California pending home sales temper in August but still record 10th straight annual increase

LOS ANGELES (Sept. 22) – California pending home sales declined in August but remained strong, marking 10 straight months of year-over-year gains, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

In a separate report, California REALTORS® responding to C.A.R.’s August Market Pulse Survey saw a drop in sales with multiple offers compared with July, as market competition cooled down toward the end of the home-buying season. 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:

• The Pending Home Sales Index (PHSI)* rose 12.8 percent on an annual basis to 112.8 in August, based on signed contracts. The August 2015 index was up from the 100 index recorded a year ago and marked the 10th straight month of year-to-year gains and the seventh straight month of double-digit advances.

• On a monthly basis, statewide pending home sales in August fell 8.7 percent on a month-to-month basis. The PHSI was down from the 123.6 index in July. The month-to-month decrease was higher than the average July-August gain of 0.3 percent observed in the last seven years.

• At the regional level, pending sales were higher on a year-over-year basis in the San Francisco Bay Area, Southern California, and Central Valley, but were lower on a monthly basis.

• San Francisco Bay Area pending sales fell 14.1 percent from July to an index of 119.7, but were up 1.1 percent from August 2014.

• Pending home sales in Southern California dropped 13.7 percent from July to reach an index of 94.3 in August but were up 14.7 percent from a year ago.

• Central Valley pending sales were lower in August, decreasing 5.7 percent from July to reach an index of 96.7 in August but were up 15.9 percent from August 2014.

Equity and distressed housing market data:

• The share of equity sales – or non-distressed property sales – edged up from August to post its highest level since the fall of 2007. Equity sales made up 93.8 percent of all home sales in August, up from 93.3 percent in July and 91.6 percent in August 2014.

• Conversely, the combined share of all distressed property sales (REOs and short sales) fell in August to 6.2 percent of total sales, down from 6.7 percent in July and 8.5 percent a year ago.

• Twenty-five of the 44 counties that C.A.R. reports showed month-to-month decreases in their share of distressed sales, with Santa Cruz having the smallest share of distressed sales at 0.6 percent, followed by Marin (1.1 percent), and San Mateo (1.5 percent). Tehama County had the highest share of distressed sales at 16.7 percent, followed by San Benito (14.3 percent) and both Lake and Kings tied at 13.4 percent.

August REALTOR® Market Pulse Survey**:

• The share of sales closing below asking price increased in August to 48 percent. More than one-fourth of homes (27 percent) closed above asking price, and 25 percent closed at asking price.

• For the one in four homes that sold above asking price, the premium paid over asking price decreased to an average of 8.2 percent, down from 11 percent in July and down from 8.4 percent in August 2014.

• The 48 percent of homes that sold below asking price sold for an average of 11 percent below asking price in August, up from 9.6 percent in July.

• The share of properties receiving multiple offers decreased in August to 58 percent, down from 67 percent in July and 61 percent in August 2014.

• The average number of offers per property dipped to 2.4 from 3.0 in July and 2.5 in August 2014.

• REALTOR® respondents reported that floor calls, listing appointments, and open house traffic all declined in August.

• When asked what REALTORS®’ biggest concerns are, more than one in five (22 percent) indicated low housing affordability, 18 percent said overinflated home prices, and another 18 percent are concerned with a shortage of available homes for sale.

Graphics (click links to open):

• Pending home sales by region.
• Transactions closing at or above asking price.
• Premium paid over asking price.
• REALTORS®’ biggest concerns.

*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.