California's housing market remains very competitive as pending home sales statewide continued their momentum in June, posting three consecutive months of annual increases, according to the latest report from the California Association of Realtors. The San Francisco Bay Area posted the highest pending home sales on an annual basis across the state.
The state Realtor group's Pending Home Sales Index increased 3.2 percent from 123.4 in June 2015 to 127.3 in June 2016, based on signed contracts. With pending sales on a rising trend annually in the past couple of months, Realtors anticipate June's increase should usher in higher closed transactions in July and August.
Pending home sales are forward-looking indicators of the future direction of home sales activity. A sale is listed as pending after a seller has accepted a sales contract on a property. An index of 100 is equal to the average level of contract activity during 2008, the benchmark for the state Realtor group's Pending Homes Sales Index.
For the Bay Area, pending home sales jumped 5.1 percent from June 2015. San Francisco took the lead with a 21.3 percent rise in pending sales. In Santa Clara County, the index rose 3.4 percent, from 98.5 in June last year to 101.9. The index in San Mateo County rose 2.1 percent, from 107.8 in June 2015 to 110.
The June increase in Bay Area pending sales suggests a brighter outlook for the region. There has been some improvement in inventory of homes for sale, especially in the counties of Alameda, San Francisco, San Mateo, and Santa Clara. This should alleviate low housing stock in the upcoming months, according to Realtor officials.
"The pending home sales data is a good indicator of future housing market trends. There are more homes for sale, especially those in the mid-range. While mortgage interest rates are still low, potential home buyers should contact a local, experienced Realtor who can provide them with good information to help them find and close on a home that's right for them," says Karen Trolan, president of the Silicon Valley Association of Realtors.
"Looking at historic numbers, September and October are very strong home sales months. With the pending home sales data and the history, the market should be even stronger in early fall," adds Trolan.
The California Realtors June Market Pulse Survey reflected a slight increase in sales with three or more offers over the previous year, particularly in homes priced $300,000-$399,000, which climbed from 8 percent in June 2015 to 18 percent this year. More than seven of 10 properties (72 percent) for sale received multiple offers in June, indicating the market remains competitive. Sixty-five percent of properties received multiple offers in June 2015.
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.