According to the California Association of REALTORS® (C.A.R.), pending home sales in the state slipped in April, but were still higher than a year ago for the 12th consecutive month. The National Association of REALTORS® (NAR) also reported this week that pending home sales in April were down nationwide. REALTOR® officials point to the tight supply of homes as a reason for the decline.
C.A.R.'s Pending Home Sales Index declined from a revised 138.9 in March to 128 in April, based on signed contracts. The index was up from the revised 114.4 index recorded in April 2011.
NAR reports pending home sales, though down in April following three consecutive monthly gains, were still notably higher than a year ago. NAR's Pending Home Sales Index, which is based on contract signings, declined 5.5 percent to 95.5 from a downwardly revised 101.1 in March, but is 14.4 percent above April 2011 when it was 83.5.
The NAR report indicates if lending returns to normal, the 2013 outlook for existing-home sales could improve to 5.3 million. The outlook for 2013 is 4.92 million. However, higher taxes and sharp spending cuts would lower the sales projection. Existing-home sales are expected to reach 4.66 million this year, compared with 4.26 million in 2011.
In California, C.A.R. president LeFrancis Arnold said lower inventory supplies, while leading to higher prices and multiple offers in some local markets, could also be a reason for the slip in April's pending sales. "Inventory constraints could be a contributing factor to lower pending sales," said Arnold. "The tight inventory we've been experiencing in the distressed market over the past several months is now spreading to equity properties, essentially affecting the supply conditions of both the distressed and non-distressed markets."
Tight inventory is exactly the case in Silicon Valley, according to Suzanne Yost, president of the Silicon Valley Association of REALTORS®. "With limited inventory, the average days on market have dropped and multiple offers persist for homes priced right," said Yost.
Whether it is due to the Facebook IPO or tech boom in the region, places like Palo Alto and Menlo Park are feeling the effect. "The housing market is very much alive in these places and it has trickled down to other parts of the region, as well," said Yost.
According to information from MLSListings Inc., the multiple listing service of the local trade association, Palo Alto had 42 single-family home sales under contract in April, compared to 40 in March and 55 in April 2011. Homes priced correctly are selling quickly with days on market down substantially. Average days on market for a single-family home in Palo Alto was 13 in April, down from 15 in March and 42 the same time a year ago.
Menlo Park had 45 single-family home sales under contract in April, compared with 30 in March and 72 in April 2011. In Menlo Park, the average days on market of a single-family home was 29 in April, compared with 28 in March and 71 in April 2011.
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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