Some experts are predicting that the California Real Estate market is getting soft. Based on some recent data, there could be some truth to this notion. While the Southern California region is strong, there were decreases in sales for the San Francisco Bay Area and Central Valley. With low inventory and rising prices, affordability still remains a concern which is likely slowing down sales.
Important items to note:
Based on signed contracts, statewide pending home sales decreased in January on a seasonally adjusted basis, with the Pending Home Sales Index (PHSI)* slipping 0.2 percent from 107.4 from January 2016 to 107.2 in January 2017. On a monthly basis, California pending home sales were down 9.2 percent from the December index of 118.0.
• For the San Francisco Bay Area as a whole, tight housing supplies and low affordability contributed to a fall in pending sales of 9.7 percent compared to January 2016.
• Pending sales in the Central Valley fell 7.9 percent from January 2016 and were up 2.2 percent from December. Within Central Valley, pending sales were down 14.6 percent in Kern County and 11.8 percent in Sacramento compared with a year ago.
• Only the Southern California region posted a year-over-year improvement in pending sales last month, rising 8.1 percent from January 2016 and increasing 10.5 percent on a monthly basis. Riverside County led the region in pending sales, posting a 16.2 percent increase from a year ago. Los Angeles, Orange, and San Diego counties also posted modest year-over-year increases of 7.1 percent, 8.0, and 4.0 percent, respectively. San Bernardino County was the only area within Southern California that saw pending sales lower on an annual basis by 2.8 percent.
It’s important to keep these numbers in perspective as experts indicate that the economic fundamentals of California remain strong. 2017 is still likely to be a good year for California Real Estate, but, the pace of growth could be more gradual.For further specifics, please contact me and I would be happy to speak with you about your specific situation.
California pending home sales dip slightly in January. Southern California market continues to outshine other regions.