This Week in Real Estate - 2-27-2015 - Pending Sales Up

January Pending sales are up … a lot.

Pending home sales rose from December’s extreme lows and posted month-to-month and year-to-year increases in January, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Additionally, California REALTORS® responding to C.A.R.’s January Market Pulse Survey saw more price reductions and an increase in open house traffic, compared to a year ago.

Making sense of the story

•          California pending home sales increased in January, with the Pending Home Sales Index (PHSI)* rising 26.7 percent from 70.9 in December to 89.8 in January, based on signed contracts.

•          The month-to-month increase was better than the long-run average increase of 16.3 percent observed in the last six years, and is attributed primarily to seasonal factors. 

•          California pending home sales were up 6 percent from the 84.7 index recorded in January 2014.  The yearly increase was the largest since May 2012.

•          The share of equity sales – or non-distressed property sales – fell for the third straight month in January.  Equity sales made up 88 percent of all sales in January, down from 89.8 percent recorded in December.

•          Equity sales have been more than 80 percent of total sales since July 2013 and have risen at or near 90 percent since mid-2014. Equity sales made up 84.3 percent of sales in January 2014.

•          Conversely, the combined share of all distressed property sales rose in January, up from 10.2 percent in December to 12 percent in January.  Distressed sales made up 15.7 percent of total sales a year ago.

•          Indicative of a less competitive buyers’ market, the percentage of homes selling above asking price has dropped from its peak of 40 percent in March 2014 to 16 percent in January.  The share is also down from 25 percent during the previous month and 27 percent a year ago.

-Kris

This Week in Real Estate - 2-20-2015 - Homeownership stable

Big Picture for homeownership.

The Census recently released their 2014 Homeownership Statistics, and many began to worry that Americans have taken a step back from the notion of homeownership.

The national homeownership rate peaked in 2004, representing a 69.2% of Americans who owned vs. rented their primary residence. Many have noticed a decline in rate since then and taken that as a bad sign.

However, if you look at the national rate over the last 30 years (1984-2014), you can see that the current homeownership rate has returned closer to the historic norm. 2014 ended the year with a rate of 64% just under the rate in 1984 and 1994.

The housing recession was a correction in the market.

We see this all the time with the stock market and commodities such as gold. But the significant downturn we faced with housing was unprecedented. The correction was too extreme and the pendulum has swung back to the positive over the last 3 years as well with double digit increases in the median home prices.

Again signs are point to the normalization and stabilization of the real estate market.

-Kris

Tip of the week.

Following up on the tip last week of housing inventory, this is from Trulia.

Nationally, the volume of home sales in June is typically 29% above the annual average, according to Trulia.  In July and August, inventory keeps climbing as some sellers miss the sales peak. Homebuyers begin their search in March and April, but they really get down to business after Memorial Day.  The peak in June and July sales reflects the fact that many people want to move in summer when school’s out and the weather’s good.  In fact, more buyers are ready to close deals in the summer than any other time of the year. 

So get your house ready and on the market now, and take advance of the surge in activity.

This Week in Real Estate - 2-13-15 - Foot Traffic is up

More proof that 2015 is looking good.

One of the predictors of future transactions is foot traffic. Nationwide December figures were up not down. As mentioned last week the 4^th quarter transactions were up from 2013 and now we have the January home trends report from our MLS and the data is strong. The number of pended transaction rose from December 2014 to January 2015 by 43% (645 to 921 combined for Napa, Somona and Solano counties) in that same time period last year the rise was only 16% (660 to 767)

-Kris

Tip of the week.

Where are the listings … coming soon.

We have been in a inventory shortage since last February. We are still currently at about 2.5-3 months of inventory. A “balanced” market is between 5-6 months of inventory. But there is reason to hope for good things to come.

History shows us that the 2^nd quarter is the when the most listings come on the market.

For the seller, we have buyers circling in the water with low inventory, get your properties out there early and priced correctly to take advantage of this pent up demand.

For the buyer, good news more properties are coming.