California homes sales improving at start of new year

Realtors optimistic about 2016 housing market

Home sales in California last month continued to improve from a year ago with solid gains, positioning the market for a modest increase in home sales in 2016.

A report by the California Association of Realtors showed that even with a slight decrease in the number of sales with multiple offers compared with November as well as a decrease in the number of offers received. December listing appointments remained stable.

Although Open Home traffic was also down in December, the decrease was attributed to seasonal factors.

CAR's report carried in its Market Pulse Survey, showed that;

• Statewide pending home sales remained strong in December on an annual basis.

• On a monthly basis, California pending home sales fell from November, primarily due to seasonal factors.

• At the regional level, pending sales were higher on a year-over-year basis in all areas, with the Central Valley and San Francisco Bay Area regions increasing at a double-digit rate, while Southern California edged up in the low single-digits.

• The share of equity sales -- or non-distressed property sales -- edged up in December and remained at the highest levels since the fall of 2007. Equity sales now make up 93.6% of all sales, up from 90.1% a year ago. Nearly one in five homes (18%) closed above asking price in December, and 57% closed below asking price. One-fourth (25%) closed at asking price. For the one in five homes that sold above asking price, the premium paid over asking price edged up to an average of 9.2%, up from November's 8.9% but down from 11% in December 2014.

• The 57% of homes that sold below asking price sold for an average of 13% below asking price in December, unchanged from November and a year ago.

• About two-thirds (65%) of properties received multiple offers in December, indicating the market remains competitive. Sixty-one percent of properties received multiple offers in December 2014.

• The average number of offers per property was 2.5 in December, down from 2.7 in November and 2.6 in December 2014.

• With home prices leveling off in recent months, more sellers are adjusting their listing price to become more in line with buyers' expectations. About one-third (30%) of properties had price reductions in December, down from 31% a year ago.

• When asked what Realtors' biggest concerns are, one in four (25%) said thin housing supplies, while 20% indicated declining housing affordability, and 14% stated overinflated home prices.

• Realtors are optimistic about the 2016 housing market, with the vast majority (89%) expecting similar or better market conditions, the highest share since spring 2015.

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