California pending home sales register first annual increase in nearly two years

REAL ESTATE NEWS

For release:
January 23, 2015

California pending home sales register first annual increase in nearly two years

REALTORS® say improving economic conditions and buyer urgency point to better market in 2015

LOS ANGELES (Jan. 23) – Pending home sales posted higher on a year-over-year basis for the first time since January 2013 and as expected, declined from the previous month due primarily to a seasonal slowdown toward the end of the year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. 

Additionally, with the specter of a better economy, greater job growth, and increasing household formation, C.A.R.’s new Market Pulse Survey found that many REALTORS® expect market conditions to improve in 2015, as does C.A.R.

Pending home sales data:

• Pending sales were up 2.6 percent from the 69.1 index recorded in December 2013.  The yearly increase was better than the six-month average of -4.3 percent from June 2014 to November 2014.

• California pending home sales dropped in December, with the Pending Home Sales Index (PHSI)* falling 21.9 percent from 90.7 in November to 70.9 in December, based on signed contracts.  The monthly decline was in line with the seasonal slowdown in pending sales observed at the end of the year for the last two years.

Equity and distressed housing market data:

• The share of equity sales – or non-distressed property sales – dipped for the second straight month in December.  Equity sales made up 89.8 percent of all sales in December, down from 90.5 percent recorded in November.  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 84.4 percent of sales in December 2013.

• Conversely, the combined share of all distressed property sales edged up in December, up from 9.5 percent in November to 10.2 percent in December. Distressed sales were down 33 percent from a year ago, when the share was 15.6 percent.

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REALTOR® Market Pulse Survey**:

• In the fourth quarter of 2014, the vast majority (87 percent) of REALTORS® expected market conditions to either improve or stay the same over the next year.

• More REALTORS® (61 percent) closed a transaction in the fourth quarter of 2014, compared to the first quarter (53 percent).

• In an indication of stabilizing home prices, fewer homes (24 percent) sold above asking price in the fourth quarter of 2014, compared to 46 percent in the first quarter.

• Homes selling below asking price rose from 19 percent in the first quarter of 2014 to 48 percent in the fourth quarter, indicating home sellers’ expectations moved more in line with buyers’ expectations toward the end of the year and competition between sellers attempting to appeal to affordability strapped home buyers increased.

• More than half (58 percent) of properties received multiple offers in the fourth quarter of 2014, down from 69 percent in the first quarter.