California pending home sales rose in August on a seasonally adjusted annualized basis, with the Calfornia Realtors Pending Home Sales Index (PHSI) increasing 6.4% from 113.9 in August 2015 to 121.3 in August 2016, based on signed contracts. The year-over-year increase was the fifth consecutive positive annual improvement and the largest in 2016.
However, the Realtors said overall market conditions appear to be slowing down and closed transactions plateauing. On a month-to-month basis, pending home sales slipped 1.0% from July's index of 122.5 – the fourth consecutive decline, which was largely due to seasonality. The monthly decrease was the smallest July-to-August decline in four years, suggesting that sales may remain at similar current levels.
Pending home sales in Southern California rose 9.7% from August 2015, thanks primarily to year-over-year pending sales increases of 15.5% in San Diego, 7.4% in Los Angeles County, and 3.0% in Orange County. Compared to July 2016, pending home sales were down 7.2%.
For the Bay Area, pending sales rose 8.5% from August 2015 and 4.1% from July. A strong 14.8% increase in pending sales in Santa Clara County drove the improvement in the Bay Area, as well as double-digit pending sales gains in San Francisco (10.4%) and San Mateo (11.9%) counties.
Overall pending sales in the Central Valley also performed well, posting a 7.1% annual increase and a 2.3% month-over-month gain. One exception for the region was Kern County, where pending sales have been dropping significantly due to a decline in oil prices and the economy's reliance on the energy sector.