California pending home sales a mixed bag in September, C.A.R. reports

Central Valley and Bay Area regions move higher, Southern California records drop

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CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.)

Oct 22, 2015, 12:39 ET

LOS ANGELES, Oct. 22, 2015 /PRNewswire-USNewswire/ -- Pending home sales results varied across California in September, decreasing statewide and in Southern California, but increasing in the Central Valley and San Francisco Bay Area, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today. All regions recorded year-over-year improvements, though.

In a separate report, California REALTORS® responding to C.A.R.'s September Market Pulse Survey saw an increase in sales with multiple offers compared with August and an increase in all cash purchases. However, floor calls and open house traffic declined, reflecting seasonal factors as the market enters the end of the home-buying season. The Market Pulse Survey is a monthly online survey of more than 300 California REALTORS®, which measures data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

Pending home sales data:

Statewide pending home sales decreased in September, with the Pending Home Sales Index (PHSI)* decreasing 1.5 percent from a revised 112.4 in August to 110.8 in September, based on signed contracts. The month-to-month decline was better than the average August- to-September loss of 3.4 percent observed in the last seven years.
On an annual basis, statewide pending home sales were up 10.9 percent from the revised 99.9 index recorded in September 2014. Pending sales have been increasing on a year-over-year basis since September 2014 and have seen double-digit increases for eight straight months.
At the regional level, pending sales were higher on a year-over-year basis in all areas, with Southern California and Central Valley both increasing by more than 10 percent over September a year ago.
San Francisco Bay Area pending sales rose 4.6 percent to reach an index of 125.2 in September, up 4.6 percent from August's 119.7 and up 4.6 percent from September 2014's 119.7 index.
Pending home sales in Southern California decreased to 85.9 in September, down 8.9 percent from 94.3 in August but up 10.2 percent from an index of 78 a year ago.
Central Valley pending sales increased in September to reach an index of 103.9, up 4.6 percent from August's 99.3 index and 14.1 percent from September 2014's 91.1 index.

Equity and distressed housing market data:

The share of equity sales – or non-distressed property sales – reached its highest level since the fall of 2007. Short sales continued to decline, while REO sales inched up slightly from August. Equity sales now make up 94.1 percent of all sales, up from 91.3 percent a year ago.
Conversely, the combined share of all distressed property sales (REOs and short sales) fell in September to 5.9 percent of total sales, down from 8.7 percent a year ago.
Twenty-one of the 44 counties that C.A.R. reports showed month-to-month decreases in their share of distressed sales, with Mendocino having the smallest share of distressed sales at 0 percent, followed by San Mateo (1 percent), San Francisco (1.3 percent) and Santa Clara (1.3 percent). Mariposa County had the highest share of distressed sales at 25 percent, followed by Lake (16.4 percent) and Tehama (15.8 percent).

September REALTOR® Market Pulse Survey**:

Nearly one in four homes (23 percent) closed above asking price in September, but twice that amount (46 percent) closed below asking price, and nearly a third (31 percent) closed at asking price.
For the one in four homes that sold above asking price, the premium paid over asking price increased to an average of 11 percent, up from 8.2 percent in August and up from 8.1 percent in September 2014.
The 46 percent of homes that sold below asking price sold for an average of 10 percent below asking price in September, up from 11 percent in August but down from 5.8 percent in September 2014.
The share of properties receiving multiple offers increased in September to 63 percent, up from 58 percent in August and 58 percent in September 2014.
The average number of offers per property was unchanged at 2.4 in September and up minimally from 2.2 in September 2014.
REALTOR® respondents reported that floor calls, listing appointments, and open house traffic all declined in September, reflecting the start of the off-peak home-buying season.
When asked what REALTORS®' biggest concerns are, more than one in five (22 percent) indicated a lack of housing inventory, 21 percent said low housing affordability, 15 percent cited a slowdown in economic growth, and another 12 percent said overinflated home prices.

Graphics (click links to open):

*Note: C.A.R.'s pending sales information is generated from a survey of more than 70 associations of REALTORS^® and MLSs throughout the state. 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. The majority of pending home sales usually becomes closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.

**C.A.R.'s Market Pulse Survey is a monthly online survey of more than 300 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

Leading the way...^® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS^® (www.car.org) is one of the largest state trade organizations in the United States with 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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SOURCE CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.)