Pending home sales index falls
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, according to the National Association of Realtors (NAR).
The index remains above the August and September readings and “indicates a broad stabilization,” according to the trade group. However, the November 2007 number was 19.2 percent below the November 2006 level of 108.4.
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to NAR chief economist Lawrence Yun.
“On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” Yun said. “On the other, consumers continue to wait for additional signs of market stabilization … A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
The PHSI in the South rose 2.3 percent in November to 100.7, but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent to 86.6 and was 18.5 percent lower than November 2006. In the Midwest, it fell 4.1 percent to 82.1, down 18.6 percent from 2006. In the Northeast, the index dropped 13 percent to 70.1, 19.1 percent below 2006.
Wagner Lumber completes acquisition
Wagner Lumber, based in Owego, N.Y., has completed an acquisition of Afton, N.Y.-based Pomeroy Lumber, according to a report in the Binghamton (New York) Press & Sun-Bulletin.
The deal has been in the pipeline for some time but was stalled by a flood in 2006, according to the report. The acquisition will enable Wagner Lumber to expand operations and procure timber from all parts of the state.
Wagner Lumber, established in Owego in 1975, also operates Wagner Hardwoods in Cayuta, N.Y. The businesses employ about 200 people. Pomeroy operates a sawmill in Nineveh, N.Y., a location which will now be known as Wagner Nineveh.
Wagner has three additional locations, including Wagner’s Western Wood Yard in Friendship, N.Y.; Wagner Millwork in Oswego, N.Y.; and Wagner Hardwoods in Cayuta, N.Y.
KB Home rounds out rough fourth quarter, year
National home builder KB Home saw a net loss of $772.7 million in the fourth fiscal quarter, a deeper loss than the $49.6 million recorded in the same period last year.
Net revenue for the quarter was $2.07 billion, down 31 percent from $3.01 billion in the same period last year.
This decline reflected a 22 percent year-over-year decrease in new home deliveries to 8,132 in the fourth quarter from 10,386 in the 2006 fourth quarter, and a 12 percent year-over-year decrease in the average selling price to $247,800 in 2007 from $280,000 in 2006. During the quarter, the company took charges of $917.6 million for write-downs and tax expenses.
For the full year, the company saw a net loss of $929.4 million, swinging from net earnings of $482.4 million last year. Net revenue for the year was $6.4 billion, down 46.5 percent from $9.38 billion in 2006.
“The challenging market conditions we experienced through the first three quarters of 2007 continued during the fourth quarter,” said Jeffrey Mezger, president and CEO of KB Home.
Mezger listed several factors detrimental to KB Home’s business throughout 2007, including an oversupply of new and resale homes, increased foreclosure activity, heightened competition for home sales, reduced home affordability, turmoil in the mortgage and credit markets and decreased consumer confidence in purchasing homes.