It was probably inevitable. For the first time since August 2014, statewide pending home sales in California decreased in January on a year-over-year basis. Los Angeles county was off 5 percent. The San Francisco Bay Area was off 4.7 percent. The only year-over-year gains were seen in Monterey and San Francisco counties.
- The California Association of Realtors report on January's market conditions revealed a slowdown in pending homes.
- The year-over-year slowing was statewide, whereas month-over-month figures were better.
- The Market Pulse Survey showed that Realtors are still confident in the market.
It was probably inevitable.
For the first time since August 2014, statewide pending home sales in California decreased in January on a year-over-year basis.
Los Angeles County was off 5 percent. The San Francisco Bay Area was off 4.7 percent. The only year-over-year gains were seen in Monterey and San Francisco counties.
A shortage of homes on the market and affordability pressures, coupled with the distraction of volatile financial markets are the primary reasons, said the California Association of Realtors (CAR).
To expand its monthly picture, CAR has now begun including pending sales in select California counties, with more to be added in the future.
Statewide pending home sales fell in January on an annual basis, with the Pending Home Sales Index falling 2.9 percent from 98.5 in January 2015 to 95.6 in January 2016. That statistic is based on signed contracts.
Pending sales also were lower on a year-over-year basis in all areas when measured by region.
But measured month over month, California’s pending home sales in January rose from those measured in December. The index leapt 21.1 percent from an index of 79 in December to 95.6 in January. All regions experienced double-digit, month-to-month increases in pending sales as well.
Seasonality to blame for California home sales fall
In the 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. Those indices are the highest regionally.
But 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.
The intricate interplay with price still goes on, just like one long dance marathon. Key indicators of this for January are:
- In January, 17 percent of homes closed above asking price, and 47 percent closed below asking price. About 36 percent closed at 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 group 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.
- Exactly two-thirds of properties received multiple offers in January, indicating the market remains competitive. This beats the 58 percent that 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.
Concurrent with its monthly report, CAR also sends out the results of its Market Pulse Survey.
Rebounding from the holiday season, Realtors in The Golden State reported seeing an increase in floor calls, appointments and open house traffic.
Floor calls and listing appointments in January were at the highest levels since June 2015. Open house traffic signaled what could be a strong start to a strong year: the traffic count in January was the best start to the year since the survey began two years ago.
Realtor sentiment is also measured in the survey.
They report that their biggest concerns are low housing inventory, declining housing affordability, and overinflated home prices. They remain optimistic, though: 88 percent of those polled expect similar or better market conditions in 2016.