California Pending Home Sales Dial Back, Marking Weakest February in Three Years, C.A.R. Reports

Los Angeles, CA – March 22, 2017 (PRNewswire-USNewswire) After a solid start to the year in closed escrow sales, low housing inventory, eroding affordability, and rising interest rates mildly pulled back pending sales on a year-over-year basis in February, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

In line with seasonal patterns, REALTORS® responding to C.A.R.’s February Market Pulse Survey** saw elevated market activity, with an increase in floor calls, presentations, and open house traffic for the second month in a row.

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Pending home sales data:

  • Based on signed contracts, statewide pending home sales decreased in February on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* declining 2.6 percent from 113.5 in February 2016 to 110.6 in February 2017, marking the weakest February in three years. On a monthly basis, California pending home sales were up 3.2 percent from the January index of 107.2.
  • After leading the state for the past year, non-seasonally adjusted pending home sales in the Southern California region decreased for the first time in nearly a year, slipping 2.8 percent from 97.9 in February 2016 to 95.2 in February 2017. The year-over-year decline was driven by a decrease in pending sales of 2.6 percent in Riverside County, 5.1 percent in San Diego County, 6 percent in Orange County, and 12.2 percent in San Bernardino County. Only Los Angeles County posted a year-over-year improvement in pending sales, but only by a paltry 0.9 percent.
  • For the San Francisco Bay Area as a whole – which has been plagued by a shortage of homes on the market and poor affordability – non-seasonally adjusted pending sales were down year-to-year for the fifth straight month, with every tracked county in the region experiencing a drop in pending sales activity. The Bay Area pending sales index fell 10 percent from 145.2 in February 2016 to 130.6 in February 2017. Santa Cruz and San Francisco counties experienced the largest year-to-year reductions in pending sales of 40.6 percent and 23 percent, respectively. Pending home sales fell 9.2 percent from the previous year in San Mateo County, 7.5 percent in Santa Cruz, and 5.6 percent in Monterey.
  • Pending sales in the Central Valley Region fell 11.4 percent from 86.2 in February 2016 to 76.3 in February 2017. Within Central Valley, pending sales were down 1.6 percent in Kern County and 19.4 percent in Sacramento compared with a year ago.

Year-to-Year Change in Pending Sales by County/Region

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* Seasonally adjusted

February REALTOR® Market Pulse Survey**:

While pending sales were lower in February, California REALTORS® responding to C.A.R.’s February Market Pulse Survey expect improved market conditions in the near term, as they reported an increase in floor calls, listing appointments, and open house traffic, as well as an increase in multiple offers.

  • The share of homes selling above asking price dipped from 31 percent a year ago to 30 percent in February. Conversely, the share of properties selling below asking price increased to 37 percent from 35 percent in February 2016. The remaining 34 percent sold at asking price, down from 35 percent in February 2016.
  • For homes that sold above asking price, the premium paid over asking price edged up to 12 percent, up from 11 percent a year ago.
  • The 38 percent of homes that sold below asking price sold for an average of 14 percent below asking price in February, compared to 13 percent a year ago.
  • Nearly three-fourths of properties for sale (71 percent) received multiple offers in February, down from 75 percent in February 2016.
  • The share of properties receiving three or more offers in February was 47 percent, compared to 48 percent a year ago.
  • The share of homes priced $500,000 to $749,000 posted the largest gain in receiving three or more offers, rising from 9 percent in February 2016 to 12 percent in February 2017.
  • As prices fell more in line with the market, listing price reductions declined to 22 percent in February, down from 26 percent in February 2016.
  • Rising for the sixth straight month, a lack of available inventory was the top concern for 40 percent of REALTORS®, the highest level in a year. Eroding housing affordability/high interest rates concerned 32 percent of REALTORS®. Inflated home prices/housing bubble was cited by 14 percent of REALTORS®. A slowdown in economic growth, lending and financing, and policy and regulations rounded out REALTORS®’ remaining biggest concerns.
  • REALTORS®’ expectation of market conditions over the next year edged up in February to an index of 68, up from an index of 64 a year ago.

