California pending home sales climb in July to post 8 straight months of annual gains, C.A.R. reports

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Aug 24, 2015, 10:00 ET

LOS ANGELES, Aug. 24, 2015 /PRNewswire-USNewswire/ -- California pending home sales soared from the previous year in July, posting the strongest year-over-year increase in more than six years, CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

In a separate report, California REALTORS® responding to C.A.R.'s July Market Pulse Survey saw a reduction in floor calls, listing appointments, and open house traffic, compared with June. 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:

The Pending Home Sales Index (PHSI)* climbed 17 percent on an annual basis to 122.3 in July, based on signed contracts. The July 2015 index was up from the 104.5 index recorded a year ago and marked the eighth straight month of year-to-year gains and the sixth straight month of double-digit advances.
Statewide pending home sales in July also reversed a three-month decline, rising 1.6 percent on a month-to-month basis. The PHSI was up from the 120.4 index in June. The month-to-month increase was higher than the average June-July loss of 2 percent observed in the last seven years.
At the regional level, pending sales rose in the San Francisco Bay Area to an index of 129.6, up 1.3 percent from June and up 9.2 percent from July 2015.
Pending home sales in Southern California were essentially flat, dipping 0.3 percent from June to reach an index of 109.3 in July but up 16.8 percent from a year ago.
Central Valley pending sales rose in July, increasing 3.1 percent from June to reach an index of 102.6 in July and up 20.7 percent from July 2015.

Equity and distressed housing market data:

The share of equity sales – or non-distressed property sales – increased in July to post its highest level since late 2007. Equity sales made up 93 percent of all home sales in July, up from 92.4 percent in June and 90.2 percent in July 2014.
Conversely, the combined share of all distressed property sales (REOs and short sales) fell in July to 7 percent of total sales, down from 7.6 percent in June and 9.8 percent a year ago.
Twenty-two of the 43 counties that C.A.R. reports showed month-to-month decreases in their share of distressed sales, with San Francisco having the smallest share of distressed sales at 1 percent, followed by San Mateo (1.6 percent), and Alameda (2.1 percent). Solano County had the highest share of distressed sales at 24 percent, followed by Mendocino (18 percent) and Siskiyou (17 percent).

July REALTOR® Market Pulse Survey**:

The share of sales closing below asking price was unchanged in July, remaining at 43 percent. More than a third of homes (34 percent) closed above asking price, and 24 percent closed at asking price.
For the one in three homes that sold above asking price, the premium paid over asking price remained at an average of 11 percent, unchanged from June but up from 11 percent in July 2014.
The 43 percent of homes that sold below asking price sold for an average of 9.6 percent below asking price in July, down from 11 percent in May.
The share of properties receiving multiple offers rose in July to 67 percent, up from 65 percent in June and 66 percent in July 2014.
The average number of offers per property increased slightly to 3.0 from 2.9 in June and 2.7 in July 2014.
REALTOR® respondents reported that floor calls, listing appointments, and open house traffic all declined in July for the third straight month.
When asked what REALTORS®' biggest concerns are, more than one in four (26 percent) indicated the lack of inventory, 16 percent said rising interest rates, and 12 percent are concerned with 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 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