San Diego Market Update

California pending home sales register first annual increase in nearly two years

REALTORS® say improving economic conditions and buyer urgency point to better market in 2015

LOS ANGELES (Jan. 23) – Pending home sales posted higher on a year-over-year basis for the first time since January 2013 and as expected, declined from the previous month due primarily to a seasonal slowdown toward the end of the year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.  

Additionally, with the specter of a better economy, greater job growth, and increasing household formation, C.A.R.’s new Market Pulse Survey found that many REALTORS® expect market conditions to improve in 2015, as does C.A.R.

Pending home sales data: 

• Pending sales were up 2.6 percent from the 69.1 index recorded in December 2013.  The yearly increase was better than the six-month average of -4.3 percent from June 2014 to November 2014.

• California pending home sales dropped in December, with the Pending Home Sales Index (PHSI)* falling 21.9 percent from 90.7 in November to 70.9 in December, based on signed contracts.  The monthly decline was in line with the seasonal slowdown in pending sales observed at the end of the year for the last two years.

Equity and distressed housing market data: 

• The share of equity sales – or non-distressed property sales – dipped for the second straight month in December.  Equity sales made up 89.8 percent of all sales in December, down from 90.5 percent recorded in November.  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 84.4 percent of sales in December 2013.

• Conversely, the combined share of all distressed property sales edged up in December, up from 9.5 percent in November to 10.2 percent in December. Distressed sales were down 33 percent from a year ago, when the share was 15.6 percent. 

REALTOR® Market Pulse Survey**:

• In the fourth quarter of 2014, the vast majority (87 percent) of REALTORS® expected market conditions to either improve or stay the same over the next year.

• More REALTORS® (61 percent) closed a transaction in the fourth quarter of 2014, compared to the first quarter (53 percent).

• In an indication of stabilizing home prices, fewer homes (24 percent) sold above asking price in the fourth quarter of 2014, compared to 46 percent in the first quarter.

• Homes selling below asking price rose from 19 percent in the first quarter of 2014 to 48 percent in the fourth quarter, indicating home sellers’ expectations moved more in line with buyers’ expectations toward the end of the year and competition between sellers attempting to appeal to affordability strapped home buyers increased.

• More than half (58 percent) of properties received multiple offers in the fourth quarter of 2014, down from 69 percent in the first quarter.

Charts (click links to open):

• REALTORS® expect market to improve in 2015.
• More REALTORS® closed a transaction.
• More homes sold below asking price.
• Fewer properties received multiple offers.

Share of Distressed Sales to Total Sales
(Single-family)

Type of Sale	Dec-14	Nov-14	Dec-13
Equity Sales	89.8%	90.5%	84.4%
Total Distressed Sales	10.2%	9.5%	15.6%
REOs	4.7%	4.3%	5.1%
Short Sales	5.1%	4.8%	10.0%
Other Distressed Sales (Not Specified)	0.4%	0.4%	0.5%
All Sales	100.0%	100.0%	100.0%

Single-family Distressed Home Sales by Select Counties
(Percent of total sales)

County	Dec-14	Nov-14	Dec-13
Alameda	3%	3%	9%
Amador	10%	7%	35%
Butte	18%	13%	18%
Calaveras	14%	19%	NA
Contra Costa	6%	3%	7%
El Dorado	14%	7%	19%
Fresno	19%	16%	24%
Glenn	40%	29%	27%
Humboldt	14%	12%	14%
Kern	13%	10%	19%
Kings	26%	17%	28%
Lake	20%	19%	34%
Los Angeles	9%	9%	17%
Madera	13%	14%	20%
Marin	2%	2%	8%
Mariposa	7%	10%	40%
Mendocino	25%	13%	27%
Merced	10%	17%	22%
Monterey	9%	9%	20%
Napa	3%	7%	10%
Orange	6%	5%	10%
Placer	7%	8%	13%
Plumas	8%	11%	NA
Riverside	12%	13%	17%
Sacramento	13%	12%	19%
San Benito	8%	3%	15%
San Bernardino	14%	16%	22%
San Diego	6%	6%	5%
San Joaquin	13%	11%	23%
San Luis Obispo	6%	6%	7%
San Mateo	2%	1%	6%
Santa Clara	3%	2%	7%
Santa Cruz	2%	6%	15%
Shasta	20%	19%	24%
Siskiyou	26%	24%	24%
Solano	11%	9%	22%
Sonoma	6%	5%	15%
Stanislaus	12%	10%	22%
Sutter	20%	21%	32%
Tulare	16%	17%	26%
Yolo	10%	8%	18%
Yuba	22%	16%	31%
California	10%	10%	16%

NA = not available

*Note:  C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state.  Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market.  A sale is listed as pending after a seller has accepted a sales contract on a property.  The majority of pending home sales usually becomes closed sales transactions one to two months later.  The year 2008 was used as the benchmark for the Pending Homes Sales Index.  An index of 100 is equal to the average level of contract activity during 2008. 

**C.A.R.’s Market Pulse Survey is a monthly online survey to gather California REALTORS®’ sentiment about their last closed transaction and business activity for the previous month and the last year.

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.