REAL ESTATE TOPICS...CALIFORNIA PENDING HOME SALES GAIN STEAM TO POST SIX STRAIGHT MONTHS OF GAINS

With the California housing market continuing its upward trend, pending home sales registered their sixth straight annual gain, with the last four months being in the double-digits, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).  In a separate report, California REALTORS® responding to C.A.R.’s May Market Pulse Survey saw more floor calls, listing appointments, and open house traffic, compared to April.

Making sense of the story

• California pending home sales were up 12.1 percent on an annual basis from the revised 110.3 index recorded in May 2014, marking the sixth straight month of year-to-year gains and the fourth straight month of double-digit advances.

• Statewide pending home sales fell in May on a month-to-month basis, with the Pending Home Sales Index decreasing 4.6 percent from a revised 129.6 in April to 123.6, based on signed contracts. The month-to-month decrease was below the average April-May loss of 3.6 percent observed in the last seven years.

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• Pending home sales in Southern California reversed last month’s decline to rise 1.6 percent in May to reach an index of 105.4, up 12.5 percent from the May 2014 index of 93.7.

• The share of equity sales – or non-distressed property sales – edged up further in May to make up 92.6 percent of all home sales, the highest level since late 2007. Equity sales made up 91.8 percent of all home sales in April and 88.8 percent in May 2014. The share of equity sales has been at or near 90 percent since mid-2014.

• In a sign of stabilizing home prices, the share of sales closing below asking price has been on a downward trend for four straight months. One in four (40 percent) transactions closed below asking price in May, down from the highest point of 55 percent in January 2015.  More than a third of homes (34 percent) closed over asking price, and 26 percent closed at asking price.

• The premium paid over asking price declined in May, suggesting diminished market competition among home buyers. In May, homes that sold above asking price sold for an average of 8 percent above asking price, down from 10 percent in April but up from 6.5 percent in May 2014.

• The share of properties receiving multiple offers fell for the first time in four months. Sixty-five percent of properties received multiple offers in May, down from 72 percent in April and up from 62 percent a year ago.