California Pending Home Sales Continued to Rise, Seventh Consecutive Month

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According to the California Association of Realtors, California pending home sales continued to gain steam in June 2015, registering seven months of continued annual increases and the fifth consecutive month of double-digit increases.
 
In a separate report, California Realtors responding to C.A.R.'s June Market Pulse Survey saw a reduction in floor calls, listing appointments, and open house traffic, compared with May. 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.

California Pending Home Sales Data:

• California pending home sales were up 12.5 percent on an annual basis from the revised 107 index recorded in June 2014, marking the seventh straight month of year-to-year gains and the fifth straight month of double-digit advances.

• Statewide pending home sales fell in June on a month-to-month basis, with the Pending Home Sales Index (PHSI) decreasing 2.6 percent from a revised 123.6 in May to 120.4, based on signed contracts.  The month-to-month decrease was slightly below the average May-June loss of 1.9 percent observed in the last seven years.

• A shortage of available homes in the San Francisco Bay Area stifled pending sales in June, pushing the PHSI to 127.9, down 5.3 percent from 135.1 in May and down 0.9 percent from the 129.1 index recorded in June 2014.

• Pending home sales in Southern California continued last month's increase by rising 4 percent in June to reach an index of 109.6, up 14.2 percent from the June 2014 index of 96.

• Central Valley pending sales fell in June, dropping 8.2 percent from May to reach an index of 99.5 in June but up 14.2 percent from the 87.2 index of June 2014.

 
Equity and distressed housing market data:

• The share of equity sales - or non-distressed property sales - declined slightly in June to make up 92.4 percent of all home sales, remaining near the highest level since late 2007. Equity sales made up 92.6 percent of all home sales in May and 89.9 percent in June 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) rose slightly in June, up to 7.6 percent from 7.4 percent in May. Distressed sales made up 10.1 percent of total sales a year ago. Ten of the 43 counties that C.A.R. reported showed month-to-month decreases in their distressed sales shares, with Alameda and Santa Clara having the smallest share of distressed sales at 1 percent, followed by San Mateo (2 percent), Contra Costa (3 percent), and San Francisco (3 percent). Glenn had the highest share of distressed sales at 27 percent, followed by Merced and Siskiyou (both at 23 percent).

 
C.A.R. Market Pulse Survey

• Reversing last month's decrease, the share of sales closing below asking price increased to 43 percent in June, up from 40 percent in May, but down from the highest point of 55 percent in January 2015.  More than a third of homes (33 percent) closed over asking price, and 24 percent closed at asking price.

• For the one in three homes that sold over asking price, the premium paid over asking price increased in June, suggesting increased market competition among home buyers in some local markets. In June, homes that sold above asking price sold for an average of 11 percent above asking price, up from 8 percent in May and 7.3 percent in June 2014.

• The 43 percent of homes that sold below asking price sold for an average of 11 percent below asking price in June, up from 7 percent in May.

• The share of properties receiving multiple offers was unchanged at 65 percent in June but down slightly from 66 percent in June 2014.

• The average number of offers per property increased slightly to 2.9 from 2.8 in May and 2.7 in June 2014.

• Realtors respondents reported that floor calls, listing appointments, and open house traffic all declined in June, compared with the previous month.

• While the majority of Realtors (83 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 six months from 62 percent in January to 44 percent in June.