Graphics (click links to open):

* Note: C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually become closed sales transactions one to two months later. The year 2008 was used as the benchmark for the Pending Homes Sales Index. An index of 100 is equal to the average level of contract activity during 2008.

** C.A.R.’s Market Pulse Survey is a monthly online survey sent to more than 10,000 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month. Approximately 300 REALTORS® responded.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with more than 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

California Existing Home Sales and Median Price Accelerate From a Year Ago

– Existing, single-family home sales totaled 400,500 in February on a seasonally adjusted annualized rate, down 4.7 percent from January and up 4.9 percent from February 2016.

– February’s statewide median home price was $478,790, down 2.2 percent from January and up 7.6 percent from February 2016.

– At the regional level, the Inland Empire and the Los Angeles metro area experienced healthy annual sales gains of 7.1 percent and 3.1 percent, respectively, while affordability and inventory pressures continue to stifle the San Francisco Bay Area market, which declined 2.7 percent from a year ago.

Los Angeles, AC – March 15th, 2017 (PRNewswire-USNewswire) After starting the year on a positive note in January, California home sales and median price backpedaled on a monthly basis in February, but still showed strong gains on a yearly basis, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

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Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for the 11th consecutive month and totaled a seasonally adjusted annualized rate of 400,500 units in February, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the February pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The February figure was down 4.7 percent from the 420,100 level in January and up 4.9 percent compared with home sales in February 2016 of a revised 381,770, which was the weakest sales level in 2016.

“While it’s encouraging to kick off the year with back-to-back yearly sales increases, moving forward, California’s housing market could lose steam in the long term as the Fed begins to adjust the federal funds rate,” said C.A.R. President Geoff McIntosh. “In the short term, however, the specter of higher interest rates may push buyers off the fence to purchase a home before mortgage rates move even higher.”

The median price of an existing, single-family detached California home fell below the $500,000 mark for the second straight month, but home prices remain seasonably strong. The median price was down 2.2 percent from $489,680 in January to hit $478,790 in February. 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.

Despite the back-to-back monthly price decline, February’s median price still registered a 7.6 percent increase from the revised $444,780 recorded a year ago. The annual gain was the largest year-over-year increase since January 2016 and was higher than the three-month average of 4.5 percent prior to February 2016.

“Despite a strong sales start for the year, the housing supply shortage in California continues to cast doubt on whether the sales momentum can be carried forward into the spring homebuying season,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The number of active listings has been on a downward trend for the past 20 months and has shown no signs of improvement. As we move into the spring homebuying season, we should see a marginal increase in listings, which will be offset by a pickup in sales. The inventory level is not likely to get better in the upcoming months.”

Other key points from C.A.R.’s February 2017 resale housing report include:

  • C.A.R.’s Unsold Inventory Index, which measures the number of months needed to sell the supply of homes on the market at the current sales rate, edged up to 4.0 months in February from 3.7 months in January. The index stood at 4.7 months in February 2016.
  • New statewide active listings continued to decline, falling 13.9 percent from a year ago. The year-over-year decline was the largest since May 2013.
  • The median number of days it took to sell a single-family home dropped from 37.4 days in January to 33.4 days in February and was down from 41.5 days in February 2016.
  • C.A.R.’s sales-to-list price ratio* was 98.6 percent of listing prices statewide in February, 98.1 percent in January and 98.2 percent in February 2016.
  • The average price per square foot** for an existing, single-family home statewide was $241 in February, $239 in January, and $223 in February 2016.
  • San Francisco County had the highest price per square foot in February at $878/sq. ft., followed by San Mateo ($864/sq. ft.), and Santa Clara ($631/sq. ft.). Counties with the lowest price per square foot in February included Siskiyou ($123/sq. ft.), Tehama ($128/sq. ft.), and Kern ($130/sq. ft.).
  • Mortgage rates have risen sharply since last fall. The 30-year, fixed-mortgage interest rate averaged 4.17 percent in February, up from 4.15 percent in January and up from 3.66 percent in February 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates dipped in February to an average of 3.20 percent, from 3.24 percent in January and 2.74 percent in February 2016.

Graphics (click links to open):

Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property. It is calculated as the sale price of the home divided by the number of finished square feet. C.A.R. currently tracks price-per-square foot statistics for 39 counties.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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