California pending home sales lift in January after disappointing December, C.A.R. reports

Fewer multiple offers and more homes sold below asking price point to less competitive buyers' market

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Feb 25, 2015, 11:56 ET

LOS ANGELES, Feb. 25, 2015 /PRNewswire-USNewswire/ -- Pending home sales rose from December's extreme lows and posted month-to-month and year-to-year increases in January, the CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R.) said today.

Additionally, California REALTORS® responding to C.A.R.'s January Market Pulse Survey saw more price reductions and an increase in open house traffic, compared to a year ago. The Market Pulse Survey is a new monthly online survey of more than 300 California REALTORS® to measure sentiment about their last closed transaction and business activity for the previous month and the last year.

Pending home sales data:

California pending home sales increased in January, with the Pending Home Sales Index (PHSI)* rising 26.7 percent from 70.9 in December to 89.8 in January, based on signed contracts. The month-to-month increase was better than the long-run average increase of 16.3 percent observed in the last six years, and is attributed primarily to seasonal factors.
California pending home sales were up 6 percent from the 84.7 index recorded in January 2014. The yearly increase was the largest since May 2012.

Equity and distressed housing market data:

The share of equity sales – or non-distressed property sales – fell for the third straight month in January. Equity sales made up 88 percent of all sales in January, down from 89.8 percent recorded in December. Equity sales have been more than 80 percent of total sales since July 2013 and have risen at or near 90 percent since mid-2014. Equity sales made up 84.3 percent of sales in January 2014.
Conversely, the combined share of all distressed property sales rose in January, up from 10.2 percent in December to 12 percent in January. Distressed sales made up 15.7 percent of total sales a year ago. Fourteen of the 42 counties that C.A.R. reported show month-to-month decreases in their distressed sales shares, with Mariposa having the smallest share of distressed sales at 0 percent, and Glenn having the highest at 33 percent.

January REALTOR® Market Pulse Survey**:

Indicative of a less competitive buyers' market, the percentage of homes selling above asking price has dropped from its peak of 40 percent in March 2014 to 16 percent in January. The share is also down from 25 percent during the previous month and 27 percent a year ago. More than half of homes (55 percent) are closing below asking price, up from 51 percent in December 2014.
In January, homes that sold below asking price sold for 11 percent below asking price, down slightly from 13 percent in December. The share of homes with listing price reductions is up from 20 percent in June 2014 to 31 percent in January, indicating sellers' expectations still are not in line with buyers' expectations.
Fifty-eight percent of properties received multiple offers in January, down from 61 percent in December 2014 and 64 percent a year ago.
The average number of offers per property in January was 2.5, down from 2.6 in December 2014 and 3.1 a year ago.
While floor calls, listing appointments, open house traffic, multiple offers, and all-cash purchases were down from December 2014, REALTORS® indicated open house traffic was up from January a year ago.

Graphics (click links to open):

Share of Distressed Sales to Total Sales
(Single-family)

Type of Sale	Jan. 2015	Dec. 2014	Jan. 2014
Equity Sales	88.0%	89.8%	84.3%
Total Distressed Sales	12.0%	10.2%	15.7%
REOs	5.8%	4.7%	6.1%
Short Sales	5.6%	5.1%	9.1%
Other Distressed Sales (Not Specified)	0.6%	0.4%	0.5%
All Sales	100.0%	100.0%	100.0%

Single-family Distressed Home Sales by Select Counties
(Percent of total sales)

County	Jan. 2015	Dec. 2014	Jan. 2014
Alameda	5%	3%	10%
Amador	9%	10%	21%
Butte	13%	18%	16%
Calaveras	22%	14%	NA
Contra Costa	9%	6%	12%
El Dorado	12%	14%	20%
Fresno	19%	19%	26%
Glenn	33%	40%	33%
Humboldt	9%	14%	17%
Kern	14%	13%	19%
Kings	25%	26%	45%
Lake	21%	20%	50%
Los Angeles	10%	9%	16%
Madera	12%	13%	14%
Marin	6%	2%	13%
Mariposa	0%	7%	57%
Mendocino	19%	25%	19%
Merced	11%	10%	27%
Monterey	2%	9%	17%
Napa	15%	3%	17%
Orange	8%	6%	9%
Placer	12%	7%	15%
Plumas	30%	11%	NA
Riverside	15%	12%	16%
Sacramento	18%	13%	20%
San Benito	6%	8%	18%
San Bernardino	17%	14%	22%
San Diego	8%	6%	4%
San Joaquin	13%	13%	25%
San Luis Obispo	8%	6%	10%
San Mateo	2%	2%	7%
Santa Clara	4%	3%	8%
Santa Cruz	9%	2%	12%
Shasta	19%	20%	19%
Siskiyou	24%	26%	34%
Solano	15%	11%	22%
Sonoma	8%	6%	11%
Stanislaus	15%	12%	25%
Sutter	15%	20%	17%
Tulare	22%	16%	20%
Yolo	14%	10%	13%
Yuba	25%	22%	24%
California	12%	10%	16%

NA = not available

*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 to measure California REALTORS®' sentiment about their last closed transaction and business activity for the previous month and the last year.

Leading the way...^® in California real estate for more than 100 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