Talking Points
- The strong sales momentum that occurred during the peak home-buying season gave way in July as shrinking housing inventory and waning affordability stifled pending home sales, which declined both from the previous month and year, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.
- Based on signed contracts, year-over-year statewide pending home sales fell in July on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* declining 2.6 percent from 122.5 in July 2016 to 119.4 in July 2017. California pending home sales also edged down on a monthly basis for the first time since March, decreasing 0.9 percent from the June index of 120.4.
- Pending home sales have declined on an annual basis for six of the last seven months so far this year, however, the pace of decline has slowed in recent months. After a solid run-up of pending sales growth in April, May, and June, continued housing inventory issues and affordability constraints may have pushed the market to a tipping point, suggesting the pace of growth will begin to slow in the fall.
- The Southern California Region was the only major region to record an increase in pending sales from the previous year – the third straight annual gain. Los Angeles, San Bernardino County and Orange County saw healthy spikes of 4.0 percent, 6.0 percent, and 4.6 percent, respectively. Pending sales in San Diego (-5.8 percent) and Riverside (-4.2 percent) counties declined from last July.
- Pending sales in the Central Valley slipped 0.3 percent from the previous year, led by a 17.8 percent annual decrease in Sacramento County. Additionally, Kern County reversed a healthy pending sales gain in June and decreased 2.6 percent from last July.
- The San Francisco Bay Area experienced the largest drop in pending sales in July, falling 11.5 percent on an annual basis. San Francisco and San Mateo counties, two of the state’s most expensive markets, were both down in double-digits, 11.0 percent and 21.4 percent, respectively. Santa Clara County, where home prices also are at all-time highs, saw pending sales decline 9.8 percent from a year ago.