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California home sales take breather in January

As prices level, sellers adjust listing prices to meet buyers' expectations

Statewide home sales in California decreased in January on a year-over-year basis for the first time since August 2014 as a shortage of homes for sale and low housing affordability persist and volatile financial markets distract buyers.

The California Association of Realtors reported this week that pending sales decreased in San Francisco, Santa Clara and Sacramento counties along with Los Angeles, Monterey and Orange counties.

Also, home sales fell in January across the state, decreasing 2.9% from January 2015. At the regional level, pending sales also were lower on a year-over-year basis in all areas.

However, in a separate report, CAR's January Market Pulse Survey saw an increase in floor calls, listing appointments, client presentations and open house traffic, primarily reflecting seasonal factors. Floor calls and listing appointments in January were at the highest levels since June 2015. Open house traffic saw its best start to the year since the survey began two years ago.

Nearly one in five homes (17%) closed above asking price in January, and 47% closed below asking price. More than one-third (36%) closed at asking price.

For the homes that sold above asking price, the premium paid over asking price edged up for the second straight month to an average of 9.8%, up from December's 9.2% but down from 12% in January 2015.

The 47% of homes that sold below asking price sold for an average of 13% below asking price in January, unchanged from December and up from 11% a year ago.

Two-thirds (66%) of properties received multiple offers in January, indicating the market remains competitive. Fifty-eight percent of properties received multiple offers in January 2015.

The average number of offers per property was 2.1 in January, down from 2.5 in December and 2.5 in January 2015.

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-fourth (24%) of properties had price reductions in January, down from 31% a year ago.

When asked what Realtors' biggest concerns are, four in 10 (40%) said low housing inventory, while 16% indicated declining housing affordability, and 11% stated overinflated home prices.

Realtors were optimistic about this year's housing market, with the vast majority (88%) expecting similar or better market conditions in 2016.

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