An increase in pending sales across all major regions buoyed statewide California pending home sales in August from a year ago, according to the California Association of Realtors. Despite the pending home sales improvement, Realtors report overall market conditions appear to be slowing down and closed transactions plateauing.
Statewide pending home sales rose in August with the Pending Home Sales Index increasing 6.4 percent from 113.9 in August 2015 to 121.3 in August 2016, based on signed contracts. The year-over-year increase was the fifth consecutive positive annual improvement and the largest in 2016.
On a month-to-month basis, California pending home sales slipped 1 percent from July's index of 122.5 – the fourth consecutive decline, which was largely due to seasonality. The monthly decrease was the smallest July-to-August decline in four years, suggesting that sales may remain at similar current levels.
All major regions posted solid year-over-year increases in pending home sales. For the Bay Area, pending sales rose 8.5 percent from August 2015 and 4.1 percent from July. Santa Clara County saw a strong 14.8 percent increase in pending sales, followed by other double-digit pending sales gains in San Francisco (10.4 percent) and San Mateo (11.9 percent) counties.
Meanwhile Realtors responding to the state Realtor group's August Market Pulse Survey, report a slowing down of most leading indicators of overall market conditions, such as a decline in floor calls, listing appointment, and open house traffic.
Realtor responding to the August survey reported that the share of homes selling above asking price dropped to 29 percent in August, up from 27 percent a year ago. The share of properties selling below asking price dropped to 41 percent from 48 percent in August 2015. The remaining 30 percent sold at asking price, up from 25 percent in August 2015.
More than six in 10 of properties (62 percent) for sale received multiple offers in August, down from 66 percent in July and up from 58 percent in August 2015.
The average number of offers per property remained at 2.8 in August, unchanged from July and up from 2.4 in August 2015. Homes priced between $200,000 - $299,000 saw the most significant increase in three or more offers compared to a year ago, primarily due to their better affordability.
In the August Realtor survey, declining housing affordability topped lack of inventory as California Realtors' number one concern for the first time in nearly a year, with 26 percent stating they were concerned about low housing affordability, and 19 percent indicating they were concerned about a tight housing supply. Realtors also were concerned about inflated home prices/housing bubble, a slowdown in economic growth, lending and financing, rising interest rates, and policy and regulations.
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.
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