After a solid start to the year in closed escrow sales, low housing inventory, eroding affordability, and rising interest rates retarded pending sales on a year-over-year basis in February, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) said Wednesday.
Based on signed contracts, statewide pending home sales decreased in February on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI) declining 2.6% from 113.5 in February 2016 to 110.6 in February 2017, marking the weakest February in three years. On a monthly basis, California pending home sales were up 3.2% from the January index of 107.2.
After leading the state for the past year, non-seasonally adjusted pending home sales in the Southern California region decreased for the first time in nearly a year, slipping 2.8% from 97.9 in February 2016 to 95.2 in February 2017. The year-over-year decline was driven by a decrease in pending sales of 2.6% in Riverside County, 5.1% in San Diego County, 6% in Orange County, and 12.2% in San Bernardino County. Only Los Angeles County posted a year-over-year improvement in pending sales, but only by 0.9%.
For the San Francisco Bay Area as a whole – which has been plagued by a shortage of homes on the market and poor affordability – non-seasonally adjusted pending sales were down year-to-year for the fifth straight month, with every tracked county in the region experiencing a drop in pending sales activity. The Bay Area pending sales index fell 10% from 145.2 in February 2016 to 130.6 in February 2017. Santa Cruz and San Francisco counties experienced the largest year-to-year reductions in pending sales of 40.6% and 23%, respectively. Pending home sales fell 9.2% from the previous year in San Mateo County, 7.5% in Santa Cruz, and 5.6% in Monterey.
Pending sales in the Central Valley Region fell 11.4% from 86.2 in February 2016 to 76.3 in February 2017. Within Central Valley, pending sales were down 1.6% in Kern County and 19.4% in Sacramento compared with a year ago.
