Pending home sales in November dropped from both the previous month and year, indicating past robust sales will likely not be repeated in the months ahead, according to the California Association of Realtors.
Based on signed contracts, statewide pending home sales fell in November with the Pending Home Sales Index falling 3.5 percent from November 2015 to November 2016. It was the first year-to-year decrease in eight months. On a monthly basis, California pending home sales were down 4 percent from the October index.
At the regional level, for Southern California as a whole, pending sales dropped 11.9 percent on a monthly basis and were up 3.9 percent on an annual basis. Overall pending sales in the Central Valley declined from both the previous month and year, decreasing 4.7 percent from October and 4.6 percent from a year ago.
For the San Francisco Bay Area as a whole, pending sales were 18.1 percent lower than October and 12.3 percent lower than November 2015, as high housing prices continued to erode affordability. San Francisco, San Mateo, and Santa Clara counties all experienced annual declines in pending home sales of 1.1 percent, 8.7 percent, and 14.9 percent, respectively.
"November's pending home sales reflects a typical seasonal slowdown compounded by low inventory," says Denise Welsh, president-elect of the Silicon Valley Association of Realtors. Welsh, who will be installed as president of the local trade association on Jan. 19, said the housing outlook overall for 2017 is positive.
Welsh said with the economic growth in Silicon Valley, if many companies stay on course with their plans to hire more workers, the demand for housing will remain strong next year. Additionally, rising interest rates could motivate both buyers and sellers who are sitting on the fence to make a move.
"Interest rates have increased and are expected to rise even more next year, which may prompt buyers to make a move before further rate hikes. Sellers, on the other hand, may be encouraged to sell now before buyers back off due to the higher rates," explained Welsh.
The California Association of Realtors' November Realtor Market Pulse Survey, a monthly online survey sent to more than 10,000 California Realtors, found rising interest rates were among the top Realtor concerns in November. Other top concerns were the lack of available homes for sale, high home prices and housing affordability.
"The numbers will be remain skewed on the downside until we have more inventory for all of the qualified buyers. There is still an unfulfilled need for housing in our area," said Welsh.
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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