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HIGH DEMAND AND THIN HOUSING SUPPLY CRIMP MARCH CALIFORNIA PENDING HOME SALES


HIGH DEMAND AND THIN HOUSING SUPPLY CRIMP MARCH CALIFORNIA PENDING HOME SALES
Source: C.A.R.
Statewide pending home sales in California decreased in March on an annual basis for the third straight month, reflecting high demand for a dearth of homes available for sale on the market, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Making sense of the story
  • Statewide pending home sales fell in March on an annual basis, with the Pending Home Sales Index (PHSI) decreasing 1.7 percent from 138.0 in March 2015 to 135.6 in March 2016, based on signed contracts.
  • On a monthly basis, California pending home sales rose from February, primarily due to seasonal factors. The PHSI increased 12.7 percent from an index of 120.3 in February to 135.6 in March. When adjusting pending sales for typical seasonal patterns, pending sales actually declined 1 percent from February. Tight inventories are expected to continue to impede home sales growth this year.
  • At the regional level, pending sales were down on an annual basis in all major regions of the state, with the San Francisco Bay Area experiencing the largest contraction at 3.7 percent. All major regions experienced double-digit, month-to-month increases in pending sales.
  • Within the core areas of the Bay Area, including San Francisco and Santa Clara counties, pending sales actually saw an increase over last year of 8.6 percent and 11.6 percent, respectively.
  • Pending home sales in Southern California were essentially flat in March, edging down 0.3 percent from a year ago and were up 17.8 percent from February. Los Angeles County posted a modest annual gain of 1 percent, while Orange County declined by 4.3 percent.
  • The share of homes selling above asking price in March rose to the highest level since July 2015 at 34 percent, indicating strong market competition for the thin supply of homes available for sale. Conversely, the share of properties selling below asking price shrank for the third straight month to a new low of 33 percent. The remainder (33 percent) sold at asking price. 
  • The average number of offers per property increased for the second straight month to 3.3 in March, up slightly from 3.1 in February and 2.7 in March 2015.

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