California pending home sales hold pace in May
Housing supply on the rise but low affordability to cut into demand
Housing supply on the rise but low affordability to cut into demand
LOS ANGELES (June 23) – Building on April’s gain, California pending home sales continued to rebound on a year-to-year basis, as listings increased, primarily in seven of nine Bay Area counties, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
With an increase in housing supply, C.A.R.’s May Market Pulse Survey** also reflected a closing gap between REALTORS®’ concern of low inventory and low housing affordability – fewer REALTORS® were concerned about low inventory, but more REALTORS® were concerned with a decline in housing affordability.
With an increase in housing supply, C.A.R.’s May Market Pulse Survey** also reflected a closing gap between REALTORS®’ concern of low inventory and low housing affordability – fewer REALTORS® were concerned about low inventory, but more REALTORS® were concerned with a decline in housing affordability.
Pending home sales data:
• Statewide pending home sales rose in May on an annual basis, with the Pending Home Sales Index (PHSI)* increasing 3.8 percent from 131.4 in May 2015 to 136.5 in May 2016, based on signed contracts. May’s increase comes as welcome news since closed transactions declined in May despite low interest rates and high housing demand.
• California pending home sales declined 3.6 percent on a monthly basis compared to April, which was almost entirely due to seasonal factors. When adjusting pending sales for typical seasonal patterns, pending sales actually edged up 0.1 percent from April and 3.1 percent from May 2015.
• Led by Southern California, pending sales were up last month on an annual basis across the state on a regional level, with the exception of the San Francisco Bay Area, which saw pending sales contract from the previous year.
• For the Bay Area as a whole, pending sales were up 4.6 percent from April and down 1.6 percent from May 2015. Perhaps counterintuitively, within the core areas of the Bay Area, San Francisco and Santa Clara counties, pending sales actually saw an increase over last year of 40.5 percent and 0.4 percent, respectively. The surge in San Francisco was exaggerated by the monthly decline in the county pending sales level a year ago, when it hit the bottom in the last 10 years. Pending sales typically increase from April to May.
• Pending sales in the more affordable areas of the Bay Area, where inventory is less constrained, have experienced a decrease in pending sales as a disproportionate increase in home prices has eroded housing affordability.
• The pending sales in Central Valley posted a gain of 3.8 percent from the previous year and were down 14.5 percent on a month-to-month basis, following a particularly strong April increase.
• Pending home sales in Southern California as a whole rose 5.6 percent from May 2015 and 2.4 percent from April, thanks to year-over-year gains of 6.9 percent in Los Angeles County and 6.2 percent in San Diego County. Orange County experienced a 1.8 percent decrease from the previous year.
Year-to-Year Change in Pending Sales by County/Region
| County/Region/State | May-16 | May-15 | Yearly % Change |
| Los Angeles | 97.8 | 91.5 | 6.9% |
| Monterey | 73.8 | 67.3 | 9.6% |
| Orange | 79.6 | 81.1 | -1.8% |
| Sacramento | 83.1 | 82.1 | 1.2% |
| San Diego | 157.4 | 148.2 | 6.2% |
| San Francisco | 115.4 | 82.1 | 40.5% |
| Santa Clara | 107.1 | 106.7 | 0.4% |
| SF Bay Area | 177.9 | 180.4 | -1.4% |
| So. CA | 111.3 | 105.4 | 5.6% |
| Central Valley | 111.3 | 107.2 | 3.8% |
| California | 136.5 | 131.4 | 3.8% |
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