag down home prices, bringing more buyers into the market.

2. Mortgage rates are still very low, but are poised to rise in just a few weeks.

3. The home buyer tax credit requires buyers to be in contract by April 30, 2010