The WPJ
Residential Real Estate News
California Home Pending Sales Gain Momentum in May
According to the California Association of Realtors, with the California housing market continuing its upward trend, pending home sales registered their sixth straight annual gain, with the last four months being in the double-digits.
California pending home sales data for May 2015 include:
- California pending home sales were up 12.1 percent on an annual basis from the revised 110.3 index recorded in May 2014, marking the sixth straight month of year-to-year gains and the fourth straight month of double-digit advances.
- Statewide pending home sales fell in May on a month-to-month basis, with the Pending Home Sales Index (PHSI) decreasing 4.6 percent from a revised 129.6 in April to 123.6, based on signed contracts. The month-to-month decrease was below the average April-May loss of 3.6 percent observed in the last seven years.
- A shortage of available homes in the San Francisco Bay Area stifled pending sales in May, pushing the PHSI to 135.1, down 1.1 percent from 136.6 in April and down 2.4 percent from the 138.5 index recorded in May 2014.
- Pending home sales in Southern California reversed last month's decline to rise 1.6 percent in May to reach an index of 105.4, up 12.5 percent from the May 2014 index of 93.7.
- Central Valley pending sales fell in May after three straight months of increases, dropping 16.1 percent from April to reach an index of 108.4 in May but up 18 percent from the 91.9 index of May 2014.
- The share of equity sales - or non-distressed property sales - edged up further in May to make up 92.6 percent of all home sales, the highest level since late 2007. Equity sales made up 91.8 percent of all home sales in April and 88.8 percent in May 2014. The share of equity sales has been at or near 90 percent since mid-2014.
- Conversely, the combined share of all distressed property sales (REOs and short sales) fell in May, down from 8.2 percent in April to 7.4 percent in May. Distressed sales made up 11.2 percent of total sales a year ago. Twenty-seven of the 43 counties that C.A.R. reported showed month-to-month decreases in their distressed sales shares, with Glenn having the smallest share of distressed sales at 0 percent, followed by San Mateo (1 percent), and Santa Clara (1 percent). Mariposa had the highest share of distressed sales at 18 percent, followed by Siskiyou (17 percent), and Mendocino, Merced, Plumas, and Yuba (all at 16 percent).
- In a sign of stabilizing home prices, the share of sales closing below asking price has been on a downward trend for four straight months. One in four (40 percent) transactions closed below asking price in May, down from the highest point of 55 percent in January 2015. More than a third of homes (34 percent) closed over asking price, and 26 percent closed at asking price.
- The premium paid over asking price declined in May, suggesting diminished market competition among home buyers. In May, homes that sold above asking price sold for an average of 8 percent above asking price, down from 10 percent in April but up from 6.5 percent in May 2014.
- Homes that sold below asking price sold for an average of 7 percent below asking price in May, down for the first time in four months.
- The share of properties receiving multiple offers fell for the first time in four months. Sixty-five percent of properties received multiple offers in May, down from 72 percent in April and up from 62 percent a year ago.
- The average number of offers per property decreased for the first time in three months, slipping from 3.6 in April to 2.8 in May.
- Floor calls, listing appointments, and open house traffic were all up in May, compared to the previous month, suggesting a solid summer home-buying season.
- While the majority of Realtors (86 percent) expect better or similar market conditions over the next year, the percentage of Realtors who are optimistic about conditions over the coming year has been on the decline for the past four months from 62 percent in January to 41 percent in May.
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