Betty Poore: What's New on the Charleston Coast Blog: November 2009

It's official! Boeing is coming to Charleston, SC, and over the next seven years bringing 3800 jobs! Needless to say, we are excited! Here's more from the Charleston City Paper:

Boeing picks Charleston

"This decision allows us to continue building on the synergies we have established in South Carolina with Boeing Charleston and Global Aeronautica," says Jim Albaugh, president and CEO of Boeing Commercial Airplanes, adding that this move will strengthen the company's competitiveness and sustainability and help it grow for the long term.

State House Speaker Bobby Harrell calls it the biggest economic development announcement in a decade.

"Today’s announcement declares to the global business community that South Carolina is back in the game and open for business," he says. "We want you to come to our state."

Great news in the real estate world. According to NAR, pending home sales are up in the 4 regions they track. Here is the article for your review.

Pending Homes Sales

(October 1, 2009 Release)

Highlights

• The pending home sales index rose 6.4 percent in August to 103.8, compared to 97.6 in July.
• The pending home sales index rose 12.3 percent from a year ago.
• All four regions reported increases: the West, Northeast, Midwest and South posted increases of 16.0 percent, 8.3 percent, 3.1 percent and 0.8 percent, respectively.

Pending Home Sales Index
	Aug 09	July 09	3 mo Avg	1 year ago
United States	103.8	97.6	98.7	92.4
% change	6.4	3.2		12.3
Northeast	85.3	78.8	80.3	75.3
% change	8.3	-3.0		13.3
Midwest	90.8	88.1	89.1	81.5
% change	3.1	-2.0		11.4
South	104.6	103.8	99.5	92.6
% change	0.8	3.1		13.0
West	130.5	112.5	103.5	93.8
% change	16.0	12.1		39.1

Source: National Association of Realtors; index is seasonally adjusted

Analysis

The index of pending home sales reported by the National Association of Realtors, climbed 6.4 percent in August compared to the previous month. The surge in sales contracts on existing homes in August was the highest monthly pace of contracts this year; and also was the seventh consecutive monthly gain in the index. The pending sales index is now 12.4 percent above the index registered in August 2008. The large jump in the index exceeded economists’ expectations as represented by a panel of analysts surveyed by Briefing.com that had a forecast of a 1 percent rise in the index.

Pending home sales are contract signings, not closings, and thus considered a leading indicator of existing home sales which are closings. The ramp up in home sales contracts over the past several months can be partially attributed to the $8,000 first-time homebuyer tax credit which is set to expire November 30. It is likely that a meaningful number of first-time buyers are hurrying to sign contract to purchase homes before the $8,000 tax credit expires at the end of next month.

Last week, the NAR reported in another report that existing home sales in August fell 2.7 percent from the previous month which brings into question the accuracy of the pending home sales index as a reliable indicator of future home sales. Many economists agree that the fallout rate-the rate at which contract signings never reach the closing stage-has increased markedly in recent months and probably explains the discrepancy between contracts and closings. Some of the households that sign a sales contract may not be able to obtain a mortgage to close the deal due to stricter credit underwriting standards. The NAR also cites that there continues to be problems in the new appraisal rules which are making it difficult for some deals to satisfy the loan-to-value ratios required by underwriters.

Nevertheless, the surge in pending sales contract volume in recent months indicates that buyers are coming back to the home buying marketplace. They are signing contracts, but not all of them actually close. The favorable news in the pending home sales report bodes well for future existing home sales activity. Combined with other recent favorable housing reports over the past several months, strengthens the notion that the housing sector is firmly on a recovery trajectory, at least from a sales perspective.

Labels: Charleston, coast, real estate, south

There is a great new article in my November E-Newlsetter regarding the New Homebuyer Tax Credit.
While it may not be right for you at this time, you might have friends and family to share it with. Click here to go to my website, then click on E-Newsletter at the top.

Labels: Charleston Coast, credit, home buyer, tax