California pending home sales declined 3.6% on a monthly basis compared to April, which was almost entirely due to seasonal factors, the California Assn. of Realtors reported Thursday. When adjusting pending sales for typical seasonal patterns, pending sales actually edged up 0.1% from April and 3.1% from May 2015.
In a separte survey, CAR reported fewer REALTORS were concerned about low inventory, but more REALTORS® were concerned with a decline in housing affordability.
Statewide pending home sales rose in May on an annual basis, with the Pending Home Sales Index (PHSI) increasing 3.8% 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.
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% from April and down 1.6% 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% and 0.4%, 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 for 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 as a disproportionate increase in home prices has eroded housing affordability.
The pending sales in Central Valley posted a gain of 3.8% from the previous year and were down 14.5% on a month-to-month basis, following a particularly strong April increase.
Pending home sales in Southern California as a whole rose 5.6% from May 2015 and 2.4% from April, thanks to year-over-year gains of 6.9% in Los Angeles County and 6.2%t in San Diego County. Orange County experienced a 1.8% decrease from the previous year.
In a separate study, California REALTORS responding to C.A.R.'s May Market Pulse Survey reported slower growth in floor calls, listing appointments, and open house traffic, reflecting slowing market activity. Despite the lagging indicators, the percentage of properties selling above asking price reached an all-time high and the number of offers per property rose.