Pending Home Sales data indicates tough times for Real Estate Sector

Pending Home Sales data indicates tough times for Real Estate Sector

Pending home sales data suggests that low housing inventory combined with higher prices have led to lower number of sales across California. Home sales in California declined for fourth straight month as per latest data released for April. The April Market Pulse Survey conducted by California Association of Realtors has reported increase in floor calls. The traffic for open houses has also declined in April.

The pending home sales index declined by 7.4 percent from 122.8 in April 2016 to 113.7 in April 2017 for California market. San Francisco Bay Area reported slowdown in sales. The real estate sector has been showing strong growth quarter after quarter as economy improved. The jobs market has reported strong performance over last few quarters. People with stable jobs are more inclined to buy their first home but higher home prices have discouraged some buyers.

Realtors surveyed by California Association of Realtors reported more price reductions in majority of markets. The open house traffic was reported lower. Additionally, multiple offers for homes priced above $750,000 declined during April. For homes priced between 500,000 and 749,000, number of multiple offers registered strength. Real estate sector is also closely watching next Federal Reserve policy meeting on interest rate change.

Denise Welsh, president of the Silicon Valley Association of Realtors said, “The continuation of year over year pending sales declines shows that our typically busy spring home buying season may underperform, primarily due to demand outstripping the supply of homes for sale.”