Pending home sales figures for the San Francisco Bay Area indicate December and January will be down months for transaction activity.
According to the California Association of Realtors (CAR), during November the number of pending sales, transactions likely to close in the next month or two, fell by nearly 12 percent month-over-month in the region.
While month-to-month activity continues to decline, the volume of November pending sales did equate to a 17.7 percent rise in activity when compared to November 2014.
The decline in month-to-month pending sales mirrors the double-digit drop in closed sales volume that recently occurred throughout the Bay Area.
Overall, closed sales activity in November dropped by nearly 17 percent in the Bay Area and by double-digits in nearly all of the area’s counties. According to a separate release from CAR, San Francisco County experienced the largest month-to-month drop in activity, 24.2 percent. The market was followed by Contra Costa and Marin counties, which both saw a 22.4 percent drop in month-to-month sales volume.
Alameda, San Mateo, Santa Clara, Solano and Sonoma counties all saw declines that ranged from 10.7 percent to 17.9 percent.
On a positive note, distressed sales accounted for a minimal amount of total closings in San Mateo and San Francisco counties, 0.9 percent and 1.1 percent, respectively. According to the San Mateo Association of Realtors, 314 homes sold in the county last month. Of these sales, less than 30 where distressed properties.
In spite of declines in closings and pending sales, the Bay Area is the only region in California where homes are routinely selling above original asking prices. CAR attributes this to the area’s inventory, which at the end of November sat at 2.3 months of supply.
Additionally, CAR attributes declines in sales activity to seasonality and delayed escrow closings caused by new loan disclosure rules. As of early October borrowers are now required to receive two new forms, the loan estimate and the closing disclosure. The later must be received at least three business days prior to the closing of a loan.
