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WASHINGTON (June 28, 2016) –  The National Association of Realtors® has partnered with Electronics Row to create a Members’ Gift Galleria, the first-of-its-kind custom shopping destination exclusively for Realtors®, association members and their families.  

As part of the REALTOR Benefits® Program, the Members’ Gift Galleria serves as Realtors®’ source for personal shopping, as well as an online location for closing, thank you and holiday gifts for clients. It… Read More

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For release:
June 23, 2016

California pending home sales hold pace in May

Housing supply on the rise but low affordability to cut into demand

LOS ANGELES (June 23) – Building on April’s gain, California pending home sales continued to rebound on a year-to-year basis, as listings increased, primarily in seven of nine Bay Area counties, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

With an increase in housing supply, C.A.R.’s May Market Pulse Survey** also reflected a closing gap between REALTORS®’ concern of low inventory and low housing affordability – fewer REALTORS® were concerned about low inventory, but more REALTORS® were concerned with a decline in housing affordability.

Pending home sales data:

• Statewide pending home sales rose in May on an annual basis, with the Pending Home Sales Index (PHSI)* increasing 3.8 percent from 131.4 in May 2015 to 136.5 in May 2016, based on signed contracts. May’s increase comes as welcome news since closed transactions declined in May despite low interest rates and high housing demand.

• California pending home sales declined 3.6 percent on a monthly basis compared to April, which was almost entirely due to seasonal factors. When adjusting pending sales for typical seasonal patterns, pending sales actually edged up 0.1 percent from April and 3.1 percent from May 2015.

• Led by Southern California, pending sales were up last month on an annual basis across the state on a regional level, with the exception of the San Francisco Bay Area, which saw pending sales contract from the previous year.

• For the Bay Area as a whole, pending sales were up 4.6 percent from April and down 1.6 percent from May 2015. Perhaps counterintuitively, within the core areas of the Bay Area, San Francisco and Santa Clara counties, pending sales actually saw an increase over last year of 40.5 percent and 0.4 percent, respectively. The surge in San Francisco was exaggerated by the monthly decline in the county pending sales level a year ago, when it hit the bottom in the last 10 years. Pending sales typically increase from April to May.

• Pending sales in the more affordable areas of the Bay Area, where inventory is less constrained, have experienced a decrease in pending sales as a disproportionate increase in home prices has eroded housing affordability.

• The pending sales in Central Valley posted a gain of 3.8 percent from the previous year and were down 14.5 percent on a month-to-month basis, following a particularly strong April increase.

• Pending home sales in Southern California as a whole rose 5.6 percent from May 2015 and 2.4 percent from April, thanks to year-over-year gains of 6.9 percent in Los Angeles County and 6.2 percent in San Diego County. Orange County experienced a 1.8 percent decrease from the previous year.

Year-to-Year Change in Pending Sales by County/Region

May REALTOR® Market Pulse Survey**:

In a separate study, California REALTORS® responding to C.A.R.’s May Market Pulse Survey reported slower growth in floor calls, listing appointments, and open house traffic, reflecting slowing market activity. Despite the lagging indicators, the percentage of properties selling above asking price reached an all-time high and the number of offers per property rose.

• The share of homes selling above asking price in May increased to 38 percent, the highest level since the survey began, rising from 32 percent in April. Conversely, the share of properties selling below asking price dropped to 34 percent. The remainder (27 percent) sold at asking price.

• For the homes that sold above asking price, the premium paid over asking price declined for the third straight month to an average of 9.4 percent, down from April’s 9.6 percent and up from 8 percent in May 2015.

• The 34 percent of homes that sold below asking price sold for an average of 10 percent below asking price in May, down from 12 percent in April and up from 7 percent a year ago.

• Nearly seven of 10 properties for sale received multiple offers in May, indicating the market remains competitive. Sixty-five percent of properties received multiple offers in May 2015.

• The average number of offers per property increased to 3.1 in May, up from 2.9 in April and 2.8 in May 2015. The increase in the number of offers was driven by a greater share of transactions that received three or more offers. Moreover, homes priced between $200,000- $399,000 and $750,000-$999,000 saw the greatest increases in three or more offers compared to a year ago.

• About one in four (23 percent) properties had price reductions in May, indicating sellers are pricing their homes more realistically. One-fourth of properties had price reductions in May 2015.

• With rising housing supply, fewer REALTORS® were concerned about low inventory (cited by 28 percent), but more REALTORS® were concerned with a decline in housing affordability (cited by 22 percent).

• REALTORS®’ optimism of market conditions over the next year is waning, with the index decreasing to 54, down from 61 in April and 64 in May 2015.

Graphics (click links to open):

• Pending home sales by region.
• Home selling above/at/below listing price.
• More REALTORS® concerned with low affordability.
• Price range of homes receiving 3+ offers.

*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 of more than 300 California REALTORS® to measure data about their last closed transaction and sentiment about business activity in their market area for the previous month.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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For release:
June 21, 2016

C.A.R. analysis finds presidential elections have little impact on California housing market

Prospective home buyers want current presidential candidates to address housing affordability

LOS ANGELES (June 21) – Presidential elections have historically had little or no negative impact on the California housing market, according to findings by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

"Transitory political events such as presidential elections don’t drive the housing market," said C.A.R. President Pat "Ziggy" Zicarelli. "Market fundamentals such as housing inventory, affordability, interest rates, job growth, and consumer confidence are the real factors that influence the housing market."

In an analysis of home sales dating back to 1990, the average growth in home sales during an election year is usually either slightly higher or lower each month than in non-presidential election years. Notably, sales growth is rarely negative during an election year, and there is no evidence of a systematic negative impact on home sales or prices stemming from election season. In fact, C.A.R. found that growth in home sales at the end of an election year actually outperforms non-election years by 7.1 percentage points.

On a monthly basis since 1990, California home sales contracted by roughly 2 percent during the last four months of the year. However, during the past five election cycles, sales in the final months of the year picked up, rising by 5.3 percent on average compared with -1.8 percent during non-election years. With the exception of December 2004, every single month of the final quarter saw robust growth in home sales during election years.

The pattern for California home prices is similar. C.A.R. also found little evidence of a negative effect on home prices during an election year. In fact, home price growth in California during the past five election cycles was slightly better than the long-run average of 5.6 percent. Again, the effects were most pronounced during the final months of the year when demand – and therefore, upward pressure on prices – were boosted by roughly 5.6 percentage points following the elections.

Slides (Click to open):

• Home sales growth election vs. non-election years
• Home price growth election vs. non-election years

Presidential candidates and housing policy

In a separate poll* by leading think tank The Futures Company commissioned by C.A.R., nearly three-fourths (70 percent) of survey respondents who plan to buy a home agreed that they would like the current presidential candidates to address how to make housing more affordable in their campaigns.

And, across all incomes, generations, and races/ethnicities, consumers were strongly in agreement that housing affordability should be a top priority on the presidential campaign trail as candidates make their pitches for ballots in the lead-up to the November contest.

However, housing affordability and solutions to reduce the cost of living have received noticeably little attention this campaign season. Other than releasing plans to increase the five-decades-low homeownership rate, the presumptive nominees, Democrat Hillary Clinton and Republican Donald Trump, have not issued comprehensive housing policies, including action items to address the significant housing affordability crisis.

*The poll was conducted by The Futures Company in partnership with the Center for California Real Estate, an institute dedicated to the advancement of advancing real estate knowledge from C.A.R.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 185,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
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