The June data, based on signed contracts, represents the sixth consecutive month of year-over-year pending home sales declines on a seasonally adjusted basis. The Pending Home Sales Index fell 0.9% to 117.9 in June from 119.0 a year ago. On a monthly basis, the decrease was 0.6% from the 118.7 index in May.
Although declines in pending home sales were recorded for every month of this year, the rate of decline has recently slowed down. However, the California housing market could see negative effects in the coming months from the further decline in housing inventory in May and a double-digit decline in active listings, CAR said.
California regions saw varied pending home sales activity during the month. The Southern California region, San Bernardino County, Orange County, Central Valley and Kern County all saw an improvement in pending sales. Meanwhile, year-over-year decreases in pending home sales were observed in San Diego, Riverside, Los Angeles and the San Francisco Bay Area.
CAR also said that price growth may continue to accelerate back into double-digit territory, according to its Market Velocity Index. With the index at 71.0, the number of active listings has fallen as a result of there being far more home sales than new listings to restock inventory. It added that increased home sales activity may continue through the fall given continued high demand.
The inventory slowdown and decreasing affordability have made realtors cautious, according to the association’s survey of California realtors. Although their outlook of market conditions in the next year remains positive, this has been declining since the beginning of 2017.
Despite short inventory, California existing-home sales spike
Pending home sales index down 1.7% year-over-year
Pending home sales in California declined in June on a monthly basis, a sign that the state’s housing market is about to slow down as the peak homebuying season wraps up, according to the California Association of Realtors (CAR).