The National Association of Realtors is forecasting a recovery in existing-home sales in the second half of the year, with modest near-term movement.”
 
The group’s Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, fell 4.7% to 84.7 from 88.9 in April. It remains 14% below May 2007.
 
“The overall decline in contract signings suggests we are not out of the woods by any means,” said Lawrence Yun, NAR chief economist.
 
The PHSI in the West slipped 1.3% to 97.5 in May but is 2% higher than May 2007. In the Northeast, the index declined 2.9% to 77.0 in May and is 16.4% below a year ago. The index in the Midwest fell 6% to 78.6 and is 13.8% below May 2007. In the South, the index dropped 7.1% in May to 84.5 and is 22.1% below a year ago.
 
Yun said location has never mattered more than in the current market. “Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.”
 
Double-digit pending sales gains in May from a year ago were noted in Colorado Springs, CO; Sacramento, CA; and Spartanburg, SC.
 
“The speed at which home prices has declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back into the market,”Yun said. “Interestingly, there have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets.”