Pending home sales down slightly in October
Pending home sales eased against a deteriorating economic backdrop but remain in a stable range, according to the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, slipped 0.7 percent to 88.9 from an upwardly revised reading of 89.5 in September, according to the National Association of Realtors. The figure released Tuesday is 1.0 percent below the year ago figure of 89.8.
“Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” said Lawrence Yun, NAR chief economist. “We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”
Conditions remain uneven around the country, but some areas that are showing gains in pending home sales from a year ago include many Florida and California markets, Providence, R.I.; Lansing, Mich.; Oklahoma City; and Las Vegas.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said he’s hopeful about considerations by the U.S. Treasury. “Efforts to bring down mortgage interest rates demonstrate a clear understanding of the role housing plays in stabilizing the economy,” McMillan said. “We’re very encouraged by all of the proposals getting serious consideration in Washington to help home buyers. More sales will stabilize home prices by bringing down inventory, and would lessen foreclosure pressure.”
Swinging into holiday sales
Listen to the clamor in the media and marketplace, and you might believe that the Grinch has already stolen the holiday season. But not everyone’s spirits are dampened.
“Despite the challenging consumer environment, we remain optimistic about this year’s holiday selling period,” True Value spokeswoman Chris Taylor said. True Value is helping its members drive business through several holiday promotions, including Ladies’ Night, a holiday open house and a special “24-percent-off on December 24” deal.
“We’re excited at the potential of the Ladies’ Night to bring in more female shoppers looking to take advantage of one-night-only sales and browse the stores,” Taylor said.
“The holiday open house will offer consumers a great shopping experience, complete with fun festivities and exclusive discounts on seasonal merchandise.”
Dave Haist, chief operating officer of Do it Best, also remained optimistic. He said that “despite the fact that the economy is in a state of flux,” sales to members between the fall market in October and early December were “reasonably good.” He also noted that there are still opportunities for retailers who are focusing on high-demand items, particularly technology driven products like Lithium-Ion tools, weather stations and wireless thermometers.
“People are out there and they’re shopping,” he said. “The stores that are providing them with the right products — and who are marketing them well — are having pretty good results.”
Haist also pointed to Christmas LED lights, which are energy efficient and continue to rise in popularity, as good sales drivers — especially for members who feature them in a holiday boutique or “Christmas store-within-a-store” setting. He sees LED lights as another example of technology inspiring consumers to open up their pocketbooks.
“We find that members who display them well in their stores are seeing activity,” Haist said. “Putting them out there so people can touch them, feel them, drives demand.”
Lowe’s, coming off a 24 percent decline in earnings for the third quarter, has been trying to draw in customers with a new ad campaign called “Let’s Holiday.” Featuring a boy having a “magical” time at a Lowe’s store, the ads focus on the shopping experience at Lowe’s rather than a value message. The retailer has also been promoting LED lights, offering specials on multiple packages of 50 or 100, and according to some reports, holiday decor items had already been discounted by 50 percent at Lowe’s stores by early December.
Home Depot has also cut prices on holiday decor, bundling items to be able to offer consumers better savings. For example, if an inflatable snowman had previously retailed for $59.99, the deal is now three lawn ornaments for $89.99. The retailer — already the nation’s largest seller of fresh-cut trees with sales of two million-plus trees projected for this season — presents “Gift Centers” featuring 15 different combinations of tool kits. Home Depot has also doubled its selection of LED lights — said to be up to 90 percent more efficient than incandescents — to more than 30 skus.
“We are positioned well in holiday products, including our expanded assortment of LED lighting,” Craig Menear, Home Depot’s senior vp-merchandising, told investors during last month’s third-quarter conference call. “Our gift centers have strong values in hand tool sets and power tools across varying price points, and we’re ready to serve the storage and organization needs of our customers following holidays.”
DeRodes hired by information commerce firm
Bob DeRodes, the former executive vp and chief information officer at Home Depot, has joined First Data as its executive vp and chief technology officer. In this role, DeRodes is responsible for product development, systems, infrastructure, and processes.
DeRodes worked at Home Depot from 2002 until last September. He led a $1 billion IT system overhaul for the Atlanta retailer, including the implementation of an electronic system for special orders.
DeRodes also served as CEO for Delta Technology and chief information officer for Delta Air Lines. In these roles, he was responsible for all aspects of technology and communications for the airline’s operations.
Headquartered in Greenwood Village, Colo., First Data has operations in 37 countries. Its portfolio of services and solutions includes merchant transaction processing in credit, debit, private-label, gift, payroll and other prepaid card offerings, as well as fraud protection, electronic check acceptance and Internet commerce.