Pending home sales on the rise
Pending home sales, a measurement of homes on which contracts have been signed, rose 0.6 in October to a reading of 87.2 from an upwardly revised reading of 86.7 in September, according to the National Association of Realtors (NAR).
It was the second consecutive monthly gain, but remained 18.4 percent below the October 2006 index of 106.8. The NAR also said it expects pending home sales to show a slight near-term rise in 2008 but that a recovery for new-home sales is unlikely before 2009.
“The unusual mortgage disruptions that peaked in August were clearly seen in lower home sales that were finalized in September and October, so the market was underperforming,” said NAR chief economist Lawrence Yun. “Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels.”
The October index rose 16 percent in Northeast to 80.6 compared to September, but is 11.1 percent below a year ago. In the West, the index increased 8.4 percent to 87.3, but is 16.9 percent lower than October 2006. The index in the Midwest slipped 1.4 percent in October to 85.5 and is 11.7 percent below a year ago. In the South, the index dropped 7.8 percent in October to 91.6 and is 25.3 percent below October 2006.
“The improvement in the Northeast reaffirms a trend apparent for some months now that shows signs of recovery, noteworthy because that was the first region to slump, and the gain in the West indicates some easing of interest rates for jumbo loans,” Yun said.
Restoration Hardware sees losses in the third quarter
On the heels of a takeover bid by Sears Holdings, Restoration Hardware released third quarter results today showing revenue rose 10.6 percent to $173.7 million, compared with $157.1 million in the same period last year. The company reported a net loss of $15.2 million, deeper than the $5.7 million in losses the retailer recorded last year.
Of those losses, $1.4 million came from costs associated with a merger agreement between Restoration Hardware and affiliates of investment company Catterton Partners, a plan that the retailer announced on Nov. 8. That merger agreement was challenged later in November by Sears Holdings, which offered to acquire Restoration Hardware for a slightly higher per-share price than Catterton.
Afurther $400,000 in losses was related to headcount reductions at the company’s Corta Madera, Calif.-based headquarters.
“Weakening consumer spending and traffic levels continued to affect our business in the third quarter, particularly higher ticket durable categories,” said Gary Friedman, president and CEO of Restoration Hardware. “While we are encouraged by some of the early holiday trends in our business, we remain cautious due to the macro economic environment, which has proven highly challenging for the home furnishings sector this year.”
Restoration Hardware opted not to hold a third quarter conference call because of “pending merger agreement activities.” The company said it would update investors through press releases and filings with the Securities and Exchange Commission.
Restoration Hardware sells high-end home furnishings, decorative hardware, fashion plumbing fixtures and bathware through more than 100 stores nationwide.
Home Depot has announced a voluntary recall of about 64,000 holiday figurines because of a lead paint hazard, according to the United States Consumer Product Safety Commission.
The products were manufactured by Creative Design of Hong Kong. The surface paint of the figurines contains lead, according to the commission. No incidents or injuries have been reported.
The products were sold at Home Depot stores from October 2007 to November 2007 for between $10 and $20. They include a snowman candle holder, a holiday bear candle holder, a rendering of three snowmen with a “Joy” sign and a snowman with a “Let it Snow” sign.