Pending home sales, a forward-looking indicator of future home sales activity, increased in California in August from both the previous month and year, according to a California Association of REALTORS® (C.A.R.). C.A.R. indicated the year-to-year increase was the highest level since July 2009.
Pending home sales in California were up 7 percent from July, according to the C.A.R.'s Pending Home Sales Index. The August index of 125.3 increased from July's index of 117.1, based on contracts signed in August. The index increased 12.6 percent from August 2010. A sale is listed as pending after a seller has accepted a sales contract on a property. The C.A.R. pending sales information is generated from a survey of more than 70 associations of Realtors and MLSs throughout the state.
Santa Clara County's pending sales did not mirror that of the state. Data from MLSListings Inc., the multiple listing service of the Silicon Valley Association of REALTORS® (SILVAR), shows 2,405 single-family home sales under contract in August in Santa Clara County, slightly down from 2,431 in July and down from 2,518 in August 2010. In Palo Alto, there were 35 single-family homes sales under contract in August, down from 45 the previous month and 38 in August 2010.
SILVAR President Gene Lentz, a REALTOR® with RE/MAX Distinctive Properties in Menlo Park, said the slowdown could indicate buyers' hands being tied with higher conforming loan limits expiring September 30. Some mortgage lenders already stopped making loans at the higher limits already in August because they were concerned they would not be able to get the paperwork done before the September 30 deadline.
"Silicon Valley is a higher-priced housing market, so the loan amounts would have to be higher in order for people to purchase a home here," said Lentz. "It's a shame that our housing market, which has been recovering nicely, will take a hit with higher loan costs and larger down payments."
Barring action by Congress, after October 1 the high loan limit of $729,750 will drop to $625,500, a decline of $104,250. Mortgage loans higher than that amount will be considered non-conforming jumbo loans, which typically have rates that are higher than conforming rates and require higher down payments.
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.