Pending Home Sales Soar, Realtors Report

Numbers indicate strengthening real estate market

California pending home sales rose sharply from last July and posted the strongest year-over-year increase in more than six years, the California Association of Realtors (C.A.R.) recently reported.

The association’s Pending Home Sales Index, which is based on signed contracts, climbed 17 percent on an annual basis to 122.3 in July.

This marks the eighth straight month of year-to-year gains and the sixth straight month of double-digit advances.

The index showed that the statewide pending home sales in July also reversed a three-month decline. It rose 1.6 percent on a month-to-month basis.

Pending sales rose in the Bay Area to an index of 129.6, up 1.3 percent from June and up 9.2 percent from July.

The share of equity sales — sales of non-distressed properties sales — increased in July to post its highest level since late 2007.

Equity sales made up 93 percent of all home sales in July, up from 92.4 percent in June and 90.2 percent in July 2014.

Conversely, the combined share of all distressed property sales (REOs and short sales) fell in July to 7 percent of total sales, down from 7.6 percent in June and 9.8 percent a year ago.

San Francisco had the smallest share of distressed sales at 1 percent, followed by San Mateo County (1.6 percent), and Alameda County (2.1 percent).

The report is in keeping with the most recent closed sales data from the association.

According to C.A.R., home sales remained above the 400,000 mark in July for the fourth consecutive month and rose to highest level since October 2012.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 449,530 units in July, according to information collected by C.A.R. from more than 90 local Realtor associations and Multiple Listing Services statewide. The statewide sales figure represents what would be the total number of homes sold during 2015 if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The July figure was up 2.7 percent from the revised 437,680 level in June and 12.7 percent compared with home sales in July 2014 of a revised 398,980. The year-to-year change was the highest since July 2009 and significantly higher than the six-month average increase of 6 percent observed from January 2015-June 2015.

The median price of an existing, single-family detached California home dipped 0.3 percent in July to $488,260 from $489,640 in June. July’s median price was 5.4 percent higher than the revised $463,330 recorded in July 2014. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values. In a separate report Realtors said that the share of sales closing below asking price was unchanged in July, remaining at 43 percent.

The July Market Pulse Survey showed that more than a third of homes (34 percent) closed above asking price, and 24 percent closed at asking price.

For the one in three homes that sold above asking price, the premium paid over asking price remained at an average of 11 percent, unchanged from June but up from 11 percent in July 2014.

The 43 percent of homes that sold below asking price sold for an average of 9.6 percent below asking price in July, down from 11 percent in May.

The Market Pulse Survey is a monthly online survey of more than 300 California Realtors.

The survey measures data and sentiment about business activity in market areas throughout the state, and compares it with the previous month.

The survey showed that the share of properties receiving multiple offers rose in July to 67 percent, up from 65 percent in June and 66 percent in July 2014.

Realtors reported that floor calls, listing appointments, and open house traffic all declined in July for the third straight month.

When asked abour their biggest concerns, more than one in four (26 percent) Realtors indicated the lack of inventory, 16 percent said rising interest rates, and 12 percent are concerned with home prices.