With the Central Valley leading the way, California’s statewide pending home sales reversed a three-month slide and posted higher in April, but an ongoing shortage of homes on the market may diminish the upcoming home-buying season, according to the California Association of Realtors (CAR).
CAR’s April Market Pulse Survey also reflected a slowdown in market activity, with a decrease in floor calls, open house traffic and listing appointments/client presentations. This likely is due to tight inventory and low affordability conditions constraining the California housing market.
Pending home sales data
Statewide pending home sales rose in April on an annual basis, with the Pending Home Sales Index (PHSI) increasing 4.1 percent (from 135.9 in April 2015 to 141.6 in April 2016), based on signed contracts. April’s annual increase was the strongest this year, and the PHSI ha reached its highest level since March 2012.
California pending home sales also rose on a monthly basis beyond what is usual for April, which averaged 1.3 percent between 2008 and 2015. The PHSI increased 4.5 percent (from an index of 135.4 in March). When adjusting pending sales for typical seasonal patterns, pending sales actually increased 9 percent from March. Despite the uptick, inventory concerns remain, as statewide listings are 4.2 percent below where they were a year ago.
At the regional level, pending sales increased on an annual basis in all of the state’s major regions, with the Central Valley Region’s index reaching an all-time best, thanks to its high affordability and plentiful inventory. The Southern California region also saw a healthy uptick in pending sales from a year ago, driven by double-digit increases in Orange County and Riverside.
For the Bay Area, pending sales decreased 5.1 percent from March and increased 1.6 percent from April 2015. 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 9.4 percent and 15.8 percent, respectively).
The pending sales index in Central Valley posted an increase of 35.3 percent from March and 2 percent from April 2015.
While pending home sales in Southern California as a whole decreased 5.5 percent from March, they rose 4.8 percent from a year ago. Los Angeles County posted an annual gain of 3.4 percent, while Orange County experienced a 10.3 percent gain.