California pending home sales take breather in January after months of solid gains last year, C.A.R. reports

LOS ANGELES, Feb. 24, 2016 /PRNewswire-USNewswire/ -- Statewide pending home sales in California decreased in January on a year-over-year basis for the first time since August 2014 as a shortage of homes for sale and low housing affordability persist and volatile financial markets distract buyers, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

C.A.R. also is now reporting pending sales in select California counties, including Los Angeles, Monterey, Orange, Sacramento, San Francisco, and Santa Clara, with more to be added in the future.

Pending home sales data:

• Statewide pending home sales fell in January on an annual basis, with the Pending Home Sales Index (PHSI)* decreasing 2.9 percent from 98.5 in January 2015 to 95.6 in January 2016, based on signed contracts.
• On a monthly basis, California pending home sales rose from December, primarily due to seasonal factors. The PHSI increased 21.1 percent from an index of 79 in December to 95.6 in January.
• At the regional level, pending sales also were lower on a year-over-year basis in all areas. All regions experienced double-digit, month-to-month increases in pending sales.
• San Francisco Bay Area pending sales rose 13.9 percent from December to reach an index of 106.5 in January, up from December's 93.5 index and down 4.7 percent from January 2015's 111.8 index.
• Pending home sales in Southern California increased 10 percent from December to reach an index of 75.9 in January, up from December's index of 69 and down 4.1 percent from an index of 79.1 a year ago.
• Central Valley pending sales rose from December to reach an index of 72.7, up 11.9 percent from December's 65 index and down 1.1 percent from January 2015's 73.5 index.

Year-to-Year Change in Pending Sales by County/Region

January REALTOR® Market Pulse Survey**: 

In a separate report, California REALTORS® responding to C.A.R.'s January Market Pulse Survey saw an increase in floor calls, listing appointments/client presentations and open house traffic, primarily reflecting seasonal factors. Floor calls and listing appointments in January were at the highest levels since June 2015. Open house traffic saw its best start to the year since the survey began two years ago. The Market Pulse Survey is a monthly online survey of more than 300 California REALTORS®, which measures data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

• Nearly one in five homes (17 percent) closed above asking price in January, and 47 percent closed below asking price. More than one-third (36 percent) closed at asking price. 
• For the homes that sold above asking price, the premium paid over asking price edged up for the second straight month to an average of 9.8 percent, up from December's 9.2 percent but down from 12 percent in January 2015. 
• The 47 percent of homes that sold below asking price sold for an average of 13 percent below asking price in January, unchanged from December and up from 11 percent a year ago.
• Two-thirds (66 percent) of properties received multiple offers in January, indicating the market remains competitive. Fifty-eight percent of properties received multiple offers in January 2015. 
• The average number of offers per property was 2.1 in January, down from 2.5 in December and 2.5 in January 2015.
• With home prices leveling off in recent months, more sellers are adjusting their listing price to become more in line with buyers' expectations. About one-fourth (24 percent) of properties had price reductions in January, down from 31 percent a year ago.
• When asked what REALTORS®' biggest concerns are, four in 10 (40 percent) said low housing inventory, while 16 percent indicated declining housing affordability, and 11 percent stated overinflated home prices.
• REALTORS® were optimistic about this year's housing market, with the vast majority (88 percent) expecting similar or better market conditions in 2016.

Graphics (click links to open): 

• Pending home sales by region.
• Nearly half of homes sold below asking price.
• Share of properties receiving multiple offers.
• REALTORS®' market condition concerns.

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*Note:  C.A.R.'s pending sales information is generated from a survey of more than 70 associations of REALTORS^® and MLSs throughout the state.  Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market.  A sale is listed as pending after a seller has accepted a sales contract on a property.  The majority of pending home sales usually becomes closed sales transactions one to two months later.  The year 2008 was used as the benchmark for the Pending Homes Sales Index.  An index of 100 is equal to the average level of contract activity during 2008.

**C.A.R.'s Market Pulse Survey is a monthly online survey of more than 300 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

Leading the way...^® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS^® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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SOURCE CALIFORNIA ASSOCIATION OF REALTORS

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