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High Demand, Thin Supply Crimp California Pending Home Sales

Residential News » San Francisco Edition | By WPJ Staff | April 26, 2016 11:07 AM ET

According to the California Association of Realtors, statewide pending home sales in California decreased in March 2016 on an annual basis for the third straight month, reflecting high demand for a dearth of homes available for sale on the market.

California Pending home sales data:

Statewide pending home sales fell in March on an annual basis, with the Pending Home Sales Index (PHSI) decreasing 1.7 percent from 138.0 in March 2015 to 135.6 in March 2016, based on signed contracts.

On a monthly basis, California pending home sales rose from February, primarily due to seasonal factors. The PHSI increased 12.7 percent from an index of 120.3 in February to 135.6 in March. When adjusting pending sales for typical seasonal patterns, pending sales actually declined 1 percent from February. Tight inventories are expected to continue to impede home sales growth this year.

At the regional level, pending sales were down on an annual basis in all major regions of the state, with the San Francisco Bay Area experiencing the largest contraction at 3.7 percent. All major regions experienced double-digit, month-to-month increases in pending sales.

Within the core areas of the Bay Area, including San Francisco and Santa Clara counties, pending sales actually saw an increase over last year of 8.6 percent and 11.6 percent, respectively.

Conversely, the Central Valley, which has been enjoying the fastest pace of home sales growth of late, saw pending sales fall 3.5 percent from March 2015, but was up 11.7 percent from February.

Pending home sales in Southern California were essentially flat in March, edging down 0.3 percent from a year ago and were up 17.8 percent from February. Los Angeles County posted a modest annual gain of 1 percent, while Orange County declined by 4.3 percent.