California pending home sales grew modestly in October from the previous year and were down from September, according to the California Association of Realtors' October pending home sales report. Realtors responding to the state Realtor association's October Markey Pulse Survey see the state's housing market is showing signs of cooling competition with fewer price reductions.
Statewide pending home sales rose in October, with the Pending Home Sales Index rising 1.5 percent from 117.3 in October 2015 to 119.1 in October 2016 – the seventh consecutive year-to-year increase. On a monthly basis, California pending home sales were down 6.7 percent from the September index of 127.7.
Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property.
For the San Francisco Bay Area, pending sales were 4.7 percent lower than September and 11.6 percent lower than October 2015, as the tight housing supply continues to trigger skyrocketing home prices in the region. San Francisco, San Mateo, and Santa Clara counties all experienced annual declines in pending home sales of 21.2 percent, 5 percent, and 12.5 percent, respectively.
"This time of year is typically seasonally slower. The anticipation and preparations for the holiday season can lead to a decrease in market activity for the fourth quarter," said Karen Trolan, president of the Silicon Valley Association of Realtors. "We expect the momentum to strengthen after the first of the year."
At the regional level, for Southern California as a whole, pending sales rose 2.4 percent on a monthly basis, and were up 6.8 percent on an annual basis. In the Central Valley, pending sales declined from both the previous month and year, posting a 23.8 percent monthly drop and a 4.8 percent annual decrease.
According to California Realtors responding to state Realtor association's October Market Pulse Survey, the share of homes selling above asking price edged up from 27 percent a year ago to 28 percent in October. Conversely, the share of properties selling below asking price dropped to 44 percent from 47 percent in October 2015. The remaining 28 percent sold at asking price, up from 25 percent in October 2015. For homes that sold above asking price, the premium paid over asking price rose to 9.1 percent, up from 7.7 percent in September and 8.9 percent a year ago.
Nearly six in 10 properties for sale (59 percent) received multiple offers in October, down from 63 percent in September and 64 percent from October 2015. Thirty-five percent of properties received three or more offers in September, and 36 percent of properties received three or more offers a year ago.
Nearly half (45 percent) of Realtors were concerned about high home prices and housing affordability, while 26 percent indicated they were concerned about a lack of available homes for sale. Realtors also were concerned about 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.
For further information, please email or call the SILVAR office at (408) 200-0100.