A typical late-summer softening in home sales appears to be taking hold pretty much everywhere in the state except for Orange and San Bernardino counties, a California Association of Realtors analysis shows.
The association’s “pending home sales index” shows the number of Orange County homes going into escrow increased 1.8 percent in August from the same month last year, while in San Bernardino County, escrows were up 2.8 percent.
That runs counter to what’s happening elsewhere. In Southern California as a whole, escrows were down 3.8 percent, with a decrease of 1.7 percent in Los Angeles County and 10.3 percent in Riverside County.
Statewide, the number of new escrows declined 3.5 percent from year-ago levels, the CAR index showed. It was the second straight month in which home sales failed to increase, suggesting a softening in the housing market in coming months.
All of the major regions recorded a decrease in pending sales from the previous year, with the San Francisco Bay Area experiencing the largest drop, down 11.6 percent year over year, the CAR index showed. San Francisco, San Mateo, Santa Clara and Monterey counties were all down in double digits.
An escrow is opened when a home-purchase contract is signed. Not all escrows result in a closed sale since deals often fall apart as buyers and sellers grapple with home inspection results, defect disclosures and financing. Still these “pending sales” serve as an early indicator of future closed-sale trends.
Real estate data firm CoreLogic reported earlier this month that closed sales last month — reflecting escrows opened in June and July — hit the highest level in Orange County for an August in 12 years. In San Bernardino County, home sales were at a seven-year high for an August. Orange County home prices, meanwhile, softened slightly in August, down from June and July levels, CoreLogic figures showed.
CAR’s monthly survey of 10,000 California agents showed that incoming calls, listing appointments and client presentations also decreased in August, although open house traffic remained strong in the state.
That doesn’t mean an abrupt market turnaround is about to occur. Homebuying typically picks up in late February each year, peaking in early summer, then gradually declines through the rest of the year.
In addition, a separate CAR index measuring home sales relative to new listings indicates that home prices should continue to stay strong. Home sales continue to outstrip new listings, putting upward pressure on home prices through the fall, CAR reported.