Pending home sales: For upon|Pending home sales fell markedly across California in September, with the largest regional drop-off in the Bay Area where an ongoing housing shortage and exorbitant prices appeared to dissuade some potential buyers.
That’s according to a new survey by the California Association of Realtors, which examines pending sales as a bellwether of where the housing market is headed. It didn’t provide data on closed home sales.
“After a solid run-up of closed sales in May, June, and August,” the report said, “continued housing inventory issues and affordability constraints may have pushed the market to a tipping point, suggesting the pace of growth will slow in the fall.”
Statewide, the number of pending sales fell 6 percent on a year-over-year basis in September, while they fell 10.8 percent across the Bay Area.
Locally, pending sales were down even more dramatically, falling 23.5 percent in Santa Clara County compared to September 2016 and 22.4 percent in San Mateo County. They rose a modest 2.8 percent in San Francisco. CAR didn’t include East Bay’s pending home sales in its survey.
“We can’t ignore the role played by the tight supply in the housing market,” said Oscar Wei, senior economist with CAR.
Still, he pointed to additional factors behind September’s dramatic year-over-year drop-off in pending sales. For one, they fell from an unusually high level: Pending sales had surged “abnormally” in September 2016, Wei said after the Federal Reserve hinted that it would begin to raise interest rates later that year. As a result, buyers rushed to lock in deals to capitalize on low rates.
pending home sales index
Other buyers rushed to close deals in September 2016, he said, because of another complication: New federal rules governing mortgage record-keeping were about to take effect in October. Afraid they would become mired in the new bookkeeping procedures, buyers and agents doubled down in their efforts to secure deals.
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Even so, last month’s plunge in pending sales is striking when compared to the dramatic increases of the previous September.
In September 2016, pending sales in Santa Clara County rose 24.2 percent on a year-over-year basis. They rose 20.2 percent in San Mateo County and were up 1.9 percent in San Francisco. Statewide, they rose 10.5 percent.
Even with the overall plunge last month, CAR reported that “home sales continue to outstrip new listings coming online to restock sold units.”
Given the steady demand from buyers and the tight housing supply, CAR expects prices to continue to rise across the state.
CAR also reported that the share of homes selling above the asking price across the state fell from 31 percent in September 2016 to 29 percent in September 2017. But among homes that sold above the asking price, the premium paid over asking climbed from 8 percent to 13 percent.
Homes receiving multiple bids were up, too.
The article was originally published here.
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