REAL ESTATE NEWS...California Real Estate

California pending home sales declined in August but remained strong, marking 10 straight months of year-over-year gains, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). In a separate report, California REALTORS® responding to C.A.R.’s August Market Pulse Survey saw a drop in sales with multiple offers compared with July, as market competition cooled down toward the end of the home-buying season.

Making sense of the story

• The Pending Home Sales Index (PHSI) rose 12.8 percent on an annual basis to 112.8 in August, based on signed contracts. The August 2015 index was up from the 100 index recorded a year ago and marked the 10th straight month of year-to-year gains and the seventh straight month of double-digit advances.

• On a monthly basis, statewide pending home sales in August fell 8.7 percent on a month-to-month basis. The PHSI was down from the 123.6 index in July. The month-to-month decrease was higher than the average July-August gain of 0.3 percent observed in the last seven years.

• At the regional level, pending sales were higher on a year-over-year basis in the San Francisco Bay Area, Southern California, and Central Valley, but were lower on a monthly basis.

• San Francisco Bay Area pending sales fell 14.1 percent from July to an index of 119.7, but were up 1.1 percent from August 2014.

• Pending home sales in Southern California dropped 13.7 percent from July to reach an index of 94.3 in August but were up 14.7 percent from a year ago.

• The share of equity sales – or non-distressed property sales – edged up from August to post its highest level since the fall of 2007. Equity sales made up 93.8 percent of all home sales in August, up from 93.3 percent in July and 91.6 percent in August 2014.

• Conversely, the combined share of all distressed property sales (REOs and short sales) fell in August to 6.2 percent of total sales, down from 6.7 percent in July and 8.5 percent a year ago.

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TALKING POINTS …

• Total mortgage application volume surged 13.9 percent on a seasonally adjusted basis for the week ended Sept. 18 versus the earlier week, according to the Mortgage Bankers Association (MBA).

• Refinance applications, which are most rate-sensitive, increased 18 percent from the previous week. Purchase applications rose 9 percent to their highest level since June 2015. They are now 27 percent higher than the same week one year ago.

• Mike Fratantoni, MBA's chief economist, commented, “We saw significant rate volatility last week surrounding the [Federal Reserve’s] meeting, and rate declines toward the end of the week likely drove applications from both prospective home buyers and borrowers looking to refinance.”