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REALTOR®: June pending home sales up nationwide

Monday, August 13, 2007

The National Association of REALTORS® (NAR) recently disclosed the Pending Home Sales Index increased in June, with the West showing the highest PHSI percentage increase. Although it may be too soon to determine if home sales have already passed bottom, NAR officials believe further sales declines will be moderate.

“Major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand,” said NAR Senior Economist Lawrence Yun.

June’s Pending Home Sales Index was 5 percent higher from the downwardly revised May index of 97.5, but is 8.6 percent below June 2006, when it stood at 112.0. This 5 percent monthly gain is the largest in more than three years, since a 6.1 percent increase in March 2004.

The PHSI in the West increased 8.6 percent in June to 103.6, but was 5.5 percent below a year ago. In the Northeast, the index rose 3.1 percent from May to 96, but is 2.4 percent lower than June 2006. The index in the South increased 4.7 percent in June to 111.6 but was 12.7 percent below a year ago. In the Midwest, the index rose 3.5 percent in June to 92.5, but was 8.2 percent lower than June 2006.

The California Association of REALTORS® (C.A.R.) reported June home sales in the state were down 24.7 percent compared with the same period a year ago, while the median price of an existing home continued to rise. Officials attribute the lag in home sales to buyer hesitance, the rise in foreclosure activity and disarray from the subprime segment of the mortgage lending industry.

"The focus on foreclosures and subprime lending is ongoing and, coupled with higher inventories of homes for sale, is prompting many would-be buyers to play a ‘wait-and-see’ role," said C.A.R. President Colleen Badagliacco. "However, well-maintained homes with curb appeal that are priced for today’s market continue to sell. It’s often a matter of counseling buyers and sellers to set realistic expectations on both sides of the transaction.

"First-time buyers continue to be impacted by tighter mortgage underwriting standards and the affordability challenge, which has not improved significantly despite price declines in most regions of the state," she said.

Closed escrow sales of existing, single-family detached homes in California totaled 364,280 in June. Statewide home resale activity decreased 24.7 percent from the 483,690 sales pace recorded in June 2006.

The median price of an existing, single-family detached home in California during June 2007 was $594,260, a 3.2 percent increase over the median for June 2006. The June 2007 median price increased 0.2 percent compared with May’s revised $592,780 median price.

"With just over a 10-month supply of homes for sale on the market, we expect further softness in prices in the coming months," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The San Francisco Bay Area continues to see leaner inventory levels compared to Southern California and the state as a whole."

“It is important to note that the decline in sales is not driven by weakening economic conditions. Both the California and U.S. economies continue to expand,” added Geoffrey Craighead, president of the San Mateo County Association of REALTORS® (SAMCAR).

The local economy and housing market are performing well in San Mateo County, said Craighead, owner of Craighead Associates in San Carlos. There continues to be job growth, and according to the state Employment Development Department (EDD), San Mateo County’s unemployment rate was 3.9 percent in June 2007, a far cry from the unemployment rate of 6 percent in 2003.

Craighead indicated homes are selling, particularly those in the high-end of the market. The median price of a home in San Mateo County increased 3.9 percent to $800,000 in June, compared with the prior year. The city of Burlingame consistently ranks among the top 10 cities in the state with the highest median home price.

Statewide, the 10 cities and communities with the highest median home prices in California during June 2007 were: Laguna Beach, $1,700,000; Burlingame, $1,637,500; Los Altos, $1,635,000; Newport Beach, $1,615,000; Palos Verdes Estates, $1,542,000; Saratoga, $1,465,000; La Canada-Flintridge, $1,400,000; Mill Valley, $1,395,000; Manhattan Beach, $1,300,000; Hermosa Beach, $1,205,000.

Statewide, the 10 cities and communities with the greatest median home price increases in June 2007 compared with the same period a year ago were: Menlo Park, 41.5 percent; Palos Verdes Estates, 25.9 percent; La Canada-Flintridge, 21.7 percent; Arcadia, 21.1 percent; Newport Beach, 20.1 percent; Santa Monica, 18.7 percent; Moorpark, 16.1 percent; Chino Hills, 12.6 percent; Saratoga, 11.9 percent; Los Angeles, 11.7 percent.

The San Mateo County Association of REALTORS® (SAMCAR) is a professional trade organization representing over 3,800 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula. SAMCAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in San Mateo County.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Julie Ziemelis, Director of Public Affairs, e-mail , or phone (650) 696-8214.

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