California pending home sales were up year-over-year in December for the first time since January 2013. With the economy improving, Realtors are more confident about market conditions this year.
The California Association of REALTORS® (C.A.R.) reports statewide pending home sales were up 2.6 percent from the 69.1 index recorded in December 2013. The annual increase was better than the six-month average of -4.3 percent from June 2014 to November 2014.
Month-over-month statewide pending home sales fell in December, but C.A.R. explains the drop is due to the seasonal slowdown in pending sales observed at the end of the year for the last two years. The pending home sales index down 21.9 percent from 90.7 in November to 70.9 in December, based on signed contracts.
The latest C.A.R. REALTOR® Market Pulse Survey found that many California REALTORS® expect market conditions to improve in 2015 due to an improving economy, strong job growth and increasing household formation.
"The December pending home sales is the first annual increase in nearly two years. We are coming into the new year with much optimism.Economic conditions are pointing to a better market this year. In some cases buyers are anxious and want to take advantage of current low interest rates, which they fear may rise later in the year," said Chris Isaacson, president of the Silicon Valley Association of REALTORS®.
According to the REALTOR® survey, in the fourth quarter of 2014, majority of REALTORS® (87 percent) expected market conditions to either improve or stay the same over the next year. More REALTORS® (61 percent) closed a transaction in the fourth quarter of 2014, compared to the first quarter (53 percent).
REALTORS® reported fewer homes (24 percent) sold above asking price in the fourth quarter of 2014, compared to 46 percent in the first quarter. Homes selling below asking price rose from 19 percent in the first quarter of 2014 to 48 percent in the fourth quarter. These findings indicate home sellers' expectations moved more in line with buyers' expectations toward the end of the year and competition between sellers appealing to home buyers increased.
REALTORS® are still reporting multiple offers, but they are fewer than in the past. More than half (58 percent) of properties received multiple offers in the fourth quarter of 2014, down from 69 percent in the first quarter.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.