California pending home sales lift in January after disappointing December
Pending home sales rose from December’s extreme lows and posted month-to-month and year-to-year increases in January, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
Additionally, California REALTORS® responding to C.A.R.’s January Market Pulse Survey saw more price reductions and an increase in open house traffic, compared to a year ago.
Making sense of the story:
- California pending home sales increased in January, with the Pending Home Sales Index (PHSI)* rising 26.7 percent from 70.9 in December to 89.8 in January, based on signed contracts.
- The month-to-month increase was better than the long-run average increase of 16.3 percent observed in the last six years, and is attributed primarily to seasonal factors.
- California pending home sales were up 6 percent from the 84.7 index recorded in January 2014. The yearly increase was the largest since May 2012.
- The share of equity sales – or non-distressed property sales – fell for the third straight month in January. Equity sales made up 88 percent of all sales in January, down from 89.8 percent recorded in December.
- Equity sales have been more than 80 percent of total sales since July 2013 and have risen at or near 90 percent since mid-2014. Equity sales made up 84.3 percent of sales in January 2014.
- Conversely, the combined share of all distressed property sales rose in January, up from 10.2 percent in December to 12 percent in January. Distressed sales made up 15.7 percent of total sales a year ago.
- Indicative of a less competitive buyers’ market, the percentage of homes selling above asking price has dropped from its peak of 40 percent in March 2014 to 16 percent in January. The share is also down from 25 percent during the previous month and 27 percent a year ago.