- The most recent CAR survey shows strong end to 2015, although seasonality has taken hold.
- The Market Pulse Survey shows most Realtors in California are optimistic about 2016.
- Distressed sales have slid statewide.
The California Association of Realtors (CAR) publishes two reports at about the same time each month– performance of the market, and the Market Pulse Survey of the people who work in it.
The Pulse survey gauges, for one thing, how optimistic Realtors are about the future of the housing market. When asked about next year’s housing market, the vast majority (89 percent) of the respondents expect similar or better market conditions in 2016, the highest share reporting that sentiment since spring 2015.
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On the performance side of the reporting, pending home sales in California continued to improve from a year ago with solid gains, which will position the market for a modest increase in home sales in 2016.
The Market Pulse Survey also noted a small decrease in the number of sales with multiple offers compared with November. It also noted that there were fewer offers received.
The average number of offers per property was 2.5 in December, down from 2.7 in November and 2.6 in December 2014. About two-thirds of properties received multiple offers in December, a sure sign of a competitive market.
That’s up over December 2014, when 61 percent of properties received multiple offers.
How close final sales come to the asking price is another key metric. Nearly one in five homes (18 percent) closed above asking price in December, and 57 percent closed below asking price.
One-fourth (25 percent) closed at asking price. For homes that close above the asking price, just over a 9 percent premium is paid. That’s a little but more than in November, but a big drop from December 2014, when it was 11 percent.
For the homes that sold below asking price, the gap was even larger– 13 percent.
California pending home sales falling
Statewide, pending home sales remained strong in December on an annual basis, with the Pending Home Sales Index increasing 8.3 percent from 71.9 in December 2014 to 77.9 in December 2015, based on signed contracts.
The annual increase there was the smallest since January 2015.
On a monthly basis though, California pending home sales fell from November.
Seasonality is thought to be to blame.
Regionally, pending sales were higher on a year-over-year basis in all areas, with the Central Valley and San Francisco Bay Area regions increasing at a double-digit rate.
The share of equity sales edged up in December and remained at the highest levels since the fall of 2007. Equity sales now make up 93.6 percent of all sales, jumping from 90.1 percent a year ago.
Distressed properties are fewer and fewer
Another sure sign of market recovery: The combined share of all distressed property sales dipped in December to 6.4 percent of total sales and was down from 9.9 percent a year ago.
San Mateo county had the smallest share of distressed sales at 1.7 percent, followed by Santa Clara with 1.8 percent, and Marin at 2.2 percent. Distress was still concentrated in the usual places.
The counties with the highest share of distress was led by Tehama, which had distressed sales at 20.4 percent. Next on that list were Siskiyou (18.8 percent), and Lake (15.6 percent).
California Realtors optimistic across the board
Of course, any good news report can be tempered by a “but the bad news is” side. Not so much in this case.
When Realtors were asked about their biggest concerns, a quarter said thin housing supplies, while 20 percent indicated declining housing affordability, and 14 percent stated overinflated home prices.
The Market Pulse Survey is a monthly online survey of more than 300 California Realtors, which measures data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.
