California Pending Home Sales Uptick in December

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According to the California Association of Realtors, pending home sales in California continued to improve from a year ago with solid gains, which will position the market for a modest increase in home sales in 2016.
 
In a separate report, California Realtors responding to C.A.R.'s December Market Pulse Survey saw a small decrease in the number of sales with multiple offers compared with November as well as a decrease in the number of offers received. Listing appointments remained stable, while floor calls and open house traffic were down, primarily reflecting seasonal factors. The Market Pulse Survey is a monthly online survey of more than 300 California agents, 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 remained strong in December on an annual basis, with the Pending Home Sales Index (PHSI) increasing 8.3 percent from 71.9 in December 2014 to 77.9 in December 2015, based on signed contracts. The annual increase was the smallest since January 2015.

• On a monthly basis, California pending home sales fell from November, primarily due to seasonal factors. The PHSI decreased 22.4 percent from an index of 100.4 in November to 77.9 in December.

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

• San Francisco Bay Area pending sales fell 36.4 percent from November to reach an index of 81.7 in December, down from November's 128.4 and up 12.4 percent from December 2014's 72.7 index.

• Pending home sales in Southern California decreased 19.3 percent from November to reach an index of 69 in December, down from November's index of 85.5 and up 2.5 percent from an index of 67.4 a year ago.

• Central Valley pending sales fell from November to reach an index of 65.7, down 22.8 percent from November's 85.1 index and up 12.9 percent from December 2014's 58.2 index.

Equity and distressed housing market data:

• The share of equity sales - or non-distressed property sales - edged up in December and remained at the highest levels since the fall of 2007. Equity sales now make up 93.6 percent of all sales, up from 90.1 percent a year ago.

• The combined share of all distressed property sales (REOs and short sales) dipped in December to 6.4 percent of total sales and was down from 9.9 percent a year ago.

• Eighteen of the 44 counties that C.A.R. reports showed month-to-month decreases in their share of distressed sales, with San Mateo having the smallest share of distressed sales at 1.7 percent, followed by Santa Clara (1.8 percent), and Marin (2.2 percent). Tehama had the highest share of distressed sales at 20.4 percent, followed by Siskiyou (18.8 percent), and Lake (15.6 percent).

December Realtor Market Pulse Survey:

• Nearly one in five homes (18 percent) closed above asking price in December, and 57 percent closed below asking price. One-fourth (25 percent) closed at asking price.

• For the one in five homes that sold above asking price, the premium paid over asking price edged up to an average of 9.2 percent, up from November's 8.9 percent but down from 11 percent in December 2014.

• The 57 percent of homes that sold below asking price sold for an average of 13 percent below asking price in December, unchanged from November and a year ago.

• About two-thirds (65 percent) of properties received multiple offers in December, indicating the market remains competitive. Sixty-one percent of properties received multiple offers in December 2014.

• The average number of offers per property was 2.5 in December, down from 2.7 in November and 2.6 in December 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 December, down from 31 percent a year ago.

• Realtor respondents reported that listing appointments remained stable, while floor calls and open house traffic were down, mostly due to seasonal factors.

• When asked what their biggest concerns are, one in four (25 percent) said thin housing supplies, while 20 percent indicated declining housing affordability, and 14 percent stated overinflated home prices.