California pending home sales dial back in November

Statewide pending sales perk higher on annual basis for 13th straight month

LOS ANGELES – December 24, 2015 – (RealEstateRama) — California pending home sales retreated in November primarily due to seasonal factors and delayed escrow closings caused by new loan disclosure rules, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

In a separate report, California REALTORS® responding to C.A.R.’s November Market Pulse Survey saw a small increase in the number of sales with multiple offers compared with October and an increase in the number of offers received. Listing appointments declined, while the number of floor calls and open house traffic stabilized, primarily reflecting seasonal factors. 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.

Pending home sales data:

• Statewide pending home sales fell in November, with the Pending Home Sales Index (PHSI)* declining 11.4 percent from 113.4 in October to 100.4 in November, based on signed contracts. The month-to-month decrease was the largest since December 2014.

• On an annual basis, California pending home sales remained strong and continued to improve from 2014 with double-digit gains. Statewide pending sales were up 13.6 percent from the 88.4 index recorded in November 2014. Pending sales have been increasing on a year-over-year basis since November 2014.

• At the regional level, pending sales were higher on a year-over-year basis in all areas, with Southern California, Central Valley, and San Francisco Bay Area all increasing at a double-digit rate compared to last November. All regions experienced a month-to-month decline in pending sales.

• San Francisco Bay Area pending sales fell 11.8 percent to reach an index of 128.4 in November, down from October’s 145.6 but up 17.7 percent from November 2014’s 109.1 index.

• Pending home sales in Southern California decreased to 85.5 in November, down 9.3 percent from 94.3 in October but up 10.6 percent from an index of 77.3 a year ago.

• Central Valley pending sales slipped in November to reach an index of 85.1, down 4.9 percent from October’s 89.5 index but up 15.8 percent from November 2014’s 73.5 index.

Equity and distressed housing market data:

• The share of equity sales – or non-distressed property sales – dipped slightly in November but remained at the highest levels since the fall of 2007. Equity sales now make up 93.4 percent of all sales, up from 90.9 percent a year ago.

• The combined share of all distressed property sales (REOs and short sales) edged up in November to 6.6 percent of total sales but was down from 9.1 percent a year ago.

• Fifteen of the 44 counties that C.A.R. reports showed month-to-month decreases in their share of distressed sales, with Amador and Mariposa having the smallest share of distressed sales at 0 percent, followed by San Mateo (0.9 percent), and San Francisco (1.1 percent). Glenn had the highest share of distressed sales at 28 percent, followed by Tehama (22.6 percent), and Kings (21.5 percent).

November REALTOR® Market Pulse Survey**:

• More than one in four homes (27 percent) closed above asking price in November, and 40 percent closed below asking price. One-third (33 percent) closed at asking price.

• For the one in four homes that sold above asking price, the premium paid over asking price fell to an average of 8.9 percent, unchanged from October but down from 10 percent in November 2014.

• The 40 percent of homes that sold below asking price sold for an average of 13 percent below asking price in November, up from 12 percent in October and up from 12 percent in November 2014.

• About two-thirds (66 percent) of properties received multiple offers in November, indicating the market remains competitive. Sixty-four percent of properties received multiple offers in November 2014.

• The average number of offers per property was 2.7 in November, up from 2.4 in October and 2.4 in November 2014.

• 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-third (30 percent) of properties had price reductions in November, down from 32 percent in October.

• REALTOR® respondents reported that listing appointments declined in November, but floor calls and open house traffic stabilized, mostly due to seasonal factors.

• When asked what REALTORS®’ biggest concerns are, more than one in four (28 percent) said a shortage of homes for sale, 22 percent indicated declining housing affordability, and 12 percent said overinflated home prices.

• REALTORS® were optimistic about next year’s housing market, with the vast majority (89 percent) expecting similar or better market conditions in 2016, the highest share since spring 2015.

Graphics (click links to open):

• Pending home sales by region.
• More than half of homes sold at or above asking price.
• Number of offers received was highest since July.
• REALTORS®’ expectations of market conditions.

*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 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.