Pending Home Sales April 2010

Pending Home Sales were reported robust for April, but real estate activity got a special boost as the deadline to enter into contract came to pass on the month's close.

"The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street. While writing for Wall Street Greek and others, he presciently predicted the financial crisis and housing and banking failures of the Great Recession. Visit the front pages of Wall Street Greek now to see our current coverage of business news, global financial markets, real estate, shipping, fine art, technical analysis and global affairs.

(Tickers: NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, Nasdaq: NDAQ)

Pending Home Sales April 2010

The National Association of Realtors (read biased organization) reported Pending Home Sales rose 6% in April, after March's result was upwardly revised to a plus 7.1% rate (February +8.3%). Since April marked the deadline to enter into contract, do not expect the same kind of result for May's Pending Home Sales. For the one thousandth time, the First-Time Homebuyers Tax Credit will not play a role moving forward, while it boosted April and March activity significantly.

Lawrence Yun, the very friendly looking Chief Economist of the NAR, correctly directed attention to the surprising impact of this latest tax credit. Most experts, including your favorite Greek/American strategist, said the government's extension and expansion of the tax credit was a sign that the home buyer pool was running thin.

Still, low mortgage rates, which conveniently benefited from Europe's demise, which in turn conveniently followed the downgrade of several European sovereigns, helped boost the American real estate market (which is of course the most important US economic driver). Hmm, what a coincidence...

Yun says the tax credit brought an additional 1 million homebuyers into the market, which has improved the inventory situation (reducing it). That's a fact! WSG real estate guru, Michael Douville, has been pointing to the inventory situation (aided by homebuilder idleness) as a fuel source for the next housing run. Home prices have stabilized, that's "for true," as my Canadian-English speaking friends like to say. However, I recently pooped on that party by noting 9.9% unemployment as a big reason why cheap prices do not necessarily translate into buying activity...

The Pending Home Sales Index jumped 29.5% in the Northeast and 7.5% in the West. The PHSI only moved 4.1% higher in the Midwest, and it fell 0.6% in the South. The NAR warns that a flood of short-sale activity and appraisal issues have extended normal closing periods. Thus, it has requested Congress reconsider its June 30 deadline for tax-benefiting closings, so as not lose the housing business the legislation was intended to create in the first place.

You may also have interest in this report: Housing Forecast 2010



Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (NYSE: FRE), Fannie Mae (NYSE: FNM), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ) and Avatar Holdings (Nasdaq: AVTR).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.