Pending home sales, a measure based on sales agreements signed during a month, rose 6.3 percent in April, but remained 13.1 percent lower than April 2007, the National Association of Realtors said today.
The Western states, with inventories brimming with lower-priced foreclosures, saw the biggest monthly and year-over-year increases - an 8.3 percent rise in April and a 4 percent gain from April 2007.
Lawrence Yun, the industry group's chief economist, said it was unclear whether the bargain-hunters in the West were "investors or owner-occupants."
While the national real estate market may not yet have hit bottom, "it looks like home sales may finally be stabilizing," said Joel F. Naroff, chief economist at Commerce Bancorp Inc., of Cherry Hill.
"Maybe the housing market will not be leading the way for quite a long time, but we have to hit bottom before we can start to rebound, and that may be happening," he said.
The Northeast saw a monthly drop of 1.9 percent, after a surge in March, and a year-over-year decline of 12.1 percent. The Philadelphia region's index rose 1 percent in April, but fell 19.6 percent year over year, according to Prudential Fox & Roach's HomExpert Report.
Steve Storti, senior vice president of marketing for Prudential, focused on the 1 percent gain. "Although the market still has a way to go before we can say the market is officially on the rebound," he said, "this month's pending-home-sales index is a welcome sign."
Foreclosures have not affected Philadelphia markets, and prices, at least in this region, have not declined significantly, according to a number of economic measures.
What is unfolding in the West, and to some extent across the United States, however, is more complex, said Patrick Newport, housing economist with Global Insight Inc., of Lexington, Mass.
In April, the median sale price in the West fell 16 percent year-over-year - twice the national rate. The drop boosted existing-home sales - up 15 percent since October - but not enough to keep inventories from climbing.
Anecdotal evidence suggests some banks in Western states are selling foreclosed homes at deep discounts. This has spurred sales, but not enough to cut inventories, Newport said.
Although this is perhaps the best buyers' market in 20 years, many prospective purchasers are remaining on the sidelines, waiting for prices to drop further, agents say.
On the other hand, some first-time buyers believe the right time is now.
Matt Levitsky, 27, a lawyer at Morgan, Lewis & Bockius L.L.P., bought a one-bedroom with den at the Parc Rittenhouse at 17th and Locust Streets in Center City, where such units are priced from $525,000 to $600,000.
"There are a lot of good buys available because of the condition of the market, and I thought that this was a good investment, given the limited amount of real estate on Rittenhouse Square," he said.
Naroff said a stabilizing housing market may help Federal Reserve members justify their decision not to cut short-term rates further.
"With rising unemployment rates, declining payrolls, $4-a-gallon gasoline and rising prices of so many other things," he said, "they really do need to find something to point to soon."