California pending home sales post third straight annual increase in June

Source: C.A.R.

Led by the San Francisco Bay Area, California pending home sales continued their upward momentum in June to post three straight months of annual increases, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Making sense of the story

• Statewide pending home sales rose in June on an annual basis, with the Pending Home Sales Index (PHSI) increasing 3.2 percent from 123.4 in June 2015 to 127.3 in June 2016, based on signed contracts. With pending sales on a rising trend in the past couple of months, June’s increase should portend for higher closed transactions in July and August.

• California pending home sales declined 7.0 percent on a monthly basis compared to May, primarily due to seasonal factors. When adjusting pending sales for typical seasonal patterns, pending sales were down 3.2 percent from May and up 3.0 percent from June 2015.

• After trailing behind Southern California and the Central Valley since the beginning of this year, the San Francisco Bay Area led the regions, with pending sales increasing on an annual basis across the state.

• For the Bay Area as a whole, pending sales were up 5.1 percent from June 2015 and down 16.3 percent from May. The June increase in Bay Area pending sales suggests a brighter outlook for the region, which had been trailing behind 2015 in closed sales, primarily due to low affordability and tight inventory.

• Pending home sales in Southern California as a whole rose 3.2 percent from June 2015 and 1.3 percent from May, thanks to year-over-year gains of 5.5 percent in Los Angeles County, 4.1 percent in San Bernardino County, and 1.3 percent in San Diego County.

• Pending sales in Central Valley posted a gain of 2.6 percent from the previous year and were down 9.3 percent on a month-to-month basis.

• Orange County experienced a 6.0 percent decrease from the previous year.