The California Association of Realtors® (CAR) has released its latest data for pending home sales, and October’s activity is pointing toward an increase in sales for the end of the year. This is one key area of data which shows the Real Estate market is in a pattern of continued growth, which many feel will carry on into 2016. There have been year-over -year improvements and some month to month gains in certain areas as well. If you are looking to sell or buy in the coming months, by watching the pending home sales data you can have a clearer picture for what the market is doing when you are ready to make a move.
Pending home sales data is used as an indicator of future closing activity and provides a sneak peek into the direction the market is moving at any given time. Pending sales are open transactions which have a seller accepting a contract for a property. Most pending sales close within 30 to 60 days of the signing. For the CAR Report on pending sales data an index is used pulling from 2008 data as the benchmark for market fluctuations. If an index number is at 100 for a given area, the data matches activity from 2008.
The Pending Home Sales Index for the state came in at 113.4 during October, up 2.5% compared to 110.7 in September. Comparing this data over the last 7 years, this was a significant increase for this time of period, as the index has averaged an increase of 0.9% from September to October since 2008.
Looking at year- over- year data, comparing October 2014 to this year, the pending home sales index has gone up steadily and is 13.9% higher than it was a year ago. Last year the index was at 99.5. Beginning in November 2014 there have been double digit increases to the rate for 9 months running. This trend is expected to continue, showing positive growth in home sales overall.
Reviewing regional data for pending home sales index, the Bay area saw pending sales rise up 16.3% from 125.2 in September to 145.6 in October. Comparing the previous year data, October saw an increase of 16.1%. Southern California saw a 9.8% increase moving from 85.9 in September up to 94.3 in October. The year-over-year comparison shows a 9.0% increase. The Central valley area showed a drop in pending home sales in October, with the index going down 13.9% from 103.9 in September down to 89.5. But comparing to the year prior the index is up 18.6%, with October 2014 coming in at 75.5.
When you review a year’s worth of data as well as the month to month shifts you can see a strong trend of growth is on hand. According to the CAR report, this trend is expected to carry forth into 2016. There are fewer distressed houses listed than a year ago and more homeowners are seeing gains in equity on their property. There has been an increase in the number of listings with multiple offers as well. More than one in four homes are currently selling for higher than the asking price. These trends, along with the Pending Homes Sales Index show the California Real Estate market is remaining competitive.
When you are ready to buy or sell a home, we at Haylen Group are here to help you with all of your real estate needs! If you are unsure what your options are, call Helen Chong at (408) 800-LIST or email at Helen@HaylenGroup.com. You can also visit us at our website for available listings and additional information.