California Pending Home Sales Soared in July

Pending home sales in California soared in July compared to the previous year, posting the strongest year-over-year increase in more than six years, an industry trade group reported Monday.

But there are signs of a possible forthcoming decline in real estate activity after California Realtors, responding to CA’s July Market Pulse Survey, saw a reduction in floor calls, listing appointments, and open house traffic, compared with June.

The Market Pulse Survey is a monthly online survey of more than 300 California Realtors, which measures data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

The Pending Home Sales Index, meanwhile, climbed 17 percent on an annual basis to 122.4 in July, based on signed contracts, CAR said in a statement. The July 2015 index was up from the 104.5 index recorded a year ago and marked the eighth straight month of year-to-year gains and the sixth straight month of double-digit advances, it said.

Statewide pending home sales in July also reversed a three-month decline, rising 1.6 percent on a month-to-month basis.

Pending home sales in Southern California were essentially flat, dipping 0.3 percent from June to reach an index of 109.3 in July but up 16.8 percent from a year ago.

At the same time, the share of equity sales — non-distressed property s

ales — increased in California in July to post its highest level since late 2007. Equity sales made up 93 percent of all home sales in July, up from 92.4 percent in June and 90.2 percent in July 2014, according to CAR.

Conversely, the combined share of all distressed property sales fell in July to 7 percent of total sales, down from 7.6 percent in June and 9.8 percent a year ago.

CAR also reported today that the share of sales closing below asking price was unchanged in July, remaining at 43 percent. More than a third of homes — 34 percent — closed above asking price, and 24 percent closed at asking price, CAR said.

For the one in three homes that sold above asking price, the premium paid over asking price remained at an average of 11 percent, unchanged from June but up from 11 percent in July 2014, and the 43 percent of homes that sold below asking price sold for an average of 9.6 percent below asking price in July, down from 11 percent in May, according to CAR.